1H’09 Swiss Watch Exports Plummet 26%; Wyler Geneve Dismisses Entire Staff

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1H’09 Swiss Watch Exports Plummet 26%; Wyler Geneve Dismisses Entire Staff
by Kyle Stults on July 21, 2009

Sign of the Times – Swiss Watch Industry’s Woes Continue

As I predicted at the beginning of this year, (see: SIHH 2009 Ends Amidst Global Slump: Some Perspective on the “State of the Watch Industry) – “Now that times have changed and global economic growth is anemic and likely to remain so in the near term or longer, it is inevitable that the industry will experience a shakeout. In these times and conditions, there are too many brands chasing too few wallets (no matter how thick or thin those wallets are……Brands will fail and cease to exist. Others will be purchased by their bigger, stronger competitors who have the ability to withstand long term economic cycles. Consolidation is inevitable.”

A somewhat prescient (if not unfortunate) prediction, it now seems.

Continuing the sharp downturn that began at the end of 2008, Swiss watch exports were down 26.4% during the first half of 2009 according to the Federation of the Swiss Watch Industry, or FHS. Dismal. Exports have now receded to below 2006 levels with no sign of bottoming yet – in fact, although it is too early to know for sure, based on June export data, the rate of decline in exports may even be accelerating, as evidenced by June’09 figures down 31% vs June’08, a full 5% ahead of the 6 months number. All markets and price points are weak, particularly the U.S. (#2 export market behind Hong Kong) which registered a whopping 44% decline. Now while export data is not necessarily the same as end-user demand, and the U.S. has across many industries seen a tightening of the supply chain and shoring up of working capital via reduction in inventories, it is clear to me that the American consumer is not in good shape.

In separate, yet equally dismal news today, Business Montres reports today that the entire staff of Wyler Geneve has been dismissed (except for the CEO Ryan St. George) as the brand tries to survive the economic storm. Although Wyler makees what I believe to be some exceptional timepieces (although sometimes with very questionable marketing tactics a la the “fully carbon neutral” watch – puh-lease!) the brand is clearly in dire straits.

wylersoldat_leather

What do you think? Has the Swiss Watch industry’s decline hit bottom, or are there more difficult times ahead? Feel free to leave a comment below.

http://thefilmnest.com The Rake

There is no question this is to be expected. I am disappointed by the news, but honestly, there were/are too many brands offering not enough differential to be around for the long haul. I would hate to see Wyler go, as they actually seemed to have their own identity going with their own unique pieces, but times as they are, the cost of 5 figure watches is going to kill brands without a re-thinking in strategy. Too bad indeed.
The Rake
http://thefilmnest.com
http://www.monochrome.nl Frank

That’s shocking news for the watch indutry….. and us as watch-a-holics. I think there’s more to follow.

The last few years i was shocked to see that every brand, doesn’t matter in which segment they where, started releasing a tourbillon. They also seemed to think that because of doing so, they would rise towards a higher segment and translated this in their prices. This caused that many brands moved up a segment, which in my opinion was unnatural.

Wyler has a tourbillon and their rose gold chronograph sells for well over $15,000 … a ridiculous price for a brand like Wyler in my opinion. Selling a rose gold watch with ETA movement and with chronograph module for the same price as a Rolex Daytona… insane.

Brands should have cherished their segment and not try to move towards a higher segment where their name and fame does not match.
Maybe this sounds like a harsh opinion, but there are some many examples… and i can only imagine that these brands have a high chance of coming in trouble real soon.

Kyle S.

@Frank – brilliant analysis. I think you summed it up quite nicely – Brands should not have tried to move up-market to where their “name and fame” does not match.

Jason

After viewing their watches in-person and meeting their PR guy, Paul O’Neil, in Switzerland, I knew they were doomed. Their watch quality, materials and design are inferior to other timepieces in the same pricing segment. And as far as PR/Media professionals, Paul is by far the worst I have ever met.
CK Tan

Was wondering if there r any developments on Wyler geneve.
1. Is any watch company looking at or decided to offer or buy wyler?
2. Is t watch still worth buying considering we may not b able
To get replacement parts.

Kyle

I have not heard any update about Wyler since this article. I have not seen any news from the company since 2009, which I do not think is a positive signal.

However, the brand still maintains its website and I would suggest contacting the company before you purchase a Wyler watch — see if and how well that they will respond to your questions.