It seems that wealthy people in Asia, Europe and the United States refused to buy Rolex Submariners and any other fashionable Swiss watches in May, as Swiss watch exports continued to decline.
Industry representative told Reuters that the economic consequences of the coronavirus pandemic “will have a lasting effect on the demand for watches,” which may lead to job cuts at the end of the six months of watch manufacturers.
Federation Swiss watch industry (FH) released a report Thursday morning describing May as “the second month of quasi-paralysis.” After a 81.3% decrease in April, Swiss watch exports continued to fall in May, decreasing by 67.9% compared to May 2019, while the export value amounted to about 655.6 million Swiss francs. Fr. ($ 690 million).
“Productivity was the same in all major groups of materials, but in physical terms, the category“ Other materials ”fell more than average. In general, the sector exported 1.3 million units less compared to May 2019, ”writes FH.
FH calls it: “It seems that recovery in this market has not yet been given.”
“The performance of major markets has more than halved compared to last year, in all respects. The United States (-79.2%), Japan (-74.2%), France (-76.7%), Singapore (-74.8%) and the United Kingdom (-76.7%) were among the countries that fell more than average. Although China (-54.6%) was ahead of other countries for the second consecutive month, it did not stand out to the same extent as in April and recorded a sharp decline. “
Francois-Henry Bennahmias, CEO of the high-quality watch brand Audemars Piguet, said: “It’s not that no one wants to buy watches anymore, but in the post-COVID era, many people will consume less, they will be more selective.”
Benahmias told Reuters that he is most worried about the US market – We expect that sales will fall to 25% this year, dropping below 1 billion Swiss francs (1.05 billion dollars).
Joris Engish, head of watchmaker Singer, said that The watch industry is about to enter a period of pain“Half of all the watches we sell are shipped to Chinese customers, and they won’t start traveling soon.”
“We did not have a single new order in three months. This summer we will have to close completely for several weeks, ”said Engish, adding that small sub-contractors with lower margins will struggle even more.
“I am optimistic in the long term, but rather pessimistic at the end of the year, we will have one or even two extremely difficult years,” he said. “Companies will start firing employees if they don’t see positive signals after the summer.”
Even before the decline caused by the virus, traditional swiss watchmakers were locked in a war against technology companies that held market share through smart watches. The Apple Watch will surpass the entire Swiss watch industry in 2019.
Changes in the export of high-quality Swiss watches have become an excellent indicator of the current economic downturn – the virus or the absence of the virus – the downturn in economic growth was approaching. Read what we wrote in December:
“So can weakening consumer spending trends for diamonds, jewelry and watches be an early warning signal that the global economy is in trouble in 2020?”
Based on the foregoing, the recent decline in the export of Swiss watches suggests that there will not be V-shaped recovery in the global economy this year.