Time Still Bodes Well for Swiss Watch Makers

Walk into any party with a £3,000,000 watch on your wrist and you’re likely to catch the room’s eye. Your success will be obvious to everyone.
This is doubtless the effect that Hublet intended for their new watch, ‘The Five Million’ (so named because of its U.S. Dollar value). Their other intention might well have been to announce their own success; a palpable display of their business’ security.
The Swiss watch industry has been riding an incredible boom for the last couple of years. Since 2009, exports of Swiss-made watches have increased by nearly 50%, but how long can it last?

The Hublot chairman, Jean-Claude Biver has announced that he expects 2012 to be their third record year in the row. He was talking about his company, specifically, but other companies can feel equally confident.

Early figures from this year strongly suggest that the demand from The East, China in particular, will sustain the advance of the last few years.
Share prices also withstand the optimistic outlook. The prices of the three main luxury watchmakers - Swatch, LVMH and Richemont – have all risen, as investors commit to their sustainable growth.

The main cause for concern had been the suspicion that the Chinese economy would decelerate, after warning signs in March. However, the export of Swiss watches rose still rose by just shy of 40%.
Even after the harsh economic winter in Europe, their poor sales have been softened by an increased amount of tourists, buying souvenir watches while travelling from China to London, Geneva and Paris.

On other shores, the future looks equally bright, as India and Brazil’s economy take large strides forward. There is also hope in the recovering Japan market and the U.S, who can still claim to be the second-largest market for exported Swiss watches.

Analysts have claimed that the Swatch group are more likely to bloom than LVMH and Richemont. They place this down to their greater share of the Chinese market and the security found in their mid-price watches, which will not suffer as much in a recession.

All three companies are set to fare well for this year, but Swatch is predicted to be 5% better off than the Swiss Performance Index, by the end of this year. LVNH and Richemont are expected to remain even.

There’s clearly to cause sleepless nights with the companies’ boards, though. Their sales are good, their profit growth is encouraging and their high stock prices are well justified, due to their solid footing in China.
Oh, and if you fancy buying that Five Million watch. It’s now in a Singapore jeweller, awaiting its new, as yet unfound, owner…

About the Author:
Written by Kris, for Swiss Time Machine, proud provider of quality, used Swiss watches.

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