2015 may well go down in history as a year to remember for the Swiss watch industry but not for reasons they will probably wish to forget. Not only was October the fourth consecutive month of declining Swiss watch exports but it was also the biggest drop in six years. In all, Swiss watch shipments have fallen by 3.2% in the first ten months of 2015.
Hong Kong, the industry’s largest market, saw shipments tumble by 39% in October. Tag Heuer recently closed one of its stores there, giving credence to analyst predictions that demand will not bounce back any time soon if ever.
While there are many reasons for the decline in Swiss watch exports, the Apple Watch is cited as one factor for a sharp drop in lower-brand sales. Worse for the industry at large, the trend is not limited to the Swiss industry. For example, Fossil Group, a U.S. watchmaker which just entered the wearable space with its Fossil Q lineup and Misfit acquisition, saw its stock plummet earlier this month after it warned that its Q4 sales could fall as much as 16 percent due to competition from wearables. Overall U.S. watch sales have also already demonstrated a similar trend. were drawn earlier as this summer when U.S. watch sales declined.
Even before the Apple Watch was released, many predicted that it would have a detrimental effect on the Swiss watch industry. Elmar Mock, the co-inventor of the Swatch, warned that the Swiss watch industry would soon enter an Ice Age that could decimate the industry much as the Quartz Crisis did in the 1970s and 1980’s when inexpensive quartz watches gained popularity.
Source : Bloomberg