Morgan Stanley’s eagerly awaited annual report on the state of the Swiss watch industry has dropped into industry inboxes this week, and it shows Rolex turnover rising by 9% to CHF 10.1 billion in 2023, which implies a retail value of CHF 15.15 billion, or $17.2 billion.
The brand is estimated to have a global market share of 30% at retail, according to the report, which includes contributions from Swiss based consultancy, LuxeConsult.
That 30% market share is higher than the next five biggest brands combined: Cartier (8%), Omega (7%), Patek Philippe (6%) Audemars Piguet (5%) and Richard Mille (3%).
However, the biggest gain of the year in 2023 was for Swatch, which has been the fastest growing Swiss brand for two consecutive years since it launched its MoonSwatch in 2022.
Swatch’s turnover last year leapt by 63% to CHF 660 million. Sales have more than trebled since 2021, when it generated CHF 214 million.
MoonSwatch was launched not only to boost sales of Swatch watches, and to bring more customers into Swatch shops because you cannot buy MoonSwatches online, but it was also hoped it would introduce a new generation to Swatch Group stablemate Omega’s Speedmaster.
Almost two years on from the first MoonSwatch, there is some evidence that this strategy is working. Omega sales rose by 5% in 2023, according to Morgan Stanley’s estimates. The report also notes that Omega has made significant progress in reducing its reliance on sales to the troubled China market and putting more focus on the more reliable American territory.
Morgan Stanley also notes the importance of Omega to group sales and profits for Swatch Group. The brand is estimated to be delivering 39% of group sales and around 60% of profits.
The top five brands by turnover remains unchanged in 2023, but there is one more billionaire player with Vacheron Constantin joining the exclusive club of eight.
Swiss watchmakers turnover in 2023
- Rolex: CHF 10.1 billion
- Cartier watches: CHF 3.1 billion
- Omega: CHF 2.6 billion
- Audemars Piguet: CHF 2.35 billion
- Patek Philippe: CHF 2.05 billion
- Richard Mille: CHF 1.54 billion
- Longines: CHF 1.11 billion
- Vacheron Constantin: CHF 1.1 billion
Privately owned brands gained market share by growing faster than those under the group umbrellas of LVMH, Richemont and Swatch Group.
Privately-owned independents increased sales by 17% and, at CHF 9 billion, are collectively now close to generating sales on the scale of Rolex/Tudor’s CHF 10.6 billion.
Rolex grouped with its sibling Tudor increased sales by 8% while Swatch Group turnover rose by 5.4%, Richemont’s portfolio averaged a rise of 3.7% and LVMH watchmakers’ turnover dipped by 3%.
LVMH-owned Hublot and TAG Heuer were among the worst performers last year, with sales dropping by 10% and 16% respectively.
Hermès, Louis Vuitton and Chanel are proving that high fashion and haute horlogerie can coexist under a single brand (potentially good news for Louis Vuitton as it ramps up its watchmaking).
Hermès sales rose by 14% to CHF 593 million, Chanel’s turnover rocketed by 45% to CHF 400 million and Louis Vuitton watches generated revenue of CHF 162, up 25% year-on-year.
Kering’s watchmaking looks in need of serious attention. It sold Girard-Perregaux and Ulysse Nardin to its management team in 2022 and then had to watch those brands grow by around 5% last year. At the same time, its one remaining watch brand, Gucci, saw its turnover plummet by 54% in 2023.
Other notable figures from the Morgan Stanley estimates are the rise of low volume independents. F.P. Journe sales are now thought to be CHF 98 million, three times higher than in 2021. That could be an underestimate because the report suggests 90% of FPJ watches are sold through wholesale, a figure that seems out-of-date since the brand is rapidly transition to an entirely direct to consumer model.
H. Moser & Cie. entered the top 50 Swiss watchmakers for the first time with sales of CHF 93 million. Jacob & Co. will be satisfied with revenue of CHF 146 million, up 12% on 2022.
