China Import Tax Cut Could Boost Profits For Swiss Watchmakers
12 Marzo 2012 - 3:52AM
Noticias Dow Jones
Moves by China to potentially reduce import taxes on consumer
and luxury goods have been welcomed by members of the Swiss watch
making industry, who say it could further boost sales in what is
their third biggest market.
China has been the main driver behind the increase in Swiss
watch exports, which reached a record 19.3 billion Swiss francs in
2011. Chinese English-language newspaper China Daily has cited Wei
Jianguo, a former deputy commerce minister and member of the
National Committee of the Chinese People's Political Consultative
Conference, as saying that there will be at least two rounds of
reductions on import taxes on consumer and luxury goods.
"This is good news," Francois Thiebaud, chief executive of
Swatch Group's Tissot brand and president of the Swiss exhibitors
at this year's Baselworld watch and jewellery show. He said a
reduction in import duties, which range from 10% to 25%, would
particularly help prestige brands like Swatch Group AG's (UHR.VX)
Omega.
According to the Beijing-based World Luxury Association, Chinese
tourists spent $7.2 billion on luxury merchandise outside the
country during the 2012 Chinese New Year holiday, up 29% from a
year ago.
Olivier Bernheim, chief executive of privately-held watchmaker
Raymond Weil, said the Chinese government had realized that if they
lift some of the customs barriers, more of this money would be
spent in China.
Eddie Lau, an analyst at Citi, said companies such as Prada SpA
(PRDSY) Coach Inc (COH), Hugo Boss AG (BOS.XE), LVMH (MC.FR),
Swatch and Richemont, could benefit
"They should either see better margins or stronger sales volume
if they decide to reduce the retail price," he said.
-By John Revill, Dow Jones Newswires; +41 43 443 8042 ;
john.revill@dowjones.com
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