The Swiss watch industry is facing the worst crisis in its history, with the coronavirus pandemic expected to reduce sales by up to 30% this year, Ricardo Guadalupe, the head of LVMH Moet Hennessy Louis Vuitton brand Hublot said.
“Over the year the industry will record a decline of 20 to 30%,” Guadalupe told German newspaper Handelsblatt in an interview published on Thursday.
“Consumption has been brought to a complete standstill. It is not yet clear when and what may be reopened. And then there will be the question of how quickly people’s confidence will return,” he added.
Some manufacturers could close down, he added, with cash flow the biggest problem faced by companies.
“The strong will survive, the weak will get into real trouble,” Guadalupe said. “You should be able to last at least 18 months if you have to.”
His own brand was still suffering with 80% of its retail network “dead” in the first weeks of the pandemic. “You can apply that to our sales,” Guadalupe said.
Chinese customers were becoming more important, Guadalupe added, with recent Hublot sales up by 30% in mainland China.
But this did not compensate for the reduction in purchases by traveling Chinese customers who are no longer going to Europe and the United States, he said.