Rolex winners, Swatch losers after Swiss luxury watch industry’s devastating year
- Rolex was one of the least affected by the economic crunch last year, according to a report, while the Swatch Group posted its first loss since 1983
- Chinese luxury consumers created a surge in Swiss watch exports to mainland China after starting to shop locally, with demand strong for mid-price brands
Joe Biden chose to wear a classy US$7,000 stainless steel Rolex Datejust when he was sworn in as US president on January 20, giving the upmarket Swiss watch brand a fillip after a diabolical year for luxury watches. Unlike a number of his predecessors who chose to wear utilitarian brands as men of the people – both Bill Clinton and George Bush wore Timex watches – Biden chose to have his wrist clasped by a statement of Swiss luxury.
After years of success, Switzerland’s luxury watch industry was hit hard by the Covid-19 pandemic and the subsequent economic crunch, and only the best-placed brands remained largely undamaged.
Within days of the US president’s inauguration, another, less fortunate Swiss watchmaker posted its first loss since 1983. The Swatch Group, owner of high-end brands including Blancpain, Breguet, Harry Winston and Omega, as well as fashion watches including Swatch and Calvin Klein, was slammed by the Covid-19 pandemic and the subsequent economic nosedive.
One of the big three watchmaker groups in Switzerland, along with LVMH and Richemont, the Swatch Group posted an annual loss of 53 million Swiss francs (US$59 million) in January after closing 384 stores worldwide.
Many Swiss watchmakers faced an existential threat in 2020 during the violent economic cyclone of the pandemic, which crushed travel and luxury sales in most of the world. Swiss watch sales plunged 81 per cent before April 2020, though recovered to 97 per cent of 2019 levels by November, according to research released in January by market analysis firm Bernstein. However, for a number of brands, reserves have been depleted and confidence shaken.
