PARIS — Financial markets have been riding a roller coaster and analysts are predicting continued turbulence, but the economic turmoil isn't affecting Switzerland's high-end watch trade.
Business continues to boom at a record-breaking pace, according to executives and retailers, who said their biggest challenge is to produce enough to satisfy lusty demand.
"We have seen a tremendous increase in our business," said Andrew J. Block, executive vice president of watch retailer Tourneau. "We have more concern about the brands' inability to deliver enough products to sustain the market demand than an economic slowdown."
For the month of September, the most recent data available, Swiss watch exports accelerated 16.7 percent, driven by the high end, according to the Federation of the Swiss Watch Industry. Over the last 12 months, exports of Swiss timepieces have improved 15.2 percent.
The last few years have been incredible for luxury watchmakers, from Cartier to Patek Philippe. New wealth markets like China, Russia and the Middle East are generating double-digit growth, and sales in the U.S. have reached record levels, too.
But as the U.S. stock market falters and the fallout from the subprime loan meltdown proves deeper than initially feared, some analysts wonder whether the party is beginning to wind down.
In a note to investors coinciding with the release of Hermès' third-quarter sales, HSBC analysts predicted watches are more susceptible to slowdown than the rest of the luxury sector.
"Our scenario remains a gradual [luxury] slowdown (inevitable after three exceptional years) with a higher momentum risk on the watch segment," HSBC said.
But most of the main players shrug off warnings like that as unlikely. They also said the diving value of the dollar and yen against European currencies has had little impact on business.
"So what if the dollar and yen are weak?" asked Cartier International president Bernard Fornas. "We don't see any reason for the boom to cool. When you see the figures of the Swiss Watch Federation, you see there is no slowdown. There's a lot of cash in the world. It's a reality. Some people are getting richer, with petrol nearing $100 a barrel and gold at $800 [an ounce]. There's liquidity. The high end is selling better than lower-priced items."Audemars Piguet recently launched a watch with brand ambassador Shaquille O'Neal costing $27,900 in stainless steel and $75,800 in white gold.
"All the timepieces were sold out by the time we had the official launch event in Miami," said François-Henry Bennahmias, president of Audemars Piguet. "We definitely haven't seen any warning signs for now. But that doesn't mean that we are not aware of and preparing for a potential slowdown."
Jean-Marc Bories, general manger of Breguet and the senior vice president of Swatch Group in the U.S., said there has been no fallout from market turmoil.
"Like most prestige items, watches at this price point are somewhat immune to momentary blips in currency or economy," he said. "Breguet is demonstrating record-breaking growth this year and under greater demand than ever."
Severin Wunderman, owner of Corum, also said he had no bad news to report. "We are still under big pressure to deliver," he said, adding, though, that he is concerned about the low value of the dollar.
"I personally feel that there will be reactions in the U.S. market, as no one has yet readjusted prices due to the dollar's slide. As most big players have prepurchased gold, diamonds and currency to cover sales this season, if the dollar doesn't rebound there will be many companies who will not survive. The watch industry has a very big failure rate."
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye
Did you know: @carlychaikin of "Mr. Robot" has been painting for about a decade? The actress, who plays Darlene on the show, is a self-taught artist who lists Salvador Dalí and Chuck Close as some of her idols. Chaikin told WWD that painting is a form of meditation for her — A much-needed one given the intensity of "Mr. Robot." See a piece Chaikin is working on at WWD.com (📷: @jilliansollazzo) #wwdeye