Swiss watch exports set to hit a record as demand soars

Exports rose 8.3% in July, compared with the same month in 2021, to $2.3bn, their highest value in eight years

Shoppers browse the window of a luxury watch and jewellery store in Geneva, Switzerland. Demand for luxury watches has been soaring after many cash-flush consumers discovered Swiss brands while stuck at home during the pandemic. Bloomberg
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Swiss watch exports rose again in July, increasing to near-record levels, to reach their highest value in eight years. This comes amid high demand for pricey Rolex, Omega and Vacheron Constantin timepieces.

Exports rose by 8.3 per cent in July, compared with the same month in 2021, to 2.2 billion Swiss francs ($2.3bn), the Federation of the Swiss Watch Industry said on Thursday.

That is the highest value for exports of Swiss watches since a record performance in October 2014.

Demand for luxury watches has risen after many cash-flush consumers discovered Swiss brands from Rolex and Omega to Audemars Piguet and Patek Philippe while stuck at home during the pandemic.

Exports to the US increased by 13.5 per cent from the year before and it remained the biggest market for Swiss watch exports after overtaking China last year.

Demand in China is recovering as Covid-19 lockdowns ease, with exports rebounding during the period to hold its position as the second-biggest market for Swiss watch exports.

The export figures were “much better than expected”, said Jean-Philippe Bertschy, an analyst at Vontobel, who was expecting a slight decrease.

While prices for luxury watches on the second-hand market have been dropping, in part because of the cryptocurrency crash and falling equities, the July exports are “rather reassuring statistics from the Federation”, Mr Bertschy said.

The trend of high-end pieces driving the industry persisted, with watches priced more than 500 francs accounting for more than a third of volumes and 95 per cent of value.

Exports of watches priced between 200 francs and 500 francs plunged by 29.2 per cent in value, continuing a downturn that began in early 2020.

Likely due in part to the success of Swatch Group’s Omega MoonSwatch collaboration, exports of watches priced at under 200 francs rose by 5.3 per cent by value, the sixth positive month of the year.

With the exception of Hong Kong, South Korea and Japan, Swiss watch exports in July to most major markets in Asia and Europe increased by double-digit percentages.

“The post-pandemic high-end demand wave continues,” Bernstein analyst Luca Solca said.

Mr Solca cautioned that any slowdown in demand will be seen first through retailers. This is because Swiss watches are primarily sold through wholesale channels and there is a delay between orders and deliveries.

“If and when there is a slowdown — watch exports will not see it first,” Mr Solca said.

Updated: August 19, 2022, 5:00 AM