Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

Just as a Jaeger-LeCoultre watch provides a (relatively) subtle indication of the wearer's wealth, the luxury market's starting to show similarly restrained signs of recovery.

It's still not time to get too excited. Swiss watch exports fell for the 15th consecutive month in September, the longest slump since monthly records started in 1988. But the drop was less steep than in each of the preceding six months.

On Watch for Recovery
Swiss watch exports have fallen for the 15th consecutive month but the decline is less steep
Federation of the Swiss Watch Industry

Hong Kong remains stubbornly weak, with exports to the region down almost 40 percent in September. But the U.S improved, with exports to the country increasing for the first time since April.

And Brexit Britain continues to stand out, with its Swiss watch imports rising 32 percent in September, as foreign shoppers seize on the weak pound and flock to London. According to a report from consultants at Bain and the Italian luxury association Altagamma, tax-free spending in the U.K. has risen this year, compared with declines in Germany, France and Italy.

Brexit Boost
Tourists are flocking to the U.K. to snap up luxury bargains after the decline in sterling
Source: Global Blue, Bain, Altagamma

There are other positive signals. Last week, LVMH reported better than expected quarterly sales. Luxury brands think China is stabilizing, while Prada's even seen improvements in Hong Kong and Macau.

The industry is also approaching the period when it has the easiest comparisons with last year. The second half of 2016 will compare with the period in 2015, when Chinese shoppers were put off from travelling to Europe after the Paris terrorist attacks. Flattering comparables can be misleading, but it's an easier sell to the market.

Meanwhile, a Clinton victory in the U.S. election would also provide stability in a crucial market.

Shares in LVHM have already risen 27 percent since their low after the Brexit vote. The group's broad-based portfolio includes fashion and leather goods, but also wine and spirits and beauty -- expected to be the fastest-growing part of the market this year. So it should continue to benefit. Kering should also be placed well given the nascent turnaround at Gucci.

Sitting Pretty
Beauty is forecast to grow faster than any other luxury category this year
Source: Bain, Altagamma

In watches, the 500 to 3,000 Swiss Franc category performed best, boding well for Swatch's Longines and Omega brands. That said, the 200 to 500 Swiss Franc category was the worst performing, not so good for the lower-priced Swatch brands.

The picture's also mixed for Richemont. While the export decline in the over 3,000 Swiss Franc category -- in which Richemont dominates -- was broadly in line with the overall market, precious metal watches were among the worst performers.

Shares in both Richemont and Swatch have stumbled this year, though they have made up ground over the past month. Swatch will benefit if recovery in the mid-priced ranges is sustained. But Richemont has been more aggressive in cutting costs, which should help it better navigate the still choppy waters.

Indeed, any recovery won’t be straightforward. According to Bain and Altagamma, the luxury market will decline 1 percent in 2016, making it the worst year since the financial crisis. Swatch and Richemont have returned to pretty opulent price to earnings ratios. But everything still depends on them polishing up next year's profit.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Andrea Felsted in London at

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