Story Highlight
– Trump’s second term sparked significant geopolitical and economic turmoil.
– Swiss watch industry faced 39% tariffs on exports to America.
– Rolex and Cartier dominate market, challenging mid-ranking brands.
– Smaller men’s watches trend benefitted brands like Cartier.
– TAG Heuer aims to regain market share amidst competition.
Full Story
In a year marked by significant geopolitical and economic shifts, the watchmaking industry has found itself navigating through turbulent waters, reminiscent of the global financial crisis of 2008-2009. The onset of 2025 was marked by the commencement of Donald Trump’s second presidential term, igniting a year of dramatic changes.
Among the notable developments was the introduction of tariffs reaching as high as 39% on Swiss goods exported to the United States. Although it may not rank among the most impactful policies from Trump’s administration, such tariffs pose considerable challenges for Switzerland’s watchmakers, sending shockwaves through the industry.
Initial forecasts for the year, penned on January 2, did not include any reference to US tariffs, potentially an oversight considering Trump’s historical support for such measures aimed at reinforcing American economic interests. Instead, the focus was primarily on market behaviours of watch brands and consumer tendencies.
Predictions leaned towards a stabilization in the market, suggesting sales of watches—both new and pre-owned—could near the $70 billion mark. However, it was anticipated that this year would witness a growing divide between leading luxury brands, such as Rolex, Cartier, Omega, and Audemars Piguet, and lesser-known labels facing more rigorous market conditions, with some potentially facing acquisition or closure.
The Swiss watch sector appeared to have held steady against the backdrop of challenges, with early reports indicating only a modest decline of 2.2% in exports for the first 11 months of the year. Western retail sales were expected to reflect similar stability, albeit flat or slightly decreased. Notably, the luxury segment, especially brands like Rolex, Cartier, and Audemars Piguet, reportedly gained market share amid these conditions, while Richard Mille emerged as a strong player among affluent consumers.
Conversely, Omega appeared to be grappling with its positioning, competing to maintain substantial sales volumes. The rising costs had made it difficult for a broader consumer base to commit to purchasing luxury items. For context, the cost of a steel Speedmaster Moonwatch Professional currently stands at £7,500, while a comparable Daytona by Rolex is priced at £14,050; the latter has waiting lists extending over two years, with substantial premiums noted in the secondary market.
Trends in watch sizes also persisted, with a shift towards smaller men’s models. Although influenced by celebrity endorsement of vintage styles from the 1970s, this movement remains niche. Cartier notably embraced this trend, offering a variety of sizes within its popular Tank and Santos collections. Patek Philippe further responded by introducing 40mm versions of its Cubitus, suggesting a potential future inclination towards smaller designs across different demographics.
Discussions surrounding TAG Heuer forecasted on regaining lost market share against competitors like Breitling, especially following its acquisition of the Official Timekeeper title for Formula 1 events. However, both brands encountered challenges this year, facing stagnant sales amid rising costs in customer acquisition. Despite an increased buzz around TAG Heuer, it must navigate a landscape where it sells significantly more units than Breitling due to differing price ranges.
Furthermore, while TAG Heuer was expected to position itself as a competitor to Omega in the sports watch sector, the brand’s long-term strategy, bolstered by a decade of partnership with Formula 1, necessitates a focus on innovative product development. Under the leadership of Antoine Pin, the brand needs to engage its retail partners more actively, seeking input on strategies that would benefit their business model rather than exerting top-down directives.
As the year progresses, the watch industry continues to evolve, reflecting broader economic trends while adapting to shifting consumer preferences and market dynamics.
