Core Viewpoint - The article discusses the recent controversy surrounding Swatch's marketing campaign, which has led to significant backlash from Chinese consumers and a subsequent apology from the company. The situation is compounded by declining sales and potential impacts from U.S. tariffs on Swiss imports. Group 1: Company Response and Controversy - Swatch issued an apology on August 16, acknowledging the backlash regarding the model's portrayal in their ESSENTIALS series and has removed all related materials globally [3] - The controversy has sparked strong protests from Chinese consumers, highlighting issues of racial sensitivity in marketing [1] Group 2: Financial Performance - Swatch Group reported a sales decline of 11.2% year-on-year for the first half of 2025, with net sales at 3.059 billion Swiss francs [7][8] - The company's net profit plummeted 88% to 17 million Swiss francs, with a net profit margin of 0.6%, down from 4.3% in the previous year [7][8] - The Chinese market, which is Swatch's largest regional market, generated 2.63 billion Swiss francs in 2023, accounting for 33.3% of total sales, but saw a 30% decline in 2024 [8] Group 3: Market Conditions and Tariffs - The U.S. is Switzerland's largest export market, with 19% of Swiss exports going to the U.S. The Swiss watch industry exported 26 billion Swiss francs worth of watches in 2024, with the U.S. accounting for 16.8% of this total [12] - The recent increase in tariffs to 39% on Swiss imports by the U.S. could severely impact Swiss brands, including Swatch, which derives 18% of its sales from the U.S. market [11][14] - Analysts warn that sustained high tariffs could be devastating for many Swiss brands, as the company has already raised prices by 5% in response to earlier tariff announcements [14]

Wealth Stages - The analysis outlines ten stages of wealth based on watch ownership, starting from no watch and progressing through various brands [1] - Stages include entry-level brands like Casio and Apple Watch, mid-range brands like Tissot and Seiko, and luxury brands like Rolex and Patek Philippe [1] - The progression culminates in ultra-high-end brands like FP Journe and Richard Mille, with the final stage returning to no watch [1] Brand Perception - Richard Mille is characterized as "dumb money," suggesting a perception of ostentatious or unwise spending [1] - Jacob & Co is labeled as "actual dumb fk," indicating a strong negative perception of the brand [1]

Wealth Accumulation Stages - The progression of wealth is often reflected in watch ownership, starting from no watch and evolving through various brands [1] - Early stages include affordable brands like Casio, Swatch, and Apple Watch [1] - Mid-tier brands such as Tissot, Seiko, Citizen, Tudor, Nomos, and Tag Heuer represent further financial progress [1] - Luxury brands like Omega, Zenith, IWC, Rolex, Grand Seiko, and JLC indicate significant wealth accumulation [1] - Ultra-luxury brands such as Patek Philippe, Audemars Piguet, Vacheron Constantin, and A Lange & Sohne signify substantial wealth [1] - Niche and independent brands like FP Journe and MB&F represent a high level of connoisseurship and wealth [1] - Richard Mille is associated with "dumb money," suggesting conspicuous consumption without genuine appreciation [1] - The final stage is "no watch," implying a return to simplicity or a transcendence of material status symbols [1] - Jacob & Co is considered an example of excessive and tasteless display of wealth [1]