Story Highlight
– 2025 ends with cautious optimism for the watch industry.
– Trump’s tariffs significantly impacted Swiss watch imports to US.
– Luxury watch prices rose due to increased tariffs.
– Demand consolidates around a few dominant luxury brands.
– Independents and microbrands gain traction amid market shifts.
Full Story
As 2025 concludes, the global watch industry reflects a cautious optimism reminiscent of the year’s outset. Financial positions appear largely unchanged since January, and trends in market share have remained consistent with patterns observed over the last decade.
A pivotal influence on the watch sector this year has been Donald J. Trump, the President of the United States. His Fourth of July address coincided with the Watches & Wonders event in Geneva, sending shockwaves through the Swiss watch community following the announcement of a 31% tariff on imports from Switzerland to the US.
During the event, industry leaders felt a climate of uncertainty as they processed the implications of the looming tariff. The announcement came at a time when the exhibition had been positively abuzz, particularly due to the introduction of intriguing new models, including Rolex’s highly anticipated Land Dweller.
This scenario highlighted the changing dynamics between brands and their retail partners, with many brands recognising the necessity of collaboration with top jewellers amid a tightening luxury goods market. Retailers soon became essential in mitigating the impact of incurred tariff costs, adeptly maintaining sales momentum.
Throughout 2025, a consistent pattern emerged regarding tariffs. Manufacturers rushed to import stock before the announced rates took effect, which retailers leveraged to maintain pre-tariff pricing for customers. This led to spikes in imports, notably a 45% increase in July, followed by a sharp 24% decline in August when new tariffs were enforced.
In response to the tariffs, brands adjusted product prices, resulting in an average 15% rise in Rolex pricing from December 2024 to January 2026, with gold watch prices increasing by nearly 20% due to soaring gold costs.
Despite these shifts, the overall effect of the tariffs has been less severe than anticipated. By the end of November, Swiss watch exports to the US had only decreased by 2% year-on-year, and total exports globally were down by just 2.2%. Conversely, while exports to China and Hong Kong saw declines, those to regions such as Saudi Arabia, the UAE, and India experienced growth.
Two long-term trends persisted and were amplified by the tariff situation. Luxury watchmakers continued their focus on the affluent market, selling high-priced pieces to a smaller clientele. Furthermore, market demand was increasingly concentrated among a select few brands: Rolex, Patek Philippe, Audemars Piguet, and Richard Mille, with Cartier also showing a slight rise in market share.
Conversely, several brands under larger luxury groups faced declines in their market foothold. Companies such as Omega and TAG Heuer faced challenges in appealing to middle-class consumers willing to invest in high-priced watches, highlighting a significant contraction in the market for mid-range timepieces over the past two decades.
Despite the tariff turmoil, the United States solidified its position as the primary market for Swiss watch exports, significantly outpacing China. Notable retail developments in the UK included several boutique openings, although expansion efforts were tempered as major chains began closing underperforming stores.
Performance across UK watch and jewellery retailers varied, reflecting no clear dominance among those focused on luxury brands compared to family-run independents. Noteworthy success stories included retailers with rich histories in fine jewellery, while emerging independent brands demonstrated a burgeoning appeal.
The growing drift toward independent and microbrands since the pandemic suggests a shift in consumer preference away from large manufacturers. The enthusiasm displayed at platforms like Dubai Watch Week emphasised a desire for creativity and innovation within the industry, highlighting the need for traditional brands to engage with audiences more directly.
Going forward, the industry must cultivate its talent pool, as experience in sales positions has significantly dwindled since the pandemic. As affluent customers become increasingly well-informed, the onus falls on brands to replicate the excitement generated by independent creators and ensure sales staff are equipped to foster genuine connections with prospective buyers.
Ultimately, as consumer preferences evolve, businesses that prioritise engaging experiences and expert personnel are likely to thrive in this competitive landscape.
