Swiss horologists are having a hard time

The industry is lowering prices and looking to new markets “The rich, instead of buying two, they will buy one”

Last year wasn’t great for Switzerland’s luxury watchmakers, and 2016 isn’t looking any better. At an invitation-only Geneva trade show in January attended by 24 of the world’s most expensive watch brands, the consensus was that Hong Kong’s luxury slump, a rocky Chinese economy, and the November terrorist attacks in Paris—as well as competition from the Apple Watch—will hurt sales this year.

“We expect 2016 to be a very, very difficult year,” Vincent Perriard, chief executive officer of luxury watchmaker HYT, said at the trade show, officially called the Salon International de la Haute Horlogerie. “One of our points of sale in Paris sold no watches at all, from any brand, from the day of the terrorist attack until now. Zero sales.”

A dearth of Chinese tourists after the Nov. 13 massacre topped off a bad year. Swiss watch exports declined 3.3 percent, to 21.5 billion Swiss francs ($21.1 billion), in 2015, the first annual drop since 2009, according to the Federation of the Swiss Watch Industry.

The industry was jolted in early 2015 when the Swiss National Bank said it would no longer maintain its cap on the

Swiss franc. The currency rose against the euro, boosting production costs for watchmakers. Vanishing stock market wealth changed habits, too. “The rich, instead of buying two, they will buy one,” says Marc Gaudreault, CEO of Parmigiani Fleurier, whose watches sell for an average 30,000 francs.

A slowdown in Russia has led Ulysse Nardin, the 170-year-old watchmaker bought by luxury goods group Kering in 2014, to cut jobs. Third-quarter sales for Cie Financiere Richemont, maker of Cartier watches, fell 4 percent from the previous year. The company plans to decrease investments in manufacturing.

Falling demand has forced makers such as Greubel Forsey, with watches that average about 480,000 francs, to seek out new clients and travel more to meet them, says Chief Operating Officer David Bernard of his salespeople. “Now you need to go, explain, show that you’re there.” The brand has introduced a less expensive timepiece starting at 150,000 francs.

Family-owned H. Moser & Cie, founded in 1828, is looking to the U.S., the No. 2 market for Swiss watch exports after Hong Kong. Cities such as Chicago, Houston, and Miami offer potential, driven mostly by tourism and greater concentrations of wealth, say many representatives at the Geneva show.

Trying to lure younger buyers, Omega, owned by Swatch Group, signed Eddie Redmayne as a brand ambassador last year, after his Oscar win. Moser, hoping to grab some of the attention lavished on the Apple Watch, created a mechanical replica called the Swiss Alp Watch that has none of the tech applications. The ploy drew many visitors to Moser’s booth to compare their Apple Watches with the copy.

“The Apple Watch, smartwatches, the Google watches—99 percent are under $500,” Montblanc CEO Jerome Lambert says. “In that price zone, the relevance for fine watchmaking is zero.” Still, TAG Heuer has introduced the Connected Watch, a $1,500 smartwatch.