PARIS – Swiss watch exports sputtered in July after logging strong sales growth in the first half of the year.
Exports were down in both value, slipping just under one percent year-over-year to 2.1 billion Swiss francs, or $2.5 billion, and volume, down 3 percent.
The drop was notable considering the softening luxury market worldwide, Barclay’s analyst Carole Madjo said in a research note.
“Considering that this is the first time [Swiss watch exports] turn negative this year, the release could provide additional caution around the sector and notably hard luxury,” she wrote.
The slowdown follows growth of 14 percent recorded in June, despite a drop in China. The July numbers marked and the first time China had posted a decline since pandemic-era restrictions were lifted in January 2023.
China sales continued to fall in July, down 16.6 percent. China remained was the second largest market for Swiss exports, with 11.9 percent market share in July.
July sales in Hong Kong were up 6.3 percent, though that number was a steep deceleration from the 46.2 percent sales growth posted in June.
Sales were up 5.2 percent in the U.S. on a value basis, a slight softening from the 8.8 percent growth last month, while North America showed a 20 percent slowdown in volume. The U.S. remains the largest export market, with a 15.5 percent share.
However, analysts framed the U.S. sales numbers in a positive light. “We view this as a positive given the weakening macro environment,” Barclay’s Madjo noted.
Outside of China and Hong Kong, the rest of Asia was down 6.4 percent, with South Korea falling 24.1 percent. Singapore was also down 7.1 percent, while Japan was a bright spot, up 5.5 percent.
Europe remained resilient overall, up 2.2 percent, with variations across the region. Spain was up 23.9 percent, the U.K. 5.6 percent, and Germany 5.1 percent. France was down 14 percent.
Value of sales on steel watches fell 6.1 percent, while precious metals remained stable. Bimetallic gold and steel watches grew 4.8 percent, while growth was strongest in the other-metals category at 10.2 percent. In volume terms, all categories fell except the other metals, which were up 21.9 percent.
The 500- to 3,000-franc price category fell significantly, down 12 percent. This segment represents around one-fifth of all Swiss watch exports. Most other price segments saw minor variations.