Morgan Stanley Investment Management published its Ninth Annual Swiss Watcher report on February 19.
This study provides a detailed analysis of the commercial dynamics of the Swiss watch market at the brand level. While few watch enthusiasts read the entire report, one table became particularly famous - the ranking of the top 50 Swiss watch brands by turnover. Watch enthusiasts around the world carefully examine this table: which brand has grown, which has fallen, who has overtaken whom? In a way, the annual publication has turned into a public tabloid leaderboard of the major players in the Swiss watch industry.
Although rumors and discussions about this report circulate in the industry annually, this year the situation is different. For the first time, a major player - Swatch Group - responded with a public letter published in the investor section of the group's official website on February 27. Swatch Group criticized Morgan Stanley's methodology and conclusions. This is an opportunity to closely examine what happened and assess how it affects us, watch enthusiasts.
What is the Morgan Stanley Investment Management Swiss Watcher Annual Report?
Annual Swiss Watcher is, simply put, an analysis of the Swiss watch market. The report is partially based on public data. The law requires public companies to publish financial statements.
However, not all watch brands are public companies. Moreover, large groups that are public are not required to disclose figures for individual brands within their portfolio. This means Morgan Stanley cannot operate with a single, clean, and consistent database covering all brands. Additionally, even incomplete and inconsistent data is often unavailable for individual brands and indicators. Therefore, the bank collaborates with the Swiss consulting firm LuxeConsult to fill in data gaps. More on this below.
The key point is that the report is not publicly available. Morgan Stanley does not publish it openly, and it is not intended for the (watch) media. The target audience of the report is Morgan Stanley Investment Management clients, that is, investors.
Why Swatch Group Feels Offended
At first glance, everything is clear. However, Swatch Group was dissatisfied with the content of the current Swiss Watcher report. One of the key findings is that Swatch Group brands have lost ground compared to competitors. In particular, the second point of the report's summary states: "Omega dropped two positions and ranked 5th by turnover." The seventh point notes: "Swatch Group: structural challenges persist. Swatch Group once again became the main donor of market share in the industry."
It is no secret that the watch industry is going through a difficult period, and the downturn has hit Swatch Group particularly hard. In the group's annual report for 2025, it reports a 89% drop in net profit, which is not surprising. However, the Morgan Stanley report delves into the details of individual brands in a way that Swatch Group considers unjustified.
Swatch Group states its position as follows:
"The study contains statements about the sales and profit dynamics of our companies, which can seriously undermine the trust of clients and retailers. Some of these incorrect statements are so serious that, in addition to communication measures, the possibility of legal action should be considered."
What are Swatch Group's Complaints About the Morgan Stanley Report?
I won't fully recount Swatch Group's letter (you can read it yourself). However, it is worth considering the key points of criticism. First, there is a lack of reliable data on which to base the report. As noted, many of the discussed figures are not publicly available. A clear example is that Swatch Group publishes figures for the group as a whole, but not for individual brands. Simply put, it is impossible to accurately determine what part of the turnover is attributed to Omega, Longines, or Hamilton. Similarly, some other companies in the report do not publish any data.
According to Swatch Group, this leads to erroneous conclusions on several levels. The report incorrectly reflects the turnovers of individual brands within the group, with a variance from -53% to +46%, with an average deviation of 24%. For example, the report states that the average price of Hamilton watches is 2,014 Swiss francs, while Swatch Group claims it is 714 francs.
The letter further emphasizes that the low quality of the data is masked by the apparent precision of the report. For instance, percentages are given to tenths, while Swatch Group asserts that they can only be approximately estimated in broad ranges. Despite Morgan Stanley's disclaimers, the report does not clearly separate known and estimated data, leading to criticism from the group.
How Does Morgan Stanley Obtain This Data?
If the available data is limited, how does Morgan Stanley form such a detailed analysis? Herein lies the complexity. I acknowledge that this is beyond my primary expertise, so I will limit myself to general statements.
Available data is supplemented with information from various sources: public statements by CEOs, export data from the Federation of the Swiss Watch Industry (FHS), as well as known data on the number of retail outlets and chains.
This data is used to calculate and estimate indicators such as the share of wholesale and retail sales, market shares, the number of units sold, etc. Morgan Stanley relies on the insider expertise of Oliver Müller from LuxeConsult, who collects and analyzes this data.
Why Does This Cause Controversy?
As can be seen, the report is based on a mix of hard data and estimated assumptions. Although the report openly states that much of the data is estimated, the conclusions appear surprisingly accurate and confident. I have no way to verify Swatch Group's counter-evidence, but if they are correct, the company's dissatisfaction is understandable. Previously, Morgan Stanley has already adjusted data based on brand feedback. Let's see how the investment bank responds to Swatch Group's comments. It can be argued that all brands can publish their data themselves. On the other hand, a more cynical view is that Morgan Stanley forces them to do so by initially publishing questionable information.
As Swatch Group states:
"Creating a ranking based on such data as in the study is crude and careless. If even the brands of the public company Swatch Group - whose global data is available - show discrepancies of 50% or more, then for private brands (which do not publish any brand data) the deviations are likely even greater. The average deviation of 24% for Swatch Group would significantly alter the top brand ranking. For example, Omega could occupy a position from second to sixth, rather than fifth, as stated. The study's claim that "Omega dropped two positions to 5th place by turnover, yielding to Audemars Piguet and Patek Philippe" (page 3) is therefore meaningless. It could also mean that Omega has overtaken Cartier and is now in second place."
Watch Media Should Self-Reflect
While I cannot objectively verify the data of either side, I respect Swatch Group's sensitivity. After all, this document is intended for investors. Reading the report, I agree that the conclusions seem too categorical given all the uncertainties in the data. It would be more logical to present estimated ranges rather than precise figures if much of the source data is subject to interpretation and estimation. On the other hand, while I have experience with scientific publications (where such an approach would not pass), I am less familiar with the rules for compiling investment reports. Experienced investors, share your opinions in the comments.
The bottom line is that the report is aimed at Morgan Stanley Investment Management clients and should help them assess investment potential. Investors must weigh the report's value themselves and adjust the degree of trust. I think experienced investors will easily spot the flaws. If I notice them, then any decent investor - even more so.
The problem is that the watch world perceives the report as a tabloid ranking. The ranking is actively discussed on Instagram accounts, limited by hashtags #wristcheck and #womw. I confess, I myself cannot guarantee that I have never cited previous versions of the report on Onewatch. I think this current conflict should be a reason for self-reflection. Watch media should not unconditionally spread such conclusions. But the unpleasant truth is that it is often impossible to verify the vast number of press releases and reports published daily. In the end, it remains only to maintain openness and transparency when such situations arise.
Final Thoughts on the Morgan Stanley Report
It is interesting to read Swatch Group's response to the annual Morgan Stanley Swiss Watcher report. I can only imagine how many heated internal discussions preceded the publication of the letter. After all, there is a risk of appearing unrestrained if you are indeed experiencing difficulties, which undoubtedly applies to Swatch Group.
Nevertheless, Swatch Group should be praised for its detailed critique. The letter appears as a thoughtful breakdown of the report's methodology and conclusions. Even if we cannot verify the figures of either side, the discussion reveals serious methodological shortcomings of the study, which are probably not sufficiently explained by Morgan Stanley. Even without questioning Mr. Müller's competencies and interests, it seems excessive to place so much responsibility on one expert. At the time of writing, no formal response from the investment bank has been received.
What do you think of Swatch Group's criticism of the Morgan Stanley report? Share your opinion in the comments!