Is the Watch Industry Weathering the Storm, or Just Eyeing the Horizon? A Deep Dive into the Turbulent World of Timepieces
The watch industry, a timeless bastion of tradition and craftsmanship, is currently navigating a tempest of change. Recent financial reports paint a picture that's both encouraging and unsettling, leaving us wondering: has the worst passed, or are we simply in the eye of the storm?
The Big Players: A Tale of Diverging Fortunes
Watch expert Robin Swithinbank, in his bi-monthly insights, dissects the industry's complex landscape. January's financial results revealed a mixed bag: Richemont's watchmakers are experiencing growth, LVMH's are holding steady, while Swatch Group faces a downturn.
But here's where it gets interesting: Swiss watch exports, after four months of decline, saw a surprising December surge, softening the annual drop to a less alarming 1.7%. This suggests a potential shift, but the picture remains far from clear.
The Strong Get Stronger, Leaving Others Behind
A closer look reveals a widening gap. Top brands are pulling ahead, leaving their competitors scrambling to catch up in a market that remains sluggish. This is particularly challenging when deeper-pocketed brands are ramping up marketing efforts.
And this is the part most people miss: Industry data lacks transparency, with conglomerates like Richemont and LVMH not disclosing individual brand performance. Richemont, for instance, reported a 7% increase in specialist watch sales, but this excludes Cartier's watch division, which saw a robust 14% growth. This opacity makes it difficult to gauge the true health of individual brands.
Controversy Brews: Tariffs and Their Impact
The tariff landscape further complicates the picture. A rush to beat incoming tariffs led to a 4.6% increase in exports to the US in 2025. However, this doesn't reflect actual sales, and bloated US retailer inventories could lead to a slowdown in exports this year.
A Hidden Crisis: The Plight of Suppliers
While brands focus on price hikes to protect margins, the real victims of this turmoil are the suppliers, the unsung heroes behind every Swiss watch. Plummeting production volumes, down nearly 5% last year, threaten their survival, with many relying on government support. The industry braces for potential closures, buyouts, and further vertical integration by major brands.
A Glimmer of Hope on the Horizon?
There are signs of improvement. The slump in the Chinese and Hong Kong markets, once major drivers, seems to be easing. While a full rebound is unlikely this year, watchmakers are relieved to see the decline slowing. Meanwhile, new markets like the UAE, India, and Spain are showing promising growth, offering a ray of hope for the future.
Rolex Shakes Things Up: A Controversial Alliance
In a move that sent shockwaves through the golfing world, Rolex, the epitome of establishment in the sport, partnered with LIV Golf, the Saudi-backed breakaway league. This unexpected alliance, seen as a vote of confidence in LIV's future, has ruffled feathers within the PGA Tour and DP World Tour, both traditionally backed by Rolex. This controversial decision raises questions about brand loyalty and the evolving landscape of sports sponsorship.
THMG's Watch Ambitions on Hold: What's the Story?
Adding to the intrigue, The Honourable Merchants Group (THMG), founded by former Audemars Piguet CEO François-Henri Bennahmias, has unexpectedly delayed the launch of its watchmaking division. Citing a shift in focus towards funding, Bennahmias hints at challenges in acquiring or investing in watch companies. This sudden pause leaves us wondering about the future of THMG's watch ambitions and the overall health of the industry.
The Storm Rages On: Questions Remain
While there are glimmers of hope, the watch industry's future remains uncertain. Will the strong brands continue to dominate, leaving smaller players behind? How will tariffs and shifting market dynamics impact the industry's long-term health? And what does Rolex's surprising partnership with LIV Golf signify for the future of sports sponsorship? Only time will tell.
What are your thoughts? Do you think the watch industry is on the mend, or is this just a temporary reprieve? Share your insights in the comments below!
