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The frenzy with expensive watches is over – The pandemic trend has deflated

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In three years, with the pandemic “wicking”, the sector has gathered enormous interest from buyers around the world

Τελος η μανΙα με τ α πανακριβα ρολόγια – Ξεφοψσκωσε η ταση της πανδημiας

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And the unprecedented – and possibly last – boom in the Swiss luxury watch market, which includes Rolex, Patek Philippe and Audemars Piguet, among others, seems to have officially come to an end.

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For three years, fueled by the pandemic, the industry has garnered huge interest from buyers around the world, as the wealthy, as well as average consumers with bloated savings due to quarantine, have turned to the iconic Swiss watch brands. Along with the interest, the prices also rose and eventually Swiss watch exports last year reached an unprecedented record level of 28.5 billion dollars.

This year things are completely different. Exogenous factors, such as high borrowing rates and weak global growth, but also endogenous factors, such as large appreciations and production growth, exerted intense pressure on the industry.

Thus, consumers who held larger reserves amid the pandemic are showing less and less willingness to make such big expenditures. Hence, there is an overall weakening in the luxury goods sector, which, contrary to the outlook given in past years, is not fully shielded from recessions.

Watchmakers are seeing a clear drop in demand in recent months, while prices on the secondary market are plummeting. “What we saw in 2021 and 2022 was out of the ordinary. We couldn't imagine that we would experience something like this in our lives. I believe we will never see that again,” Audemars Piguet CEO Henry Bennahmias told Bloomberg, referring to the months-long frenzy for expensive pieces.

In July, Swiss watch exports fell for the first time in at least two years, and since then average export growth has slowed significantly compared to the first half of the year. The industry is still on course for a new record this year, but that is largely due to the first half.

Indicatively, October figures show a 5% year-on-year increase in exports, but this is attributed to the cheaper watches. In contrast, exports of watches between 500 and 3,000 Swiss francs fell in value, possibly indicating that market fanatics have grown weary of price hikes.

In terms of pre-owned watches, prices have been falling for at least a year, down about 42% from their peak in April last year.

It is worth noting that watchmaking is a mainstay of the Swiss economy and the third largest export sector, employing around 60,000 workers. . The slowdown in recent months has sent tremors across the Swiss industry. For example, a few years ago the market players were eagerly looking for staff and now some are making layoffs.

With information from Bloomberg

Source: www.kathimerini.com.cy

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