ZURICH (Reuters) – Swiss luxury watchmaker Hublot, part of the French group LVMH, expects sales to grow 15-20% in 2021, led by China, after a tough 2020 and a challenging start to the new year, has its chief executive officer said Monday.
Sales by Swiss watchmakers fell last year as stores were hit by pandemic-related closures and tourism, a major driver of luxury watch sales, collapsed.
Some companies that have a strong presence in mainland China have benefited from this 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%,” CEO Ricardo Guadalupe told Reuters in a telephone interview during LVMH watch week.
Guadalupe said last quarter sales growth was better than third for Hublot, but also for LVMH’s watch and jewelry business in general. LVMH, the world’s largest luxury goods group, will release full year results on Tuesday.
He said the growth had come from Mainland China, while Macau has 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 remains difficult due to the lack of tourists,” Guadalupe said. Closure of shops related to COVID-19 restrictions are currently affecting sales in Switzerland, Germany, the Netherlands and the UK.
He said the brand was 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 buildup of excess stock at retailers, but in some affected areas, such as cruise ships, the brand was poised to take back unsold watches, Guadalupe said.
Online sales of Hublot watches, which cost an average of 18,000 euros ($ 21,864.60), are still meager and are expected to reach 2-3% of total sales this year.
($ 1 = 0.8232 euros)
Reporting by Silke Koltrowitz; Editing by Michael Shields and Jane Merriman