The Swiss watch industry experienced a notable revival in April 2024, following a significant decline in the previous month. According to the latest Federation of the Swiss Watch Industry report, exports rose 4.5% in April, reaching 2.1 billion Swiss francs. Despite this positive development, the cumulative result since the start of the year still shows a drop of 2.6%.
Interestingly, the export value of wristwatches increased by 4.3% to 2,045.5 million CHF, even though the number of units exported fell by 4.2% to 1.2 million. This shift towards higher-value watches suggests upper-income consumers continue to spend while other income tiers remain reluctant to purchase luxury items.
Watches priced over 3,000 francs saw a 7.8% increase in value, while those in the 500-3,000 francs segment suffered a 10% decline. Watches priced below 500 francs remained relatively stable, with a slight decrease of 1.2%.
The report highlights varied performance across different markets:
- USA: The largest market for Swiss watches, with exports valued at 338.7 million CHF, up 11.6%.
- China: Experienced a significant decline of 7.5%, with exports valued at 187.2 million CHF.
- Japan: Saw a robust growth of 13.6%, with exports reaching 172.1 million CHF.
- Hong Kong: Remained stable with a slight increase of 0.2%, totaling 169.7 million CHF.
- Singapore: Achieved a 12.5% increase, with exports valued at 145.5 million CHF.
- United Kingdom: Posted a 4.6% increase, with exports totaling 142.2 million CHF.
Stabilization in Swiss watch exports is a positive sign for the industry, which has been struggling to attract new buyers since demand peaked in March of 2022. Less disposable income, steady price increases due to inflation and the strength of the Swiss franc, and declining secondary market watch values have caused buyers of luxury timepieces to step back from the market.
More demand for luxury watches is also welcome news to watch sellers. There had been concern that Swiss watchmakers would increase supply to the market in the face of falling demand. Those fears appear to be fading. “The Swiss watch industry overall is taking a more conservative approach to expected sales in calendar 24, which we believe to be both correct and responsible, as the industry emerges from this more volatile period,” said Brian Duffy, CEO of Watches of Switzerland Group on a May 16 earnings call.
Watches of Switzerland Group, a retailer of Swiss watches in the U.K., has seen its stock drop 32% over the last year. However, shares of the company have rebounded 26.3% over the previous month, reflecting an improved outlook.
Secondary values for luxury watches also indicate a resumption of demand. The WatchCharts Overall Market Index, which tracks prices of 60 luxury secondhand watches, was up 0.1% in May after falling in the first four months of the year.
Watch enthusiasts are closely monitoring the state of the Swiss watch industry, which produces luxury brands like Rolex, Patek Philippe, and Audemars Piguet. The next report will be released June 20th.
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