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π Swiss Chronometers are no longer in trend
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The biggest boom in the popularity of luxury Swiss watches in history has waned. Luxury goods are no longer worth investing in over the long term, with major brands recording a significant decline in sales.
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Since the beginning of the COVID-19 pandemic, there has been a sharp surge in demand for this product, with consumers seeking to purchase mechanical wristwatches from brands such as Audemars Piguet, Patek Philippe,
Rolex and others. Last year, luxury watch exports hit a record high of approximately β£25 billion ($28.5 billion).
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High-interest rates and faltering economic growth have led to a loss of demand and a decline in watch production at all price points. The most alarming moment came in November when Cartier owner Richemont revealed its financial results for the first half of the year: sales fell by 3% in North America and by 17% in South America. Declining consumer interest has been observed in the UK (the main European market for major Swiss brands), as well as in Germany and France. There is also a decline in prices for exclusive watches at auctions.
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Excess of shipments over sales inevitably leads to increased inventory levels at distributors and retailers. The leaders in unsold inventory were mono-brand stores, for example, the retail chain Watches Of Switzerland Group PLC (UK: WOSG), whose shares have lost more than 50% of their price since the beginning of the year.
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The negative picture is complemented by watches from less pretentious brands that satisfy the demand of mass consumers, but have low investment value.
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Analysts expect consumers in the United States and Europe to continue cutting spending in the first half of 2024 amid soaring living costs and weak economic growth. So branded Swiss Chronometers are gradually turning from objects of worship into ordinary household items.
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And what do you think?
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Profits to yβall!