The Bloomberg Subdial Watch Index, which tracks secondary-market prices for the 50 most-traded watches by value, has been ticking higher for about a year, rebounding from a multi-year slump that followed the Covid-era luxury watch mania fueled by cheap interest rates and easy money.
Our last note on the secondary watch market was about a month ago, covering the rebound in prices from a 2025 low (read here) and the shifting tastes of Gen Z collectors (or at least the ones with money).
To add more color to the Swiss watch cycle, UBS analysts, led by Zuzanna Pusz, spoke with a veteran industry insider.
Pusz's key takeaway from the conversation with the expert is that the industry has "entered a stabilization phase following the post-Covid boom and the subsequent normalization period marked by pronounced weakness in China."
Here's the full takeaway that gives readers more guidance on what to expect from the luxury timepiece industry this year:
Stabilising industry momentum, but outlook remains uncertain
Earlier today, we hosted a call with a seasoned Swiss watch industry expert to discuss the latest industry trends and brand dynamics. In summary, the expert believes theindustry has entered a stabilisation phase following the post-Covid boom and the subsequent normalisation period marked by pronounced weakness in China. While he expects 2026 to be a better year than 2025, it remains uncertain whether growth will return across the board given ongoing macro-political uncertainty. Market trends remain volatile and divergent: (1)US continues to show strength; (2)Europe faces uncertain demand, heavily influenced by tourism flows and FX; and (3)Asia lacks broad-based momentum, with China stabilising but Japan weakening. Overall, the call reinforced our view that theluxury recovery is still in its early stagesand that investors should remain selective.LVMH and CFR remain our top picks, while Swatch and Pandora continue to be rated Sell.
"Winner takes all" amid polarised brand performance
On brand performance, the expert highlightedcontinued market share gains among the outperformers, including Rolex, albeit with shorter waiting lists. He also noted the rising popularity of "microbrands", which are gaining visibility thanks to lower barriers to entry and growing "wrist/voice" share. Regarding Swatch Group specifically, the expert did not identify any clear idiosyncratic drivers behind the improving H2 sales momentum (c. FX +5% vs. Swiss watch exports -3%), aside from positive traction at Breguet and the group's ability to more easily supply retailers amid tariff concerns (inventory >100% of sales) compared to stock constrained peers. Nevertheless, he also pointed out the likely distortion of the FHS Swiss watch export statistics due to tariff-related volatility in today's context. Lastly, he expects continued consolidation within the retail landscape, with publicly listed groups likely to optimise their brand portfolios and refocus on more efficient assets.
Growing appreciation for luxury watches among younger cohorts
Source: ZeroHedge News
