Is the watchmaking industry's storm finally passing? It's a complex question with a nuanced answer. While some brands are thriving, others are struggling, and the overall market remains volatile. Let's dive into the latest trends and insights from the world of horology.
Blizzard of Results, Mixed Outlooks
At the end of January, the watch industry revealed its latest performance. Richemont's watchmakers are leading the pack, with a 7% annual sales increase. This success is partly due to the recent sale of Baume et Mercier, a brand Richemont had previously overlooked. However, the figures don't include Cartier's watch sales, which are part of the group's jewelry division and saw a healthy 14% growth. LVMH, on the other hand, reported a 3% growth in its watches and jewelry division, although this includes jewelry sales led by Tiffany and Bulgari. Swatch Group's net sales dropped by 1.3%, but net profits fell more steeply, from 219 million Swiss francs in 2024 to 25 million in 2025.
The Strong Get Stronger, Laggards Struggle
The data highlights a clear divide between the industry's top performers and laggards. Richemont's strong performance sets it apart from LVMH and Swatch Group. Lagging brands will need to step up their efforts to catch up, but the market remains subdued, and brands with deeper pockets are investing heavily in marketing. This creates a challenging environment for smaller players.
Tariff Strategies and Export Figures
The impact of tariff strategies on export figures is significant. Exports to the US saw a 4.6% increase in 2025 compared to 2023, as brands rushed to beat incoming tariffs. However, these figures don't account for sell-through, and US retailer inventories may be bursting, potentially leading to slower exports this year. Export volume figures dropped by 742,000 units, almost 5%, bringing overall unit production to near 2020 levels, when factories were closed for two months due to COVID-19.
Chinese and Hong Kong Markets: Easing Crises
The crises in the Chinese and Hong Kong markets, once major drivers of Swiss watch exports, are showing signs of easing. While it's unlikely either market will rebound this year, watchmakers will welcome the subsiding slump. The industry's focus is broadening, with the UAE, India, and Spain reporting meaningful growth, and Saudi Arabia up by 9% last year.
Rolex's Controversial Move: A Game-Changer?
Rolex's partnership with LIV Golf has sparked controversy. LIV, a breakaway professional golf league funded by Saudi Arabia's Public Investment Fund, has been a thorn in the side of the golfing establishment. Rolex's endorsement is seen as a vote of confidence in LIV's future, but it may also sting the PGA Tour and DP World Tour, both backed by Rolex. This move could lead to rancor and division within the sport.
The Honourable Merchants Group: Delayed Watchmaking Announcement
The Honourable Merchants Group, founded by François-Henri Bennahmias, initially planned to announce its watchmaking division in February. However, a recent statement revealed that the news has been put on ice. Bennahmias attributed this to a shift in focus towards funding, hinting at challenges in acquiring or investing in watch companies. This delay adds to the uncertainty surrounding the industry's future.
The Storm's Impact: A Nuanced Outlook
In conclusion, the watchmaking industry's storm is not yet over, but it has been downgraded. While some brands are thriving, others are struggling, and the overall market remains volatile. The impact of tariff strategies, the easing of crises in Chinese and Hong Kong markets, and the controversial moves by Rolex and The Honourable Merchants Group all contribute to a complex and evolving landscape. As the year progresses, further improvements may emerge, but the industry's future remains uncertain.
