Iran war creates more unease for makers of luxury watches

Key Points:

• The luxury watch industry faces uncertainty due to the ongoing U.S. and Israeli war against Iran, which has disrupted the global economy and affected key markets like the oil-rich Gulf Arab countries that account for 10% of Swiss watch exports.
• The Watches and Wonders fair in Geneva, a major industry event with around 65 brands and 60,000 visitors expected, continues despite the geopolitical tensions, with few cancellations reported but some travel adjustments made.
• Swiss watch exports declined 1.7% in value last year, marking a second consecutive year of contraction, influenced by factors such as tariffs, a strong Swiss franc, and now inflation and consumer confidence concerns linked to the Middle East conflict.
• Luxury watch brands like Rolex, Cartier, Patek Philippe, and Omega dominate over half of the Swiss retail market, with the high-end segment (watches over $63,000) growing to 37% of export value, underscoring Switzerland's leading position in the global luxury watch market.
• The Swiss industry recently saw a reduction in U.S. tariffs after peak levels of 39% were imposed in 2023, following diplomatic efforts including a Swiss delegation gifting a Rolex clock to President Trump, which has helped ease some trade tensions.