The books have closed for June, and let's just say the results are not exactly rosy.
What had been a rather gentle, steady drop essentially bottomed out this past month. And in fairness, it would be easy to say that this is not worth panicking about, because the numbers are still in the plus range (i.e. above zero), but like a frog put into a pot that slowly comes to a boil, it is perhaps once again too late for some brand bosses to make the adjustments necessary to salvage what might turn out to be a shitty year overall.
Now how is it possible that things were going so great, and one bad month has Mr. Grumpy being so negative? Well, I would simply refer you, gentle reader, to the graph provided by the FH summarizing the last year.
Notice a trend?
So what happened? The same thing that some of us have been talking about for awhile, and that other people have either ignored or failed to notice. There was a reason why export numbers climbed impressively towards the end of last year and the start of this year - the new Swissness regulations. Simply put, there was a very real impetus to shift as much product outside of the borders of the Cantons prior to the implementation of the regulations. Although that was meant to happen when the meter flipped in January, several brands were, let's just say, using "alternative facts" to justify continuing to flush the tubes of not 100% Swissness product during the first half of this year.
And now? Well now we are starting to see where things really are. It is worth noting that yes, we are still in the black and have not slipped back into the red. BUT, it is also worth noting that if we are talking about trends, the numbers are trending in a Southerly direction, and like that frog slowly coming to the realization that his warm bath has now become soup, brands are going to have to start making some tough decisions that will inevitably cause some pain. Ad budgets will contract, panicky gambits will be employed, and unfortunately, the transfer window will open for a lot of people who thought for sure that they had outrun the reaper during this current downturn.
In fairness, this latest shake out has been on the books for several years, the product has been piling up, and the the transshipping destination countries have been saturated in overstock product. The majority of the big dogs have now also discovered the soft grey market of online super stores that are selling their overstock watches as "gently used", and while that can "clean" some of the glut, it is really a drop in the bucket overall.
As many of the brands have finally adjusted their production numbers to the real world, it remains to be seen what the real demand is. July and August are likely to be bumpy as we are in the Swiss Watchmaker Holidays.
Let's hope things will pick up.
 |
| Courtesy of the FH |
Now how is it possible that things were going so great, and one bad month has Mr. Grumpy being so negative? Well, I would simply refer you, gentle reader, to the graph provided by the FH summarizing the last year.
Notice a trend?
So what happened? The same thing that some of us have been talking about for awhile, and that other people have either ignored or failed to notice. There was a reason why export numbers climbed impressively towards the end of last year and the start of this year - the new Swissness regulations. Simply put, there was a very real impetus to shift as much product outside of the borders of the Cantons prior to the implementation of the regulations. Although that was meant to happen when the meter flipped in January, several brands were, let's just say, using "alternative facts" to justify continuing to flush the tubes of not 100% Swissness product during the first half of this year.
And now? Well now we are starting to see where things really are. It is worth noting that yes, we are still in the black and have not slipped back into the red. BUT, it is also worth noting that if we are talking about trends, the numbers are trending in a Southerly direction, and like that frog slowly coming to the realization that his warm bath has now become soup, brands are going to have to start making some tough decisions that will inevitably cause some pain. Ad budgets will contract, panicky gambits will be employed, and unfortunately, the transfer window will open for a lot of people who thought for sure that they had outrun the reaper during this current downturn.
In fairness, this latest shake out has been on the books for several years, the product has been piling up, and the the transshipping destination countries have been saturated in overstock product. The majority of the big dogs have now also discovered the soft grey market of online super stores that are selling their overstock watches as "gently used", and while that can "clean" some of the glut, it is really a drop in the bucket overall.
As many of the brands have finally adjusted their production numbers to the real world, it remains to be seen what the real demand is. July and August are likely to be bumpy as we are in the Swiss Watchmaker Holidays.
Let's hope things will pick up.
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