While many countries have imposed sanctions on Russia, taking a stand against the conflict with Ukraine, the impact is being felt in the watch market.
Swiss watchmakers are meeting in Geneva this week for Watches and Wonders, their first major trade event in three years. However, they are facing the impact of the sanctions imposed on Russian oligarchs.
Last year, Russia was only the 17th largest market for Swiss watch exports, but managing business and customer relations during such a sensitive period was high on the list of priorities. Indeed, sanctions against Russia and the ban on exports of luxury goods led brands to close their shops in the country and stop exporting to it.
Russians account for about 2-3% of global luxury spending, or about €7bn, dwarfed by the US and China, according to Claudia D’Arpizio, senior partner and head of fashion and luxury at consultancy Bain. “These are loyal customers who buy every year and I think have strong relationships with some of these brands on a personal level,” she noted.
Russian retailers were unable to attend the show, according to Thierry Stern, director of Patek Philippe, which works with the large Russian luxury retailer Mercury Group.
The Richemont Group said it had stopped buying Russian diamonds, but was confident it could source them elsewhere. Oris, meanwhile, said it had put plans to expand in Russia with a new retail partner on hold. “But we must not forget that there are also people there, families whose existence is threatened,” co-CEO Rolf Studer told Reuters, pointing out that many brands had long-standing relationships with Russian partners.
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Featured photo : © Watches and Wonders
