Gloom grows as franc strengthens and smartwatches soar
Swiss watchmaker executives are more pessimistic than in the past four years as many see a threat from smartwatches while the strong franc is buffetting the industry, a Deloitte report has shown.
Deloitte found 41 percent of executives were negative about 12-month prospects and only 14 percent were positive, according to the study released yesterday. That’s the first time gloominess has beaten opti- mism since the market researcher began its annual study in 2012.
Swiss watchmakers have struggled with a shrinking Chinese market since the eastern country’s government started discouraging exuberant spending among officials in late 2012.
Franc biggest risk
The surge in the franc this year has also spoilt the mood, with 69 percent of executives citing it as the industry’s biggest risk.
Brands scrambled to add electronic functions to their products once the Apple Watch arrived in Swiss stores in June. Richemont’s Montblanc brand introduced an “e-Strap, while Swatch Group and Mondaine also announced smart devices.
And Apple is looking to add a touch of luxury to its smartwatch, evidenced by its collaboration with Hermès to make bands for the Apple Watch.
Richemont and Swatch shares were little changed in Zurich yesterday. They have declined 20 percent and 18 percent this year, respectively.
A separate survey by Re- search Now showed more than 60 percent of Chinese consumers planned to buy a smartwatch in the next year.
The percentage of watch executives considering smartwatches a growing competitive threat rose from 11 percent last year to 25 percent in 2015.
Deloitte’s survey was conducted with more than 50 watch executives earlier this year.
The Research Now survey had 3 000 participants in China, France, Italy, Japan, Switzerland and the US.