Global slump in luxury watch sales hitting closer to Singapore

The dip in global sales of Swiss luxury watches last year, the first yearly drop since the 2009 recession, may have finally caught up with Singapore.

While the shipments of Swiss watches worldwide in 2015 slipped 3.3 per cent from a year ago to 21.5 billion Swiss francs (S$30.7 billion), the shipments to Singapore rose one per cent to 1.13 billion Swiss francs, reversing the 1.4 per cent dip in 2014.

In December 2015 alone, retail orders of Swiss watches in Singapore, one of the 10 biggest markets for luxury timepieces, jumped 8.1 per cent year on year to 102.6 million Swiss francs, according to figures compiled earlier by the Federation of the Swiss Watch Industry.

But the latest numbers for January 2016 released this week by the federation show Swiss watch exports to Singapore suddenly plunged 22.6 per cent - the second-biggest drop in the top 10 markets for Swiss luxury timepieces.

The biggest fall - down 33.1 per cent - was seen in Hong Kong, the world's biggest luxury watch market and where Swiss shipments of watches have fallen for 12 straight months, wiping one billion Swiss franc off the order books.

Globally, Swiss watch exports, which account for virtually all luxury timepieces sold worldwide, slid for the seventh consecutive month in January 2016, tumbling 7.9 per cent to 1.5 billion Swiss franc. "An unfavourable environment continues to hold back results in the sector," said the Federation of the Swiss Watch Industry.

Both The Hour Glass (THG) and Cortina Holdings, the two publicly listed watch retailers in Singapore, declined to comment for this report.

But THG group managing director Michael Tay told BT earlier that he had seen a "re-balancing of supply to the new demand reality" brought about by the 2009 recession.

"There will be market consolidation across Asia (excluding South Korea and Japan)," he had predicted. "We are already seeing it happen in Hong Kong where speciality watch and jewellery retailers are trimming stores opened in the go-go days of 2007 and 2011."

Mr Tay had said that the "rout in Singapore in particular may last for at least another two to three years - end 2017, possibly well into 2018".

THG, which is the largest luxury watch retailer in Singapore, reported its sales revenue was flat at S$186.4 million for the three months ended Dec 31, 2015. Net profit slipped 2 per cent from a year ago to S$14.5 million.

For the first nine of months of its financial year, the company's revenue rose 2 per cent to S$521 million. Net profit dipped one per cent to S$34.6 million.

Cortina's revenue slipped 0.04 per cent to S$97.7 million in the third quarter ending December 2015. Net profit fell 1.22 per cent to S$2.8 million.

For the first nine months, the retail chain's revenue dropped 2.94 per cent to S$273.7 million. Net profit declined 17.8 per cent to S$6.9 million.

This article was first published on March 7, 2016.
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