Exports of Swiss watches to the UK rocketed by 23.5% in August, while sales to Germany and Japan declined by 15% and 27% respectively. The contrasting performances propelled Britain to fourth in the global league table compiled by the Federation of the Swiss Watch Industry.
China also showed its first sign of recovery, posting a 29% rise in imports over August 2015; although it remains 20% below the same month in 2015. Swatch Group shares rose slightly this week as traders digested the news.
The remarkable UK performance has seen it rise from a position barely in the top 10 largest markets for Swiss watchmakers in 2014 to fourth in August this year.
In the year-to-date (January-August), the UK is in sixth place with total imports worth CHF 738 million. It is the only country in the top 20 to have registered any growth at all compared to the same eight months in 2015.
Worldwide, the Swiss industry is still in turmoil, having seen exports decline by 8.8% in August, alone, and by 10.9% in the first eight months of 2016.
Luxury watches costing more than £1000 have been the star performers in the UK, according to GfK data. The retail analyst’s monthly barometer, in association with WatchPro, shows luxury watch sales up 33.4% in August. Sales in the sub-£500 price range declined by around 10%, leading to overall UK sales growth in August of 15.3%
The Federation of the Swiss Watch Industry data shows that the ultra-luxury market is the country’s biggest problem. Exports of watches priced at over CHF 3000 (export price) declined by 14.4% in value.
There was better news in the more mainstream market, with world-wide exports rising by 9.3% for watches with an export price of CHF 200-500; exports for watches priced CHF 500-3000 also rose, by 4.9%.
The UK has clearly benefited from a summer spending spree driven by the post-Brexit weakening of the pound that has create a considerable difference in prices for luxury watches. German, French and American tourists, who rarely find watches cheaper in the UK, were splurging this year, retailers report.
Middle Eastern shoppers, not only in London but also in Manchester, have also been splashing the cash on luxury items. Most Middle Eastern currencies are pegged to the US dollar.