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 Independent watchmakers Audemars Piguet, Parmigiani, Greubel Forsey
and Richard Mille, told Reuters at an industry show they were
expecting higher sales in 2014 than last year.
The Chinese government's crackdown on the use of luxury goods as
bribes and illegitimate gifts has hurt sales of luxury watches in
mainland China, the third largest market for Swiss watch exports.
"The biggest dark cloud on the horizon is a potential Chinese
bubble, we don't know if it's going to burst or not," Jean-Marc
Jacot, head of independent high-end watch brand Parmigiani told
Reuters in an interview on Tuesday.
"We'll all be hit terribly if something happens in China, let's hope
the Chinese government keeps things in check," he said at the SIHH
watch fair that unites Richemont <CFR.VX> brands and a handful of
independents in Geneva this week.
Hong Kong and mainland China together accounted for about a quarter
of Swiss watch exports. In the eleven months to November the total
market was worth 20 billion Swiss francs ($22 billion). Exports to
these two markets fell 6 and 15 percent, respectively, in that
period.
Exane BNP Paribas analyst Luca Solca said he estimated that the
luxury watchmakers were vulnerable to a slowdown because sales in
China, as well as to Chinese tourists overseas, generated half of
their revenue.
Richemont, which owns the Cartier brand, said last week that its
sales in China were still in negative territory in the three months
to December, while Swatch Group <UHR.VX> was more optimistic, saying
its Omega brand was about to recover in China.
Vacheron Constantin's CEO, Juan-Carlos Torres, said many watchmakers
took buoyant Chinese growth for granted.
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"You have to go slowly in China and work for the long term. We did
not only go to first-tier cities, but also to second- and third-tier
cities with local retail partners," Torres said, adding this would
help the brand grow sales in China this year. Watchmakers said the
second biggest market for Swiss watches, the United States, should
see a tepid recovery gather momentum this year. Exports rose 2.4
percent between January and November last year.
Jasmine Audemars, chairwoman of Audemars Piguet, the biggest
independent watchmaker at the fair, said the brand was doing well in
the U.S. market and things should get better.
Parmigiani's Jacot said: "The United States (is) coming back, this
year we'll see the real rebound."
Overall, Audemars Piguet is expecting single-digit growth this year,
while Parmigiani expects to grow about 15 percent after 17 percent
last year. Richard Mille, another high-end player, is aiming for 150
million Swiss francs ($165 million) in 2014 sales after 132 million
in 2013. ($1 = 0.9094 Swiss francs)
(Editing by Louise Heavens)
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