The latest numbers from the Federation of the Swiss Watch Industry just landed, and they are nothing short of brutal. Exports collapsed by more than 16% in August compared to last year, dragging volumes down with them. That’s the kind of headline that makes people sit up, and it should. But to understand what’s going on, you have to look at what happened just before.
In July, the industry continued to report record highs. Shipments to the United States exploded as brands and retailers rushed to get stock out of Switzerland and into stores before the new American tariff hit. The scramble inflated the figures, creating a sugar rush of exports that made everything look unstoppable. Then August arrived. What we’re seeing now is less a natural slowdown and more the inevitable comedown after a frantic stockpiling spree.
The problem is that once you strip out that distortion, the underlying picture looks even worse. China has collapsed, Hong Kong isn’t far behind, and Asia as a whole, once the growth engine of Swiss watchmaking, is now dragging the industry into negative territory. Mechanical watches still account for most of the value, but unit numbers are sliding, and the mid-price segment under CHF 3,000 is bleeding. Quartz, already under pressure from smartwatches, continues to fade.
And the tariff isn’t a one-off headache. At 39%, it’s a structural shift in the cost of doing business with America, the single most important export market left. Brands are already forced to make choices: absorb the cost and protect volume, or raise prices and risk demand. Either way, suppliers and subcontractors are feeling the squeeze, and inventories are piling up. If you’re out of the loop on what to expect with regards to the tariffs, I invite you to check out this video on the topic which explains it nicely.
Expect more cautious rollouts and plenty of belt-tightening. The high end will keep flying because it always does (and their customers can simply hop on a jet and buy wherever they happen to be roaming anyway), but the middle ground, the affordable Swiss luxury that has been squeezed for years, is where the real pressure is showing.
And who knows, maybe this storm comes with an unexpected side effect. After nearly two decades of chasing growth in America and Asia, while treating Europe like the forgotten stepchild at the family dinner, perhaps the industry will finally remember there’s still a loyal audience here at home.
The Latest Data Is Brutal