Swiss watch exports to China recover in December

Thu Feb 6, 2014 6:47am EST
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By Silke Koltrowitz

ZURICH (Reuters) - Swiss watch exports to China rose in December, data showed on Thursday, adding to signs a difficult spell for luxury goods makers in an important market may be coming to an end after Swatch Group's UHR.VX upbeat statements on Wednesday.

Swiss watchmakers sold fewer watches in China last year after a government crackdown on gift-giving to officials hit demand for expensive timepieces.

Continued weakness in the Chinese market is one of the main reasons why analysts expect luxury goods sales growth to slow in 2014, despite strong demand from the United States and emerging market tourists hunting for bargains in Europe.

Recently, however, signs are mounting that demand for watches in China may be picking up again.

Swiss watch exports to mainland China, their No.3 market, jumped 18.8 percent in December, partly due to comparison with a very weak result the year before, the Swiss watch federation (FH) said on Thursday. They fell 12.5 percent in 2013.

Exports of Swiss timepieces to No.1 market Hong Kong, where mainland Chinese like to shop, were down 1.8 percent in December, after falling 5.6 percent for the whole of 2013, the FH said, speaking of a "gradual recovery".

"The December datapoint is difficult to read given the obvious benefits of earlier timing of Chinese New Year but it is overall slightly positive for sector sentiment," Citi analyst Thomas Chauvet said in a note.

"We see limited signs of restocking in the industry at this stage although the end of destocking might be near with better industry growth expected in 2014," he said.   Continued...

A Vacheron Constantin watchmaker adjusts a movement in the company headquarters in Plan-les-Ouates near Geneva May 23, 2007. REUTERS/Denis Balibouse