Big bonuses propel Swiss exports of watches >

23 november 2006

By Hugo Miller and Jacob Greber / Bloomberg News Published: November 22, 2006 

GENEVA: Exports of Swiss watches rose 16 percent in October to a record as retailers stockpiled timepieces in anticipation of holiday season spending by bankers and other wealthy consumers in Asia and the United States.

The value of watch exports climbed to 1.5 billion Swiss francs, or $1.2 billion, the Federation of the Swiss Watch Industry, based in Biel, said Tuesday. Sales in the year through October rose 12 percent compared with a year earlier.

Swatch Group, the world's largest watchmaker and owner of the Omega and Rado brands, and its rival Financière Richemont are benefiting as bankers look to spend annual bonuses on watches costing as much as $25,000.

Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns are likely to reward employees with $36 billion in total bonuses, an increase of 30 percent from last year, Bloomberg calculations show.Shares of Swatch surged 8.75 francs, or 3.4 percent, to close at 264 francs in Zurich, their biggest gain since Aug. 24. Richemont advanced 95 centimes, or 1.5 percent, to close at 66.65 francs.

Exports to the United States, the industry's biggest market, climbed 5.9 percent to 257.6 million francs in October, the federation said.

Sales of watches also are being helped by rising spending power in developing countries including India and China. Swiss shipments to Hong Kong, the No. 2 export market and a popular point of sale for Chinese consumers, surged 26 percent to 217.3 million francs, the federation said.

Shipments to Japan, the third-largest market, rose 9.6 percent to 137.4 million francs.