news of swiss watches

COLLAPSE IN EXPORTS

Swiss watchmakers export some 95 percent of production.

Swiss watch exports fell 28 percent in February on the year when adjusted for price swings, while exports for the economy as a whole fell 16 percent. The watch sector was the third hardest hit after the textile and metal industries.

In nominal terms, watch exports were down 22 percent -- the second consecutive monthly drop of this size and the fourth month in a row of declining demand from abroad.

MASS DEMAND FADES

Exports of timepieces costing between 500 and 3,000 Swiss francs almost halved in value terms in February and demand for watches costing between 200 and 500 francs slumped by a third.

Exports of watches costing more than 3,000 Swiss francs fell by some 7 percent.

U.S. MARKET CRUMBLES

European markets performed better than the average, with demand in Italy even growing over 2 percent in February. But exports to the United States, the second-largest market for the Swiss watch industry, almost halved.

Exports to Hong Kong, the biggest market for Swiss watches, fell 4 percent, contrasting with China, down 29 percent and the United Arab Emirates, down 38 percent.

STRONG FRANC

The franc has risen some 10 percent on a trade weighted basis since the start of the financial crisis, putting pressure on all Swiss exporters and Swatch Group has said exchange rate fluctuations are one of its main concerns.

Swatch Group recorded an exchange rate loss of 233 million francs in 2008, its highest since its foundation in 1986.

DISCOUNTING

Many retailers have started to slash prices for watches as they look to get rid of their stock. Some retailers are struggling to stay in business as they scramble to get enough cash.

JOB CUTS

The Swiss watchmaking employers association estimates that around 500 jobs, or 1 percent, have been cut so far.

Ebel , Zenith , Chopard, Maurice Lacroix and Girard Perregaux have all started to cut jobs, while Cartier has introduced shorter working hours at one of its factories.

Until 2008, many companies were facing bottlenecks as they did not have enough qualified watchmakers to keep up with booming demand. Between 2002 and 2008, the number of jobs in the Swiss industry grew by 25 percent to 50,000.