The Watch Industry Is In for a Very Rough Period

The watch industry is about to enter one of its worst periods in decades. This next downtrend will make the quartz crisis look like a walk in the park….and frankly, most of these brands are not ready.

Let me break it down for you.

These companies have grown too fat, too used to the good times. And they’ve completely disregarded the lessons they learned in the past.

Costs are through the roof. During the quartz crisis, most of you outsourced your movement production, so you could REALLY tighten the belt and build watches on demand. And you only had to supply the ADs.

That is no longer possible. So many of you moved to in-house movements, that during the next downtrend, you are going to be carrying massive additional costs. All those movement makers making watches, all those extra repair technicians fixing the broken in-house movements, all those boutiques that require paying massive rents. All those things add up to millions and millions in extra costs that you simply didn’t have during the last crisis.

You also were protected from consumers finding out since back then internet didn’t exist. Do you really think people will continue buying _____ once rumors start circulating that you are going out of business? Do you think people won’t report on the forums that their local AD is offering a night with their wife just to get them to buy one of your watches?

The next recession will separate the wheat from the chaff. The companies that are smart and were thinking ahead and have the cash reserves to survive will still be around. But I can pretty much guarantee you that we’ll be seeing institutions that have been around for 100+ years close up shop left and right.

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