Analysts enthused by Swiss watch exports for 2010

“We couldn’t have hoped for a better time to wish you a happy Chinese new year,” HSBC wrote to its customers on February 3rd, when the industry released its latest figures. “Statistics from the Federation of the Swiss Watch Industry show exports grew strongly in December to gain 26%. This brings growth for the year to 22%, due in no small part to a sharp rise in demand from Hong Kong (20% of total exports in 2010 compared with 16% in 2009) and China (7% in 2010 versus 5% in 2009). Note that out of the sector’s 30 main export markets, only Germany, Australia and Greece experienced a decline in exports in 2010 versus 2009.”

HSBC also pointed to the acceleration in growth at year-end. This is all the more remarkable given the significantly less favourable comparison base, after watch exports lost just 2% in December 2009. In this context, and with stock levels back to normal, HSBC is expecting 2011 to begin with more double-digit growth, in spite of an increasingly negative base effect: +3% in January, +25% in February, +33% in March. As the bank concludes, “in the current climate, few industries are better grounded than luxury.”

Prestige watches perform well

Credit Suisse shares this positive analysis. It also highlights figures for December, which “ends a remarkably strong year for the industry. These encouraging figures together with the continued positive trend reported by our retailer contacts in January confirm our positive opinion of companies in the branch, in particular Swatch.” The bank also pointed to exceptional growth in December 2010 in China (+71%), Hong Kong (+59%) and France (+37%), while Japan confirms that it is bouncing back (+18%). A breakdown of exports by price reveals that watches with an ex-works price above CHF 3,000 performed well. This category gained close to 30% in December, after an increase of 39% in November.