Are hard times over for Swiss watches?

The Geneva Watch Days event opens Wednesday, and the industry might have reason to be optimistic. Indicators point toward improvement as watch sales appear to have passed their lowest ebb after a two-year pile-on of adverse circumstances, from U.S. tariffs and record gold prices to foreign exchange rates and ongoing geopolitical instability.

The most recent export figures released by the Federation of the Swiss Watch Industry showed a tipping point. Shipments in June accelerated by 11.2 percent globally, resulting in an overall 0.7 percent dip in the first six months of 2026. In July, growth in shipments slowed to 9.6 percent, bringing the year’s overall tally to 0.9 percent.

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That modest growth trend is likely to continue. “We expect a continuing gentle progression in demand” in the second half of 2026, said Bernstein analyst Luca Solca. The second quarter of the year had shown improvement relative to the first, and he told WWD he’s expecting the improvement to continue into the second half.

But the industry’s “drawn-out recovery” could still be upset, with risks including higher oil prices, inflation, and a sudden reappearance of tariffs, Solca said in a July research note.

Oliver Müller, founder of the specialized consultancy firm LuxConsult, cautioned against reading Swiss watch export figures in too positive a light. He pointed out that France’s skyrocketing figures, a result of the country serving as a logistics hub, “is masking a more negative situation.”

By his calculations, the year-to-date balance of all exports is in negative territory, having shrunk around 2.5 percent, or around 400 million Swiss francs, in the 12 months to July. He pointed out that almost half of the top 30 markets for Swiss watch exports have declined in the period.

This apparent return to growth is “no organic growth at all, it is a post-COVID anomaly coming back to normal,” Müller added. But even with a low single-digit decline, Swiss watch export tallies “would still be at 2022 levels and substantially higher than 2019,” showing the deflation of the post-pandemic bubble.

The U.S. continues to drive sales. In July, the country recorded a third month of double-digit gains, with a 26.5 percent leap in sales, due to “a very positive momentum due to wealth creation,” said Müller, although he cautioned that the market was “a lot less predictable” due to the Trump administration’s erratic policies.

In his opinion, risks include “the fear of a stock market bubble, ever-increasing spending to cover the budget deficit and geopolitics,” as well as growth from “a thinner, but less price-sensitive, clientele.”

“Due to the very erratic politics of the Trump administration I wouldn’t dare to make any predictions,” he added.

Emerging markets such as India, which entered the top 20 markets two years ago and now ranks 15th for Swiss watch exports by size, and Mexico are also contributing to a lessening of the dependency on wavering top markets, in particular China.

If shipments to India and Mexico continue apace, respectively at 15 and 30 percent year-over-year, Müller estimates “the result could be in positive territory” — but still not reflect a full picture of the industry’s health.

Asia remains a major unknown as consumer confidence remains uneven, compounded by the August announcement of a 20 percent tax on overseas and offshore wealth.

Müller expects this move to have much impact by hitting the discretionary budgets of wealthy Chinese nationals. He drew a parallel between China’s new rules and taxes on U.S. expats, which aim to identify wealth and income of U.S. citizens worldwide.

In the Middle East, where the war between the U.S. and Iran continues to roil, it remains to be seen if the apparent return to growth stems from “momentary optimism from wholesale buyers about a return of tourists, or reflects a more sustainable improvement in local demand,” Bernstein said.

By price segment, polarization is likely to persist between high-end timepieces that continue to boom, particularly for top players such as Rolex, Patek Philippe, Audemars Piguet and Cartier, and lower-priced players, despite a recent leap driven mainly by Swatch’s buzzy Royal Pop collaboration with Audemars Piguet.

Consumers’ changing attitudes toward purchasing, selling and collecting, where reselling a watch is no longer seen as taboo, could also support recovery. In May, Watches of Switerzland’s chief executive officer Brian Duffy told WWD that he thought there was “a safe haven element in buying watches.”

Recent earnings from luxury groups for the second quarter of 2026 seem to support this hypothesis. Compagnie Financière Richemont’s specialist watch division reported in July that sales had gone up 8 percent in the three months to June 30, while LVMH Moët Hennessy Louis Vuitton’s watches and jewelry unit recorded an 11 percent increase in organic sales for the second quarter.

Meanwhile, Swatch Group said its outlook for the second half was marked by expectations for “an important sales growth,” and significant improvement in profitability for the rest of the year based on the “strong sales acceleration” in May and June that continued in the first weeks of July.

The industry should proceed with a cautious optimism.

Asked how consumers were spending, Ryan Bassuday, managing director of Le Paris Watch Club collectors group, said that “cooler heads continue to prevail throughout 2026 now that the doom and gloom rhetoric has largely subsided following a much needed market correction post [pandemic].”

“While the secondary (resale) market has stabilized and even rebounded in some instances, sustained global economic uncertainly is causing collectors to exercise caution and restraint, inevitably leading to deliberate and informed purchases,” he continued.

Value retention, individuality and exclusivity remain important in purchasing decisions but one factor is key: “Collectors really need to fall in love again before spending,” Bassuday said. “In my opinion, this has brought a certain sense of romance back to the hobby.”

— With contributions from Samantha Conti, London

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