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U.S. Tariff Impact Weighs on January Swiss Watch Exports

Sales in the period declined 3.6 percent on-year.

PARIS – Swiss watch exports fell 3.6 percent in January, weighed down by the impact of tariffs on business in the United States.

The monthly exports totaled 1.9 billion Swiss francs, or $2.46 billion, according to figures published Thursday by the Federation of the Swiss Watch Industry.

The U.S. reverted to negative territory last month, with sales down 14 percent. The federation said in a statement that impacted “heavily on the overall performance.”

In December 2025, Swiss watch exports’ return to growth was thanks to the U.S. and a surprising copilot, France.

“Exports to the [U.S.] experienced significant volatility over [the second half of 2025] as Swiss manufacturers adjusted volumes around tariffs. Onshore retailers are likely working through the tail-end of inventories built up around tariffs, with export data now providing a cleaner read-through to sell-in trends,” Luca Solca, analyst at Bernstein, said in a research note.

Annualized sales figures for the U.S. potentially point to “a consolidation in Swiss watch demand after a roller coaster year,” he added.

On the plus side in January were signs of recovery in Hong Kong and Mainland China, with sales growth of 2.6 percent and 5 percent, respectively. Japan, hampered by an unfavorable base effect, recorded a decline of 7.5 percent, the federation said.

Also entering in the red were Singapore, down 14.3 percent, and the United Kingdom, softening 6.3 percent, while Germany, with minus 16.4 percent, continued its downward trend.

France, registering strong growth of 36.8 percent, maintained the healthy momentum begun in December 2025. That country and the United Arab Emirates, with an 8.1 percent increase, remained among the six leading Swiss watch export markets.

Sales of watches made from precious metals and steel declined 14 percent and 4.5 percent, respectively. The federation said those drops weren’t counterbalanced by the 16.1 percent gain in bimetallic watches.

Bimetallic watches, however, drove overall volumes up 2 percent. That category’s volumes rose 45.1 percent, while those in the other materials segment gained 2.9 percent, outpacing the January 2025 level by almost 23,000 units.

Watches priced at more than 3,000 francs at export were down 8.1 percent, which made a significant dent in overall performance. This was not mitigated by strong growth of sales in watches priced between 500 francs and 3,000 francs that were up 17.7 percent, the federation said.

Initial plans call for reviving the original Fred Segal location on Melrose Avenue in Los Angeles into an "experiential destination."

Aritzia has acquired the  Fred Segal  brand and has leased 8100 Melrose Avenue — Fred Segal’s original  flagship destination, WWD has learned.

The acquisition includes the Fred Segal brand, including intellectual property and trademarks. Aritzia did not disclose the purchase price. Aritzia purchased the Fred Segal brand from Fred Segal Family LLC.

The move marks another step in the Vancouver, Canada-based Aritzia’s long-term strategy to continue to expand in the U.S., but also challenges the retailer to revive the Fred Segal brand so that it lives up to its storied reputation.

Fred Segal founded his namesake brand in 1961, pioneering experiential retail and  introducing what was known as the “California cool aesthetic,” with sexy looks, fashion-forward denim lines, and collaborations with designers. Segal shaped  Los Angeles’ stylistic and cultural identity for decades and the store often appeared on television shows such as “Dawson’s Creek” and “Beverly Hills 90210.” Aside from integrating into pop culture, the store was an L.A. hot spot, drawing celebrities. Fred Segal died at the age of 87 in 2021.

Now the brand enters a new chapter under Aritzia’s vision. ​ 

“Fred Segal has long been a cultural touchstone in Los Angeles — a place where creativity, community and style converge,” Jennifer Wong, chief executive officer of Aritzia, said in a statement. “We are honored  to steward and evolve this iconic brand for a new generation with  the elevated experience and ‘everyday luxury’ that define Aritzia.”

Aritzia plans to restore the Melrose location and its ivy-covered facade, which was destroyed during a recent storm. The plan also calls for creating a new “experiential destination  that reflects the creative spirit that has defined both brands,” Aritzia indicated. “The space will bring together curated product and immersive experiences that transcend traditional retail while also serving as a dynamic lifestyle hub. Our focus now is on revitalizing the Fred Segal brand across product and retail, with the goal of reestablishing it as a true destination.”

Fred Segal is not the first acquisition by Aritzia, which was founded in 1984. In June 2021, Aritzia acquired a 75 percent stake in CYC Design Corporation, the parent company of the Reigning Champ brand, in a deal valued at about 63 million Canadian dollars. The acquisition boosted Aritzia’s presence in menswear. Aritzia purchased the remaining 25 percent of CYC in May 2023.

In 2017, Fred Segal moved from 8100 Melrose to Sunset Boulevard in West Hollywood, Los Angeles. The Sunset location and the Malibu location closed in 2024, victims of the COVID-19 pandemic and the internet. Fred Segal at times also operated other retail locations.

Asked if the Aritzia brand will have a presence at the Fred Segal Melrose location, a spokesperson replying by email said, “Further plans and details are actively being developed, and more information will be shared as it becomes available.”

Asked what criteria Aritzia has for making an acquisition, the spokesperson replied, “This was an opportunistic acquisition that aligned with our strategic priorities. We remain focused on executing our three key growth levers — geographic expansion, e-commerce growth, and increased brand awareness, particularly in the U.S.

“For  more than 40 years, Aritzia has built a reputation  transforming retail into an immersive world of design, culture and connection — delivering beautiful products, aspirational spaces, highly personalized service and captivating communications. With the acquisition, Aritzia will bring that ethos to Fred Segal, honoring the brand’s storied heritage while reimagining its future for a new generation,” the company stated.

Aritzia is steadily growing its presence and popularity across North America, and sees the potential to operate upward of 200 stores in the U.S. alone. The U.S. expansion began in 2007, and was followed by the launch of e-commerce in 2012, and an initial public offering in 2016.

The company was founded in 1984. Aritzia, a vertically integrated design house, is guided by its “everyday luxury” philosophy. The retailer can be fashion-forward, and has a reputation for quality and being spot on with trends. It fills a niche between mass-market and high-end brands. Many of the items in the collection are considered wardrobing staples, versatile and easy to mix and match. Aritzia is further advantaged by successfully attracting mothers and daughters shopping together.

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EA’s owners have invoked a ‘defeasance’ clause in the bond documentation

Private equity companies are known for keeping a keen eye on costs, even when times are good. Collapsing software and gaming valuations, though, must be providing an extra frisson for the buyers of Electronic Arts.

Silver Lake, Saudi Arabia’s Public Investment Fund and Affinity Partners agreed to buy the video game maker for $55bn in September. Since then, gaming shares have taken a tumble: rival Take-Two Interactive, for example, is down by a fifth. That may help explain why the incoming owners of EA, known for its football and NFL games, are taking a robust approach to dealing with its bondholders.

Typically in a leveraged buyout, holders of the target’s outstanding public debt receive a payout equivalent to 101 cents for every dollar of face value, under the so-called “change of control” provision. But EA’s owners have invoked a “defeasance” clause in the bond documentation. Instead of buying back the bonds, they will buy a pile of US treasuries, place them in a trust, and use the income they generate and the securities themselves to cover all future interest and principal payments. EA’s notes, due in 2031 and 2051, in effect become treasury-backed instruments. 

For EA, that’s good capital management. Its 2051 bond, issued in a low-rate environment, yields 2.9 per cent while 30-year US treasuries yield about 4.6 per cent. That means the company can spend less on treasuries to make up the same interest payments. Instead of the roughly $1.5bn they would have spent paying everyone back at 101 cents, they only spend about $1.1bn buying treasuries, Lex calculates. Sure, that’s a tiny sliver of the private equity companies’ total equity investment, but every little helps.

Some bondholders, however, are displeased. From a net present value perspective, they are no worse off. They receive identical cash flows to those their bonds promised, now backed by the US government. But these quasi treasuries will be hard to trade, and anyone who tries to sell may have to accept less than their face value.

In recognition of this, EA has offered to buy them back at a treasury-equivalent price of roughly 73 cents on the dollar for the 2051 notes. That might be attractive to long-term holders. But event-driven funds that piled in after the M&A announcement and drove up the price from about 60 to 95 cents on the dollar will be left nursing losses, and are pushing back at the company’s offer.

Defeasance clauses — the name literally means “to make null” — are widespread in corporate bond contracts. But incoming investors might have underestimated the likelihood that they are invoked. With treasury yields now much higher than yields on debt issued in 2020 and 2021, and many private equity buyouts facing lower valuations, EA may not be the last LBO to seek to take advantage of this contractual quirk.