Let’s not get carried away, but there has been a substantial increase in Swiss watch exports to the United Kingdom, which gained 16% to reach CHF 1.2 billion to end October, according to figures reported by the Federation of the Swiss Watch Industry (FH). “Brands haven’t waited to take their precautions, whether the outcome is a hard or a soft Brexit,” notes Jean-Daniel Pasche, president of the FH. It’s what you could call the Brexit effect, one that will likely be shortlived.
In February, Switzerland and the UK signed a trade continuity agreement which, as the Swiss Federal Council explained in a press release, “ensures the continuation of the economic and commercial rights and obligations arising from the agreements between Switzerland and the European Union (EU). This new agreement lays the foundations for the two parties to continue their sound economic and trade relations once the United Kingdom has left the EU.” Whether or not customs checks will cause delays at the border remains to be seen. For the moment, all eyes are on the chaotic situation in the UK, the next instalment being the snap election on December 12.
Watch brands are making provisions in the meantime and maintaining a high level of inventory at UK retailers. This goes a long way towards explaining the spike in exports to the country. Add to this sterling’s weakness, as it continues to slide against the dollar, the euro and the Swiss franc.
Swiss watches, in particular Haute Horlogerie models, are clearly still in demand along New Bond Street and other swanky shopping streets. “London remains an important centre for the wealthy and attracts large numbers of well-off visitors,” says Olivier Müller, a consultant at LuxeConsult. “There is a non-negligible price difference, in particular for watches in excess of ten thousand francs.” However, these currency effects benefit foreign visitors as opposed to British buyers, still sceptical of a better tomorrow.
Positive export figures are one thing; sales to the end customer are another, with brands preferring to remain silent on the matter. Management at Bucherer, for example, which in 2017 became the new owner of The Watch Gallery and its six boutiques, gives little away, conceding only that “London is an important city and an important market for us. We like its vibe, its trends, its population, and for these reasons Bucherer decided to invest in this market, in line with our business strategy.”
According to observers, the brands that are performing particularly well in the UK are Omega, Patek Philippe, Rolex, TAG Heuer and Audemars Piguet. The latter is said to have made giant strides, thanks to its relative rarity and the quality of its products: its limited editions for Harrods are hot sellers. Richard Mille, Hublot and Roger Dubuis are other sought-after brands. “The United Kingdom, and London in particular, reflect trends on the global market but on a heightened scale,” Olivier Müller concludes. Clearly, the horological heavyweights are taking advantage of an uncertain climate to consolidate their leadership position, edging out brands that don’t have the same marketing and distribution clout.