Watches worth £1 billion (CHF 1.3 billion) have been re-imported to Switzerland, according to a Bloomberg analysis of customs data.
The ongoing global slowdown in sales of luxury Swiss watches has led to a glut of supply in the retail channel, particularly in Asia, leading to an unprecedented level of businesses returning unsold inventory.
“As the rich purchase fewer Swiss watches, producers have been buying back unsold inventory from retailers, and that’s showing up in export data. Almost CHF 1.3 billion francs worth of timepieces were sent back to the country in the first 10 months of the year as the industry slump deepens. That’s more than three times as much as the 398 million francs re-imported in 2002, according to customs data,” says Bloomberg reporter Thomas Mulier in Geneva.
In an annual study of the watch industry published by accounting specialist Deloitte in September, a survey of 3000 executives in the global watch industry revealed little optimism that business would improve next year.
Among executives working in the Swiss watch industry, 82% had a pessimistic outlook of the next 12 months; double the percentage when the same question was posed in 2015 (see graph at the top).
The latest export data from the Federation of the Swiss Watch Industry showed global sales slumped by 16.4% in October. For the first 10 months of 2016, exports fell by 11%.
The UK has been the only large market that has registered growth this year, with imports up 9% in October and 4.5% in the first 10 months of 2016.