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Swiss watch exports have biggest monthly drop in seven years

[GENEVA] Swiss watch exports plunged 16 per cent in October, the biggest monthly drop in seven years, as demand weakened in almost every major market for Rolex and Omega timepieces.

Shipments fell to 1.68 billion francs (S$2.4 billion), the Federation of the Swiss Watch Industry said in a statement Tuesday. The decline was much greater than expected and was made worse because October was the weakest month of last year, according to Zuzanna Pusz, an analyst at Berenberg.

The longest slump in more than two decades is threatening employment in the Swiss watch industry, which had been riding a boom as rich Chinese bought more timepieces.

Richemont plans to cut more than 200 positions at brands such as Vacheron Constantin, the Unia trade union said last week. That came after sweeping management changes at the Geneva-based luxury-goods maker, which eliminated the role of CEO.

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"Given the wide expectation of a rebound in the fourth quarter, the weaker October data is likely to be taken negatively for both Swatch and Richemont," Berenberg's Ms Pusz said in a note.

Swatch shares fell 3.7 per cent to 285.3 Swiss francs at 9:07am in Zurich, while Richemont declined 2.5 per cent to 64.1 francs.

Exports have fallen 11 per cent in the first 10 months of the year. 13 of top 15 markets were negative in October. Shipments to Hong Kong, the biggest market, fell 22 per cent vs 40 per cent in September. Exports to the US declined 17 per cent. The UK posted a 9 per cent gain as a weaker pound drove sales.