Swiss watch exports slump on lower shipments to China

Monthly Swiss watch exports fell for just the second time in three years, led by lower shipments to China and Hong Kong, as demand for luxury timepieces cools.

Exports dropped 3.8% by value in February to 2.15 billion Swiss francs ($2.4 billion) from a year earlier, the Federation of the Swiss Watch Industry said Tuesday. 

The number of watches shipped from Switzerland also fell, slumping 5.2% to 1.2 million units.

Shares of Swatch Group AG, the maker of Omega, Blancpain and Longines brand watches, fell as much as 3% in Swiss trading Tuesday following the report. Shares of Richemont, which owns a stable of watch brands including Vacheron Constantin and IWC, fell as much as 2.4%. 

Demand for Swiss watches and luxury timepieces surged during the pandemic as consumers stuck at home and flush with cash from government stimulus measures rushed to buy top brands, including Rolex and Patek Philippe.

Hamstrung by supply chain issues after halting production during lockdowns, many Swiss watchmakers couldn’t keep up and most brands drove up prices.

Now a reckoning is underway as wars rage in Ukraine and the Middle East and economic pressures persist. Shipments of watches priced at over 3,000 francs, which account for about 80% of export values, fell by 1.8% in February.

Exports to mainland China plunged by 25% from a year earlier, and Hong Kong shipments fell 19%. The US remained the top destination for Swiss watches, with exports rising 5.5%. Exports to the UK dropped 2.1%, the Federation said.