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Bloomberg
The Swiss watch industry has survived lickings before, but Rolex, Omega and Cartier now face a combination of economic punches putting them back on their heels.
The industry was adapting to downturn from political protests in its largest market, Hong Kong, when coronavirus outbreak hit. Meanwhile, Swiss franc, surging gold prices, and store closures are set to saddle firms like Swatch and Richemont with higher costs.
Rolex shut down all its plants in Switzerland for at least 10 days. Richemont has been offering price cuts of 49% for second-hand Cartier timepieces in a one-week special offer on its vintage resale site, Watchfinder. Watch fairs in Basel and Geneva have been cancelled. Swatch has prepared a special-edition Omega for the 2020 Tokyo Summer Olympics, which many believe will be cancelled.
The first half will probably be the worst ever for the modern luxury-goods industry, Sanford C. Bernstein’s Luca Solca said. That threatens employment in Swiss watchmaking, which supports 59,000 people and accounts for almost a tenth of the country’s exports. To make matters worse, many workers live across the border in France, and may be staying home in containment efforts or because many border crossings have closed.
“This scenario is worse than in 2008, as there doesn’t seem to be any offset — other than possibly a quantum of solace from online,†Solca wrote.