IBIS for all of your Strategic Environmental Analysis

Call us on +27 (83) 3777843 or send IBIS an e-mail

Declining Luxury Watch Sales a Sign of Weakening Luxury Goods Market

The demand for Swiss watches has declined so much that manufacturers are buying back unsold supplies from retailers. Watches worth 1,3 million Swiss Francs (CHF) were sent back to Switzerland; in comparison, in 2002 CHF393 million worth of unsold watches were bought back. Recent earnings reports from luxury producers like Prada, Burberry, Richemont and LVMH (which owns brands like Louis Vuitton, Dom P

Factors that are put forward that led to the decline include a loss in Chinese appetite and spending power for luxury goods, a fall in tourists visiting Europe and a sales slowdown in Hong Kong. Consequences of this trend are clear: Richemont and other luxury goods houses plan to lay off employees and cut back production and are refocusing their strategy in order to remain competitive in this highly select market.