Retailers, Specialty European Luxury - Swiss Watches First Hand (#49)

Swiss watch exports fell -21% year over year in March on impact of COVID-19, with CHF3,000+ segment best performing. We expect further downside in April as retailers must de-stock given store closures & some manufacturing plants shut down.

21 Apr 2020

Wristwatches by price categories, March 2020

Source: UBS FHS

The figure charts exports by units and value in each price category for the month of March 2020. All categories showed negative growth.

Swiss watch export data for March -21% year over year (wristwatches)

March exports decreased by -21.1% on a reported basis and by -25.4% adjusting for number of working days (February was -8.7% on reported and adjusted basis). The comp base was 3ppt tougher on a reported and adjusted basis. March data shows a significant sequential deceleration, not surprising given the virus outbreak worldwide. April data is likely to show further downside, as retailers need to de-stock amid store closures and several Swiss watch manufacturing plants being shut down will add further pressure. By region, Hong Kong fell -41.3% (February -42.0%, comps 6ppt tougher) while Mainland China interestingly grew +10.5% (February -51.5%, comps 2ppt tougher) pointing to early signs of recovery in the country. In Europe, France declined -48.0% (February +12.6%, comps 1ppt tougher) with Italy -57.6% (February +5.0%, comps 8ppt easier). North America however was still resilient in March growing +20.9% (February +17.8%, comps 13ppt tougher) given the later spread of the outbreak. All price segments were declining, the best performing being the CHF3,000+ segment, down "only" -12.9% in value (February -1.3%, comps 6ppt tougher). By material, the best performer was the gold-steel segment at +0.7% in March (February -5.1%, comps 1ppt tougher).

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