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Luxury Swiss Watches See Increased Demand in US, China Despite Price Surge July 15, 2023 (0 comments)
Zurich, Switzerland--In the face of soaring prices, the demand for luxury Swiss watches, such as Rolex and Omega, continues to surge in the US and China. The Swatch Group AG, which produces Omega, and Watches of Switzerland Group Plc, UK's largest retailer of Rolex watches, have noted that consumers' appetite for these high-end timepieces remains strong.
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According to a report published by Fortune, CEO Nick Hayek from Swatch Group stated that this year's revenue might reach a record due to the healthy demand in China and the US. The company's shares rose to 7% following this announcement. Concurrently, Watches of Switzerland Group's shares surged by 18%, as the UK retailer reported solid demand for luxury timepieces despite some major brands hiking their prices.
Hayek noted in an interview that the lower-priced watch market in Asia and the US is robust. Swiss watch exports in 2023 have continued to rise after last year's record of more than 24 billion francs ($28 billion), easing concerns over the potential waning demand for luxury goods in the US.
The report stated that operating profit for the Swatch Group saw a 36% increase in the first half of the year, reaching 686 million francs, and revenue reached 4 billion francs. Sales tripled in Hong Kong, while mainland China saw double-digit growth. The company reported the strongest growth in its lowest price segment, especially its Omega MoonSwatch collaboration, priced around $260.
Despite an unfavorable currency environment, with a weak US dollar and euro against the franc, the management remains optimistic about growth opportunities in the second half of 2023.
Watches of Switzerland reported a sales figure of £1.54 billion ($2 billion) for the year through April, reaffirming its full-year forecast for 2024. According to CEO Brian Duffy, waitlists for the most sought-after timepieces are growing. “Elevated conditions remain and we are adding more people to the waiting lists than we are managing to take off despite us editing down some of the names,” he said, per the report.
Learn more in the entire Fortune report.