The bling is again, however the Iran war has tarnished the outlook for the luxurious watch trade — the last word in opulence.
Beginning Tuesday, Geneva hosts the annual Watches and Wonders truthful, a premiere gathering in an trade longing for a rebound after two years of market contraction, hopefully together with gross sales in oil-rich Gulf Arab nations.
The U.S. and Israeli war in opposition to Iran that started Feb. 28, nevertheless, has had a sweeping influence on the worldwide economic system, driving up power costs, stalling shipments of fertilizer, and disrupting air travel, amongst different issues.
Excessive-end watches haven’t been spared. Hovering costs for valuable metals like gold and silver, and U.S. President Donald Trump‘s tariffs launched a yr in the past — whereas down from peak ranges — already affected the market.
Now, renewed inflation pressures and doubts about client confidence are injecting new uncertainty into the market that generates tens of billions of {dollars} in income annually.
“The warfare within the Center East may have definitely a huge effect for the Swiss exports as a result of it represents 10% of the overall Swiss watch exports, so it’s fairly substantial,” mentioned Oliver Müller, founding father of Swiss consultancy LuxeConsult.
“Some markets within the Center East are completely halted,” he mentioned. Within the United Arab Emirates, for instance, “60% of enterprise is completed with vacationers. You may think about that nothing is happening at present.”
A ‘cloud’ over Watches and Wonders present
The present is an elite gathering that showcases improvements, drums up offers and hosts some 65 exhibiting manufacturers from all over the world: That’s only a sliver of an trade that counts some 450 watchmakers in Switzerland alone. About 60,000 guests are anticipated to attend.
“We now have only a few cancellations. We needed to adapt some travels, however we expect a document version when it comes to numbers of holiday makers,” mentioned Mathieu Humair, the CEO of Watches and Wonders.
Celebrities have been within the combine. Tennis star Jannik Sinner and actor Patrick Dempsey have been available for the opening Tuesday.
Morgan Stanley, within the ninth Annual Swiss Watcher report put along with LuxeConsult, mentioned in February that Swiss watch exports declined 1.7% final yr in worth phrases — a yr when Switzerland’s franc was comparatively robust in contrast with the U.S. greenback and the euro.
It was a second straight yr of market contraction, the report mentioned.
“If you look again at a yr in the past, the type of theme was: The tariffs and the uncertainty,” mentioned trade analyst Ming Liu. “Sadly, we aren’t wherever nearer to certainty, in all probability even much less with what’s occurring within the Center East.”
Much like the luxurious items sector as a complete, the most important manufacturers have been gaining market share. 4 of Switzerland’s 450-odd watch manufacturers — Rolex, Cartier, Patek Philippe, and Omega — make up over half the overall Swiss retail market share, the report mentioned.
And the upper-end phase has been rising: hand-crafted watches priced at greater than 50,000 francs (greater than $63,000) apiece made up 37% of the overall worth of Swiss watch exports final yr — up from 33.5% in 2024, it mentioned.
Switzerland nonetheless stands out within the luxurious watch enterprise
The Morgan Stanley report mentioned Swiss-made watches symbolize about 96% p.c of the worldwide luxurious watch market, or those who retail for at the very least 2,000 francs every (greater than $2,200).
Japan’s Grand Seiko is the “most credible non-Swiss challenger” and India’s Titan is making a run on the high tier, the report mentioned.
The Swiss are coming off a turbulent yr. Trump imposed exceptionally excessive U.S. tariffs on items from Switzerland final yr, hitting a peak of 39% — the very best confronted by any developed Western nation.
A delegation of Swiss enterprise executives traveled to the White Home and provided Trump presents, together with a Rolex clock, in November. The next month a deal was introduced that sharply lowered U.S. tariffs on Swiss merchandise.
—Jamey Kaeten, Related Press
AP video journalist Mustakim Hasnath contributed to this report.
