Interesting Post in WSJ Today

[NitroRacer]

Exports of Swiss Watches Fall Faster Than Expected


By MARTIN GELNAR
ZURICH -- Switzerland's luxury-goods industry took a pre-Christmas hit, with watch exports sharply lower in November.

Swiss watch exports fell 15% in November from a year earlier to 1.52 billion Swiss francs ($1.41 billion), a steep deterioration from the drop of around 5% posted for October. November is the watch industry's most important month of the year because of the run-up to Christmas.


Although a decline had been expected, the extent of the plunge surprised market watchers. Particularly worrying were the first signs of a weakness in Asian markets and the tailing off of demand for premium products, which had been thought to be less prone to cutbacks in spending, analysts said.

All price segments were affected, from the basic plastic watches sold by Swatch Group AG to high-end items selling for thousands of francs, the Federation of the Swiss Watch Industry FH said.

Exports to Hong Kong and the U.S. fell 17% and 24%, respectively, though shipments to Germany rose 9%. Exports to China, which have risen regularly in the past few quarters, were flat.

Shares in Swatch, the world's largest watch producer in terms of sales, fell 2.6% Thursday in Zurich. Shares in Geneva-based luxury-goods maker Cie. Financière Richemont SA declined 5.5% on the Virt-X pan-European exchange. Swatch and Richemont dominate the world's premium watch industry, together with closely held Rolex SA.

"The data confirm views that the news flow from the luxury sector will be gloomy in the near future," said Bank Sarasin analyst Patrick Hasenböhler.

Patrik Schwendimann, an analyst with Zürcher Kantonalbank, said there were signs of weak uptake in emerging markets and that premium watches selling for 7,500 Swiss francs and above are also beginning to feel the pinch.