Good Times: Luxe Watch Brands Support Charities

In recent months, there’s been an uptick in events and ads from watchmakers in the humanitarian and environmental domains.

PARIS — Forget about diamond bezels and the splashy red carpet. High-end watchmakers are suddenly trumpeting more benevolent initiatives instead as a way to maintain their brand profiles in a tough and sensitive market.

This story first appeared in the August 18, 2009 issue of WWD.  Subscribe Today.

“The crisis we are going through has brought a general trend toward sobriety and, at times, a guilt complex toward luxury,” said Manfredi Ricca, an expert with London-based branding consultancy Interbrand. “But for those brands that rely on excellence, such as the art of jewel making or the perfection of watch mechanisms, being benevolent means adding another facet to their excellence.”

In recent months, there’s been an uptick in events and ads from watchmakers in the humanitarian and environmental domains, from awards to fund-raising sport events to sponsorship of nonprofit organizations.

The long-standing association between high-end jewelers and watchmakers and charitable activities dates back almost 80 years, coinciding with the first years of the Great Depression. In 1932, Coco Chanel launched her first fine jewelry collection amid an outcry from established Place Vendôme jewelers, who were appalled a couturier dared venture into their home turf.

The astute designer charged 20 francs to guests at the launch of her collection and donated the proceeds to an organization that supplied powdered milk to impoverished mothers — starting a link between carats and charities that has continued for decades.

Now the global economic meltdown — and its related shift in consumer attitudes toward conspicuous consumption — has given even more impetus to the support of charitable activities.

High-income consumers have started to approach luxury for the quality of the experience and less as a status symbol, because they are aware that flaunting their wealth comes across as ostentatious and insensitive in the recession.

As a result, watchmakers are increasingly seeking to link with celebrities who take an interest in humanitarian or environmental causes, and who show compassion, creativity, individuality and intellect — as opposed to those who are famous for just being famous.

For example, Swiss watchmaker Longines has chosen personalities like Andre Agassi and Stefanie Graf, who have a long-standing involvement in charitable activities, as its brand ambassadors.

The company has helped raise $220,000 through an auction of two timepieces especially created for a fund-raising dinner in Paris earlier this summer, with proceeds being donated to two charities founded by the former tennis champions. They are the Andre Agassi Foundation, which supports underprivileged youth in the U.S., and Children of Tomorrow, a foundation that assists children and families who have become victims of war, persecution and violence.

Longines and Graf are teaming up again in New York for an awards dinner in September to honor extraordinary women who have made an impact on children’s lives.

“In the last few years, luxury has progressively turned into a form of ostentation to a form of awareness,” said Interbrand’s Ricca.

That’s why many brands, even those without a charitable link, are playing down the bling in their marketing. “In years past, we would have focused on the aspirational — this isn’t the year to do that,” Michael Irilli, marketing manager for Baume & Mercier North America, said before the Baselworld show in March.

Baume & Mercier has signed two new brand ambassadors — David Duchovny and Evangeline Lilly of “Lost” — for the fourth installment of its “Baume & Mercier & Me” campaign. All royalties for Duchovny and Lilly, as well as for the photographers who shot them, will be donated to different charities, as has been the case in the past.

Meanwhile, Tag Heuer has upped its charitable involvement by linking with Leonardo DiCaprio, who in January inked a three-year agreement with the brand. DiCaprio is donating a portion of his signing fee with Tag Heuer to the National Resources Defense Council, and all royalties generated from the sale of select Tag Heuer products also will benefit the council.

For more than 175 years, Swiss watchmaker Jaeger-LeCoultre has been making its precision mechanisms by a lake in the Vallee de Joux, between Lausanne and Geneva. Having been based near water since its inception, it was a natural step for the company to become involved in a clean water project in Ethiopia with the Saint Lazare organization.

Yves Meylan, managing director of Jaeger-LeCoultre France, said this kind of initiative “gives depth to brand values,” and motivates the company’s staff.

Because the company manufactures timeless pieces, it wants to be associated with charitable projects that will make a durable impact. “More and more people will distinguish brands that are taking actions from brands that aren’t doing anything,” Meylan said.

Jaeger-LeCoultre has donated 250,000 euros, or $351,000, to the project in Ethiopia, which will bring clean water to 50,000 people. But it has also set up environmental initiatives at its own headquarters, where employees are encouraged to carpool, save electricity and recycle. Swiss watchmakers are facing the worst decline in exports in more than two decades as their customers reduce spending on luxury items on concerns of job losses and shrinking investment portfolios. Swiss watch exports fell 31.9 percent in June and were down a total of 26.4 percent in the first half to 6.1 billion Swiss francs, or $5.7 billion at average exchange. The hardest-hit sector was wristwatches selling for more than 500 Swiss francs, or $466.

High-end jewelers are in a similar predicament, since only their wealthiest clientele have continued spending on precious baubles.

While many companies have trimmed their advertising and marketing budgets — some to almost zero — most are continuing and even stepping up their charitable activities. For most firms, gone are the days of sumptuous parties and dinners to get out their brand message; now it’s a more sober message.

This is because environmental and humanitarian causes, once the preserve of small activist groups, have now been embraced by fashion and retail conglomerates like PPR, along with wealthy individuals, especially younger generations that have just begun purchasing luxury goods.

Although Montblanc has branched out beyond its signature pens into watches, jewelry and leather goods, in several markets its image remains linked to fine writing instruments. As a result, the company has been involved in several UNICEF literacy projects since 2004.

The latest is called “Signature for Good,” a collection of limited edition pens, jewelry and small leather goods that went on sale June 1. Until the end of May 2010, Montblanc will donate 10 percent of the retail price from each sale of the collection, for which prices range from $165 to $27,300. According to Michel Adé, chief executive officer of Montblanc France, such involvements give “density” to the brand.

With a number of luxury goods executives and analysts predicting some early signs of an upturn in the fall, the timing of the Only Watch charity auction in September might turn out to be perfect.

The auction is held in Monte Carlo every two years and brings together 35 of Switzerland’s top watchmakers, each contributing a unique watch, or the first from a limited series, to be auctioned without a reserve price. All the proceeds go to medical research into finding a treatment for Duchenne muscular dystrophy, a serious genetic disorder.

For the event, Jaquet Droz has created an exclusive timepiece with a rare red-enameled dial. Red is the most complicated color to achieve, because it needs 22 layers, compared with 10 needed for a white dial and 19 for blue. “It is the first time we have created a completely red-enameled dial and, given the complexity, it is probably the last,” said ceo Manuel Emch.