Is the Watch Industry's Storm Over? A Complex Tale of Ups and Downs
The watch industry, a realm of tradition and innovation, is navigating a turbulent storm, with some brands weathering the crisis better than others. Here's a breakdown of the latest developments, offering a nuanced perspective on the market's performance.
The Numbers Speak: A Mixed Bag
- Richemont's Rise: Richemont's watchmakers saw a 7% annual sales increase in 2025, a positive sign. The acquisition of Baume et Mercier and the strong performance of Cartier's watch sales within the jewelry division contributed to this growth.
- LVMH's Plateau: LVMH's watch and jewelry division reported a 3% growth, but this includes jewelry sales, with watches showing a positive turn in the final quarter.
- Swatch Group's Decline: Swatch Group's net sales dropped 1.3%, with net profits plummeting from CHF 219 million in 2024 to CHF 25 million in 2025. However, the final quarter's sales accelerated, aligning with FHS data.
The Complex Web of Brand Performance
The industry's figures are intricate, with private companies like Audemars Piguet, Patek Philippe, and Richard Mille not disclosing financial details. This lack of transparency makes it challenging to pinpoint exact brand performances, but analysts suggest Rolex, Patek Philippe, and Audemars Piguet are leading the pack, potentially distorting FHS data further.
Tariffs and Export Figures: A Double-Edged Sword
- US Exports: Exports to the US surged by 4.6% in 2025, attributed to brands rushing to beat incoming tariffs. However, this may lead to slower exports this year as US retailer inventories swell.
- Export Volumes: A 742,000-unit drop in export volumes last year, nearly 5%, brings production levels close to 2020's, when factories were closed due to COVID-19. This trend highlights the industry's struggle with supply chain challenges.
Market Shifts and Glimmers of Hope
- Chinese and Hong Kong Markets: The crises in these once-major export markets are easing, offering a glimmer of hope for watchmakers.
- Emerging Markets: The industry is diversifying its focus, with the UAE, India, Spain, and Saudi Arabia reporting growth. Saudi Arabia, in particular, saw a 9% increase in sales last year.
Rolex's Controversial Move: A Game-Changer?
Rolex's partnership with LIV Golf, a Saudi-funded professional golf league, has sparked debate. While it provides a vote of confidence in LIV's future, it also stirs controversy, especially given Rolex's established connections to the golfing establishment.
The THMG Conundrum: A Delayed Watch
The Honourable Merchants Group, a luxury conglomerate, initially planned to unveil its watchmaking division in February. However, a recent statement postponed the news, citing a shift in focus to funding and challenges in acquiring or investing in watch companies.
The industry's storm, though not entirely over, has shown signs of improvement. Yet, the path to recovery is complex, with brands like Rolex, Audemars Piguet, and Patek Philippe leading the way, while others struggle to keep up. The market's future remains a captivating, yet uncertain, narrative.
