The Swiss watch industry has centuries of history, but it was not always surrounded by the glitter, luxury and glamor that it now exudes. In 1601, Geneva watchmakers united to protect their profession against poor working conditions. And it is an industry that, in its origins, was possible thanks to cheap foreign labor, especially Italian women, and is currently supported by labor that moves from nearby areas, especially from the French region. of the Jura.
To give identity and relevance to its sector, the watchmakers’ guild decided that each watch created in Geneva would bear the manufacturer’s seal. An initiative that was born as a social demand, but over time has become a luxury badge. It is enough to mention brands such as Rolex, Omega, Patek Philippe or Audemars Piguet to see the most desired and expensive watches in the world (with four, five or six figure prices), only available to a minority.
The Swiss watch business is not experiencing its best moment in terms of units sold, but it is in terms of turnover, due to the rise in prices and the strength of exports. And luxury watches have never ceased to be an object of desire, pieces that are 95% Swiss made, according to Swissinfo. In general, the Swiss Confederation produces about 30 million watches of all price ranges, which only represent 2% of all those sold in the world, but with a value that reaches 60% of the total sold, according to the Chrono24 portal.
Exports of Swiss wristwatches generated 23.7 billion Swiss francs (27.93 billion euros) last year, 11.6% more than in 2021, according to data from the Federation of the Swiss Watch Industry (FH). A growth that comes mainly from watches with a price higher than 3,000 francs (3,103 euros), which increased their exports by 15.6% compared to 2021. Along the same lines were watches made with precious metals, a segment that It was the one that grew the most despite accounting for only 3% of all sales abroad.
However, behind the big (and dizzying) numbers there is a less idyllic reality. Despite this increase in billing, exports per unit have fallen in the last 20 years and it seems that, at the moment, there is no recovery in sight. This was recently stated in statements to Bloomberg by Johann Rupert, majority shareholder of Richemont, a Swiss group with brands such as Cartier, IWC and Vacheron Constantin, who highlighted how inflation had begun to affect the demand for luxury in Europe. According to his words, even the most powerful pockets would have begun to tighten their belts. Due to this slowdown, the watch industry exported 15.8 million watches in 2022, which is just 0.3% more than in 2021, while 30 million were exported in 2000.
Main buyers
By countries receiving Swiss precision parts, the first places are for Singapore, the United States and the United Kingdom. Other destinations that in recent years started from modest figures have recently shown a significant buying zeal, with examples such as Malaysia (57.2% increase), Turkey (41.9%) or Spain (25.9%). On the other side of the scale, China and Hong Kong, until now the kings of purchasing this type of watch, have curbed their desire to show off luxury on their wrists. In fact, its imports have been reduced by 13.6 and 10.5%, respectively.
Until last August, exports of Swiss watches exceeded the barrier of 17,000 million Swiss francs (17,590 million euros), standing 9.2% above sales abroad registered in the same period of 2022, according to data from the Federation of the Swiss Watch Industry.
Around 350 brands claim to have the Swiss Made label, according to Swissinfo, but in reality the Swiss watch industry is concentrated in a few hands. There are 10 brands that occupy the podium, but of these, four stand out above the rest, they are the so-called big four of luxury watches: Rolex, Audemars Piguet, Patek Philippe and Richard Mille, none of which wanted to participate in this article. All four are family businesses and have achieved – or almost, since Rolex is now in the hands of a foundation created by the family of the founder, Hans Wilsdorf, so it is exempt from paying taxes, cannot be divided or sold and does not distribute dividends — avoid the offers of the great giants of global luxury.
According to data from the 2022 annual report on luxury watchmaking carried out by the investment bank Morgan Stanley and the Swiss consulting firm LuxeConsult, the big four They concentrate 42% of the turnover of this industry, 5% more than in 2021, despite the fact that their models are produced in limited quantities.
Rolex, known as the crown brand, remains the king within this chosen quartet. It has a turnover of 9,300 million Swiss francs (9,603 million euros) and a 29.2% market share, figures similar to those of some global fashion house such as Gucci, but in its case achieved with a single product.
Last summer, Rolex announced an operation that shook the foundations of the global watch industry: the purchase of the British jewelry and watch retailer Bucherer, with more than 100 stores around the world, of which 53 distribute Rolex and 48 Tudor, its second brand, in addition to offering after-sales service.
The other three horsemen of Swiss watchmaking also show million-dollar figures, such as Audemars Piguet, with a turnover of 2,116 million euros last year and a 4.7% market share; Patek Philippe with revenues of 1,895 million and 5.1%; and Richard Mille with 1,369 million and 2.7% of the pie, according to data from Morgan Stanley.
Along with these brands, large multi-brand emporiums coexist such as Swatch Group, which generates 69% of the volume of the Swiss watch industry in general, and which in 2022, according to figures published by the company, had a turnover of 7.9 billion, 2.5% more than last year.
The parent company has found a vein in collaborations with its most exclusive brands. Omega (it is the division that contributes the most to the total with 2.6 billion) last year released the Swatch Moonswatch collection (250 euros) to commemorate the arrival of man to the Moon with the legendary chronograph. Now, Swatch wants to repeat the success together with another of its great brands, Blancpain, with which it has just launched a collection linked to watches specialized in diving.
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