The luxury watch industry faces heightened uncertainty as the U.S. and Israeli war against Iran, which began on February 28, has significantly impacted the global economy, including the high-end watch market [1]. The conflict has driven up energy prices, disrupted shipments of fertilizer, and affected air travel, all of which have contributed to renewed inflation pressures and shaken consumer confidence in a market that generates tens of billions of dollars in revenue annually [1].
According to Oliver Müller, founder of Swiss consultancy LuxeConsult, the Middle East is a crucial market for Swiss watch exports, accounting for 10% of total exports. He noted that 'some markets in the Middle East are totally halted,' and in the United Arab Emirates, where 60% of business is done with tourists, 'nothing is going on currently' [1]. This disruption comes as the industry gathers in Geneva for the annual Watches and Wonders fair, which is expected to host about 65 brands and 60,000 visitors, despite travel adaptations and very few cancellations, according to CEO Mathieu Humair [1].
The industry has already been grappling with challenges such as soaring prices for precious metals like gold and silver and tariffs imposed by U.S. President Donald Trump a year ago, which, while down from peak levels, continue to affect the market [1]. The Morgan Stanley and LuxeConsult 9th Annual Swiss Watcher report from February indicated that Swiss watch exports declined by 1.7% in value terms last year, marking a second consecutive year of market contraction, with the strong Swiss franc exacerbating the decline [1].
Industry analyst Ming Liu highlighted ongoing uncertainty, stating, 'When you look back at a year ago, the sort of theme was: The tariffs and the uncertainty. Unfortunately, we aren’t anywhere closer to certainty, probably even less with what’s happening in the Middle East' [1]. The report also noted that the largest brands—Rolex, Cartier, Patek Philippe, and Omega—now account for over half of the total Swiss retail market share, reflecting a consolidation trend in the upper-end segment [1].
CONCLUSION
The ongoing war in the Middle East has intensified uncertainty for the luxury watch industry, compounding existing challenges such as tariffs and inflation. With key markets in the region halted and a second year of declining exports, the industry faces significant headwinds despite strong show attendance and brand consolidation at the top end.