Swiss luxury watchmakers turn to government for help

Swiss luxury watchmakers are turning to the government for financial aid to help them cope with falling demand.

Girard-Perregaux and Ulysse Nardin have become the first brands to confirm they are using a government program to retain jobs and avoid permanent cuts. The Sowind group, which owns the two manufacturers, has put about 50%, or 15%, of its 320 workers on so-called part-time work or furlough, according to chairman and chief executive Patrick Brunieux.

Swiss watch exports in 2015 recorded their first annual decline since 2009, when they contracted by 3.3%, with falling demand from Hong Kong the main reason. The decline is accelerating, the Federation of the Swiss Watch Industry said.

In 2020, Swiss watch revenues abroad fell to 17 billion francs. It is a decline that Switzerland has not seen since the financial crisis of 2008 and 2009. At the same time, sales of smartwatches, especially American and Asian ones, rose by twenty percent, which was another blow to Swiss manufacturers. But some stability prevailed in the markets at the beginning of 2021. Therefore, Pierre-Yves Donzé, professor of history at Osaka University in Japan and an expert in the watch industry, believes that it is “just a cyclical economic crisis.”