Independent luxury watchmakers expect growth this year
By Silke Koltrowitz
GENEVA (Reuters) - Swiss luxury watchmakers predict the market will grow this year, expecting rising demand from North America and Europe to more than offset slowing sales to China.
Independent watchmakers Audemars Piguet, Parmigiani, Greubel Forsey and Richard Mille, told Reuters at an industry show they were expecting higher sales in 2014 than last year.
The Chinese government's crackdown on the use of luxury goods as bribes and illegitimate gifts has hurt sales of luxury watches in mainland China, the third largest market for Swiss watch exports.
"The biggest dark cloud on the horizon is a potential Chinese bubble, we don't know if it's going to burst or not," Jean-Marc Jacot, head of independent high-end watch brand Parmigiani told Reuters in an interview on Tuesday.
"We'll all be hit terribly if something happens in China, let's hope the Chinese government keeps things in check," he said at the SIHH watch fair that unites Richemont CFR.VX brands and a handful of independents in Geneva this week.
Hong Kong and mainland China together accounted for about a quarter of Swiss watch exports. In the eleven months to November the total market was worth 20 billion Swiss francs ($22 billion). Exports to these two markets fell 6 and 15 percent, respectively, in that period.
Exane BNP Paribas analyst Luca Solca said he estimated that the luxury watchmakers were vulnerable to a slowdown because sales in China, as well as to Chinese tourists overseas, generated half of their revenue.
Richemont, which owns the Cartier brand, said last week that its sales in China were still in negative territory in the three months to December, while Swatch Group UHR.VX was more optimistic, saying its Omega brand was about to recover in China. Continued...