Time is Money: Swatch and Rolex Ride the Wave of High Demand for Swiss Timepieces

“Swatch and UK’s Leading Rolex Retailer Indicate Strong Demand for Swiss Timepieces Despite Rising Prices”
Time is Money: Swatch and Rolex Ride the Wave of High Demand for Swiss Timepieces

Swatch, the renowned Swiss watchmaker, and Watches of Switzerland, the largest retailer of Rolex watches in the UK, have both indicated that the demand for Swiss timepieces remains robust despite rising prices. This positive sentiment has been reflected in Swatch’s shares, which rose by as much as 7%, while Watches of Switzerland experienced a surge of up to 18% in their stock value. CEO Nick Hayek of Swatch expressed optimism, stating that the company’s revenue for this year could potentially reach a record high due to strong demand from China and the US.

Contrary to concerns that price increases by major luxury watch brands might dampen demand, Watches of Switzerland reported that the appetite for luxury timepieces remains solid. Hayek also highlighted the continued strong demand for lower-priced watches in Asia and the US. Although China’s recovery has not yet reached its full potential, Swatch’s first-half earnings have already exceeded pre-pandemic levels for the first time.

The Swiss watch industry has been experiencing a steady increase in exports, with last year reaching a record high. These positive reports allay fears that the US market’s demand for luxury goods may be diminishing, as exports to the US experienced a dip in April. Hayek expressed his satisfaction, particularly with the strength of the consumption in the United States and Europe across all price segments. Swatch Group’s revenue from its own retail network has also seen a significant boost, accounting for 40% of its total revenue, as average sales per store rose by 30% worldwide.

Swatch, which also produces Omega and Longines watches, witnessed a 36% increase in operating profit during the first half of the year. The growth was most pronounced in the lowest price segment of watches and jewelry. Additionally, the demand for the company’s collaboration with Omega, the Omega Moon Swatch, has been accelerating. The recovery of tourist destinations like Thailand and Macau has also contributed to Swatch’s success, with sales in Switzerland increasing by 50% and strong growth observed in markets such as Italy, Spain, and France. Overall, the management of Swatch foresees “excellent” growth opportunities for the second half of 2023.

In conclusion, despite the upward trend in prices, the appetite for Swiss timepieces remains strong, as evidenced by the positive performance of Swatch and Watches of Switzerland. Demand from China and the US, as well as the recovery of tourist destinations, has contributed to the robust sales of luxury watches. Swatch Group’s revenue has reached record levels, exceeding pre-pandemic figures, and the company’s collaboration with Omega has been particularly successful. With excellent growth opportunities anticipated for the second half of this year, the Swiss watch industry continues to thrive.