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2010, a watershed year for Swiss watch exports

2010, a watershed year for Swiss watch exports

Tuesday, 20 October 2009
By The FHH Journal editors
The FHH Journal editors

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3 min read

Anyone tempted to dabble in predictions will see that the indications for end 2009 all suggest an upward turn in trends.

Statistics from the Federation of the Swiss Watch Industry (FH) show that exports of high-end watches for January to August 2009 recorded a substantial decline year-on-year in value terms, at -30% for models with an ex-works price of CHF 1,500 to CHF 3,000, and -25% for watches with an ex-works value of over CHF 3,000. In the first case, this marks a return to values recorded in the early 2000s; in the second case, levels are those of 2007. However, were we to dabble in predictions, the indications for end 2009 suggest an upward trend, for two main reasons:

  • Recession was at its worst in the early months of 2009 whereas markets were buoyant in previous years, resulting in a strongly negative base effect.
  • Conversely, the last three months of the year compare with the last quarter 2008, when Lehman Brothers filed for bankruptcy and the global economy plummeted. Now that markets are beginning to level off, we can expect the base effect to be at worst neutral and possibly even positive.

Year on year, we can expect Swiss watch exports for 2009 to fall by around -20%. Additionally, markets have been implementing a stock-reduction strategy which, while necessary, is now coming to an end. This suggests that retailers will shortly be placing new orders, particularly for watches at the high end of the range, where insufficient cashflow to buy these higher-priced models means they have been unable to meet demand.

Which leads us to the following point: the fall in demand among end customers is clearly less than the drop in deliveries to the markets. While this doesn’t mean recession is behind us, supply and demand are clearly beginning to gel, which will almost certainly separate the wheat from the chaff.


2008 nonetheless remains an exceptional 12 months.

At its 2009 Observatory and at the last SIHH, the Fondation de la Haute Horlogerie said it was expecting a -20% drop in the CHF 1,500-plus price range, and -15% in the CHF 3,000-plus price range for 2009. The end of the year will confirm or disprove the -30% and -25% figures quoted above, which take Fine Watches (ex-works price of more than CHF 3,000) to 2007 levels. 2008 nonetheless remains an exceptional 12 months, synonymous with the industry’s record performances over the past decade.

If these figures are reached, the situation in the Fine Watch segment can no longer be described as critical; rather we should expect the inflationist growth of recent years to give way to organic growth as of 2010, a turning-point in the end to recession. This is therefore a positive message: even in times of crisis, demand for products of the highest standard and which are not sold at inflated prices remains constant. Clearly this is hardly a segment in crisis when the true values of Fine Watchmaking continue to assert themselves this way.

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