ZURICH (Reuters) – Swiss luxury watchmaker Hublot, part of French group LVMH, expects sales to grow 15-20% in 2021, driven by China, after a difficult 2020 and a challenging start to the new year, its chief executive said on Monday.
Swiss watchmakers’ sales slid last year as stores were affected by pandemic-related closures and as tourism, an important driver of luxury watch sales, collapsed.
Some companies which have a strong presence in mainland China have benefited from a rebound in demand, such as Richemont, which returned to growth in the final quarter of 2020.
“For Hublot, we expect 15-20% sales growth this year … In China, we still have a lot of potential, we expect very strong growth of 30-50% there,” CEO Ricardo Guadalupe told Reuters in a phone interview during LVMH watch week.
Guadalupe said sales growth in the final quarter had been better than in the third for Hublot, but also for LVMH’s watch and jewellery business overall. LVMH, the world’s biggest luxury goods group, is due to publish full-year results on Tuesday.
He said growth had come from mainland China, while Macau had also improved since October. Hong Kong was still difficult, due to the political situation, but Japan and the Middle East were doing well, he said.
“Western Europe stays difficult due to the lack of tourists,” Guadalupe said. Store closures related to COVID-19 restrictions are currently hitting sales in Switzerland, Germany, the Netherlands and the United Kingdom.
He said the brand was looking to further streamline its distribution network in the coming years, but would open four new stores in second-tier cities in China this year.
A monitoring system helped Hublot to avoid excess stock build-up 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 18,000 euros ($21,864.60) on average, are still small and are expected to reach 2-3% of total sales this year.