Luxury boom masks a widening divide in Switzerland’s watch industry

CHF 12.2 billion in exports has not delivered a broad recovery. Swiss watch exports stabilised in the first half of 2026, with value down just 0.6% from a year earlier and volumes up 2.3%. Behind those figures, manufacturers across the sector are experiencing sharply different conditions.

A small group of ultra luxury watches is supplying most of the industry's value growth. LuxeConsult, using data from the Federation of the Swiss Watch Industry, found that watches representing only 1.3% of volumes accounted for 75% of market value growth. The result is a recovery visible in export totals, but uneven on factory floors and in retailers' inventory rooms.

The industry has spent three years absorbing wars, tariffs, a strong Swiss franc, expensive gold and weaker demand for luxury goods. The pressure has encouraged brands and suppliers to use Switzerland's RHT short time work scheme to preserve jobs and specialised skills. Yves Bugmann, president of the industry federation, said uncertainty remained high and expressed hope that conditions would improve in the coming months.

For Switzerland's watchmaking regions, the distinction matters. Export value can hold steady while production schedules, supplier orders and household incomes remain under pressure.

The top 1.3% of watch volumes generated 75% of value growth. That concentration defines the industry's current economics. Ultra luxury pieces are carrying export performance even as larger parts of the market struggle to move stock.

Oliver Müller, founder of LuxeConsult and author of the report, said the growth of ultra luxury was spectacular and showed the direction of the wider market. The gains reflect the spending power that remains among wealthy customers, even after the broader luxury market weakened. They also show why headline export values can give an incomplete picture of demand.

The squeeze is particularly clear in the CHF 25,000 to CHF 50,000 bracket. Sales in that segment fell 8.3%, making it the weakest performer identified in the report. Retailers have become more cautious about replenishing inventory, according to Müller. Brands cannot assume that expensive watches will automatically sell through once they reach a shop window.

Accessible luxury performed better, but only marginally. Watches priced from CHF 7,500 to CHF 12,500 rose 0.5%, helped by steel models from Rolex, Omega and Cartier. That modest increase suggests that buyers remain selective. Reputation, design and resale confidence are carrying more weight as retailers and customers reduce their exposure to slower stock.

Swiss watch exports fell from 17 million units in 2023 to 14.6 million in 2025. The first half of 2026 brought a modest volume rebound, driven largely by Longines, Tissot, Hamilton and Swatch, all brands owned by Swatch Group.

Those brands occupy a different commercial terrain from the ultra luxury houses. Their watches bring production scale, broad retail distribution and a stronger connection to everyday consumers. The volume increase offers some relief to factories and suppliers, but it does not erase the decline of the previous two years or the weakness affecting other manufacturers.

Gold prices have raised input costs, while the strong franc makes Swiss production more expensive for overseas buyers. Tariffs add another layer of uncertainty. Companies must decide how much to produce before they know whether retailers will reorder, and smaller suppliers have less room to absorb delayed payments or reduced contracts.

Many firms have turned to RHT, Switzerland's short working hours programme, to retain workers and protect expertise. That support can preserve capacity during a downturn, but it also signals that the recovery has not reached the full industrial network. A factory may remain open while operating well below its previous rhythm.