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Watch brand Frederique Constant expects 25% drop in sales this year

ZURICH (Reuters) - Swiss watch brand Frederique Constant, owned by Japan's Citizen Watch Co 7762.T, is hoping to limit the fall in sales to 25% this year as September business was almost back to normal, its chief executive told Reuters.

“That’s what we’re aiming for,” Niels Eggerding said in an interview in Zurich this week.

Swiss watchmakers have been severely hit by the COVID-19 pandemic as stores stayed closed for weeks during lockdowns. Swatch Group's UHR.S sales almost halved in the first six months of 2020 and Richemont CFR.S posted a similar decline for the quarter to June.

The two industry heavyweights have not released trading updates since, but recent industry comments and watch export data are also pointing to a timid recovery.

“April was down 80%, May still around -50%, June almost back to normal, July and August down again, but September almost back to normal,” Eggerding said, adding the UK market was doing well while China remained difficult for the Geneva-based brand that sold 160,000 watches last year.

He said, however, that the company, acquired by Citizen in 2016, had cut some jobs and many employees were still working shorter hours under a Swiss state-backed programme to avoid layoffs.

Frederique Constant and sister brand Alpina were among the first Swiss watchmakers to embrace smartwatches five years ago, while many peers ignored this competition that has since taken a heavy toll on Swiss watch sales in the entry-price segment.

Frederique Constant's new Vitality Gents smartwatch costs just under 1,000 Swiss francs (846.40 pounds), while prices for the latest Apple Watch on Apple's AAPL.O website start at 419 francs. Smartwatch sales currently represent about 10% of Frederique Constant's sales.

Reporting by Silke Koltrowitz; editing by Emelia Sithole-Matarise

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