Watches and Wonders 2025: How Will Markets Respond to the Concerns of Major Watch Industry Players?

At the heart of discussions is the unprecedented destabilization of geopolitical and economic balances, largely driven by shifting policies from the U.S. administration. These changes fuel concerns within the watchmaking industry that a global sales rebound may be slipping further out of reach.

While this year’s Watches and Wonders will undoubtedly showcase remarkable innovations—particularly from brands marking significant anniversaries, such as Vacheron Constantin celebrating its 270th year—the industry as a whole remains acutely aware that demand has yet to pick up. The entire supply chain is suffering. Off the record, many suppliers report order reductions of 50%, with some upstream providers, such as gold suppliers, facing drops of up to 80%. Over the past twelve months, Swiss watch exports have been in decline, a trend that accelerated in February with an 8.2% contraction. Olivier R. Müller, founder of LuxeConsult and collaborator on Morgan Stanley’s "Annual Swiss Watcher" report, notes: "Swiss watch production fell to a historic low of 15.3 million units in 2024, down 9.5% from 2023, with 10 million quartz watches and 5.4 million mechanical watches produced.

Furthermore, the market has also contracted in value: Swiss wristwatch exports totaled CHF 24.8 billion in 2024, a 2.8% decline from 2023. The 2025 outlook points to a continued decline in volume and a slight decrease in revenue compared to 2024. Brands that expanded their retail presence last year will see their revenue increase in 2025. The fundamental arithmetic remains the same: if the top five brands hold steady, the industry can expect a relatively stable year. However, the major concern lies with the U.S. market. If a recession looms, the watch industry will struggle, as the U.S. is currently the only market capable of driving demand. But uncertainty remains high."

The dominance of the top five watch brands is stronger than ever. Among approximately 400 Swiss watch brands, profit distribution remains highly concentrated. According to Morgan Stanley estimates, the four largest privately held watch brands—Rolex, Patek Philippe, Audemars Piguet, and Richard Mille—generated a combined revenue of CHF 17.2 billion in 2024, accounting for around 48% of the market. However, they captured a staggering 67% of the industry’s total profits, with an average operating margin of 34%. Similarly, the three publicly traded groups—Swatch Group, Richemont, and LVMH—recorded a combined revenue of CHF 15.1 billion, representing approximately 42% of the market, yet only secured around 26% of total industry profits.

The Swiss watch industry remains heavily concentrated at the top and is in dire need of accessible, high-volume brands. The Morgan Stanley report highlights that watches priced above CHF 50,000 account for 33.5% of export value but only 1.2% of total volume. Leading the industry is Rolex, with estimated (but unconfirmed) revenue of CHF 10.583 billion from 1.176 million watches produced, followed by Cartier at CHF 3.183 billion with 680,000 units, Omega at CHF 2.39 billion with 505,000 units, Audemars Piguet at CHF 2.38 billion from just 51,000 pieces, and Patek Philippe at CHF 2.3 billion with 72,000 watches produced. According to Olivier R. Müller, "This is an existential issue for Switzerland’s industrial structures. The premiumization of the watch industry is a serious problem. The sector is moving dangerously toward an annual volume of just 12 million units, which will have severe repercussions across the entire production chain."

Hopes for a rebound in the Chinese market remain unfulfilled. In 2024, China saw a 23% decline in watch sales by value and a 37% drop in volume. Arthur Jurus, Head of Investment Office, Private Wealth Management at ODDO Bank Switzerland, observes: "Across the luxury industry, demand is slowing more sharply in China. We’ve noticed a decline in Asian tourism, evidenced by decreased airport foot traffic. Brands like Hermès and Brunello Cucinelli are faring better because they have greater pricing power and more limited production.

"Another factor impacting Chinese demand is the weak yen, which encourages Chinese consumers to shop in Japan. However, Olivier R. Müller warns against assuming that new markets can replace China: "It’s an illusion to think that other markets will become the next China. The buying frenzy of 5 to 10 years ago is gone. Asian consumers have matured, and young Chinese buyers are increasingly drawn to the secondary market. More accessible brands like Frédérique Constant, Raymond Weil, and Swatch Group brands have potential in China and India, but significant investment in desirability through social media is needed."

Understanding and adapting to Chinese consumer preferences is also key, according to Laura Burdese, COO of Bulgari: "China remains our top market, but in a much healthier and more balanced way than before. Our geographical diversification is far better today. Since the beginning of the year, we’ve had great success in China, thanks to the Year of the Snake—our signature motif, featured in the Serpenti Tubogas and Seduttori collections. Chinese customers appreciate the jewelry versions, but more than the product itself, they are drawn to the story behind it and how it resonates with their culture and emotions. Our cultural initiatives have been well received, and our substantial investment in China has given the brand a boost, while others have chosen to scale back."

Richemont’s recent decision to dissolve its Specialist Watchmakers division highlights the need for Swiss watch brands to refocus on their core strengths—industrial verticalization, innovation, and creative distinctiveness. Burdese adds: "Bulgari has a unique DNA, both as a Roman high jeweler and a master of timekeeping. At Watches and Wonders, we will showcase our new Serpenti Aeterna and the Octo Finissimo Tourbillon Skeleton. In terms of verticalization, the opening of our new Métiers d’Art facility in Saignelégier aligns with this strategic necessity."

With the stabilization of demand, another major concern for watchmaking and jewelry brands is the exorbitant price of gold today. Now at 2,670 Swiss francs per ounce (33g) or 85,870 Swiss francs per kilogram, gold has become the safe haven in these highly unstable times.

This increase will inevitably impact the price of watches in 2025. In fact, most brands have planned a price increase of 4 to 5%. But beyond the pricing policy, the impact of the price of gold is extreme on the cash flow of brands, who are forced to pay astronomical sums. Olivier R. Müller explains: "Watchmakers and jewelers must pay upfront for the entire amount of material being manufactured. To make 100 cases weighing 40 grams each, which equals 4 kilograms of gold, a multiple of five is required at the start of production. So, in this case, it’s the equivalent of 20 kg of gold to commit. The cash out at the moment is huge!"

For many, it is expected to exceed 100,000 Swiss francs in 2025. Arthur Jurus confirms: "Yes, gold will continue to rise, and it should reach $3,200 by the end of the year. However, this increase is not indicative of a bubble. It is the result of three factors: central banks buying physical gold (China, Turkey, and Poland); the economic slowdown in the U.S. causing a drop in 10-year bond rates, which in turn causes the rise in gold prices; and the stress from Trump’s policies affecting investors."

In 2025, we should also see an increase in the average price of brands since turnover cannot be increased by production volume. Yet, an underlying danger persists: pricing power or the capitalization of houses based on the strength of their brand image. Some excesses have occurred in the industry when demand was at its peak, especially on certain highly sought-after models. For Olivier R. Müller, this is not the right time for this practice: "Price elasticity is not infinite; luxury brands have realized there is a limit to this game, and the watch industry must understand that too. Recently, at Patek Philippe, for example, we saw that after the release of the model reference 5711 in steel at 28,500 francs, there was the introduction of the new Cubitus collection in steel, very similar, at 35,000 francs. Brands are raising the average price by working on their product mix, introducing more gold-set watches, for example."

The Watches and Wonders fair will therefore look closely at the United States, the only market currently capable of growth, even though, in February, there too, demand dropped by 6.7%. India, a country with high growth potential, is particularly under scrutiny, although today it represents only 1% of Swiss exports. It is therefore highly likely that brands will make up for these drops by highlighting new models at higher prices, typically made from alternative materials to gold, such as ceramics.