Watchmaker Says Fears Of Significant Drop In China Luxury Demand Overblown#
Swatch boutique at Shanghai's Swatch Art Peace Hotel
Responding to recent reports that project a slowdown in China's retail market, this week Swatch head Nayla Hayek tells Reuters that fears of a hard landing in the World's fastest-growing luxury market are overblown.
"I believe that as usual the movement in our share price is linked to speculation and hysteria about the euro. For the moment, we do not see any difference in growth in China," Hayek said on the sidelines of a press conference in Zurich.
Swiss watchmakers have so far not been hit by slowing consumer demand as China's growing taste for luxurious timepieces more than makes up for any weakness in mature markets.
Though the economic growth in China is expected to be slow, but there is no signs of hard landing, an analyst said in a recent note. While we can't speak for Swatch, among high-end segments in China, Swiss watchmakers should remain mostly unscathed even if a slowdown in Chinese demand occurs -- which, in itself, is far from certain. The fundamentals driving demand for watches at the luxury end of the spectrum: a desire for prestige, their investment value, status as a hedge against inflation, will likely hold true for years.