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

It's one step forward, two steps back for the makers of bling watches.

Swiss watch exports fell 5.7 percent in April, after March broke a 21-month streak of declines, the Federation of the Swiss Watch Industry said on Tuesday.

Off Trend
Swiss watch exports fell again in April after recovering in March
Source: Federation of the Swiss Watch Industry

It's possible the underlying picture isn't quite that bad: April included three fewer working days. If you adjust for the calendar effect, exports probably rose about 7.5 percent, roughly similar to March's increase, according to Exane BNP Paribas analysts.

Diverging Fortunes
China is recovering, but demand in Hong Kong and the U.S. remains volatile
Source: Federation of the Swiss Watch Industry

All the same, there were wild variations in regional demand: China was back in strong growth, while the U.K. was boosted by the slump in sterling. But exports to Hong Kong and the U.S., the two biggest markets in April, fell into decline.

Marking Time
Two of the biggest Swiss watch markets were disappointing
Source: Federation of the Swiss Watch Industry

The biggest drop in exports was in timepieces costing less than 200 Swiss francs ($206) -- suggesting smart watches may be starting to hurt cheaper models. That's bad news for the core Swatch brand.

The mixed picture shows that the recovery in the luxury won't take the straight line that share prices are factoring in. Shares in Cie Financiere Richemont SA are up 42 percent over the past year, with Swatch Group AG up 34 percent.

Gaining Time
Watch maker valuations have surged on expectations of a recovery in demand
Source: Bloomberg

The two companies' forward price-earnings ratios are at 10 year highs, and are ahead of their Bloomberg Intelligence luxury peer group.

Some of that elevation is due to a collapse in their profits -- but it also shows that investors are betting on a bounce back in bling watches. Tuesday's data is a reminder, though, that they shouldn't expect to set their watches by it. 

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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