Swiss Watch Trade Sees 12th Month of Decline


Swiss watch exports fell 11% year on year to CHF 1.59 billion ($1.78 billion) in January, the 12th consecutive monthly drop, as demand slowed in the US and in key Asian markets.

Shipments to the US declined 11% to CHF 183.3 million ($204.5 million), partly because strong figures in January 2020 created an unfavorable comparison, the Federation of the Swiss Watch Industry said Thursday.

Supply to Hong Kong dipped 9% to CHF 169.3 million ($188.9 million) last month as market conditions deteriorated, while exports to the UK and Japan slumped due to the tightening of Covid-19 measures, it added. January also had one fewer business day than the same period a year earlier.

The negative figures outweighed a 58% jump in orders from China, for a total of CHF 255 million ($284.5 million), mirroring a continued recovery of the retail sector on the mainland.

Globally, cheaper watches saw a sharper downturn, with shipments of timepieces priced under CHF 200 ($223) sliding 31% by value. Exports of watches with wholesale prices ranging from CHF 200 to CHF 500 ($558) decreased 26%, while goods valued between CHF 500 and CHF 3,000 ($3,347) suffered a decline of 25%. Shipments of items above that price level slipped 4.1%.

The numbers point to a worsening of the situation versus December, when the global decline was the mildest since the start of the pandemic as Chinese demand rose. The trade hasn’t witnessed a year-on-year increase since January 2020.

“The result for the month will nonetheless have only a limited effect on the upward trend seen since last summer, and a return to significant growth is expected over the next few months,” the federation noted.


Swiss Watch Exports Down 81% in April

Swiss Watches

Swiss watch exports plunged in April as coronavirus lockdowns brought the entire supply chain to a near halt.

“Swiss watch exports were extremely low in April as a direct result of the standstill in production, distribution and sales, causing them to collapse,” the Federation of the Swiss Watch Industry reported Tuesday.

Shipments slid 81% to CHF 328.8 million ($339.1 million) for the month, with nearly all markets declining significantly. Orders from Hong Kong plummeted 83% to CHF 42.2 million ($43.5 million), while supply to the US dropped 86% to CHF 27.9 million ($28.8 million). Exports to Japan fell 86% to CHF 19.5 million ($20.1 million).

The decline in China was more mild, slipping 16% to CHF 110.3 million ($113.7 million), and accounting for one-third of total Swiss watch exports in April, as the economy began to recover. However that compares with an increase of 11% to CHF 155.9 million ($160.6 million) in March. In February, shipments to China fell 52% due to the coronavirus.

All price categories “contracted sharply,” as exports of timepieces valued between CHF 500 ($516) to CHF 3,000 ($3,095) declined 72% by value. Watches worth more than CHF 3,000 dropped 86%.

Shipments of timepieces made from precious metal decreased 82% to CHF 102.4 million ($105.6 million). Supply of gold and steel watches saw the steepest decline, tumbling 90% to CHF 28.4 million ($29.3 million).


Manufactured diamonds will be to mined diamonds what Tudor is to Rolex

Manufactured diamonds

It’s no secret that Israel is one of the largest suppliers of cut diamonds the world over. And, if you have ever bought an engagement ring, chances are you have likely been presented with the option of buying an Israeli diamond.

According to USTradeNumbers, Israel ranked 22nd in total global trade this year with a total of $18.37 billion. Of that, more than $6.5 billion came from the importing and exporting of you guessed it diamonds.

I recently read a story published in Canada’s Financial Post titled, “A diamond may be forever for some but for millennial it’s looking like not so much”, lamenting the potential demise of the mined diamond industry.

In it, the author states:

the millennial generation poses an existential dilemma for the industry: they tend to spend on experiences rather than luxury items, achieve financial maturity later in life and are less likely to get married than previous generations.

It’s an interesting argument to be sure. And, if true, this trend could pose challenging for countries like Israel who rely so heavily on the art of refining mined diamonds.

The story goes on to argue that it’s not just the lifestyle choices of millennials that pose a threat to the old adage that diamonds are a girl’s best friend it’s the growing popularity of something called artisan or lab created diamonds.

Yeah, I’m not so sure I agree with that.

Many in the media have been making the same argument about the luxury watch industry for years now. While quartz  and other digital offerings may well be more accurate than mechanical wristwatches, the appeal to aficionados and luxury buyers is simply not there. Same for smart watches, which, to be sure, have a place among the masses and those interested in fitness, but do not affect demand for brands like Rolex, Cartier or Patek Philippe. Someone who wants a Rolex simply will not buy an Apple Watch as an alternative and call it a day. It’s like comparing apples and oranges.

While these manufactured stones may well be incredibly difficult to distinguish from mined diamonds, even to the most well trained gemologist, I am not convinced they will take much if any market share from those who truly want to buy a traditional diamond.

Now don’t get me wrong, I’m not saying the mined diamond industry isn’t susceptible to demand changes. Surely the past few years have illustrated it is indeed possible. I’m also not suggesting no one will buy this new type of jewelry stone. Some people will choose man made diamonds over the mined ones. And, they’ll pay less money and get a larger stone too.

But I predict manufactured diamonds will be to mined diamonds what Tudor is to Rolex or what Acura and Lexus are to BMW and Mercedes a quality alternative with a comparable look and feel, but cheaper, less valuable and ultimately less desirable.

Time will tell.