keep my inbox inspiring

Sign up to our monthly newsletter for exclusive news and trends

Follow us on all channels

Start following us for more content, inspiration, news, trends and more

© 2021 - Copyright Fondation de la Haute Horlogerie Tous droits réservés

Swiss watchmaking strikes a positive note in 2017

Swiss watchmaking strikes a positive note in 2017

Friday, 22 December 2017
Editor Image
Christophe Roulet
Editor-in-chief, HH Journal

“The desire to learn is the key to understanding.”

“Thirty years in journalism are a powerful stimulant for curiosity”.

Read More

3 min read

After a dry spell lasting almost two years and plenty of soul-searching, Swiss watchmakers have seen an upturn in business since March. With the watch fair season about to begin, the industry can breathe again.

Christmas came early to the Swiss watch industry when exports jumped 6.3% year-on-year in November; a rate of growth that hadn’t been seen in almost four years. A meanspirited observer would point to the base effect as the reason for this hike, but the fact remains that since the inflection point in March, shipments have followed a positive trend and increased by 2.8% over the first eleven months of the year. If they continue on this upward trajectory, exports should again end the year north of the symbolic CHF 20 billion mark.

New topics have pushed problems of overinvestment, excess production capacity, ballooning prices and redundancies off the front page in recent months. The first, and probably one of the most important, concerns CEO revolving doors, with a new generation of bosses taking the helm at several watch firms. Just as millennials have taken over as luxury brands’ favourite target, executives in their prime have been appointed to the top spot at, for example, Omega, Piaget, Ulysse Nardin, Vacheron Constantin, Zenith and soon Panerai. However, these boardroom musical chairs have nothing to do with any major transactions on the mergers and acquisitions market – with the exception of Breitling which sold to CVC Capital for US$ 870 million. Firstly there are fewer targets but more to the point integration is now focused on industrial activities, as witnessed by the continued expansion of Acrotec which subsumed four independent businesses in 2017 (H2i, Mimotec, Gasser-Ravussin and Pierhor) or Festina’s acquisition of Technotime’s intellectual property rights after the movement-maker went bankrupt.

Once again, mechanical watches set the industry back on course as exports.
The e-word

Once again, mechanical watches set the industry back on course as exports between January and November grew both in volumes (3%) and in value (5%). Sales of electronic watches tailed off during the same period, losing 3.5% in value. However, given that this category accounts for just one-fifth of export values (compared with 70% of volumes), there was no adverse effect on growth. Whether or not this downturn is due to heightened competition from smartwatches is hard to affirm. What we can say with relative certainty is that the three million Apple Watches sold per quarter – and probably more since the Series 3 was released at end September – have encroached on traditional watches’ market share. Or rather a certain type of traditional watch given that luxury watches, which are by essence mechanical, appeal on a different emotional level. This mechanical excellence is one area where brands aren’t about to compromise. Some examples among several this year include Agenhor’s chronograph with central hands (picked up by Fabergé and newcomer Singer), Zenith’s Defy Lab with a revolutionary escapement, and Vacheron Constantin’s Celestia Astronomical that displays solar, civil and sidereal times. Coming as a counterpoint to this mechanical extremism, vintage timepieces took up a significant amount of window display this year, as though harking back to a gentler, pre-technical age.

Are window displays even still relevant? Distribution, and specifically e-commerce, will doubtless be the big issue for luxury watch brands in 2018, especially since exploits such as the Omega Speedy Tuesday limited edition – sold out in less than four hours – have shown the enormous potential of online sales, when done properly. Of course, e-commerce needs its own showcase and storytelling in order to succeed, and for watchmakers to go on believing in Father Christmas!

Back to Top