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.

[Wolfgang427]

And this is unexpected news? When the USA sneezes the world catches a cold. I predict much more downward slides in production and sales worldwide as demand keeps falling and unsold supply increases.

[vapalux]

Totally agree with Wolfgang

This is going to get a lot worse before it gets better. Rolex putting their prices up in the UK by any percent is a dangerous move on their part. No one is buying their watches at the moment, price go's up there will be even less.As this is worldwide they have a choice:-

Heavily discounted goods or bigger safes to hold the unsold watches in.

You listening Rolex!

[DSJ]

No surprises!

Look at the dropping resale values, despite 2 price increases in 2008.

[joeyk]

sad sad sad :( :(

[bradg]

It would be nice if we could all find a good deal in these troubled times. Things will come back at some point. They always do. Let's try and find a Rollie at a good price while we can.

[veefour]

Originally Posted by NitroRacer

Exports of Swiss Watches Fall Faster Than Expected


B

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.

They were WRONG, as everybody else!!!