Morgan Stanley states in its latest Morgan Stanley Investment Management (MSIM) Public Side Code of Ethics and Personal Trading Guidelines, submitted to the SEC files, that it is a duty to deal fairly and act in the best interests of its clients at all the times. Furthermore, MSIM states on their homepage:” Research; through timely, in-depth analysis of companies, industries, markets and world economies, Morgan Stanley has earned its reputation as a leader in the field of investment research.”
However, releasing research reports with lack of research quality, lack of verified statements and numbers, even completely wrong estimations and/or wrong statements even when the information already is in the public field, then such a research work clearly is not in the best interest of clients. Such work is harming the reputation of MSIM itself and also hurts of course all its clients by wrong information and also all the analyzed companies by the misstatements in the research paper.
Regarding Swatch Group and its brands, please find hereafter the detailed comments about the research work.
Executive Summary
Lack of Reliable Data Basis: The figures and statements in the research are based on unsuitable and not transparent data sources, without disclosing their unreliability. None of the input data can be verified.
Questionable Methodology: The methodology appears designed to hide the poor data situation. This includes an abundance of unsubstantiated data, apparent inaccuracy such as the use of point values instead of ranges to create a false sense of precision, and plausibility checks that sometimes produce absurd results.
Incorrect Findings: As far as our brands are concerned, 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% – thus, in the case of Hamilton, actual unit sales are three times higher than stated. You can find a similar degree of deviation in the implied retail prices.
Negligent Conclusions: These significant errors make any reliable ranking, as this is done by the research, impossible. Given above average deviations for Swatch Group brands, Omega, for example could rank anywhere from second to sixth, instead of listed as fifth.
Damaging Statements: The research includes statements about sales development and profits of our companies that could seriously undermine customer and retailer trust. Some of these wrong statements are so severe that in addition to communication measures, legal action should be considered.
Potential Conflicts of Interest: While Morgan Stanley discloses potential conflicts of interest, the author of the research (LuxeConsult) does not. Given that the data sources are said to rely primarily on information from discussions with brand representatives, this lack of transparency is concerning.
Details to Each Point
Lack of a Solid, Reliable Data Basis
The research gives the impression that its information is grounded on solid facts. As evidence, it cites five data sources used to determine sales and unit sales – and thus market shares and rankings – of each of the brands, namely, “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 (FHS), and dialogue with industry contacts” (page 23).
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, as neither provides brand-level information. Their inclusion therefore serves primarily to create the illusion of a fact-based approach.
The quality of the remaining three sources (public CEO statements, direct discussions with brands, and dialogue with industry contracts) speaks for itself, they are inherently unreliable. As industry expert and luxury analyst at Vontobel, notes: “…brand owners delight in everything” (Le Temps, February 21, 2026). Making precise statements on this basis is highly unprofessional and purely speculative.
A reputable research would clearly distinguish between verified data and estimates. This is not the case here.
Extensive Detail, Apparent Precision, and Purported Plausibility Mask the Lack of a Solid Data Foundation
Based on this shaky data base, the research presents a wealth of “precise” data – 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 extensive details serve only to convey apparent expertise and conceal the lack of reliable data.
The use of “precise” point estimates reinforces a false sense of accuracy. For example: “Swatch Group had an estimated 16.1% share of the industry in 2025… (down about 220 bps vs. 2024 from 18.3% and 1000 bps vs. 2019 from 26.4%) (page 26). Not only that these figures rely on a comparison of unverifiable data in earlier reports, but they also suggest a level of accuracy that is inappropriate given the speculative nature of the underlying data. Reputable studies would use ranges, not point estimates, when data is fragile. However, single numbers make for more striking headlines.
The research further compounds speculative turnover figures of the individual brands with additional assumptions about unit sales, retail share, and – calculated from these – average retail prices, each based on unverifiable estimates (whose errors are sometimes compounded). These do not reflect methodological rigor and do not serve plausibility; rather, they are used to preserve predetermined turnover figures or to avoid contradicting previous years’ figures.
Example Breguet: Until 2023, the research’s estimates implied an average retail price of approximately CHF 15’000. When informed by Swatch Group that this was completely wrong, the figure was doubled to around CHF 32’500 in 2024. Yet the turnover estimate remained unchanged. To avoid acknowledging the earlier error, unit sales were simply more than halved from 20’000 to 7’400 – without any explanation. The same procedure was applied to Harry Winston in 2025.
The research also maintains erroneous estimates even when publicly available information contradicts them. For example, it claims that “less than 40% of Swatch Group brand sales are done at wholesale level” (page 23).
It is likely that the research contains an error in this wording. The “less than 40%” probably refers to the retail share, not the wholesale share. But it is still incorrect, despite the Group having long published the accurate figures (for 2025: 53%). This suggests that inconvenient facts are ignored when it contradicts the narrative.
Incorrect Findings
Unsurprisingly, the lack of data and questionable assumptions result in inaccurate findings and questionable conclusions (reference: exhibit 13, page 13):
Turnover: Across all Swatch Group brands considered in the research, the average deviation between actual and estimated turnover figures is 24% (!), ranging from -53% (Certina) to +46% (Rado). Sales are thus over- or underestimated by up to 50% and more. Of the 12 Swatch Group brands listed in the report, only six are in a range of +/-20%, two show a deviation between 20-40%, and four are even more than 40% off reality.
Unit Sales: The deviations are even larger for unit sales: an average of 35%, ranging from -48% to 198%. Thus, for Hamilton, unit sales are three times higher than stated.
Retail Share: The research’s assumptions about retail share of our brands are often unplausible, despite the availability of published data by the Group.
Examples: Breguet: research assumes 22%, actual is 54%.
Longines: research estimates 10%, actual is 24%.
Swatch: research assumes 60%, actual is 86%.
Retail Prices: Retail prices are calculated from the estimated turnover, unit sales, and retail share – multiplying errors. Unsurprisingly, the results deviate significantly from reality.
Examples:
Mido: research assumes an average retail price of CHF 2’131; actual is CHF 969.
Hamilton: research assumes CHF 2’014; actual is CHF 741.
All these wrong figures demask the research for what it is: pure speculation.
Questionable Conclusions
Creating a ranking based on such figures, as the research does, is crude and negligent. If even brands of a publicly traded company like Swatch Group – whose global data is publicly available – shows discrepancies of 50% and more, the deviations for privately owned brands (which do not publish any brand specific data at all) are likely even bigger. Even the average deviation of 24% for Swatch Group would significantly reshuffle the ranking of top brands. Omega, for example, could rank anywhere from second to sixth, instead of listed as fifth. The research’s claim that “Omega fell two positions to #5 by turnover, overtaken by Audemars Piguet and Patek Philippe” (page 3) is therefore meaningless. It could just as easily mean that Omega has overtaken Cartier and is now in second place.
Reputation- and Business-Damaging False Statements
Beyond data and methodology flaws, the research makes assertions that could harm brand reputation and stakeholder confidence.
Examples:
On page 2 it is claimed that “… 10 brands experienced a contraction of their turnover of 15% or more in 2025: Longines, Swatch, Hamilton, Blancpain and Breguet (all part of the Swatch Group) …”. And on page 4, with regards to Swatch Group, it is stated that “all of the Group’s top five brands posted a sales contraction in 2025, as per our estimates.” Later, in the same paragraph, the turnover decline for individual brands is specified: Omega -8%, Longines -18%, Tissot -5%, Swatch -10%.
These statements are far from reality. Just as an example: Tissot grew by 3%, and did not decline by -5%.
The research also makes unsubstantiated claims about profitability. For example, it asserts that Longines became loss-making in 2025: “…we believe that this once highly profitable brand [Longines] became loss making in 2025 and its now Swatch Group’s main problem child” (page 3). In reality, Longines reports a profit of 16.6% on net sales in 2025.
Undisclosed Conflict of Interests
While Morgan Stanley discloses potential conflicts of interest (disclaimer on page 1, stating that it does and seeks to do business with companies covered in the report and that this could result in a conflict of interest, the research’s author, LuxeConsult, does not. It is therefore unclear whether and to what extent conflicts of interest exist. The very fact that the figures published in the report rely heavily – in case of turnover or unit sales solely – on “public statements made by the CEOs of watch brands,” “direct discussions with watch brands,” and “dialogue with industry contacts” raises serious concerns about impartiality.
Conclusions
The research is highly speculative, based on unsuitable and unverifiable data source. Instead of acknowledging this, it masks this weakness through excessive details, artificial precision, and questionable plausibility checks. As a result, the figures and conclusions regarding turnover, unit sales, average retail price, market shares, and ranking are unusable. Occasionally, the research even produces defamatory and potentially damaging statements.
