Swatch Group Formally Challenges The Morgan Stanley Swiss Watch Report

On February 18, 2026, Morgan Stanley Investment Management, in partnership with Geneva-based consultancy LuxeConsult, released the ninth edition of its annual Swiss Watcher report. This document has, over the years, become something of a fixed point on the industry calendar. Rankings, revenue estimates, unit sales projections, and market share breakdowns across the top 50 Swiss watch brands. The report carries authority the way a confident headline does: not because everything in it is verifiable, but because it is specific. Numbers presented to the decimal place are often believed.

Nine days later, the Swatch Group responded. Not with a statement, not with a spokesperson's comment to the press, but with a formal, 1,800-word open letter published on its investor relations page and addressed directly to Morgan Stanley Investment Management. It was methodical, pointed, and in places, forensic. It was also something the industry has not seen before at this scale: a publicly listed conglomerate that does not disclose individual brand financials choosing to selectively open its books in order to demonstrate, case by case, how wrong the numbers were.

The core charge was stated without softening: the figures in the research are highly inaccurate. Actual turnover figures deviate on average by 24% from those presented in the research, with a range of -53% to +46% for individual brands. The inaccuracies are even more pronounced for unit sales, with an average deviation of 39%, ranging from -48% to +198%. That last figure is not a rounding error. It is the difference between a narrative of decline and a narrative of performance, and for a group whose share price fell as much as 3.1% on the day the letter was published, the distinction is not academic.

The February 18 report described Longines as a brand under significant pressure, citing high management turnover and heavy reliance on China. It also placed Omega, historically the group's most prominent brand globally, at number five in the overall rankings, implying it had been overtaken by competitors including Patek Philippe and Audemars Piguet. And it concluded that Longines had lost money in 2025.

Swatch Group's response to the Longines claim was direct: the brand had in fact reported a profit of 16.6% on net sales in 2025. On Hamilton, the discrepancy was even more stark, actual unit sales are three times higher than stated. The letter then turned to the methodology that produced these figures and found it structurally compromised. The research cites five data sources used to determine sales and unit sales: figures reported by public companies, public statements made by the CEOs of watch brands over the years, direct discussions with watch brands, data from the Fédération de l'Industrie Horlogère Suisse, and dialogue with industry contacts. Two of these sources, published figures from listed companies and FHS export data, are indeed reliable but they are unusable for determining sales and unit sales of individual brands. The remaining three, CEO statements, brand discussions, and industry contacts, the letter described as inherently unreliable, citing a Vontobel luxury analyst's observation that brand representatives tend to present their performance favorably regardless of circumstance.

Among the sharpest passages in the letter is the one addressing disclosure. While Morgan Stanley discloses potential conflicts of interest — stating on page 1 that it does and seeks to do business with companies covered in the report, the research's author, LuxeConsult, does not. It is therefore unclear whether and to what extent conflicts of interest exist. This matters because the report's methodology relies heavily on direct conversations with industry participants. Research built on brand dialogue, without a clear disclosure of the researcher's commercial relationships with those brands, is not a neutral instrument. LuxeConsult declined to comment. Morgan Stanley had not responded at time of publication.

What Swatch Group Is Really Saying
The Swatch Group's total turnover across all brands in 2025 was CHF 6.28 billion, a hard fact that must anchor all estimates in the Morgan Stanley report. The group's 2025 results were genuinely difficult: operating margins compressed sharply, demand from China softened, and the group's deliberate policy of maintaining full production capacity and protecting employment — absorbing losses in its manufacturing segment rather than cutting headcount — weighed on headline profitability. None of that is in dispute. The letter is not a denial of a challenging year.

What it disputes, specifically and with numbers, is the right of a report built on unverifiable estimates to publish definitive-sounding rankings and conclusions as though they were documented facts. The research presents a wealth of precise data, including turnover, unit sales, market share, retail share, and average retail prices for each brand. This abundance of information is intended to create the impression of thorough documentation and sound conclusions. Yet none of these figures is based on a solid, verifiable foundation. The letter closes with notice that legal action is under consideration.  In a sense, the open letter is its own argument. A group that truly had nothing to defend would have ignored the report, as most privately held brands quietly do each year. Instead, Swatch Group chose to engage, publicly, in writing, with specific figures, because the alternative was allowing a document with documented errors to shape how investors, journalists, and the industry itself understood their performance. In horology, the tolerance for imprecision is measured in microns. It appears the same standard now applies to the research that covers it.