Cover: luxury watch retail in London. Photograph courtesy of The Watches of Switzerland Group.
The Swiss watch industry has spent several years learning an uncomfortable lesson: a market can look healthy in aggregate while becoming much less comfortable for many of the companies inside it.
Export values have stabilised. Major retailers are still growing. The strongest brands continue to attract demand. Yet the recovery is becoming increasingly concentrated, and the part of the market between accessible luxury and the very top is under pressure.
The Disappearing Middle of the Swiss Watch Industry is not a story about the end of Swiss watchmaking. It is a story about where the money is moving, and why the old assumption that a rising luxury market lifts most established brands no longer looks reliable.
The headline numbers hide more than they reveal
Swiss watch exports fell by 1.7% in 2025 to CHF25.6 billion, according to the Federation of the Swiss Watch Industry FH. The number of watches exported dropped by 4.8% to 14.6 million units.
That combination already matters. Switzerland exported fewer watches, but the value of those exports proved more resilient than the volume.
The 2026 picture has been stronger in places, but the improvement has not been evenly distributed. The Financial Times, drawing on industry analysis, reported in September that roughly 75% of recent market growth came from watches representing only 1.3% of unit volume.
That is a remarkable concentration of value. It also changes what an apparently stable industry total actually means.
The industry is not simply separating into cheap and expensive watches. The more important split is between brands with enough identity, distribution power or scarcity to command attention, and those competing in a crowded band where the customer has many alternatives.
The top of the market has become its own economy
At the very top, the rules are different.
Rare independents can sell very small numbers of watches at very high prices. The largest prestige brands can combine scale with extraordinary pricing power. Jewellery-led houses can draw on customers who are not necessarily approaching a watch as a conventional horological purchase.
The result is that a relatively small number of companies can make the wider industry appear stronger than many manufacturers experience it.
Richemont offers a useful example. For the year ended March 2026, its Jewellery Maisons, which include Cartier, generated €16.5 billion in sales and an operating margin of 30.5%. Its Specialist Watchmakers, including IWC, Jaeger-LeCoultre, Panerai and Vacheron Constantin, recorded €3.1 billion in sales and an operating margin of just 3.4%.
Those businesses are not directly comparable, and Cartier itself sells both jewellery and watches. Even so, the contrast is difficult to ignore. The same luxury group can contain businesses operating under radically different economic conditions.
By the first quarter of Richemont’s 2027 financial year, the picture had improved. Specialist Watchmakers were up 8% at constant exchange rates, while the Jewellery Maisons rose 24%. Recovery was visible, but the gap in momentum remained.
The retailer can be growing while the manufacturer struggles
Another source of confusion is the difference between the health of luxury retail and the health of every watch brand sold through it.
The Watches of Switzerland Group reported record FY26 revenue of £1.83 billion, up 13% in constant currency. Luxury watch revenue rose by the same percentage, while US revenue increased by 24% and now represents more than half of group revenue.
The company also said demand for key luxury brands continued to exceed supply.
There is no contradiction here. A retailer with strong access to Rolex, Cartier, Patek Philippe and other highly desirable names can grow even if weaker brands elsewhere in the sector are reducing production, discounting through the secondary market or struggling to protect margins.
In other words, the success of a multi-brand retailer tells us that demand exists. It does not tell us that demand is evenly shared.
What exactly is the ‘middle’?
The phrase can be misleading if it is treated as a simple price category.
The middle of the modern Swiss watch market is better understood as a strategic position. These are brands that are too expensive to compete primarily on accessibility, but not scarce or culturally dominant enough to behave like trophy assets.
They may produce technically excellent watches. Many do. The problem is that technical competence is no longer sufficient differentiation in a market where a buyer can compare dozens of established names at the same price within minutes.
A CHF10,000 or CHF20,000 watch is competing not only with another new watch. It is competing with pre-owned Rolex, vintage Cartier, discounted examples of more expensive brands and an increasingly liquid global secondary market.
That changes the customer’s reference point.
The buyer no longer asks only whether a watch is well made. The buyer can also ask what else the same money buys, how easily the watch could be sold, how much value is lost on purchase and whether the brand means enough to justify the difference.
The secondary market has made comparison unavoidable
During the pandemic boom, scarcity temporarily disguised some of these distinctions. Rising secondary-market prices gave large parts of the industry a financial halo.
That period has ended.
Chrono24’s 2026 Rolex Report, based on completed transactions through the second quarter of 2026, found that Rolex remained the largest brand on the marketplace at around 31% of dollar sales volume. Its share, however, had fallen from a 44% peak in early 2022.
The beneficiaries were not simply lower-priced alternatives. Cartier gained ground in the $5,000 to $10,000 segment, while Patek Philippe and Vacheron Constantin strengthened above $20,000.
This is important because it suggests that the market is becoming more selective rather than simply cheaper.
Collectors are still spending. They are simply becoming less willing to spend indiscriminately.
Brand equity is becoming harder to manufacture
For decades, the Swiss watch industry benefited from a relatively straightforward ladder. Entry-level mechanical watches introduced buyers to the category. Successful customers traded upwards. Established brands occupied recognisable positions as price and complication increased.
That ladder is now less orderly.
Cartier can draw buyers from fashion, jewellery, design and watch collecting at once. Rolex operates with a level of recognition and resale liquidity that most watch companies cannot reproduce. At the independent end, scarcity itself can become part of the product.
The brands between these positions face a more difficult question: what exactly is the customer paying a premium for?
Heritage helps, but there are many old Swiss names. Manufacture movements help, but movements are increasingly invisible to buyers outside enthusiast circles. Limited editions help until everything begins to feel limited.
The strongest answer is usually a recognisable product and a recognisable point of view.
This is why the current market rewards coherent collections more than large catalogues. The customer has to understand the brand before being asked to understand the watch.
Gallet is an interesting experiment
The return of Gallet in September offers a timely case study.
Breitling acquired the historic name and has relaunched it as what the company explicitly calls its “luxury entry-level sibling brand”. The watches are manufactured within Breitling’s infrastructure and supported by its distribution and after-sales network.
That positioning is notable because it acknowledges a space that much of Swiss watchmaking has spent years moving away from.
The strategy is not to make Breitling cheaper. It is to use a different name, history and product architecture to address a different customer without diluting the parent brand.
Whether that succeeds will depend on execution. But the logic is revealing.
One way to compete in the middle may be to stop treating it as a compromised version of the top.
The disappearing middle is really a disappearing assumption
The most important change may not be price. It may be the loss of an old industry assumption: that an established Swiss name, good finishing and a respectable mechanical movement are enough to sustain premium pricing.
Those qualities still matter. They are simply more common than they once were, while information about pricing, depreciation and alternatives is much easier to obtain.
The customer therefore has more leverage, even in luxury.
That helps explain why the winners in the present market can look so different. A mass-recognised Rolex, a jewellery-led Cartier and a tiny independent manufacture do not share the same business model. What they share is a clear reason for the buyer to choose them instead of something else.
The brands under pressure are often those for which the answer takes longer to explain.
That is the real significance of The Disappearing Middle of the Swiss Watch Industry. The market has not stopped spending. It has become less forgiving about where that spending goes.
Industry figures reviewed on 24 September 2026. FH figures measure exports rather than final retail sales, and company results reflect different brand portfolios, accounting periods and distribution models.
Further reading
Counter-Signalling in Luxury: When the Watch Matters Less
Swatch Group Morgan Stanley Watch Report Dispute Explained
Quiet Luxury Explained: What High-End Watch Buyers Want Now
About the author
Isaac Kaufman covers the business and culture of watchmaking for Watch & Bullion, exploring how technology, ownership and design shape the industry.
