Luxury Swiss Watch Brands Are Performing Best: Credit Suisse Says

The Swiss Watch industry is always a bit of a cyclical one. It is also one that is often very difficult to get real data on. Trying to figure out which sells more watches, Rolex vs Omega, for instance, can be especially tricky.

So I was especially pleased when someone popped something into my inbox. It is a piece of research from analysts at Credit Suisse, a Swiss bank, on trends in the Swiss Watch Industry.

The basically went around for a couple of months doing a survey of luxury retailers, asking them a bunch of questions around which watches are selling well. The results are pretty impressive for the biggest names in Swiss watches. Rolex is doing incredibly well, Omega is also on a roll. So are Cartier and Tissot.

Here’s the result of one of their surveys on which brands are selling well:

 

The chart clearly shows how brands such as Dior and Ebel are not performing at all well in the market.

They also looked at which price segment of watches is performing best and found that without any doubt, the best performing segment is for high end watches, which it categorises as costing more than $5000 each.

The results would seem to be good news for the biggest groups. They say that the investment implications are that these trends favour Swatch Group and Richemont. They say:

Swatch Group remains our preferred idea in the hard luxury space thanks to best-in-class supply chain capabilities, diversification across price points and strong momentum for Omega, Longines and Tissot. Richemont’s main brands are also performing well – we will hear from the company (i.e. interim results) on November 11.

Please bear in mind that this report is a few months old (so don’t go and start buying shares just because this blog had a post on how great the industry is). Also note that I’m here to provide news and interesting facts on the industry, not investment advice. With that little disclaimer out the way, I thought I’d also share another piece of outdated stockbroker research that someone has given me. This time it is from Nomura, a Japanese bank. In a report titled: Watches: why we like telling the time (August 31, 2011), they say:

We continue to be bullish on the watch industry long term due to: 1) regulatory changes: that should help alleviate longer term bottlenecks and increase capacity utilisation rates; 2) China potential: still just scratching the surface; 3) US: premiumise the category and increase distribution control, which should help increase transparency of stock levels in the channels and elevate pricing power.

 

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