Remember the bluster of Swiss watch manufacturers before the Apple Watch appeared on the scene? Many of them were sure that nothing could cause a decline in the sales of their mechanical watches. Well, the Swiss customs office released a statement today showing that exports of Swiss watches dropped 12 percent in October, the most dramatic decline in six years.
Perhaps the biggest decline by region was in Hong Kong, normally a hotspot for sales of luxury watch lines like Rado, TAG Heuer, and IWC. Shipments to Hong Kong dropped by 39 percent, and shares in watch companies slumped today as a result. In addition to the competition from Apple Watch and other smartwatches, the Swiss watch industry is also suffering from an 11 percent surge in the value of the Swiss franc from a year ago, cutting profit margins.
The Swiss watch industry is now beginning to cut jobs in order to adjust to the drop in demand, with Richemont (makers of IWC timepieces and Cartier jewelry) stating on Monday that it will cut 85 jobs at watch-dial maker Stern Cadrans.