Swiss Watches Crater – Coronavirus Watch 26


“As countries around the world contend with the health emergency, the economic effects of suspending almost all activity have inevitably impacted the Swiss watch industry,” reports, “and will continue to do so for months to come.” The latter part of that statement – predicting a “challenging” future for Swiss watch exports – reflects the industry’s growing realization that Coronageddon is a lot more than a flesh wound. The May numbers tell the tale . . .

Swiss watch exports collapsed by 67.9% at 655.6 million francs [$688.5m] in May 2020, following a steep decline of -81.3% in April. Over the first five months of the year, shipments of Swiss watches are down 35.8%.

[As we’ve said before, these numbers reflect exports, not sales. It’s entirely possible that some manufacturers have been/are stuffing the sales channel – which will come back to haunt them if demand remains weak.]

Chinese jewelry store (courtesy

Before the The Federation of the Swiss Watch Industry May stats dropped, the Swiss watch industry was hoping (against hope) for a “revenge buying” rebound tied to lockdown liberation. All eyes looked East.

Pre-Coronageddon, China accounted for over half of the industry’s exports. The industry seized on unconfirmed, anecdotal reports of a China luxury market rebound. A harbinger of good times ahead! And not too far ahead, either!

Swiss watch exports by country May 2020The Federation’s chart shows exports to the Middle Kingdom fell 54.6 percent in May. In April, they were “only” down 16.1 percent. The market upon which the traditional watch industry placed their horological hopes and dreams is getting worse, not better.

Chinese consumers are “revenge saving” not “revenge buying.” Fears of a COVID-19 “second wave” are doing nothing to change their new parsimony, and everything to increase it.

Personal saving rate in the United States from June 2015 to April 2020

The trend is no less true in the U.S., as the chart of The Personal Saving Rate in the United States From June 2015 to April 2020 reveals.

Potential watch consumers may be emerging from lockdown, but a big chunk of their money is going in.

Counterintuitively, consumers at the top of the market are saving more aggressively than those at the bottom of the economic scale. That’s a bad, bad thing for Swiss luxury watchmakers.

Swiss watch exports by value for May 2020

Before Coronageddon, Swiss watch exports were crawling back from a downturn. During that recovery, low- to mid-priced watches were getting hammered by the smartwatch crisis (still are), while high-priced watch exports were doing less badly, holding steady or increasing.

The chart above brings us up-to-date. It’s an across-the-board rout.

Bottom line: that V-shaped recovery? Not happening. Not for the watch industry (as we said last week). There are too many hits. Lockdowns. Travel bans. An abrupt shift to online for an experiential good. It’s all too much.

Watches of Switzerland Regent Street

The Swiss Federation described their May stats on Swiss watch exports “quasi paralysis.” There’s nothing quasi about it. Even the “good news” is anything but. British watch sales rise by 61% screams the headline at Look at the chart:

British Swiss watch exports

Watch sales in The Land of Hope and Glory are still down more than 50 percent year over year – and this in a “recovery month.” No matter how you spin it, that’s one hell of a hill to climb. It’s going to be a long, slow slog back up. Not everyone’s going to make it.

Singer watch

“We have not had a single new order in three months,” Singer’s head watchmaker Joris Engisch admits to Reuters. “We’ll have to shut down completely for several weeks this summer.” Engisch said smaller subcontractors with lower margins would struggle even more.

“It’s not that nobody wants to buy watches anymore,” Audemars Piguet CEO Francois-Henry Bennahmias told Reuters, “but in the after-COVID era many people will consume less, they will be more selective.”

Aside from Mr. Engisch and Mr. Bennahmias, very few people in the Swiss watch industry are talking about this new reality. And certainly not the mainstream watch press.

Every day we read interviews with executives calmly adopting a “crisis what crisis” or  damn the torpedoes, full speed ahead attitude. Without a single hard question being thrown their way,.

Hamilton for sale

The Swiss watch industry refused to face the quartz crisis until after the technology they’d invented had eaten their breakfast, lunch and dinner. The industry’s stoicism in the face of a sea change, in the middle of a stormy sea, may soon prove that history does indeed repeat itself.

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  1. Not sure about in the States, but in Australia, our local boutiques have reopened with INCREASED luxury watch prices. Most JLCs are 10-15% higher than pre-lockdown. Omega 321 steel has gone up from 20K to 21.5K. Pateks up. This is significant because Aussie dollar has risen against the US dollar and with with borders shut, we cannot claim the 10% sales tax back.

    • That’s fascinating. Wouldn’t surprise me if dealers are positioning to take some margin for the “pent-up demand” and / or the Chinese traveling again. We’ve definitely seen prices creep up on Chrono 24 in the last couple of weeks (I track them), wouldn’t surprise me if it’s the same phenomenon.

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