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Swiss watch exports have worst November in five years
[ZURICH] Watch exports from Switzerland, home to Richemont, Swatch Group and LVMH's Tag Heuer and Hublot brands, recorded their worst November in five years as sales to top market Hong Kong plunged more than a quarter.
In November 2014, exports had already started to fall as the biggest market for timepieces, Hong Kong, and neighboring China slumped.
This November, exports to Hong Kong dropped 27.1 per cent, while in China they were up compared with a weak figure in the previous year.
This was the first November since 2010 in which watch exports fell below 2 billion Swiss francs (S$2.84 billion).
"Watch exports remained depressed during the month of November despite a more favourable base effect and one additional working day," the Federation of the Swiss Watch Industry said. "The situation clearly illustrates the difficult international context facing the Swiss watch industry."
Vontobel analyst Rene Weber saw flat or falling exports to China and further troubles in Hong Kong as retailers decrease inventory, but expected the overall market to pick up by the end of next year.
With 90 per cent of its sales from Swiss watches, according to Weber, Swatch is particularly exposed to flagging sales. Richemont, which makes 50 per cent of its sales from watches, will better absorb the blow.
Swatch shares rose 1 per cent and Richemont stock gained 0.6 per cent by 1039 GMT. Both have fallen by more than a fifth since the start of the year.