The Swiss watch bubble might be about to unravel.
After years of stunning growth, in which exports more than doubled from 2000 to 2014, Swiss watchmakers had a terrible month.
China led the fall, according to export figures from the Federation of the Swiss Watch Industry.
Overall exports were 9.3% lower than a year earlier, at 1.9 billion Swiss francs (£1.3 billion) with the Chinese market segment dropping by more than 39%. Sales to the United Arab Emirates also tanked 29.8%.
Weirdly, watch sales to France jumped more than 50% in July. The Federation doesn’t have an explanation for that, just calling it “astonishing.”
Here’s the graph, showing the mid- and top-range watches were hit the hardest:
All sorts of luxury goods makers are getting hit by the slowing Chinese economy and a crackdown on the practice of “gifting” — read corruption. The rich also just lost a whole lot of cash gambling in China’s crumbling stock market so there’s less money to plow into expensive items.
Added to this, the Swiss franc suddenly jumped in value in January, after the central bank abandoned its policy of capping currency prices. This had the effect of making Swiss watches more expensive abroad and destroyed exports:
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