By Andrea Figueras

Exports of Swiss watches recorded a marked slowdown in February, reverting positive results seen in the prior month, due to declines in key markets.

Total exports of Swiss timepieces dropped 8.2% to 1.98 billion Swiss francs ($2.26 billion) in February compared with the prior-year period, according to data from the Federation of the Swiss Watch Industry, known as FH. The overall decrease for the first two months of 2025 was of 2.4%.

"Most of the main markets saw significant declines in February," the industry body said. The U.S., the leading market for watch exports, reported a drop of 6.7%, while exports to China continued to fall, dropping by 25%.

FH previously anticipated a negative outlook for the rest of the year.

Luxury companies are grappling with a slowdown in demand after the postpandemic surge in spending on high-end goods. The downturn is particularly steep in China, once a growth engine for luxury names, as Chinese consumers closed their wallets in light of the country's economic challenges.

Given weakness in China, the U.S. was set to become a bright spot for high-end brands, helped also by a more favorable context following the end of the uncertainty around the presidential election.

However, analysts at RBC Capital Markets said the acceleration seen in the U.S. during the fourth quarter was supported by one-off factors that are unlikely to sustain in the first three months of 2025. This is partly due to the current trade environment with the implementation of tariffs.

Only watches with an export price below 200 Swiss francs posted a positive result, while timepieces in other price segments suffered more or less marked declines.

This contrasts with updates from previous months, when the upper-end segment showed resilience. Despite the slowdown seen in February, this segment remains the key growth driver in the long term, Citi analysts said in a note.

The is consistent with a wider trend in the luxury industry, with brands that cater to the most affluent clients performing better, as these consumers have continued to splurge on pricey goods despite the tougher macroeconomic environment.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

March 20, 2025 05:18 ET (09:18 GMT)

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