Swiss watchmakers sum up last year's results.
The most important reports for the Swiss watch industry were published at the end of January. The results have been summarized for 2020 — the year Covid-19 hit — with the impact acutely felt by the Federation of the Swiss Watch Industry. An annual downturn of 21.8% has been recorded: shipments dropped to 16,984 million CHF.
The situation in the main markets also looks downright depressing, despite the growth China experienced after recovering from the pandemic in the second half of the year. China took first place in 2020 as the biggest importer of Swiss watches, and was the only country to experience positive economic growth out of the top-20 importers. Watch exports to the Celestial Empire grew by 20% in 2020 compared with 2019, and by 40% compared to 2018.
Speaking about plans for the coming year, Hublot CEO Ricardo Guadalupe has set his hopes on recovery in other markets too — in the US and Japan. However, the United States dropped by 17.5% in 2020, with the Land of the Rising Sun down 26.1%. Hong Kong which had once been a key market remains down -36.9%, and there's little hope of a return to growth.
The Swatch Group's reporting shows just how severe last year was for the Swiss. The Group which consists of 20 watch brands from Breguet to Flik-Flak suffered losses of 53 million CHF. That's compared to 748 million in profits in 2019! Sales fell by 32.1% to 5.6 billion, although the situation wasn't quite as catastrophic in the second half of the year: sales were still down, but better than in the first half of 2020 at 54.7%.
And this has allowed the Swatch Group to begin this year with a positive outlook. The company reckons that once quarantine restrictions have been lifted and mass vaccination has been rolled out, people all around the world will be flocking to the shops for watches, which was what happened in China.
LVMH watch brand sales fell by 24% in 2020, although there was a significant improvement in the fourth quarter, when the least severe slump of 2% was recorded. Another luxury goods market leader has only presented results from the third quarter of the financial year, although the end of the financial year coincides with the end of the calendar year.
The sales of Richemont's specialist watchmakers fell by 4% in the third quarter, while jewelry sales calculated at constant exchange rates rose by 14%. The situation isn't all that bad, it's improving by leaps and bounds. We'll soon see whether 2021 lives up to watchmakers' expectations.