Breitling CEO ‘quite confident’ luxury sector’s China-led slowdown has hit bottom

Breitling AG’s CEO Georges Kern is “quite confident” the luxury industry has hit bottom, amid a China-led economic slowdown that has taken a toll on high-end retailers around the world.

“The problem of the Swiss watch industry, of many brands, is that some of them are dependent on the Chinese market,” he said in an interview with Bloomberg Television on Wednesday. “You need to have a plane with four, five engines. If one engine doesn’t work, just hope that the other four engines are working.”

Swiss watchmakers last week cautioned about a negative outlook for the industry, which has been grappling with the pullback from once-flush shoppers in China, the second-biggest market after the US, and a cornerstone of the global luxury market. The country represents 6 per cent of Breitling’s sales, according to Kern.

Buyers of premium timepieces curbed spending as interest rates soared and geopolitical conflicts intensified, and China sales plunged for watch giants like Swatch Group AG, which owns Omega, and Richemont, the group behind brands Vacheron Constantin and IWC.

Bright spots Kern cited include India, where luxury infrastructure has been boosted by more distribution and the opening of new shopping centres that have made it easier for people who once shopped abroad to buy at home. Breitling is opening two or three more boutiques in the country, he said, without giving a time frame.

“The market is there, the wealth is there,” he said. “Many luxury companies are putting lots of effort into that market, including ourselves.”