[PARIS] LVMH watch chief Jean-Claude Biver said 2016 is set to be a tougher year for the Swiss watch industry because of the economic slowdown in China.
While revenue at LVMH brands such as Hublot should continue growing at a double-digit rate in 2015, "the problem might be next year," Mr Biver said in an interview Tuesday with Bloomberg Television. "Not only for us, but also for the whole industry." The introduction of Apple Inc's smartwatch, combined with a surge in the Swiss franc and China's slowing economy, have clouded the outlook for Swiss timepieces. Exports fell in August, heading for the first annual decline in six years, and Swiss watchmaker executives are the most pessimistic in four years, according to a study published this month by Deloitte LLP.
"Hong Kong is suffering," said Mr Biver, who announced in August that TAG Heuer was closing a store in the island city as high rental costs and declining numbers of customers weighed on margins. "There is also a problem in China." Swiss watchmakers have struggled with a shrinking Chinese market since the country's government started discouraging exuberant spending among officials in late 2012. More recently, the devaluation of yuan fueled concern over a slowing economy that has weighed on stock markets globally. According to Biver though, the Chinese are still spending.
"We see the consumer from China is traveling all over the world, in every country," he said, citing demand in places as far flung as Finland. "They're buying outside China." To that end, Mr Biver said LVMH - full name LVMH Moet Hennessy Louis Vuitton SE- will open stores in Ginza, Japan, and Melbourne, Australia.
"We will follow the Chinese consumer wherever he goes," Mr Biver said. "We want to be present and we want to offer him the possibility to buy one of our watches." Mr Biver also said LVMH's answer to the Apple Watch - the TAG Heuer smartwatch - will go on sale at 11 am in New York on Nov 9 and will look like a regular watch.
"That was our biggest challenge," Biver said. "How can we make a connected watch that looks like a normal watch with the normal DNA of the Swiss watchmaking?"