Watch brands LVMH Hublot and Zenith expect sales to rebound in 2021
ZURICH (Reuters) – Swiss luxury watchmakers Hublot and Zenith, both belonging to French group LVMH, expect sales to rebound in 2021, after a difficult 2020 and a difficult start, said Monday their CEO.
Sales by Swiss watchmakers fell last year as stores were hit by closures linked to the pandemic and tourism, a major driver of the luxury watch industry, collapsed.
Some companies with a strong presence in mainland China have benefited from a rebound in demand, such as Richemont, which returned to growth in the last quarter of 2020.
“For Hublot, we expect sales growth of 15-20% this year … In China, we still have a lot of potential, we expect very strong growth of 30-50%,” the CEO told Reuters Ricardo Guadalupe in a telephone interview. during LVMH watch week.
Physical watch shows were canceled again in 2021, so LVMH watch brands are showing off their luxury watches practically this week.
TAG Heuer, the largest watch brand in the group, is not participating, but its new CEO FrÃ©dÃ©ric Arnault said in a video message that the brand had been “very resistant” last year.
Guadalupe de Hublot said last quarter sales growth was better than third for all of LVMH’s watch and jewelry businesses as well as for Hublot. LVMH, the world’s leading luxury goods group, is due to publish its annual results on Tuesday.
Guadalupe said Hublot’s growth came from mainland China, while Macau had also improved since October. Hong Kong was always difficult, due to the political situation, but Japan and the Middle East were doing well, he said.
Zenith CEO Julien Tornare said the brand’s successful turnaround was interrupted last year by the pandemic, but Japan, China and the United States are expected to fuel growth this year.
Tornare said the problems in Hong Kong, formerly the No.1 market for Swiss watches, would not go away with the end of the pandemic and were a major headache for watchmakers.
Meanwhile, Guadalupe said Western Europe remains difficult due to the lack of tourists. Store closures linked to COVID-19 restrictions are currently hitting sales in Switzerland, Germany, the Netherlands and the United Kingdom.
He said the brand is looking to further streamline its distribution network in the coming years, but will open four new stores in second-tier cities in China this year.
A monitoring system helped Hublot avoid the build-up of excess inventory at retailers, but in some hard-hit areas, such as cruise ships, the brand was ready to take back unsold timepieces, Guadalupe said.
Online sales of Hublot watches, which cost an average of 18,000 euros ($ 21,864.60), are still modest and are expected to reach 2-3% of total sales this year. Zenith, whose watches cost an average of 10,000 Swiss francs, sold around 5-6% of its watches online last year.
($ 1 = 0.8232 euros)
Editing by Michael Shields and Jane Merriman