Last month, premium British watch brand Christopher Ward announced a partnership with the Morgan Motor Company, a car company of the same calibre. The relationship between the two companies, which will lead to a collection of timepieces available exclusively to Morgan car owners, reflects the historic link between the automotive and watch industries. It also reflects the trajectory of growth seen in the British watch industry in the past few years as a small collection of local watchmakers have revived the trade.
Coming back from two hundred years of laying low in the luxury watch industry – despite having been a major player until the mid-19th century – these companies have come up against the industry giants in Switzerland, such as Rolex, which boasts an output of 2,000 watches per day. Swiss watch manufacturers have on their side the tradition of establissage, or locals in rural areas who work for the companies during winter months, to boost production. The Swiss industry also responded quicker when, during the myriad of wars at the turn of the 20th century, the demand for wristwatches skyrocketed.
But the past few years have seen a downturn in the Swiss market with exports declining across a number of key markets, including Italy, Germany and France. Currency fluctuations have played a key role in this pattern, as Chinese shoppers have avoided Hong Kong, one of the biggest export recipients from Switzerland. On the other hand, luxury watch sales in the UK have surged since Brexit as the pound has fallen compared to international currencies.
Part of this development has been due to an increased interest in luxury watches within the UK. In eighth place one year ago, the UK quickly moved up to fourth place on the list of top Swiss watch export markets in January 2016. Since 2010, the value of Swiss watch exports to the UK has almost doubled to US$1.06bn, and UK-based pre-owned luxury watch seller Watchfinder.co.uk noted in September that the number of daily sales has nearly doubled since Brexit.
These circumstances have created the ideal situation for UK-based watchmakers to reclaim the local market. Founded in 2007, UK firm Bremont today manufactures nearly all of its watches – between 8,000 and 10,000 per year – in the country. Although the output pales in comparison Swiss giants such as TAG Heuer, the company has stores in New York, London and Hong Kong and sponsors the America’s Cup yachting competition. Movement can also be found among mid-range luxury brands such as Larsson & Jennings, where the in-house UK-based design team partners with Swiss manufacturers to develop a range of high-quality quartz movement watches.
“The unquestionable British stamp of authority on luxury and craftsmanship makes the ‘Made in the UK’ branding an obvious choice” – Brian Duffy, Watches of Switzerland, CEO
Beyond stellar market conditions, credit for the revival can also be given to the inherent traits of the British and Swiss luxury watch markets. Characteristic of the Swiss one are its regulations surrounding provenance, similar to those that exist for Champagne and Parmigiano-Reggiano. Entering into effect on 1st January 2017 is a regulation that will require at least 60% of manufacturing costs to occur in Switzerland in order for any product, watches included, to be labeled ‘Swiss Made’. The law reflects a revision from the existing regulation requiring 50%, and is likely to take a toll on the already-struggling Swiss luxury watch industry, which has seen exports fall across a number of key markets, including Hong Kong, France and Italy.
As the British watch industry develops, notably missing is a similar regulation to determine how much of a watch must be made in the UK to fly the ‘Made in Britain’ flag. While some UK companies, including Bremont and Garrick, manufacture wholly in the UK, others lack the engineering facilities to manufacture the hundreds of intricate pieces that are needed to make the high-end mechanical watches historically attributed to Swiss companies. Lacking any regulations surrounding how much of the watch must be made in the UK, British companies have better flexibility to produce luxury watches and turn a profit. And according to industry experts, this makes sense. When I spoke to Brian Duffy, CEO of Watches of Switzerland and Mappin & Webb parent company Aurum, he told me that “the unquestionable British stamp of authority on luxury and craftsmanship makes the ‘Made in the UK’ branding an obvious choice.”
But there are still challenges for the British luxury watch industry. Still on the rise and highly fragmented, many of the companies developing on the market are making no more than 8,000 to 10,000 pieces per year – a fraction of those made at larger Swiss companies. The labels also don’t yet have the same level of global recognition as their Swiss counterparts: according to the Digital Luxury Group’s World Watch Report, of the top 62 luxury brands that were searched for online in 2015, the only British one was Bremont. According to Brian, this makes sense: “When it comes down to it, Switzerland is irresistible and dominates the upper end of mechanical watches.”
British labels are also faced with the issue of requiring highly expensive equipment for manufacturing – or having to outsource some of their engineering operations. Although this does not technically impact UK companies in the same way it does for their Swiss counterparts, it leaves the question of whether a brand can claim to be ‘British made’ in the hands of the purveyors of luxury watches – a notoriously scrupulous market. For these customers, only a few labels, such as ultra-luxury brand Roger W Smith, with pieces priced at £100,000, and Norfolk-based Garrick will make the cut. On the other hand, British label Mappin & Webb Campaign watch, paying homage to the model used by British troops during WWI, uses Swiss movement – showing that flexibility and authenticity are not mutually exclusive.
Switzerland also benefits from a wholly-developed industry. With government funding and schools dedicated to the art of watchmaking, such as that recently launched by LVMH, the country has invested in the market significantly more than the UK. Nevertheless, all hands point to a market on the rise in England. According to the British Horological Institute, the number of UK-based watch companies has grown in the past decade as entrepreneurs have realised the profit potentials of high-end watches with strong marketing. And as we’ve seen across the UK luxury industry at large, the recent decline of the pound sterling means that British brands stand to benefit from the huge influx of tourism seeking cheaper prices.
However, still in the early years of revival, it remains to be seen whether any British watch companies will reach the same global scale as have Swiss brands such as TAG Heuer or Rolex. While this new market grows, there’s little doubt that the best Swiss brands remain the gold standard for luxury watch aficionados. What remains to be seen is whether the uniqueness and excitement of new players to the scene will be able to turn enough heads – or hands.