It’s no surprise that watchmaking companies have been affected by the ongoing COVID-19 pandemic just like everyone else in the world. This means that the watch industry as a whole and its beloved products will be, too.
Along with so many other non-essential businesses around the world, watch manufacturers are doing the responsible thing and closing their facilities to help prevent the further spread of the virus. Following Rolex, some of the latest to make such announcements are Patek Philippe, Audemars Piguet and Hublot. More are sure to follow before the crisis abates.
As well as production facilities, offices and boutiques will also be closed as Switzerland enacts measures that include restrictions on businesses and gatherings, as well as on movement. Since it’s not clear how long the situation will last, the closures are open-ended or may simply be extended beyond current estimates.
Amid governments’ scrambling to not only protect citizens but also to buffer the economy against what has already been a massive shock, watches are the least of most people’s immediate concerns. However, even when the health crisis eventually passes, the world will be left with its economic consequences. Luxury and discretionary purchases like watches are sure to be hard hit.
The number of Swiss watch exports to the important markets of China and Hong Kong for the month of February (when the virus hadn’t yet “gone global”) give us a picture of where we’re headed: they were down 51% and 42%, respectively. That’s just the beginning.
Not only are production, supply chains, and other critical systems temporarily disrupted, but an economic downturn and unemployment will further cause demand for watches to fall. In terms of product, belt-tightening could lead to fewer new releases in the coming years — and possibly less interesting ones as well, as brands invest less in innovation and aim for quick sales with conservative products.
Watch releases planned for 2020 will largely be digital for the time being — rather than centered around large events and gatherings, as many typically are — and many might be postponed. Waiting lists for sought-after watches might get longer, but don’t cry for those disappointed customers: Unemployment is a bigger problem. Big brands like Rolex have the capital reserves to weather such a storm, but smaller brands might not. Even if major effects are short term, their depth and breadth are hard to predict, and ripples are likely to be felt for years.
