close

Swiss watchmakers file for bankruptcy as Coronavirus impact bites

Swiss flag lucerne

Swiss watch sales are expected to fall by 25% this year, according to a report published this month by investment bank Vontobel, a worse slump than the industry experienced during the quartz crisis, when exports dropped by over 15%, or the global financial crisis of 2009 when they fell by 22%.

Geneva-based industry analyst Oliver Müller, founder and managing director of LuxeConsult, says there will be fewer than 16 million watches sold this year, down from 20.6 million in 2019.

“In terms of volumes, we’re going to fall back to levels seen in 1945,” he tells Switzerland’s Swissinfo.ch.

Story continues below
Advertisement

A 25% drop in exports would translate to a total of CHF 15.4 billion for 2020, with over CHF 5 billion of potential sales lost to the Coronavirus lock down.

Production in Switzerland ground to a virtual standstill in March, and is only now inching back to life.

Rolex remains closed, Patek Philippe is back but with limited production, Swatch Group has attempted to keep manufacturing, but at dramatically reduced capacity, LVMH brands began to return last week but virtually all of Richemont’s maisons are expected to remain closed through to the end of May.

Loss of production should, at least, prevent a massive oversupply of watches into wholesale that might then end up flooding the grey market.

While the world’s biggest watchmaking businesses have more than enough cash to survive, Mr Müller thinks that there will be a large number of casualties. “Between 30 and 60 ‘Swiss Made’ watch brands – of a total 350 – will not survive,” he tells Swissinfo.

“By my count, a dozen watchmaking companies have already filed for bankruptcy since the beginning of the crisis.”

4 Comments

  1. I have no sympathy!
    For years they have starved the trade of spare parts through their monopolising restrictive greedy practices. Not all the companies, but those who do, know who they are.
    Maybe they should take the time (while closed) to reconsider their selfish actions?
    Now they know how we repairers feel, support us and things will be better for everybody. The time has come to be kind to your fellow human, not continue with you selfish, greedy all for me ways, we can all have a bite of the pie as they say, the pie is big enough for everybody!

  2. First, they’ve got rid of independant watchmakers who serviced their watches, then of retailers who were loyal to brands for decades, then finally of customers by limiting supply and creating artificial shortages in order to increase prices. All of the above with arrogance and total disrespect to both Swiss and foreign consumer laws and regulations. Bankruptcy for many Swiss brands was just a matter of time.

    Nicholas Hacko, Sydney

Leave a Response

Tags : LuxeConsultswiss watchmaking
Rob Corder

The author Rob Corder