Swiss Watchmakers See Uptick in 2010

Last month, we reported on 2009 being a dismal year for Swiss watch brands, posting the biggest drop in sales since the Great Depression. Luxury watch-makers including Rolex, which depends on the U.S. for about one-third of its sales, were particularly battered. But there is a glimmer of hope for the world's most prominent watchmakers, as this year is already off to a more positive start.

Exports in January rose almost 3 percent compared with a year ago. February was even stronger, clocking a more than 14 percent increase in exports versus last year, as noted in the Financial Times. It was enough of a boost for watchmakers like Swatch Group, owner of such brands as Hamilton, Longines, Omega, and Tissot, to breathe a sigh of relief.

Swatch Group CEO Nick Hayek is bullish on the year ahead, predicting that "2010 would bring record sales and earnings" for the company. Richemont, a company with luxury brands like Cartier, Piaget, IWC, and Montblanc in its portfolio, is being more cautiously optimistic.

Clearly, it was the well-capitalized brands that managed to weather the economic storm. Others, particularly those who entered the luxury watch market prior to the recession, were not so lucky. In January 2009, boutique brand Villemont Geneve closed its doors. BNB Concepts, the independent maker of highly complex watch movements, declared bankruptcy this past January.

As the FT points out, "having the safety net of a big and well financed parent has taken on great value, even for once proudly-independent marques." In the aftermath of the economic downturn, it's the big watch-makers are well-positioned to stand the test of time.