Swiss Watch Exports Dropped in April

(Bloomberg) -- Swiss watch export growth ground to a halt as weakness in low-end timepieces portends a difficult market for brands such as Swatch.

• Shipments fell 0.4% in April. Growth in the first four months of the year was 2.1%, compared with the industry's annual pace of 6.3% last year.

Key Insights

• The number of watches exported with wholesale prices below 200 francs ($199) slumped 24%, showing how hard it's getting for Swatch Group AG to find buyers for its most accessible brand. The label may be losing money, or breaking even at best, Luca Solca, an analyst at Sanford C. Bernstein, said in April.
• The only sweet spot in the market is the top end of timepieces, and growth there isn't exactly vibrant. Switzerland's exports of watches wholesaling for more than 3,000 francs rose 4.3% in April.
• Japan has shown unexpected strength so far this year, with exports up 23% in the first four months. The market, which historically has been weaker than the rest of Asia, has become the No. 4 destination for Swiss watch exports.

Market Reaction

• Swatch shares fell 44% in the past year, while Richemont declined 20%.

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To contact the reporter on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John J. Edwards III

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