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The Swiss watch industry is experiencing one of its toughest years due to the global health crisis, forced to witness the successive cancellations of its numerous trade fairs.
It is exceptional that one of the largest international watch and jewellery exhibitions, Watches & Wonders, will not have seen the light of day for two years.
Formerly known as the Salon International de la Haute Horlogerie, this exceptional show was cancelled this year but also for April 2021: “In view of the uncertainties linked to the current health crisis, the Geneva Watch and Jewellery Exhibitors’ Committee has decided not to hold the physical show, scheduled from 7 to 13 April 2021”.
This major exhibition, dominated by numerous brands of the French group Richemont such as A. Lange & Söhne, Cartier, Jaeger-LeCoultre, or Montblanc, will unfortunately not offer the opportunity to present the pieces of the new collections of these brands during these two years as traditionally: “An entirely digital edition will be offered on the same dates on watchsandwonders.com with new services and functionalities, where the participating brands will be able to present their new watches for 2021 and interact directly with their public”.
Other brands are facing the same issue. Rolex, Patek Philippe, Tudor, Chanel and Chopard had to withdraw from the physical exhibition under duress. A decision that was also taken earlier this year at Baselworld, the world’s leading trade fair for Swiss watch and jewellery.
As the main market and consumer of luxury goods, China has also had to cancel one of its biggest watch shows in Hong Kong and turn it into a virtual event, which was due to take place in September, due to the pandemic but also to the political instability in the city.
An official statement from the Hong Kong Trade Development Council announced the news at the time: “After consultation with the Hong Kong… A decision was taken to migrate the fair online, consolidating it with other fairs in HKTDC Autumn Sourcing Week – ONLINE. The online exhibition will be held from 16 to 27 November 2020, allowing the industry to continue to explore business opportunities. »
Although the major brands on the market have a strong image and are well established in the face of the potential risks they may face, the global pandemic will have left its mark.
The Richemont group posted an overall drop in wholesale sales of 65% in the last quarter of 2020, and in retail sales of 43%. And with good reason, mainly due to “temporary shop closures, a sharply reduced tourism and generally weak consumer sentiment.” Sales by the group’s specialist watchmakers also fell during this period by 56%, due to the same causes, in addition to low penetration of global e-commerce.
The Swiss Swatch group also unveiled its results for the first quarter of 2020. Global trade has slowed sharply, causing a strong loss on sales of 46% in addition to an operating loss of AUD 491 million, compared to AUD 822 million in 2019. Nevertheless, the Swatch group has insisted on implementing an exceptional policy within the company to maintain its jobs as much as possible. In return, out of 23,000 employees, 6,000 will have to undergo a reduction in working hours and wages.
The French luxury group LVMH, owner of the TAG Heuer, Zenith, Bvlgari and Hublot brands, had also suffered significant losses in the first quarter of 2020, with in particular a 26% drop in turnover.
Nevertheless, one of the market sectors managed to stand out from the others, that of second-hand watches. Retail sales results are rather good and the market has been booming since the beginning of the year. According to the British daily newspaper Telegraph, the online site WatchBox has posted a 48% increase in sales of vintage wristwatches this year, in a unit price range of £100,000 per watch.
The segment that is however showing great difficulties is that of small watchmakers. Increasingly, trade fairs for small exhibitors and online platforms are shrinking, posing a real problem for these brands, which are seeing the number of visitors to their points of sale fall and consequently their reputation diminish.
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