Johann Rupert has urged luxury watchmakers to reduce production in response to a drop in demand for high-end timepieces.
During Richemont’s annual general meeting, Rupert stated that global demand for luxury timepieces has “surpassed the boom,” citing lower sales in important countries such as mainland China and Hong Kong.
He underlined that the industry’s focus should shift away from volume and toward responding to changing market conditions.
The Swiss luxury group, which owns iconic brands such as Cartier, Vacheron Constantin, IWC, and Jaeger-LeCoultre, has seen a drop in watch exports after three years of uninterrupted record growth.
Contributing factors include the depletion of pandemic-era savings, high inflation, and the strong Swiss franc, all of which have slowed consumer buying and crimped earnings for luxury watchmakers.
Rupert applauded private companies like Rolex, Patek Philippe, and Audemars Piguet for showing caution and reducing production during these difficult times.
Rupert emphasized that Richemont faces particular challenges as a publicly traded firm that must reconcile market demands and shareholder expectations.
Unlike its privately held Swiss competitors, which can weather market changes without the strain of shareholder scrutiny, Richemont must stay agile and sensitive to changing situations.
To mitigate the impact of diminished demand, some Swiss watchmakers and component manufacturers have turned to government initiatives that allow companies to temporarily furlough employees and restrict production without resorting to layoffs.
Richemont’s proposal for output cuts comes as the sector as a whole grapples with declining Swiss watch exports, which have fallen following a decade of steady expansion.
As the market cools, Rupert advises luxury watchmakers to take a more careful approach to avoid oversupply and maintain their brands’ uniqueness and value.
