The watchmaking industry is facing a pivotal moment, and the future looks both promising and challenging. The storm may be blowing over, but it's a cautious optimism that prevails.
Let's delve into the recent developments and uncover the key insights that are shaping this age-old industry.
The Battle for Watchmaking Supremacy
In the world of luxury watchmakers, the race is on. Richemont's watchmakers are leading the pack, with a 7% increase in annual sales in 2025. LVMH's watch and jewelry division also showed growth, but the real story is the outperformance of Richemont's brands. Cartier, part of Richemont's jewelry division, experienced a healthy 14% growth, further solidifying its position.
However, not all is well. Swatch Group, heavily reliant on Omega, saw a steep drop in net profits, from 219 million Swiss francs in 2024 to a mere 25 million in 2025. Despite some acceleration in the final quarter, the group's high-end watchmakers, including Tissot and Longines, may still be facing challenges.
The Private Players and Their Impact
Adding to the complexity, four of the six largest Swiss watch companies are privately held, and their financial figures remain shrouded in secrecy. Audemars Piguet, for instance, reported a 10% increase in revenues last year, but without official results, analysts suggest that Rolex, Patek Philippe, Richard Mille, and Audemars Piguet are pulling further ahead, potentially distorting the overall industry data.
Tariff Strategies and Export Fog
The Swiss watch export figures are also a bit murky. While export values for 2025 showed a 4.5% decline compared to the record year of 2023, the real impact of tariffs is a concern. Brands rushed to ship watches to the US, leading to a 4.6% increase in exports, but the true sell-through rate remains unknown. This could result in a slowdown in exports to Switzerland's largest market this year.
More concerning is the drop in export volumes, which fell by almost 5% last year. This has a significant impact on industry suppliers, the unsung heroes who create the components for these luxury timepieces. Many of these suppliers are struggling, relying on government support to stay afloat.
A Glimmer of Hope in New Markets
Amidst the challenges, there's a silver lining. The crises in the Chinese and Hong Kong markets, once the drivers of Swiss watch exports, seem to be easing. While a rebound is unlikely this year, watchmakers are hopeful for a stabilization. Meanwhile, the industry is broadening its focus, with the UAE, India, and Spain reporting meaningful growth. Saudi Arabia, too, saw a 9% increase last year, indicating a shift in market dynamics.
The Rolex Effect on LIV Golf
In a surprising move, Rolex announced a partnership with LIV Golf, the breakaway professional golf league funded by Saudi Arabia's Public Investment Fund. This endorsement has sent shockwaves through the golfing world, as LIV has been a thorn in the side of the establishment. Despite high-profile players like Brooks Koepka and Patrick Reed leaving LIV, Rolex's support may be the lifeline the league needs to survive. It's a bold move for Rolex, which has long been associated with the golfing establishment.
The THMG Watchmaking Division: On Hold
The Honourable Merchants Group (THMG), founded by former Audemars Piguet CEO François-Henri Bennahmias, had plans to announce its watchmaking division this month. However, the group has put these plans on ice, citing a shift in focus towards funding. Bennahmias hinted at challenges in either buying out or investing in watch companies. This unexpected delay raises questions about the future of THMG's watchmaking ambitions.
So, is the storm truly blowing over for watchmakers? While there are signs of improvement, the industry remains cautious. The battle for supremacy continues, and the impact of private players and tariff strategies adds complexity. As we look ahead, the future of watchmaking is a story of both resilience and reinvention.
