Over a week ago, a historic decision was made by the people of Britain. By a narrow majority, a referendum took place, with the outcome leading to Britain declaring it was going to leave the EU.
This isn’t a political commentary page, so I won’t be commenting my views on the decision. But as a horology blog, I think this makes for an interesting opportunity to talk about how Brexit has affected the watch industry.
One of the major fears of a Brexit was the idea that a lot of industry would be affected. Foreign multinational companies were predicted to pull out of the UK, looking for alternate trading access to the consumer giant known as the EU. In light of this, I think there isn’t much room for concern for the watch labels of the UK. I think the British watch industry (not including the individual political views of each label) has been and will continue to be, mostly undisturbed by the aftermath of Brexit, at least in terms of selling watches. One thing that has to be noted is that British watchmaking is very niche, with many labels being independent, and having a relatively small client base. Brands like Bremont have a very strong international following, with clients across the globe. Sales abroad will unlikely be affected, though I don’t have any insider information on any company sales. I would think however, that foreign buyers will be all the more interested, given the economic prospects on making purchases in the UK.
British collectors might be in a bit more of an uncertain condition, as they’ll be affected by simply being residents of the UK. That being said, if I’ve learned anything about collectors of such brands, it’s that said collectors are very loyal and won’t give up on their preferred label. They also tend to plan things carefully before making a purchase. Any immediate purchase plans can be put on hold, with the ability to work with, and contact the watch label directly.
One point that has been mentioned throughout the Brexit campaign and not just within the realm of watches, was the idea that people who wanted Britain to remain in the EU were severely undermining Britain’s ability to produce goods that would appeal and sell to the rest of the world. While this is a valid point to note, the current negotiations of trade deals and access to the free market-such as Switzerland have proven unsuccessful. Many labels who source and produce parts outside of the UK, will have their costs increase. This doesn’t bode well with labels who have their prices fixed by the pound and might end up running unprecedented costs.
British Watchmaking may be seen as relatively small, but there’s certainly no shortage of brands to provide unique and innovative products.
A golden investment opportunity
One of the immediate aftermaths of the referendum was an implosion of the British economy. Overnight, the value of the Pound Sterling fell sharply against rival currencies. Global markets went into a frenzy, and everyone was in panic and shock. The luxury retail sector will most certainly be affected. Many clients of retailers have asked “What effect will Brexit have on our timepieces?”
The answer to this question isn’t too difficult. There have been numerous market and financial collapses over the decades, I wasn’t alive for most of them. In the world of horology as a whole, it’s a proven statement that timeless and collectable watches have withstood these events; facing crises of the past,maintaining and even increasing in value. As the news has begun to settle, investors have begun looking hopefully at opportunities to buy watches at a reduced price. With the current unpredictability of the market, it can be seen as the perfect time to invest in luxury watches. There’s no denying that the fruits of such an endeavour will be very rewarding.
Pidgin economics explain the benefits of buying fixed price goods of a weaker currency, with a more valuable currency. Less money is spent by the investor, and the returns can result in being a very worthwhile purchase.
Asking the watch industry
What better way to get an insight on how Brexit has affect the watch industry, than by directly asking the executives of watch labels?
Alexandre Meerson, Founder Of Meerson Watches
The Meerson D15 Sport Travellers watch. Copyright Alexandre Meerson
An independent British luxury watch and accessories brand, whose aim is to cultivate art in the details of their products. Meerson watches are proud to be of British design, and are manufactured in Switzerland, under a team of 88 skilled artisans and watchmakers.
“I think we are going through the shock of the vote now, but Brexit – if there is an actual Brexit – will not take place before several years. For us it immediately meant a surge of demand from the US and Europe because of the low British pound. But that is short term. The most important thing is that people are now seriously thinking before buying and will be greater considering the integrity, reality and the quality of what they are buying, and this is very good for us”
Edouard Meylan, CEO of Moser & Cie
The Moser Endeavour Perpetual Calendar concept. Copyright Moser & Cie
An independent family run business, Moser stands out among fellow labels for it’s elegant yet outlandish design, constantly redefining simplicity.
“Any long term effect is difficult to judge but I don’t think it will affect much. Currently the main effect is the change in currency valuation which makes watches very cheap in the UK we seem to see an increase in sales. This is a short term effect and will stabilise once the arbitrage levels up as retailers review pricing”
Giles Ellis, founder of Schofield Watch Company
A British watch label based in the West Sussex countryside. Schofield strives to produce unique and impeccably designed timepieces, made both in Germany and England.
The Schofield Blacklamp Carbon. Copyright Schofield Watch Company
“We will not forecast the effects of leaving the EU, as it was guessing that got us in this mess to begin with. We deal in facts and at present these are financial. The weak pound is a double edged sword, it costs us more to buy parts from Europe but we see increased sales outside of the UK. It is business as usual for Schofield”
Richard Hoptroff, Founder of Hoptroff London
A London based watch company, Hoptroff timepieces can easily be distinguished as the most accurate in the world. Each piece is a compendium of physics and maths, paired with unique design.
The Hoptroff no.16 can be credited to be among the most accurate timepieces you’ll ever see on a person’s wrist. Copyright Hoptroff London.
“It’s hard to say what the impact will be, since there nobody seems to know where we go from here! What is clear is that we will have a weakened exchange rate, meaning importing parts will be more expensive, but our watches will appear lower cost to export markets”
I think as a whole, particularly on the level of high end luxury; the watch industry will be a bit ruffled from the Brexit news in early days. A lot of people are quite uneasy over the idea of making forecasts, but the basic facts are enough to draw a decent conclusion. It has to be noted that there will be a unanimous need to adjust to the immediate geopolitical and economic climate. Things will be volatile-but there’s confidence from all sides that the industry will regain it’s footing over time. I’d also like to give a huge thanks to the watch labels who have agreed to be featured in this article.