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[SINGAPORE] Local sales of luxury timepieces are likely to repeat last year's pattern: down in the first half and up in the second.
The full-year sales may post growth, as they did in 2013, but the growth is likely to be meagre.
Direct sales figures are unavailable but Swiss watch exports, which account for sales of virtually all luxury timepieces (those in the price range of S$5,000 to over S$1 million) worldwide, provide a good indicator.
And the indication is the sales here fell in the first six months of 2014. Shipments of Swiss watches to Singapore - one of Switzerland's top 10 market for timepieces - dipped 2.0 per cent from a year ago to 515.8 million Swiss francs (S$706.4 million) during that period, according to the Federation of the Swiss Watch Industry.
Chinese tourists, estimated to have spent S$2 of every S$5 tourists spent in Singapore in the first two months of this year, must be one of the main culprits for causing the drop. There were 27 per cent fewer of them visiting Singapore in January to May, the latest tourism figures show.
F J Benjamin, a Singapore distributor of high-end fashion goods, including timepieces by Bell & Ross, Federique Constant and, until recently, Girard Perregaux, specifically blamed China's curb on luxury spendings, along with the Indonesian rupiah's depreciation against the Singapore dollar, for its first quarterly loss since the 2008-09 global financial crisis.
The group made an overall net loss of $5 million in the first three months of 2014, with sales of watches taking a 10 per cent dive in South-east Asia, including Singapore.
Multi-brand retail chain Cortina, which is particularly strong in selling Patek Philippe timepieces, reported its turnover slipped nearly 5 per cent to S$92.1 million in the quarter ending June this year. Net profits fell 9 per cent to S$4.1 million.
The Hour Glass, which operates in nine cities in the Asia-Pacific region, was in a happier state with sales up 2.5 per cent in the same quarter to hit S$158.6 million. But profits before tax slipped a bit from S$11.7 million to S$11.6 million.
Much of the sales increase came from overseas outlets. Still, the retail chain's sales in the last quarter seemed to have a harder climb. And sales for this financial year (ending March 2015) look unlikely to even come near last year's 13 per cent growth.
The Hour Glass' executive director, Michael Tay, who had complained that the past year was "difficult" despite the double-digit growth in his business, expects the rest of 2014 to be "highly volatile and market conditions challenging as exuberant Asian spending on hard luxury is curtailed".
Yet local sales of luxury timepieces are tipped to pick up in the second half of the year, when well-heeled tourists hit town for the F1 race - and doing some shopping on the side - and Christmas and year-end bonus send locals to the malls to spend.
That's apparently what happened last year. Singapore's imports of Swiss watches dropped 2.6 per cent in the first half of 2013 but bounced back in the second half to deliver a one per cent full-year growth, lifting imports to 1.14 billion Swiss francs that year.
Still, there's little joy for luxury watch retailers here who, until recently, were enjoying double-digit jumps in sales. Singapore's imports of Swiss timepieces rose 33.4 per cent in 2010 to 899.3 million Swiss francs, the year after the financial crisis. They increased 27.5 per cent in 2011 to exceed one billion Swiss francs for the first time, before tripping and slipped one per cent in the following year.
Singapore was the only one among the top 10 importers of Swiss watches in 2012 to see a drop in imports.
Local retailers will be less happy when they see retailers in other countries doing better, especially those in countries around Singapore.
Singapore was one of the four top Asian markets that brought in fewer Swiss watches in the first half of this year; the others were China (-4.2 per cent), Taiwan (-2.9 per cent) and Thailand (-9.8 per cent).
Japan and South Korea were the fastest growing markets for Swiss watches in the first six months of 2014, both growing at a 25 per cent-plus clip. Hong Kong, the biggest market, grew 4.4 per cent.
While shipments to Singapore fell, the Federation of the Swiss Watch Industry says Swiss watch exports overall put up a "very favourable" performance in the first half of the year, expanding 3 per cent to 10.53 billion Swiss francs, up from a year ago when they barely moved. And it predicts export growth will speed up in the second half.
With the traditional European and American markets largely still flat, Swiss watch shipments in January-June continued to be driven mainly by Asian markets - though not China, or Singapore.