The watchmaking industry is facing a critical juncture, and the future looks both promising and challenging. Let's delve into the recent developments and uncover the key insights that will shape the industry's trajectory.
The Storm: A Tale of Two Extremes
In the world of watchmaking, some brands are thriving while others are struggling to keep up. The latest data reveals a stark contrast: Richemont's watchmakers are on the rise, LVMH's remain steady, and Swatch Group's are experiencing a downturn. But here's where it gets controversial... the industry as a whole showed a surprising spike in December, halting a four-month decline and ending the year with a modest 1.7% drop.
So, what does this mean for the watchmakers? Well, it appears that the strong brands are pulling away from the competition, leaving their rivals in the dust. The laggards will need to step up their game, but with a subdued market and aggressive marketing from the big players, it's an uphill battle.
The Numbers Game: Unraveling the Mystery
Industry figures are far from straightforward. None of the groups provide detailed performance reports for individual brands, leaving analysts to piece together the puzzle.
Richemont, for instance, reported a 7% increase in sales for its specialist watchmakers in 2025, but the figures might have been even better without the inclusion of Baume et Mercier, which they finally sold off. And Cartier, part of Richemont's jewelry division, saw a healthy 14% growth.
In contrast, LVMH's watch and jewelry division reported a 3% growth for the year, but that includes jewelry sales from brands like Tiffany and Bulgari. TAG Heuer, still awaiting a new CEO, saw its Hublot revenues drop by around 250 million Swiss francs since the pandemic boom, according to Morgan Stanley estimates.
However, TAG Heuer's Formula 1 deal has boosted sales and boutique footfall, with a 20% increase in Formula 1 collection sales last year.
Swatch Group, on the other hand, experienced a 1.3% drop in net sales but a steep decline in net profits, from 219 million Swiss francs in 2024 to a mere 25 million in 2025. Despite this, the group projects positive sales and volume developments for 2026, which could be a sign of relief for Tissot, Longines, and their high-end watchmakers.
The Fog of Private Ownership
Adding to the complexity, four of the six largest Swiss watch companies are privately held and do not disclose financial figures. Audemars Piguet's CEO, Ilaria Resta, revealed a 10% revenue increase last year, but without official results, analysts believe Rolex, Patek Philippe, Richard Mille, and Audemars Piguet are pulling ahead, further distorting industry data.
Tariff Troubles: Muddying the Export Waters
Swiss watch export figures, as broken down by FHS, are only marginally less opaque. The 2025 export values of 25.5 billion Swiss francs, a 4.5% drop from the record year of 2023, show a relatively small difference from the previous year's revenge purchasing.
But how much are tariffs inflating the 2025 results? Exports to the US increased by 4.6% compared to 2023, as brands rushed to ship watches before incoming tariffs. However, these figures don't reflect actual sales, and it's possible that US retailers are now overstocked, leading to slower exports to Switzerland's largest market this year.
More concerning are the export volume figures, which dropped by 742,000 last year, almost 5%, bringing overall unit production down to near 2020 levels when factories were closed due to Covid. While brands raise prices to protect margins, volume is crucial for industry suppliers, the unsung heroes who make the components for almost every Swiss watch. Many of these suppliers are struggling, relying on the Swiss government's furlough scheme to stay afloat.
Looking Ahead: A Glimmer of Hope
There are signs that the crises in the Chinese and Hong Kong markets, once the drivers of Swiss watch exports, are easing. While it's unlikely these markets will rebound this year, watchmakers will be relieved to see the slump subside. Meanwhile, the industry's focus is shifting to the UAE, India, and Spain, which reported meaningful growth, and Saudi Arabia, which saw a 9% increase last year.
So, has the storm passed? Not quite, but it has certainly calmed down. Further improvement may come by the end of the year, but watchmakers are taking a cautious approach.
Rolex's Surprising Move: A Boost for LIV Golf
In a surprising turn of events, Rolex, the prestigious sporting sponsor, announced a partnership with LIV Golf, the breakaway professional golf league funded by Saudi Arabia's Public Investment Fund. LIV has been a thorn in the side of the golfing establishment, luring top players with exorbitant fees, but its shorter format and uncompetitive fields have struggled to attract broadcasters and sponsors.
Despite high purses, with the top 10 players earning over $6.5 million in prize money last year, LIV's commercial success has been elusive. However, Rolex's endorsement is a huge vote of confidence and may secure LIV's survival. This move will undoubtedly sting the PGA Tour and the DP World Tour, both backed by Rolex, as the rancor and division caused by PIF's entry into golf lingers.
THMG's Watchmaking Division: On Hold
The Honourable Merchants Group, the luxury group founded by former Audemars Piguet CEO François-Henri Bennahmias, was expected to announce its watchmaking division this February. However, the group has put its plans on ice, with Bennahmias citing a shift in focus towards funding and suggesting that watch company buyouts or investments are not going as planned.
With a war chest of nearly $300 million, Bennahmias may be facing challenges in unlocking the padlock or seeking additional funding.
The watchmaking industry is at a crossroads, and these recent developments offer a glimpse into its future. While some brands are thriving, others are facing challenges, and the impact of tariffs and export figures adds to the complexity. The industry is bracing for changes, and only time will tell if the storm has truly passed.
