BASEL, Switzerland — Acclimating to life with an 800-pound gorilla, watchmakers at Baselworld showed they are finding their footing by fine-tuning strategies to survive in territory invaded by Apple.
A focus on mechanical skills underpinned the wide range of responses to competition from the Apple Watch — similar to the Swiss watch industry’s method for weathering the onslaught of quartz timepieces in the Eighties. High-end players such as Breguet, Patek Philippe and Bulgari continue to build on their luxury heritage and offered delicate chiming minute repeaters while more accessible brands emphasized affordability, with Tissot offering automatic watches in cheaper price ranges.
A growing number of brands are pushing into the connected watch business themselves and Hublot marked its splashy entrance into the field by hosting a soccer game with star sports figures including Diego Maradona and Usain Bolt to introduce its soccer-themed Big Bang referee watch. The brand plans to limit connected watches to special partnerships.
Watchmakers also continue to home in on specific technologies to maintain relevance. Citizen, the Japanese light-power specialist, celebrated its 100th anniversary with a sapphire crystal pocket watch called the Calibre 0100, reaching new levels of accuracy through internal mechanisms — more or less a second over a year. The concept model, which is not for sale, was made in-house, to display technological capabilities.
Now in its third edition, the Apple Watch has secured its ascendency, forcing watchmakers to move past the denial stage and bulk up their survival skills. Research firm Canalys estimates Apple shipped eight million watches in the last quarter of 2017, the highest amount ever.
“In general, the timepiece industry is very tough in the U.S. market, because of the smartwatch; Apple Watch clearly affected our price range,” said Kikuo Ibe, an engineer at Casio who invented the G-Shock watch. At Baselworld, the company showed G-Shock timepieces ranging from $130 to $7,400 for a connected MR-G model with hammer tone finishes inspired by a samurai sword. The brand has shifted to jewelry distributors from department stores to sell its higher end watches in the U.S.
This year’s Baselworld offered clues about how watchmakers are coping and hope to grab the attention of younger generations as the industry emerges from a prolonged slump. Swiss watch exports are growing again after a two-year decline, up 12.9 percent in February thanks to a pickup in Asian spending. The rising confidence brought measured optimism to the fair.
“The mood is better this year in general,” remarked Ricardo Guadalupe, chief executive officer of Hublot, a brand in the LVMH Moët Hennessy Louis Vuitton stable, a few days into the show.
Jean-Claude Biver, who heads LVMH’s watch division and its Tag Heuer brand, referred to a tailwind.
“When there’s wind from the back, it pushes everybody, and we are pushed by a good economy, a good situation,” noted the industry heavyweight, cautioning nonetheless that a wave of protectionism could cause problems in the future.
“Basel is still important,” said Frédéric Grangié, president of the watches and fine jewelry division at Chanel. The executive stressed that for Chanel, which he said brings evidence each year of its positioning as a serious watchmaker, the show is the place to meet key retail partners.
“We favor long-term partnerships, we are loyal to them, they are loyal to us,” noted Grangié, pulling out the label’s latest edition of the Boyfriend watch, the Skeleton Calibre Three, while seated in a lounge of the Chanel booth.
The fair had started off under a shroud of questions, with organizers at pains to put a positive spin on a stark change from last year — the steep drop in the number of exhibitors. Nearly half the amount in 2017, there were 650 brands this time.
Ahead of the event, a number of executives expressed hopes the fair would evolve to keep up with the rise of digital commerce, with several seeing the need to better engage with end consumers. Movado ducked out, taking its brands and licenses — which include Coach, Tommy Hilfiger, Juicy Couture and Lacoste — to a summit in Davos, Switzerland, a few days before. Ceo Efraim Grinberg explained he expected to save 80 percent of the cost of going to Baselworld, money he planned to use instead as investment in the digital sphere — trade fairs have lost relevance with the growth of e-commerce, in his view.
A fierce snowstorm on the East Coast of the U.S. added uncertainty to early days of the show, causing flight cancellations for a number of fairgoers.
Among the jewelers, Valerie Messika, who is expanding her diamond jewelry business into the U.S. and considers Baselworld an important forum for meeting customers from around the world, said, at the start of the show when exhibitors were reporting weather-related postponements and cancellations, that she found it a bit sad that fewer people were present.
“It’s not the same as it used to be, but it’s still very important,” said Messika, who chose Basel for her first haute joaillerie presentation, in 2013. This year, she brought fairy-tale-inspired jewelry for her “once upon a time” high jewelry collection, which included the Siren Song diamond necklace with free moving diamonds, inspired by the story of “The Little Mermaid.”
While show organizers lowered the price to rent stands by 10 percent this year, some questioned if that was enough given the range of alternatives. This year, for example, GemGenève, a new trade show for jewelry and precious stones, has cropped up, founded by gem dealers Thomas Faerber and Ronny Totah, scheduled May 10 to 13 in Geneva.
Like Messika, Roberto Coin, a jeweler known for gem-encrusted animal bracelets, attends Baselworld for an international audience. Coin, who has plans to enter the French market this year, said he thought the show should probably be less expensive.
But as the show gathered steam, some of the doubts about Baselworld were brushed aside and it wrapped up with promises from a number of key brands to return. Despite a shorter time period — the show took place from March 22 to 27, two fewer days than before — organizers said the number of visitors were stable at last year’s level, around 135,000. Rolex, Swatch Group brands, Patek Philippe, Chopard, Chanel, LVMH brands and Breitling have committed to returning to next year’s show, which is scheduled for March 21 to 26, 2019.
Breitling, whose new private equity owner CVC Capital Partners last year snared former Compagnie Financière Richemont executive Georges Kern to run the brand, brought a freshly streamlined collection. It was the first under the creative direction of Guy Bove, who had worked with Kern at IWC Schaffhausen. They have done away with entry-level timepieces in quartz and reduced the number of collections to four from about 11, now organizing them around themes of air, land and sea. It was mostly aviation before.
Bove has been tinkering with details on the Navitimer 8, revisiting typefaces, for example, and showed a selection of new models with a scalloped bezel. Bove said to expect the company to reveal partnerships in each of the three areas; it unveiled a partnership with Ocean Conservancy in early March, joining efforts to keep plastic out of the sea.
Breguet, a brand steeped in maritime history as the official chronometer maker for the French royal navy in the early 19th century, also has its sights on the ocean. At Baselworld, the luxury watchmaker revealed it’s teaming with the Race for Water foundation that has sent a solar paneled vessel around the world on a five-year mission. It issued a special edition of its Marine 5517 timepiece in titanium with a blue dial, to be worn by participants in the project to transform plastic to energy resources.
The Swatch Group-owned company is working to improve its commercial structures in the U.S. with plans to step up joint efforts with retailers for marketing events.
“We have a lot to learn from them and to share with them,” said ceo Thierry Esslinger, who expects to make further inroads into the American market with Tourneau LLC, which was purchased early this year by Swiss high-end watch and jewelry retailer Bucherer.
Esslinger noted that Chinese clients tune in to advertising in their own country, but then often travel to Hong Kong or Taiwan for their purchase, or even Europe, reserving a timepiece as they book a trip.
“We are also looking at e-commerce; we haven’t made any decisions yet but we are thinking about it — there’s not just booking but also pre-booking pieces, as well as cross border transaction and e-commerce — there is certainly something interesting to do here,” said Esslinger, adding that for the Chinese market an external partner might be a good option since many prefer to learn about products in their own language.
“In the high-end sector it takes a bit longer in general to move beyond classic ways of working,” Esslinger added. The label has also been considering how to adjust products to suit younger audiences while remaining loyal to its traditions. In China, for example, the age group of potential Breguet consumers has decreased to an average of between 30 and 40 years, according to the executive. He pointed to the maritime collection and extra flat tourbillon model as classic pieces with a modern appeal.
Younger brands have turned to ultra-slim styles to push into the contemporary realm, including another member of the Swatch Group, Rado. The label, which specializes in hard and scratch-resistant materials, showed a deep green ceramic Rado True Thinline model, its thinnest watch at 4.9 millimeters, with a quartz movement and green mother-of-pearl dial.
On the higher end, Italian jeweler Bulgari showcased its ultra thin Octo Finissimo Tourbillon Automatic, 3.95 millimeters thick, with the brand billing the sand-blasted titanium piece as the slimmest self-winding watch. Fashion conscious singing star Zayn Malik will wear it in gold for the upcoming music video of his second album.
Bulgari sells a lot of watches in gold, noted ceo Jean-Christophe Babin.
“Being a jeweler, people will expect precious materials from you, so it’s true we sell gold rather well and we don’t sell as much steel,” Babin said. The brand recently opened stores in Boston and Vancouver, and its newly refurbished Manhattan store is helping fuel growth in the region, according to the executive.
“The Fifth Avenue store has been a kind of platform on which we are somehow launching the brand toward the next level in the U.S.,” Babin said.
Chopard has also been focusing on the U.S. market, moving back office activities from New York to Miami, merging activities for the Americas into a building it owns in Florida and reshuffling management.
“We were a bit unfortunate and had some management issues…so now we have a new team and we’re doing quite well now,” there, said Karl-Friedrich Scheufele, co-president of the family jeweler and watchmaker. Julianne Moore and Colin Firth were on hand at the jeweler’s Baselworld announcement that it will only use ethically certified gold starting this year.
Rolex’s little brother brand, Tudor, has moved firmly into the celebrity sphere, bringing on Lady Gaga and David Beckham as ambassadors and sponsoring New Zealand’s All Blacks rugby team last year. It brought a new Black Bay GMT model to Baselworld, priced at around 3,600 euros. Tudor notably launched the timepiece as Rolex also issued a new GMT watch.
Pairing red and blue ceramic with a jubilee bracelet, the Rolex GMT Master II in stainless steel was one of the biggest hits at Baselworld, even if the rainbow Daytona was one of the most eye-catching numbers. With its rainbow-rim of sapphires and white diamond-encrusted lugs, the gold timepiece brought more than a healthy dose of bling to a stiff era of belt-tightening.
Hublot also offered a rainbow gem piece, the Spirit of Big Bang Sapphire, mixing the stones with a skeleton movement and transparent straps, limited to 50 pieces.
Carbon materials provided flashiness on a different register, with Ateliers deMonaco borrowing a forged carbon technique from the car industry to make its Admiral Chronographe Flyback Prato model. Pressing a mix of carbon fiber, gold and resin, the watchmaker made dials with squiggles of gold set against a dark backdrop.
Tag Heuer also turned to carbon, which it used in this year’s George Bamford model. The partnership with the famous watch “customizer” produced a new carbon case Monaco model with a bright aqua blue dial — a product geared to Millennials.
As watchmakers jockey for attention from consumers, many are zeroing in on niche activities. Alpina, a brand geared toward mountaineers, launched a Kickstarter campaign for its new AlpinerX watch to build a community around the timepiece and get feedback on the outdoor connected watch, which features a UV indicator.
Citizen, meanwhile, is carrying on with its focus on watches for diving, a sport gaining in popularity, as a way to differentiate the brand.
“It’s about the excitement and the emotional connection with the brand,” said Jeffrey Cohen, president of Citizen’s American operations.
“These aren’t toy watches…they’re used as tools,” he added, noting the company continues to push for longer charge time, more accuracy and explore how light, as a power source, is directed to watches.
Bulova recently extended its partnership with the Grammy Awards for another five years, supplying winners with a music-inspired watch with hands in the shape of drumsticks. The American label, which belongs to Citizen, is publishing a book by Assouline this month.
“The book for us was less about the watch and why it ticks or hums in our case, and much more about Bulova’s place and relevance in popular culture through the last 143 years,” said Robert Christiano, who heads the brand’s marketing efforts.
It’s basketball for Tissot in the U.S., which has partnered with the National Basketball Association in a bid to broaden its appeal among NBA fans. Its parent company, Swatch Group, has been restructuring operations in the U.S. and recently moved the headquarters from New York to Miami. Tissot brought several versions of its Chrono XL Classic priced at $350 and Everytime watches as low as $230 to Baselworld.
“In the U.S., we changed the team, they have a mission of winning the American battle notably in distribution,” said Walter Von Känel, ceo of Longines, another brand belonging to the Swatch Group, referring to the move to Miami. Longines, which prices the bulk of its timepieces in the $1,500 to $3,000 range, has overtaken Cartier in terms of Swiss watch exports, Von Känel estimates, trailing only Rolex and Omega.
Omega, also a member of the Swatch family, launched an e-commerce web site in the U.S. in November, which is helping the label widen its geographic reach in the country, said Omega ceo Raynald Aeschlimann. The executive is not interested in connected watches for the brand. In his view, a traditional watch can build emotion with consumers in a way that a connected watch does not. Besides, Omega clients aren’t asking for that, he added.
Piero Braga, who heads Gucci’s timepieces and jewelry division, on the other hand, considers connected watches as likely suitable for the fashion brand that appeals to Millennials. But it will take some time, since the idea is to bring something new to the market, he noted.
The label’s watch offer has shifted in line with the rest of the brand, to reflect the aesthetic introduced by creative director Alessandro Michele. As in the fashion world these days, timepieces offered by the brand appeal to both genders — the boundaries are thin, explained Braga, pointing to a stainless steel watch with a striped snake writhing across the dial.
Zenith ceo Julien Tornare, who is keen to increase the proportion of sales to women — which stand at around 20 percent – also sees a blurring of the gender lines for his label’s watches.
“I think today we should not talk about women’s watches, or men’s watches,” he said. Instead, he wants Zenith to offer watches that can be worn by both genders, using straps, for example, to add a more feminine touch to a timepiece.
Looking even further to the future, Biver takes a long view when it comes to drumming up a label’s appeal. Not only should a watch brand speak to its customers, but they should also consider the very young, he insisted: “Talk also to your children and even if they cannot buy, they can buy tomorrow — put your brand in their brain when they’re young, so one day they might want to realize the dream and buy your watch.”