At the end of July, the French luxury market leaders LVMH and Kering presented their financial reports.
After -46.1% losses of Swatch Group, indicators for the watch industry of these groups looked more favorable. However, it should be taken into account that LVMH does not separate the watch and jewelry division, and jewelry felt much better during the crisis, so the total sum of the two segments looks more favorable.
In the first six months, sales of Hublot, TAG Heuer, and Zenith watches, Chaumet and Fred jewelry, and balancing on the edge of two worlds Bvlgari decreased by 38% from 2.1 to 1.3 million euros. This figure is quite comparable to the 35.3% decline for all Swiss watch exports over the past period.
Most of the money comes from Asia, which is responsible for 41% of the LVMH watchmakers and jewelers revenue. Despite the difference of quarantine periods for continents, the central regions retained their share in total revenue: Europe follows Asia with 21% (with a separately calculated France contribution -4%), Japan with its 12%, and the United States with 7%.
Unlike its competitors, LVMH managed to present its new products in Dubai and attract attention to the activities of watch houses by implementing their advertising and charity projects. Bvlgari takes the lead in this area: the company has established a Fund to support coronavirus research financially, launched a marketing campaign with Naomi Watts and Zendaya, and presented a new High Jewelry collection in Abu Dhabi.
Kering, which portfolio includes such luxury brands as Gucci, Saint Laurent, and Balenciaga, also owns brands Ulysse Nardin and Girard-Perregaux. The company does not provide separate figures for sales in its jewelry and watch the segment. However, their financial report claims that the watch category experienced a more challenging time than the rest divisions due to the overall market situation even before the coronavirus conquered the world.
Kering analysts agree with the estimates of Bain & Company and Altagamma, whose experts announced that the watch market would suffer more than others this year. The May forecast shows an annual loss of 25% for watches and 23% for jewelry. However, everything will depend on how the virus behaves in the second half of the year and how positive trends of re-opening stores in China will spread to other markets.