2024 will be “a challenge” for the Swiss watch industry, Rolex CEO Jean-Frédéric Dufour (pictured) told Swiss newspaper NZZ in a rare interview.

“A phase in which all manufacturers were doing well is coming to an end,” he said. “In good times, too much is often produced. When the markets weaken, as is the case now, watch dealers come under pressure and respond with discounts. This is extremely problematic because discounts damage emotional products like ours.”

Dufour said several factors presented issues for the industry, particularly the high price of gold.

“A kilo of gold currently costs almost 66,000 [Swiss] francs,” he said. “Thirty years ago, when I started in the watch industry, it was still 18,000 francs. Of course this makes the watches more expensive. The increased interest rates are also affecting people’s spending mood, and the geopolitical situation isn’t helping either.”

But he noted that large brands like Rolex are less affected than smaller companies by shifting marketplace conditions.

Less-established brands “may have seen a 20% increase in sales during the upswing, they may now experience a 15% decline,” Dufour said. “For the big brands, the fluctuations are smaller, in the range of plus or minus 2 to 3%. Big brands never achieve 20% annual growth.”

The Rolex CEO spoke to the publication at Watches and Wonders Geneva. The annual trade fair has attracted big names like Rolex and Patek Philippe—but so far not Swatch Group, the leading watch conglomerate.

Dufour chairs the foundation that runs the fair, and he says the door remains open for Swatch Group to participate.

“I can’t see into [Swatch Group CEO Nick] Hayek’s head. I visited him and his family and invited them. But Nick Hayek has his own ideas. He says the Swatch Group is very industrial and doesn’t want to waste time on exhibitions. However, for us it is not a waste of time. We sell emotions and dreams. To keep this alive, you have to tell stories, you have to be active. You can’t just sell products.”

(Photo: Bart Michiels/© Rolex)

 

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