There is no doubt that the global COVID-19 pandemic will take a heavy toll on the watch industry. After two consecutive months of decrease (-9% in February and -22% in March), The Swiss Watch Federation (FHS) has just released its statistics for the month of April 2020 and, as expected, exports fell sharply. A direct result of the standstill in production, distribution and sales, shipments collapsed by 81.3%, to 328.8 million francs.
The value of Swiss watch exports had already contracted by 7.5% over the first quarter at CHF 4,749 million and an acceleration of the decline was expected for the second quarter. The FHS itself had predicted “a probable deterioration in April ” when releasing the statistics for the month of March 2020… Here we are, and the decrease in exports is brutal. In a recent report, Bain & Company estimates that global luxury sales are set to slump by 20% to 35% in 2020, depending on the speed of the recovery – and that a return to 2019 levels will not occur until 2022 or 2023.
To end with a little bit of optimism, several reports and feedback from brands we are in touch with suggest that business in mainland China is bouncing back. In particular, with global travel restrictions, Chinese customers tend to buy within the country instead of doing so overseas. The luxury industry’s future surely depends on China’s recovery. This was confirmed by the trend of Swiss watch exports, as China was the only country to buck the trend in April, with a contraction limited to 16.1%. China accounted for one-third of watch exports for the month.
For more information, please visit www.fhs.swiss.