Furlough: How Swiss Luxury Watchmakers are Navigating a Demand Crisis
Furlough: A Solution for Luxury Watchmakers
Swiss luxury watchmakers are turning to furlough programs as they grapple with declining demand. According to Bloomberg, brands such as Girard-Perregaux and Ulysse Nardin have confirmed their reliance on state financial assistance to navigate these challenges.
Impact of State Support
- The Swiss short-time work program covers up to 80% of employee salaries for reduced hours.
- Approximately 15% of Sowind Group's 320 employees are enrolled in this program.
- Preventing permanent job losses is a key goal of this initiative.
The luxury watch market has experienced considerable fluctuations since its post-pandemic boom. For instance, Swatch Group reported a net sales decrease of 14.3% in the first half of this year. At the same time, Richemont saw luxury watch sales drop by 13% in the past quarter due to weakened demand from China.
Broader Market Trends
- Between January 2021 and March 2022, secondhand luxury watch prices rose significantly.
- Since the Federal Reserve raised interest rates, there has been a marked decline in demand for high-end luxury items.
- As of September 2024, luxury watch prices have plummeted by nearly 40% from their peak in 2022.
Moreover, high-end fashion brands like Burberry and Gucci have similarly reported declining sales in key markets, reflecting a wider trend across luxury sectors.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.