Hard Luxury Shows Resilience in China Despite Soft Goods Slump, Jefferies Says

Hard luxury goods such as watches and jewelry are demonstrating notable resilience in China, outperforming the struggling soft luxury sector, according to a new analysis from Jefferies. The report points to a rebound in Swiss watch imports as a key indicator of demand, even as other data points to broader consumer weakness.

China's Diverging Luxury Demand

In a sign of recovering high-end demand, China's imports of Swiss watches surged 15.8% in August. This marks a significant turnaround from the three-month moving average decline of 18.8% seen previously, Jefferies noted.

This contrasts with domestic retail figures, which show a more challenging environment. Chinese jewelry retail sales fell 17.5% in August, accelerating from the 10.1% decline recorded in July. The data suggests that while there are pockets of strength, the overall consumer backdrop remains mixed.

Global Trends and Brand Performance

Globally, interest in hard luxury remains stable. The category's share of global Google searches stood at 54.9% in September, consistent with levels seen in prior months, according to the report. Within the sector, Richemont-owned brands Cartier and Van Cleef & Arpels continue to gain market share.

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The two brands' combined share of global hard luxury website visits grew by approximately 190 basis points year-over-year to 60.5% through mid-August. This performance builds on strong gains seen earlier in the year.

Swiss Export Data Reveals US Weakness

Overall Swiss watch exports showed robust growth, rising 8.6% by value in August. This strength was driven by markets outside the United States, with global exports excluding the U.S. increasing 13.8%.

However, the data revealed a significant downturn in the U.S. market, which saw exports plummet 19.4% in August. Jefferies analysts cautioned that these figures may be distorted by U.S. tariffs, potentially causing delayed shipments or changes in transit points. Other key markets showed strong growth:

• United Kingdom: +46.1%
• Japan: +22.1%
• Hong Kong: +1.4%