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Swiss luxury watchmakers have said they are seeking state support to help cope with a drop in demand.
Bloomberg reported that Girard-Perregaux and Ulysse Nardin, owned by Sowind Group, are the first brands to confirm that they've turned to the government for financial aid.
Under the Swiss short-time work program, the state will pay up to 80% of workers' salaries directly to the company to cover cut hours. The benefit aims to prevent permanent job cuts.
Sowind Group's CEO and chairman, Patrick Pruniaux, has placed about 15% of its 320 employees on the state program, according to Bloomberg.
The luxury watch market has been struggling since its pandemic boom.
Swiss-based Swatch, which owns the watch brands Longines, Omega, and Tissot, saw its net sales drop by 14.3% in the first half of the year.
Meanwhile, luxury watch sales fell 13% at fellow Swiss luxury giant Richemont in its most recent quarter.
Both companies have grappled with a sharp decline in demand from China.
Plunging demand for luxury watches has also been troubling the secondary market.
Between January 2021 and March 2022, secondhand luxury watch prices spiked as investors sought to diversify their portfolios.
But as the Federal Reserve started raising interest rates in March 2022, demand for expensive, high-end items like watches and jewelry fell.
Data from WatchCharts Overall Market Index — which tracks the cost of 60 secondary market watches taken from the top 10 luxury watch brands — showed that as of September 2024, luxury watch prices have fallen by nearly 40% since their peak in 2022.
It's not just the luxury watch market. High-end fashion companies, including Burberry and Gucci, have also reported slumping sales in China.
