Rolex Retains Top Spot as #1 Swiss Watchmaker in 2020

When someone says “luxury watch” the brand Rolex frequently comes to mind and for good reason. In a report published by Morgan Stanley and LuxeConsult, Rolex is shown to have retained the #1 spot for the most valuable Swiss watchmaker, even during a global pandemic. However, sadly a few other Swiss watch brands did not fare well and even had to shut their doors. We delved deep into the financial report and sum it all up here in a way that makes it easy to understand. Our financial expert weighs in on what this all means.

Rolex dominance

“The Crown” held the crown with retail sales of approximately CHF 8 billion, an equivalent $8.61 billion. Let's say that number again, $8.61 billion. Holy moly that’s a lot. But before you get too snubby about it, remember this: something that people don’t always know is that Rolex is set up as a charitable trust, and the brand does a tremendous amount for the community, the Earth, and the world. For sure that 8+ billion dollars can make a significant dent in the various social and ecological endeavours Rolex is currently supporting financially. 

Can you guess who came in second place? At first we thought maybe Audemars Piguet or Patek but we were wrong. According to the report, Omega is the brand that follows firmly in second place with retail sales of approximately CHF 2.8 billion, an equivalent $3 billion. Still significantly less than Rolex, but $3 billion dollars is no small amount, especially during a global pandemic.

Comparing Rolex vs Cartier

In 2020, Rolex unit sales dropped by 140,000 units (19%) bringing the production numbers down to 810,000 watches, however it was able to make up some losses with a price increase of approximately 5% per watch. In contrast, Cartier Watches came in third with sales of approximately CHF 2.2 billion ($2.4 billion). Unlike Rolex, Cartier Watches grew its number of units sold in 2020 from 410,000 in 2019 to 490,000 in 2020, but the average selling price per watch fell by about 30%, offsetting those gains. 

We predict that in 2021, we will see a price increase once again from Rolex, ranging anywhere between 5-20%. With the aftermath of the pandemic, delays, shutdowns, longer timelines needed to produce mass quantities, and manufacturers going out of business, it seems inevitable that Rolex will increase prices in 2021.

Public vs Private: Who Fared Better?

Publicly traded companies such as LVMH (Tag Heuer, Zenith, BVLGARI, Hublot, etc.), Swatch Group (Omega, Breguet, Hamilton, Swatch, Longines, etc.), and Hermes lagged privately-owned operations such as Rolex, Patek Philippe, Audemars Piguet, and Breitling according to the research. Swatch Group owned Longines and Tissot shipped an astounding 1.5 million and 2.4 million watches respectively. Although their lower average retail prices of CHF 1,313 ($1413) and CHF 415 ($447) prevented them from ranking higher on the list.

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What’s in store for 2021?

Due to COVID-19 related impacts, the Swiss watch industry is estimated to have shrunk by a third in 2020, according to the report. The report mentions that exports fell by 21.8% in 2020. This is most likely due to lockdowns and restrictions in some of the world’s largest economies, namely the United States and China. As vaccinations pick up and countries start to re-open exports may increase in 2021, however, local restrictions in Switzerland and social distancing guidelines in place at production facilities will most likely weigh on production numbers in the near future.

Source: Apple

The state of the industry

One interesting takeaway from this report is the dramatic polarization of the Swiss watch industry. The top four private companies: Rolex, Patek Philippe, Audemars Piguet, and Richard Mille account for 35% of Swiss watch sales. In contrast the four largest multi-brand groups Swatch Group (17 brands), Richemont (11 brands), LVMH (6 brands), Kering (3 brands) account for 37 total brands but only contribute 55% of total watch sales. This is further exemplified at the lower end of watches where Swiss brands appear to be losing share to fashion brands (Daniel Wellington, Guess, Diesel) and smartwatches (Apple, Samsung, Fitbit). 

In 2020 the Swiss watch industry sold 13.7M watches compared with 75M smartwatches; this is in stark contrast to 2016 where 25M Swiss watches were sold compared to only 22M smartwatches. However, while these numbers are a bit concerning, we truly believe that the popularity of Apple smartwatches is no competition for Rolex, instead it is welcome fodder to the Rolex fire. Smartwatches made people want to wear time on the wrist again, they kept watches relevant, and increased people’s interest in timepieces all over again. 

A few brands didn’t survive 2020

This is not in the report, but from our research we can say that sadly the financial strains caused by the global pandemic did take some casualties in the Swiss watch industry. It has been reported that HYT and RJ watches have both filed for bankruptcy. HYT, founded in 2012 says they filed bankruptcy due to being unable to raise capital needed, and it has also been noted that their watches are now selling for significantly below market value on the second-hand market. The current COO is trying to take over and bring the brand back to life, but only time will tell. RJ Watches (Romain Jerome), established in 2004 also went bankrupt due to a sudden loss of investors. They couldn’t find a buyer, and therefore sadly the business went under and all 33 employees will lose their jobs. 

To Sum It All Up

It’s clear to see from the numbers and industry trends that Rolex appears like it will remain dominant in the coming years. While it’s unlikely that any other Swiss brand will be able to overtake the big crown in the near future, competition from outside sources like fashion watches and especially smartwatches is definitely something to be on the lookout for. 

Since Rolex appears as though it is definitely here to stay, it’s definitely a great idea to customize your timepiece investment with a custom Swiss-made rubber or leather strap from Everest Bands. Remember to keep your Rolexes safe in an Italian leather Everest Watch Roll or Everest watch pouches. Rolex remains the #1 top Swiss watch brand, and after earning nearly 3,000 unbiased 5-star reviews, the data indicates that Everest Bands remains #1 as well. 

Header Image Source: Spot the Watch