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Article from Watchtime
Downturn Batters Watch Industry
The evidence is mounting that the long and bitter global recession is taking a severe toll on the Swiss watch industry. With demand for watches down nearly everywhere, Swiss watch firms are cutting production and jobs. So far this year, Swiss watch firms have laid off more than 1,000 people, according to Swiss press reports.
The latest round of job cuts occurred at the Franck Muller Group, headquartered outside of Geneva. The firm announced in early June that it would lay off nearly half (47%) of its 428-person workforce by the end of the month. Franck Muller joins a growing list of firms that have announced job cuts this year. The list includes Ebel, Zenith, Chopard, Maurice Lacroix, Girard-Perregaux, and Roger Dubuis. Also hard hit are firms that supply watch companies. Metalor, the precious metals specialist, has cut 50 of the 475 jobs in the division that supplies cases, bracelets, bridges, hands and other components to watch companies. Geneva’s Le Temps newspaper estimates that 1,000 jobs had been cut in Switzerland’s Jura Mountain watchmaking region by the end of March. More watch industry layoffs are expected.
Other firms have put workers on short time. Earlier this year, Cartier introduced shorter work hours at the smallest of its three Swiss factories. In May, Cartier expanded the program. Nearly half (500 workers) of the firm’s 1,100 employees in Switzerland began working 40% of their normal hours, according to the Swiss paper, L’Agefi. Most of these workers were at its main production facility in La Chaux-de-Fonds. Cartier’s shorter-hours program is expected to last three months.
The layoffs are a response to a precipitous drop in Swiss watch demand in 2009. In the January through April 2009 period, the latest month for which data is available, Swiss watch exports have fallen 28% in units and 24% in value versus the same period in 2008, according to data issued by the Federation of the Swiss Watch Industry. The slowdown in truly global: only three of Switzerland’s top 30 markets showed export growth. (The three were South Korea, Switzerland’s 12th largest market, #16 Australia, and #30 Oman.) All the rest suffered declines versus 2008. Several markets reported severe drops; four of Switzerland’s top 10 markets were down by 36% or more, including the United States, Switzerland’s second most important market, which was down 42%. The U.S. had the third worst export performance, after Russia and Thailand. Russia, which was a red-hot market for tourbillon and other high-complication watches with six-figure price tags just a year ago, is down a staggering 61.5% this year.
Switzerland is bracing for a dismal export performance for the full year. Citi analyst Thomas Chauvet told Reuters at the end the May, “We forecast a 15% decline in Swiss watch exports in 2009, the worst performance in 25 years.”
The Swiss watch industry is not the only one suffering. Each of Japan’s Big Three watch companies reported declines in watch sales and profit for the fiscal year ended March 31. The Citizen Group reported a 5.3% drop in sales for its watch division to the yen equivalent of $1.35 billion and a 57.2% drop in operating profit to $92.6 million. Seiko’s watch business declined 20% in net sales to $1.06 billion with an 82% drop in operating profit to $16.3 million. Casio reported a 7.6% drop in net sales of timepieces to $814 million; it did not release watch division profits.
Downturn Batters Watch Industry
The evidence is mounting that the long and bitter global recession is taking a severe toll on the Swiss watch industry. With demand for watches down nearly everywhere, Swiss watch firms are cutting production and jobs. So far this year, Swiss watch firms have laid off more than 1,000 people, according to Swiss press reports.
The latest round of job cuts occurred at the Franck Muller Group, headquartered outside of Geneva. The firm announced in early June that it would lay off nearly half (47%) of its 428-person workforce by the end of the month. Franck Muller joins a growing list of firms that have announced job cuts this year. The list includes Ebel, Zenith, Chopard, Maurice Lacroix, Girard-Perregaux, and Roger Dubuis. Also hard hit are firms that supply watch companies. Metalor, the precious metals specialist, has cut 50 of the 475 jobs in the division that supplies cases, bracelets, bridges, hands and other components to watch companies. Geneva’s Le Temps newspaper estimates that 1,000 jobs had been cut in Switzerland’s Jura Mountain watchmaking region by the end of March. More watch industry layoffs are expected.
Other firms have put workers on short time. Earlier this year, Cartier introduced shorter work hours at the smallest of its three Swiss factories. In May, Cartier expanded the program. Nearly half (500 workers) of the firm’s 1,100 employees in Switzerland began working 40% of their normal hours, according to the Swiss paper, L’Agefi. Most of these workers were at its main production facility in La Chaux-de-Fonds. Cartier’s shorter-hours program is expected to last three months.
The layoffs are a response to a precipitous drop in Swiss watch demand in 2009. In the January through April 2009 period, the latest month for which data is available, Swiss watch exports have fallen 28% in units and 24% in value versus the same period in 2008, according to data issued by the Federation of the Swiss Watch Industry. The slowdown in truly global: only three of Switzerland’s top 30 markets showed export growth. (The three were South Korea, Switzerland’s 12th largest market, #16 Australia, and #30 Oman.) All the rest suffered declines versus 2008. Several markets reported severe drops; four of Switzerland’s top 10 markets were down by 36% or more, including the United States, Switzerland’s second most important market, which was down 42%. The U.S. had the third worst export performance, after Russia and Thailand. Russia, which was a red-hot market for tourbillon and other high-complication watches with six-figure price tags just a year ago, is down a staggering 61.5% this year.
Switzerland is bracing for a dismal export performance for the full year. Citi analyst Thomas Chauvet told Reuters at the end the May, “We forecast a 15% decline in Swiss watch exports in 2009, the worst performance in 25 years.”
The Swiss watch industry is not the only one suffering. Each of Japan’s Big Three watch companies reported declines in watch sales and profit for the fiscal year ended March 31. The Citizen Group reported a 5.3% drop in sales for its watch division to the yen equivalent of $1.35 billion and a 57.2% drop in operating profit to $92.6 million. Seiko’s watch business declined 20% in net sales to $1.06 billion with an 82% drop in operating profit to $16.3 million. Casio reported a 7.6% drop in net sales of timepieces to $814 million; it did not release watch division profits.
. And even if i willing to pay, also unlikely to be able to get one in view of the limited production quantiities for this new models
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