Business News: Mid-Year Swiss Watch Sales Results Show Industry Beset By 'Perfect Storm'
Precious metal watches seem hardest hit, showing a 31% decrease, albeit all materials classes were down. Regarding value section, the report states: “Watches evaluated somewhere in the range of 500 and 3,000 francs (trade cost) are the solitary ones to have stayed away from a double digit decrease. They followed a similar pattern as in the previous a year. The 200-500 francs category posted the steepest falls. Watches evaluated over 3,000 francs likewise lost almost 20% in worth (- 19.5%) as compared to June 2015.”
"Il n’y a pas de crise." Nick Hayek Jr. to Le Temps, July 21
In other industry news, Swatch Group revealed a 54 percent decrease in benefits year over year, carrying its first half benefits to the least in quite a while. In spite of analysis from certain quarters that investors are losing trust in his administration of the Group, CEO Nick Hayek demands that no critical changes in working technique are important, portraying the current headwinds confronting the business and the gathering as an “remarkable situation” however not an emergency.
Yet while a few investigators recognize that there are momentary headwinds applying descending tension on deals, others see all the more long haul issues – some external the business, and out of its control, yet also, obsolete points of view and a powerlessness to adjust to moving business sector requests and tastes. Bloomberg View journalist Leonid Bershidsky composes :
“Swiss watchmakers cruised into an ideal tempest this year. The business, which creates more than $20 billion in fares, was rocked from all sides – generally by conditions to a great extent outside its ability to control, yet it’s undeniably evident that the decay will proceed with except if the business changes the manner in which it plans and markets its items . . . the Swiss industry can’t lay all the fault on outer elements. The commodity, cash and the travel industry variances are such an excess of background noise diverting the Swiss from their industry’s serious issue: The emanation of old-world extravagance, on which its publicizing society is based, has an undeniably restricted allure in a tech-driven reality where the more youthful age is, interestingly since World War II, less fortunate than its parents.”
At the extremely least, the colossal measure of unsold stock in retailers’ grasp will push down sell through for quite a while; Bershidsky noticed that Bloomberg Intelligence information focuses to unsold stock making up at any rate 60% of the market capitalization of significant Asian market retailers. The Financial Times detailed last May that the Richemont Group is repurchasing stock from some Hong Kong retailers. In a similar story, Richemont administrator Johann Rupert communicated wariness that any close term improvement is normal, saying, “In the close to term, we are suspicious that any important improvement in the exchanging climate is to be expected.”