Swiss watchmakers face another challenging year
By Silke Koltrowitz
BASEL, Switzerland (Reuters) - Swiss watchmakers are braced for another difficult year as economic woes in major markets curb consumers' appetite for pricey timepieces, industry executives said on Thursday.
Sales in Hong Kong, the biggest market for Swiss watches, have been depressed as China's economic slowdown and Beijing's anti-corruption campaign have hurt spending by mainland Chinese, which shows no signs of rebounding.
Zenith, the upmarket watch brand owned by LVMH (LVMH.PA: Quote), sells almost two out of three watches to Chinese customers.
"2016 is very complicated because people no longer have the confidence needed to simply go and buy our products," Zenith's Chief Executive Aldo Magada told Reuters at the Baselworld watch fair.
He said he could not rule out job cuts.
As well as China's slowdown, tourism in Paris, another luxury goods hub, has been hit by the Islamist attacks in November, while Russians travel and spend less because of the weak rouble, the Ukraine crisis and the low oil price - which is also tempering luxury spending in the Middle East.
Like other upscale brands, Zenith has expanded into more affordable watches to meet the demands of more price-conscious consumers, a trend already visible at January's Geneva watch fair dominated by luxury goods group Richemont's CFR.S high-end brands.
"Our product mix has changed, we sell fewer gold watches, more steel," said Magada. Continued...