Value sales within the US watch market increased by 6% in 2013, as pent-up demand for watches during the economic downturn was released from 2010 to 2012.
However, the 6% current value growth rate in 2012 was an improvement on the 5% compound annual growth rate (CAGR) seen over the past five years, which was negatively affected by declines in 2008 and 2009.
Growth in value sales of watches slowed down in 2013, after growing by double-digits in 2011 and 2012. Sales of watches plunged by 10% in current value terms in 2009, during the Great Recession.
The strong demand for high-end watches allowed sales of watches to move past the pre-recession high of US$6.8 billion in 2007.
Sales surged to US$7.0 billion in 2011. Affluent men picked up luxury watches to add to their collections. However, this strong growth cannot continue forever.
Consumers of all income levels were shaken up by the recession, and took a break from buying discretionary items such as watches.
As the US economy began to recover, high-income consumers felt more confident about their economic prospects, and started to spend again on gifts and on themselves.
Fossil led the US watch market in 2012, with a 24% value share, up from 23% in 2011. The company has been able to grow sales through a multi-brand philosophy.
Instead of relying on just one brand, such as its eponymous brand Fossil, the company produces watches under numerous owned brands (such as Michele and Relic), as well as licensed brands, including Burberry, DKNY and Michael Kors.
Fossil is focused on "fashion watches". The core consumers of its watches are women, who purchase a watch as a fashion accessory for their wardrobe, rather than as a long term investment.
Demand for watches is expected to slow down in the coming five years. Despite improved confidence in the US economy amongst higher-income Americans as the housing market improves, shoppers are not expected to purchase as many new watches as they did between 2009 and 2012.
For more information on the US watch market, see the latest research: US Watch Market
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