Nothing says 'wealth' like a luxury Swiss watch (or two), and despite the equity markets of developed 'wealthy' nations resurgent in their inflated-asset-based selves, it seems the demand for luxury watches remains subdued at best. While Asia appears to be a big drag (as we noted here [4]), Europe and the US are also plunging; but have no fear as African sales are up 25% (there's the real wealth effect?). The 'wealth effect' plan appeared to be working until the beginning of 2013 when, in spite of the almost unprecedented and inexorable rise in equities, Swiss watch exports collapsed to their worst levels since the great recession [5]. Transitory blip? Doesn't seem that way as the most recent YoY change is the worst in six months.
Spot the diminishing returns of the wealth effect... or can the wealthy have too many luxury watches?
[6]
and where is the growth?
[7]
Charts: Bloomberg and Swiss Watchmaking Industry [8]