Vontobel forecasts zero growth in 2015 replica watches UK

Vontobel forecasts zero growth in 2015 replica watches UK

Vontobel’s annual report on Swiss replica watchmaking is as eagerly awaited as “Le Messager Boiteux“, the country’s oldest almanac. As far as forecasts go, the private bank is predicting zero growth for the sector this year.

The Zurich bank has published the findings of three of its analysts in its eagerly anticipated annual report on the Swiss watch industry, titled Vontobel Luxury Goods Shop – Watch Industry. As always, the survey lifts the lid on secrets many would rather keep under wraps. Watch manufacturers are renowned for being less than forthcoming with information about their business. Vontobel lifts a corner of this veil of secrecy with its listings of production volumes and sales by the sector’s various players. Granted, these are only estimates but given the lack of published figures, listed companies included, they are seen as a reliable indication of which way the wind is blowing.

Advantage Richemont

The report looks ahead to a less than glittering year, as Vontobel forecasts export sales of CHF 22.3 billion, meaning the Swiss Rolex Replica watches industry will post zero growth in 2015. Coming after minimal increases of 1.9% in 2013 and again in 2014, the industry looks set to mark time in more ways than one. In what amounts to a rather morose climate, the Zurich bank is clear about where its preference lies in terms of share value, clearly preferring Richemont over Swatch, with the former expected to benefit from its dominant position in the jewellery segment, an activity that accounts for 30% of its sales and 50% of operating profits.

With production facilities located for the most part in Europe and the majority of sales in dollars, Richemont seems well positioned to improve profitability. This was already the case in the previous fiscal year, ended March 31st 2015, when operating margin rose by 140 base points to 25.6% for sales which climbed 4% to EUR 10.4 billion. As Vontobel points out, the Richemont group put in the second-best performance within the luxury segment over five years to end 2014, thanks to average annual growth of 10.8% (versus 13.4% for Hermès). Exchange rate volatility nonetheless weighed heavily on the group’s accounts last year, leading to a loss of EUR 686 million and a subsequent 35% fall in net profit to EUR 1.3 billion. Despite this, Vontobel remains confident, along with the stock exchange which has barely sanctioned the impact of currency swings on Richemont’s bottom line.

Group efforts

Even so, from a purely watchmaking perspective and based on 2014 figures compiled by Vontobel, Swatch Group claims the biggest share of the global market with 19% of sales (CHF 7.6 billion) ahead of Richemont (16% / CHF 6.5 billion) and Rolex (12% / CHF 4.8 billion). Fossil takes a surprise fourth place, having cornered 6.3% of the market; the group sold 35 million fake watches UK in 2014 for CHF 2.5 billion. This is more than total Swiss production of 28.5 million watches. The Japanese continue to give the Swiss a run for their money: Seiko, Citizen and Casio together generated sales of CHF 3.8 billion, cutting them a 10% share of the cake.

As for brands, Rolex takes pole position with CHF 4.5 billion in sales, well ahead of Omega and Cartier (see chart). Better still! According to Vontobel, the “brand with the crown” has succeeded in pulling even further ahead thanks to an excellent performance in last year’s buoyant American market, whereas Omega and Cartier are more exposed to the more sluggish markets of Hong Kong and China. To conclude, Vontobel notes that Swatch Group owns four of the top ten Swiss replica watches brands in terms of sales, and Richemont six of the top twenty.

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