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Swiss watchmakers file for bankruptcy as Coronavirus impact bites

Geneva

Swiss watch sales are expected to fall by 25% this year, according to a report published this month by investment bank Vontobel, a worse slump than the industry experienced during the quartz crisis, when exports dropped by over 15%, or the global financial crisis of 2009 when they fell by 22%.

Geneva-based industry analyst Oliver Müller, managing director of LuxeConsult, says there will be fewer than 16 million watches sold this year, down from 20.6 million in 2019.

“In terms of volumes, we’re going to fall back to levels seen in 1945,” he tells Switzerland’s Swissinfo.ch.

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A 25% drop in exports would translate to a total of CHF 15.4 billion for 2020, with over CHF 5 billion of potential sales lost to the Coronavirus lock down.

Production in Switzerland ground to a virtual standstill in March, and is only now inching back to life.

Rolex remains closed, Patek Philippe is back but with limited production, Swatch Group has attempted to keep manufacturing, but at dramatically reduced capacity, LVMH brands began to return last week but virtually all of Richemont’s maisons are expected to remain closed through to the end of May.

Loss of production should, at least, prevent a massive oversupply of watches into wholesale that might then end up flooding the grey market.

While the world’s biggest watchmaking businesses have more than enough cash to survive, Mr Müller thinks that there will be a large number of casualties. “Between 30 and 60 ‘Swiss Made’ watch brands – of a total 350 – will not survive,” he tells Swissinfo. “By my count, a dozen watchmaking companies have already filed for bankruptcy since the beginning of the crisis.”

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Rob Corder

The author Rob Corder