Fashion Events

Upper Values, Decrease Volumes: The Unused Circumstance of the Guard Sector



Is the clock ticking for the Swiss guard trade? That is determined by the way you learn the figures.

Judged by way of its revenues, it’s booming. In line with the Federation of the Swiss Guard Trade (FH), in 2022 Swiss guard firms exported watches with a worth of 24.8 billion Swiss francs ($27.6 billion), an all-time report and a year-on-year bounce of eleven.4 p.c.

However on the similar week, the trade is haemorrhaging volumes. In 2015, Switzerland exported 28.1 million watches, a determine the FH mentioned had fallen to only 15.8 million ultimate yr.

Some analysts say the trade won’t ever recuperate misplaced volumes, and that the tide determine is propped up by way of a shrinking pond of teams and types, in particular Rolex and the Swatch Workforce.

In March, Morgan Stanley excepted a file that estimated Rolex and the Swatch Workforce — which owns Omega, Longines and Tissot, amongst others — accounted for round 80 p.c of Swiss guard exports by way of quantity. That integrated one million of Swatch Workforce’s MoonSwatch, a $260 mash-up between Swatch and Omega that led to a purchasing frenzy on foundation ultimate March.

“We have lost half of the volume of the Swiss watch industry in only 20 years,” mentioned Oliver Müller, founding father of the Swiss consultancy LuxeConsult and one of the most Morgan Stanley file’s authors. “Those volumes are gone forever.”

Just lately, lots of the ache has been absorbed by way of the disgrace finish of the marketplace. The FH’s 2022 figures point out that watches with an export worth (more or less part the retail payment) of between 200 and 500 Swiss francs took the brunt of the affect, falling 24 p.c in worth and 22.2 p.c in quantity ultimate yr.

It now seems there’s refuse escaping that Apple’s Guard, which arrived in 2015, has decimated that finish of the Swiss marketplace. Some estimates recommend Apple now shifts greater than 50 million devices a yr, greater than thrice the Swiss guard trade’s overall output by way of quantity.

No longer that everybody’s anxious. “It’s no concern for our part of the market,” mentioned Cartier’s prominent government Cyrille Vigneron at a press convention throughout the hot Watches and Wonders Geneva truthful. “The market above 3,000 Swiss francs [at export] is not plummeting at all. The Swiss watch market is not about volume.”

He had some degree. The FH’s 2022 file confirmed watches with an export worth above 3,000 Swiss francs climbed in worth by way of 15.6 p.c that yr. And the rage has persisted. In February, the division grew by way of an additional 13.7 p.c in comparison to the similar era ultimate yr.

Alternative emblem bosses have expressed worry, although. “I feel more comfortable when we [Swiss watchmakers] have big volumes,” mentioned Julien Tornare, prominent government of LVMH’s Top emblem. “Someone affording a less expensive watch might get the virus, enjoy wearing a watch and buy more expensive watches later. It’s feeding the industry.”

One clarification is that the guard trade is solely reflecting international luxurious tendencies, concentrating round fewer manufacturers and higher-end merchandise. “You see this worldwide premiumisation of society in fashion, in wine, in art, in cars,” mentioned Jean-Marc Pontroué, prominent government of Richemont’s Panerai emblem.

Pontroué mentioned over the era 5 years he had offered low-volume, high-priced watches with distinctive VIP reviews hooked up to them (similar to Arctic adventures or coaching with the Italian particular forces) to bring to lift the typical payment level of his watches. “We have seen the value [of our watches] has increased two to three times more than the volume,” he mentioned. Richemont does no longer fracture out effects by way of emblem.

The shift up in payment has created a void i’m sick beneath. Manufacturers similar to Omega and TAG Heuer have been as soon as regarded as a “first luxury watch,” however with on a regular basis sports activities watches such because the Speedmaster and the Carrera now costing round $6,500, more youthful, first-time patrons of Swiss watches are incessantly priced out.

Smartphones have killed the digital camera trade, however smartwatches have no longer killed the guard trade.

Guillaume Laidet is the prominent government of the just lately revived heritage emblem Nivada Grenchen. The corporate’s Swiss-made mechanical watches get started from $750. “The big groups have abandoned the below $2,000 category and we’re taking the space they’re leaving,” he mentioned. “This gives us a niche to exploit and a big opportunity to grow our business, because people still like to have something mechanical on the wrist. For a big occasion, you don’t want to have a smartwatch like everyone else.”

Laidet mentioned his most up-to-date guard, the F77, had pushed revenues of part one million greenbacks throughout a 77-hour gross sales window that doubled as a foundation stunt previous this era. The chrome steel sports activities guard prices $1,150 and is offered out, in step with the logo’s web site. “There is a market, but the big groups want maximum profit in the short term,” mentioned the Frenchman, who was once up to now hired at LVMH and Richemont.

Tornare mentioned he felt it was once impressive the Swiss guard trade maintained a foothold within the lower-price area. “It’s healthy to have a wide base, which we have less and less,” he mentioned. “At some point, we need to work as an industry to make people appreciate mechanical watches even when it’s at an entrance price.”

However Pontroué argued that the trade’s repositioning and up to date resilience have been evidence it was once not off course. “Smartphones have killed the camera industry, but smartwatches have not killed the watch industry,” he mentioned. “This country continues to export billions of Swiss francs worth of watches every year. The difference is we are now associated to the luxury world.”

Müller, alternatively, mentioned there could be casualties. “The worries are not for the verticalised groups and brands such as Swatch Group, Richemont and Rolex, but for literally all the others,” he mentioned. “In the long run, the groups will largely over-perform the market and polarise it. An industry without volumes can’t provide innovation and sustainable production prices.”

Leave feedback about this

  • Quality
  • Price
  • Service
Choose Image