Coronavirus Watch 4: Swiss Watches Nosediving

Bell & Ross Burning Skull

The Swiss Watch Federation has released its February export report. As you’d expect, the news isn’t exactly sunshine and rainbows. In fact, it’s tsunamis and tornadoes. While monochrome-watches.com is busy repeating the Communist Party line – Chinese shoppers are returning to the stores! – the stats indicate it’s the not even the beginning of the end. Coronageddon is a great buying opportunity and the world’s worst selling situation. Let’s run the numbers . . .

Swiss Watch Federation stats

The chart above compares Swiss watch exports to 2019. It confirms what we asserted in the Coronavirus Watch 3: Swiss watches in the $200 to $500 range are going extinct. Their relatively enormous drop indicates that the Apple Watch and their smartwatch ilk have already taken their toll.

SWATCH store

Swiss watchmakers selling product in that range – most prominently SWATCH – are screwed. The only good news in this category: Apple’s retail stores are closed. For now.

Watches in the $500 to $3k range are second most vulnerable. I imagine the chart would look very different – and even more dire – if the Swiss stat makers had included a $500 to $1500 category, where Hamilton lives.

Keep in mind that this is a worldwide chart for February, when the U.S. market was still online. Viewed on a regional basis . . .

Swiss Watch Federation export stats for February 2020

Yep, that’s right: Swiss watch income from America increased by 17.8 percent in February. Germany was up by 7.3 percent. France rose 12.6 percent and Italy jumped by five percent.

Was there a last minute, pre-Coronageddon sales surge for high-priced horology – the only real bright spot in the first chart? Did well-heeled watch buyers see the dark clouds of Coronageddon gathering on the horizon and decide to shelter-in-place with their good friend Audemars Piguet?

One of my local authorized dealers – purveyor of Rolex, Tudor, OMEGA, Luminox and Hamilton – says yes. Remember that the economy was booming – right until it wasn’t. And now . . . crickets.

Watches of Switzerland

With German, Italy, France, Spain, California, New York and soon London completely offline, March’s stats will make February’s 10 percent gross revenue decline look like The Good Old Days.

In previous posts, we’ve offered ideas on how a watch buyer can negotiate the new normal for a deep discount. As they say, no plan survives first contact with the enemy. We’ll update our views as conditions change.

Meanwhile, I’d like to point out that it will be damn difficult for Rolex and OMEGA to get production up and running when this is over. Will the current glut become a shortage? Stranger things have happened. Are happening now.

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