SDC Weekly 101; Watches I Didn’t Buy; LVMH Can’t Get What It Wants; The Art of the Shill
Swiss Watch Industry (FHS) - May Update, Swatch Greenwood Presentation, On Discomfort and Gratitude, and a new section: "Heard on the Street"
🚨 Welcome back to SDC Weekly. First up, check out this pen ad from Mont Blanc - wouldn’t it be cool if watch brands did something like this?!
After the bonus link today, I have added a new section called ‘Heard on the Street’ - don’t miss it.
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Estimated reading time: ~29 mins
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Swiss Watch Industry (FHS) - May Update
After April’s insane 149.2% spike to the US (pure tariff panic-shipping), May delivered the inevitable correction: -9.5% to ~2.1 billion CHF.
May summary:
US market: -25.3% (the hangover was always coming)
China: -17.4% (still in free fall)
Japan: -10.5% (so much for that weak yen tourism boost)
Hong Kong: -12.6% (gateway effect well and truly dead)
UK: -14.5% (even Brexit Britain can’t catch a break)
The most worrying bit for me, was that the Federation explicitly admitted that “this result does not reflect the actual sales situation, which has followed a less positive trend.” In other words, inventory is stacking up. The export figures are basically flattering the reality.
Vontobel analyst and head of Swiss equity research, Jean-Philippe Bertschy says, “such a cautious or negative statement from the Federation is unusual and noteworthy.”
via Source
April was essentially pure theatre. The 18.2% growth spike was logistics panic rather than actual demand. Brands front-loaded everything they could ahead of US tariff increases, and the Federation adds in the April report: “Without the United States, the monthly result would have been a decline of 6.4%, again penalised by China and Hong Kong.” So I guess the underlying trend remains consistently negative.
China’s -17.4% decline seems to confirm this is a systematic weakening in what was supposed to be the golden market. When you add Hong Kong’s continued struggles, the entire Asia strategy looks increasingly scary. Meanwhile, April’s tariff distortion proved that brands can manipulate monthly export figures, but underlying demand trends can’t be doctored. The Federation’s candid admission about channel inventory building reinforces what retailers have been saying as well - stock is piling up. I will add, however, that WatchPro suggests that reality is a little less bleak:
Watch sales in the United States continued to explode in May, rising by 16.8% year-on-year, according to retail analyst Luxury Watch Barometer.
Swiss watch exports to the USA are still up by 28.5% for the first five months of 2025, and the total value of global exports is also in positive territory, just, at +1% year-on-year.
To make matters worse, it is clear that any geographic diversification strategy will be failing now. When even Japan and the UK are posting double-digit declines, the “China alternatives” narrative obviously falls apart.
As we head into traditionally slower summer months, the pressure will undoubtedly rise. Brands can’t keep front-loading shipments to massage monthly figures forever. Which means, in the coming months, I would expect production cut announcements, pricing strategy adjustments, and further geographical market adjustments.
