Watchmakers Band Together, Focus on Value, Innovation, Craftsmanship in Volatile Times
“Being together makes us stronger,” said Matthieu Humair, the organizer of Watches and Wonders, which is unfurling against a backdrop of lackluster luxury sales and social, political and economic uncertainty worldwide.
Anne Hathaway wearing Bulgari jewelry. In a vote of confidence for the industry, the Italian brand is joining Watches and Wonders for the first time.
High-end watchmakers are tapping into the power of positive thinking and working together to promote the business ahead of this year’s Watches and Wonders, which is unfolding against a volatile social and economic backdrop.
Matthieu Humair, chief executive officer of the Watches and Wonders Geneva Foundation, which organizes the annual event, believes there is safety — and strength — in numbers.
In the days leading up to a record edition in terms of exhibitors, he said the fair “really plays this role of unifying the industry and strengthening watchmaking whatever the environment is.” He also said that major watchmakers have committed themselves to helping to support smaller ones.
There is strength in numbers, too. This year the fair will host 60 brands across 810,000 square feet and run from April 1 to 7.
Bulgari is joining for the first time alongside newcomers Christiaan van der Klaauw, Genus, Kross Studio and MeisterSinger. Two other brands will be returning to the lineup, Armin Strom and HYT.
Last fall, Bulgari CEO Jean-Christophe Babin said his company viewed Watches and Wonders as a “significant opportunity for us to firmly state our position in the top tier of the watch industry alongside the most respected brands in the world.”
The watchmakers are increasingly speaking with one loud voice. “Last year, the watch brands had a combined reach of 600 [million] to 620 million” across various platforms, Humair said. “When brands speak individually, you don’t get that kind of result.”
Last year also saw the arrival of LVMH Moët Hennessy Louis Vuitton, Chanel and Hermès on the board of the Watches and Wonders Geneva Foundation.
Bvlgari Serpenti Aterna
Courtesy of Bvlgari
The watch brands are uniting on particularly shaky terrain, with U.S. President Donald Trump threatening to tax European and U.K. imports to the U.S., the largest market for high-end watches.
Adding to the watchmakers’ headaches, Chinese consumers, once hungry for the Swiss-made status symbols, remain unenthusiastic about buying luxury goods across all categories.
The Federation of the Swiss Watch Industry reported on March 20 that February exports contracted by 8.2 percent in value and 7.7 percent in volume to 1.98 billion Swiss francs. The industry organization said it saw a “marked slowdown in an uncertain climate,” affecting its top six markets and all material categories to various degrees.
The 2024 edition of the Watches and Wonders fair also took place against a challenging backdrop for watch sales.
Courtesy of Watches and Wonders
The big luxury groups that make and market watches are also having a difficult time.
Watch sales at Hermès were sluggish, up just 2 percent for 2024, amid the worldwide slowdown. Although LVMH Moët Hennessy Louis Vuitton recorded a 3 percent increase for its watches and jewelry division in 2024, it’s unclear what drove the growth. The group does not break out sales within the division.
Richemont posted a surprise hike in third-quarter jewelry sales, but its specialist watch division continued to struggle through the 2024 holiday period. Sales declined 8 percent in the key third quarter, following a 16 percent drop in the first half of the fiscal year.
Richemont’s watchmaking declines would have been even greater had it not been for a bounce in consumer confidence following the U.S. election in November. But that confidence is rapidly dwindling amid Trump’s tariff threats, policy switchbacks and the looming specter of high inflation in the U.S.
Like many in the industry, Oliver R. Müller, a watch adviser and analyst, sees difficult times ahead.
“China won’t be back to pre-COVID-19 levels anytime soon and the most important market — the U.S. — is at risk if the new presidency decides to introduce new taxes. If uncertainty prevails over the economy with shaky stock markets and an American president changing his mind every day, we will see a major cooling of luxury goods consumption around the world,” he said.
The Jaeger-LeCoultre Reverso Tribute Georgraphic Recto watch.
Müller added that while the ultra-high end will likely be less impacted in that scenario, everyone will suffer. “I don’t expect a market crash, but I neither expect any miraculous rebound,” he said.
Bernstein luxury analyst Luca Solca said the U.S. and China are the big roadblocks to recovery.
In a research note following the latest Swiss Federation numbers, Bernstein wrote that the sudden weakness in the [U.S.] was unexpected and likely driven by a combination of the new round of price increases at the top end kicking in, and the uncertain geopolitical environment between U.S. and trade partners.”
Solca added that sales to China continued to fall, down 25 percent in February, impacted by the earlier timing of the Chinese New Year.
“Although we highlighted that export value appears to show first sign of stabilization in Greater China this period, overall volume remains weak and a key drag on growth. As long as Chinese demand for high-end watches remains depressed, a sector-wide recovery is unlikely to materialize, in our view,” the Bernstein report said.
Jefferies also took a look at the February figures and said they indicated “a softening global demand picture” driven by a waning appetite in the U.S., and worldwide, for higher-priced pieces in particular. The bank added that the “positive surprises” of U.S. watch sales in the fourth quarter of 2024 are “unlikely to have carried through” to the first quarter of 2025.
Deutsche Bank said the figures “dimmed hopes held by some for a very strong year of growth for the U.S. market, following on from the post-election boost the high-end U.S. consumer saw.”
The watch business is facing further challenges, according to Müller.
“Watches are by definition more cyclical than most of the other luxury segments, because the average ticket is a lot higher. When uncertainty prevails, you might still buy your perfume, but you might postpone the acquisition of your next watch,” he said.
Chanel Boyfriend Blush
Courtesy of Chanel
He also believes the current downturn will reshape the overall watch business, where the split between high-end and mid-price timepieces has been getting bigger.
“The current negative cyclical environment is only accelerating a transition toward less volume with higher average selling prices, and fewer brands managing to establish themselves for the long-term,” Müller said, adding he expects the industry to become even more dominated by a small number of brands with an “over-proportional” growth dynamic.
“Polarization and premiumization are unabated trends that have been driving the market for more than a decade and will probably continue at least for the mid-term,” he said.
In the meantime brands are holding their nerve, investing and cultivating clients across the generations.
Asked about the Gen Z customer, Müller said they are sticklers for value and brand coherence.
He said they often buy secondhand, not necessarily for green reasons but because of their interest in certain design periods, such as the 1970s or 1980s.
“When they buy new they are quite critical about the coherence of the brand and its claims. Brand status remains important, and so does the belief of buying something meant to keep value,” he said.
Van Cleef & Arpels Lady Arpels Pont Des Amoureux Aube
Courtesy of Van Cleef
It’s not only Gen Z that’s taking an interest in high-end watches. Women, across the generations, are becoming an ever-larger part of the market.
Consumer surveys showed that 66 percent of women interested in buying a watch intended to buy it for themselves, according to a 2024 report coauthored by Deloitte and Watch Femme, a Geneva-based association that is the first international platform dedicated to women in the watch world.
Watchmakers are hearing this call. In the report, Audemars Piguet’s CEO Ilaria Resta said that increasing numbers of women were coming to the brand for mechanical watches, which led her to predict that by 2030, 40 to 45 percent of the buyers would be female.
In the meantime, Watches and Wonders continues to make its voice heard. The Shanghai edition welcomed more than 10,000 visitors in August.
Humair has described it as a “very good platform” to get closer to Chinese retailers, press and high-end clients,” as he seeks to lay the groundwork for a brighter future.