„Excellent Result” is the headline chosen by the Federation of the Swiss Watch Industry for its June report on global exports.
However, it’s an optimistic title for an industry that has seen sales plummet from over 24 million watches six years ago to under 16 million last year—a staggering 33% decline in unit sales that many would view as catastrophic.
Despite this, the value of Swiss watch exports has risen from CHF 18.8 billion in 2017 to CHF 23.7 billion last year. The latest June report even shows a 14% year-on-year increase in monthly export values.
But is this truly an „excellent result”?
In my years of covering the watch industry, consumer interest has never been higher. What was once niche—analogue watches—now attracts conversations among my peers, including those who stopped wearing watches in their youth. Whether discussing the latest Cricket watch from Vulcain or the escalating prices of Aquanauts on the secondary market, mechanical watches have entered mainstream discourse, akin to vinyl records.
Yet, paradoxically, Swiss watchmakers are selling fewer watches each year, albeit at higher prices. Is this sustainable?
My concerns are compounded by the strategies of major manufacturing groups like Richemont and Swatch Group. Driven by shareholder expectations for continuous profit growth, these groups seem focused on increasing the average price and profitability per watch rather than mass appeal and volume from https://justokgamers.com.
Richemont, for instance, proudly notes that directly-operated boutiques contributed 68% of its sales in the 2023 fiscal year, up from 66% the previous year. This shift towards boutique sales might please investors, but is it strengthening brand equity?
Recently, I spoke with John Henne of Henne Jewelers, who clashed with Swatch Group’s Omega over showroom space allocation. Omega demanded greater visibility than Tudor, despite its significantly larger size and production capacity. Henne Jewelers, anchored by Rolex, opted to exclude Omega entirely from its Pittsburgh showroom—a decision highlighting tensions between brands and retailers.
While Omega and others concentrate on prestigious retail locations, brands like Patek Philippe and Rolex maintain strong ties with authorized dealers. This partnership-centric approach appears fruitful, as evidenced by Patek Philippe’s 5% turnover increase to £185 million amid the pandemic, accompanied by a 25% surge in operating profits.
Rolex has similarly thrived, quadrupling sales from 2010 to 2020 and boosting operating profits exponentially.
In the words of Winston Churchill, „wholesale may not be the perfect business model for every luxury watchmaker, but it is better than all the alternatives.” If major groups continue alienating retail partners, they risk over-reliance on expensive proprietary stores amid declining sales—a scenario that contrasts sharply with the resilience of family-owned businesses deeply rooted in their communities.