Luxury watchmakers are currently experiencing a boom in demand, leading to some companies struggling to keep up with orders. This surge in demand comes after the luxury watch industry faced significant challenges during the global economic downturn caused by the COVID-19 pandemic in 2020. However, the sector has made a remarkable recovery in 2021 and continues to thrive in 2022, despite the uncertainties caused by Russia’s war in Ukraine.

Hermes, a French luxury brand, had a particularly successful year in the watches business, with sales increasing by an impressive 73 percent. Guillaume de Seynes, Vice President of Hermes, expressed his satisfaction with the strong performance of the watchmaking industry globally. He also mentioned that there was high demand for a particular men’s watch model last year and that the company could have sold even more if they had been able to produce an adequate supply. The overwhelming challenge now for watchmakers is to meet the demand, as it surpasses their production capacity.

Rolf Studer, CEO of the Oris brand, also reported a strong year for his company. However, they faced difficulties in launching a new collection in the higher price range due to a lack of watch movements. The company had underestimated the demand and decided to prioritize fulfilling orders for existing models before introducing new ones. This delay in the launch showcases the challenges luxury watchmakers are facing in meeting customer demands.

Despite the challenges, Swiss watch exports rebounded strongly in 2021, with a 31.2 percent increase compared to a contraction of 21.8 percent in 2020. In fact, exports exceeded pre-pandemic levels and even surpassed the record set in 2014. The industry has seen a recovery in the first two months of 2022, with a nearly 16 percent increase in exports of watches worth over 3,000 Swiss francs. This data highlights the resilience of the luxury watch market and its ability to bounce back quickly.

However, the industry now faces potential challenges due to the war in Ukraine and the resulting sanctions on Russia. Many luxury watch brands have a significant client base in Russia, and the geopolitical situation could impact sales. To mitigate this risk, some brands are reallocating their inventory to other markets where there is high demand for luxury timepieces.

Despite the uncertainty in global markets, some luxury watchmakers are confident in the resilience of their brands. Edouard Meylan, CEO of H. Moser & Cie., stated that while there may be some volatility in other markets, it would take a major financial crash to significantly impact an independent brand like theirs. Meylan also noted that all of their 2022 production has already been pre-sold to retailers and partly pre-paid by customers, demonstrating the strong demand for their watches.

In conclusion, luxury watchmakers are currently facing a surge in demand, which is outstripping their production capacity. While this presents challenges, it also signifies a strong recovery for the industry after the challenges of the COVID-19 pandemic. Luxury watch brands are adapting to this trend by investing in production capacity and prioritizing existing orders. Despite geopolitical uncertainties, the resilience of the luxury watch market and its ability to satisfy customer demand remains robust.

Useful links:
1. Why Hermes Credits Its Watch Success to Good Timing
2. Alabaster Madison – Luxury Watches