Saturday, November 21, 2015

Watch Market Hammered in Hong Kong

One thinks of luxury when thinking of Swiss watches, and when I read the headline I thought it would show me something contrary to what I say: specialty does fine as mass merchandise is in deflation/freefall/death spiral.  But what does the article talk about?  Swatch, Fossil... discount leader watches:
Hong Kong’s lead against the U.S. is eroding seven years after becoming the world’s biggest marketplace for Swiss watches. The industry is pulling back in the island city, with TAG Heuer shuttering a store there in August. Richemont, , the maker of Cartier jewelry and IWC timepieces, has said its sales declined in October on weak watch demand....
“The data would suggest prudence about Swatch,” wrote Luca Solca, an analyst at Exane BNP Paribas in a note to investors. The watchmaker will find it harder to fight inventory build-up due to the difficult wholesale watch market and a significant number of new models the watchmaker is introducing, Solca said.
Competition from Apple Inc.’s smartwatch has also weighed on low-end brands of timepieces. Fossil Group Inc., a U.S. watchmaker, saw its stock slump 37 percent Nov. 13 after saying fourth-quarter sales may decline as much as 16 percent amid competition with wearable technology.
So Patek Phillippe, no word.  The article mentions Tag Heuer, but it all Swatch and low end watches  Again, low end is in trouble, not specialty.

Who cares about saving 20% tax on a $200 watch....  it's the 20% of a $5000 watch that matters,  a thousand bucks!


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