Kering And Its Swiss Watch Brands Face The Covid Heat

The French owned luxury conglomerate Kering is a major brand in the luxury industry. The French giants own two major swiss luxury brands like ‘Ulysse Nardin’ and ‘Girard Perregaux’. The swiss watch industry has been majorly affected by the Covid-19 pandemic resulting a huge hit in sales. Lack of sales has led to stringent decisions recently in every business sector. The luxury Swiss brands owned by Kering have decide to cut almost a quarter of their workforce by laying off 100 jobs. This has led to a dire strait situation for the employees and the brand itself. In fact the luxury watch industry on a global level has been affected badly due to the Covid pandemic.

CEO of both the Swiss watch brands said, “The economic repercussions of the pandemic were likely to have a ripple affect over several years”. The loss of demand due to the hard-hit pandemic, Chinese tourists aren’t really flocking up on the famous luxury streets like Paris, London to splurge on shopping. Due to the sudden hit in sales, the two swiss brands believe that the rate of recovery in the luxury watch industry will be very timid. A significant scale down in manufacturing, has led the swiss watchmakers to let go off their 100 employees. Before the news of letting go of 100 jobs, Kering’s swiss watch brands were present at the Swiss watch trade fair trying to fortify demand but feared that there would be a significant amount of loss in jobs, indicating specially to those involved in supplying. According to Kering, when they acquired ‘Ulysse Nardin’ and ‘Girard Perregaux’ in 2014 and 2011 respectively, both the swiss watch brands seemed to be in an in-depth transformation. Both the watch brands seemed to have suffered due to sudden change in the market and this goes on to proves that a big French conglomerate like Kering can suffer with its own brands. Financially Kering has reported a soaring increase in loss of up to $238 Million regarding both the Swiss watch makers.

Covid-19 seems to have really hit the luxury industry hard and a dip in demand could mean a lot of brands suffering financially. This goes on to prove that the economy recovery seems like a long road ahead for a lot of luxury brands. Though, Kering being the Core owners of ‘Ulysse Nardin’ and ‘Girard Perregaux’, will the Swiss watch makers survive this hurdle or will the financial discomfort lead Kering to let go of the two watch makers? Certainly, an interesting situation to keep an eye on.