LUXURY WATCHES KEEP TICKING
Byline: Robert Murphy
GENEVA — The message was clear from American retailers shopping two of the key watch and jewelry fairs in Switzerland over the last two weeks: The upscale retail environment is alive and well.
Despite the squeeze on the economy and uncertainty in world affairs, retailers said downsizing is not on their agendas. Most said their budgets for the upcoming year would increase based on a belief that wealthy consumers would continue to open their pocketbooks for important and innovative jewelry pieces.
The World Watch & Jewelry Show in Basel ended its eight-day run on April 11, while the Salon International de la Haute Horlogerie in Geneva concludes its own eight-day run today.
“We have tremendous optimism,” said Andrew J. Block, senior vice president at watch retailer Tourneau. “The brands [we have viewed] feel good and we’ve seen some introductions that are sure to drum up business. But we feel we still have to be a bit cautious. Our budget is up because we’re expanding with two new stores, in San Francisco and San Jose. We ask ourselves how much better business could be without the problems in the Middle East and the U.S.”
Mark Udell, chief executive officer of New York-based London Jewelers, said: “We feel good about business. It’s not too bad overall. We expect a strong May and June.”
Udell said that London Jewelers plans to inaugurate a new unit, its fifth, in the Hamptons this June.
“People aren’t traveling as much,” he said. “People are staying close to home, but they are still spending. Based on that, we believe business in the Hamptons, and at home, will be buoyant.”
Most exhibitors concurred with Udell’s analysis of the market. They said overall business had increased slightly, even though travel business was off.
“Let’s face it, the travel business is not what it used to be,” said Karl-Friedrich Scheufele, president of Chopard. “But people are buying at home. People who have money are going to spend it. They have to spend it.”
Scheufele said business was up among clients from Asia and North America, but Europe has been weak.
“Usually, the fair is a reliable indication of the direction business will take,” said Scheufele. “Overall, business has been up. We exceeded our sales targets.”
Guy Leymarie, president and chief executive officer of Cartier International, said: “Business is strong. The fair has been good, but we have to be innovative today. We have to create in order to be strong.”
Philippe Leopold-Metzger, ceo at Piaget, said that business last year was good, “but it could have been fantastic if world events had been different. Business is picking up and should hit full pace by the second half.”
Some retailers expressed disappointment about the selection of new watches. Basel, considered the major annual trade show for watches, is where companies typically introduce their new offerings for the year.
“We’re not spending as much [at Basel] as we have in the past,” said Mark B. Marshall, buyer of watches and fine jewelry for Neiman Marcus. “There’s not a lot of novelty. There’s not a lot that’s really interesting.”
However, there were some standout watch introductions. Retailers praised Severin Wunderman’s creative turn at Corum, especially the unusual triangular Rocket watches and the round Fullmoon model with a diamond pave setting on its bezel. Wunderman is the owner of the Swiss brand, having acquired it in January 2000.
“Severin is a creative genius,” said Tourneau’s Block. “He’s a step ahead of most of the other brands.”
Marshall agreed: “The most excitement is being generated by Corum. It…will make customers open their pocketbooks.”
Other hot styles cited by retailers included Tag Heuer’s gold and diamond watch, De Grisogono’s large Instrumento Doppio, Chopard’s watches with cognac diamonds decorating the bezel, Cartier’s oversized Divan, Piaget’s oval jewelry watches and Vacheron Constantin’s asymmetrical timepiece. Franck Muller and Bedat & Co. were also cited as hits.
Boucheron, a division of the newly created Gucci Group Watches division, introduced a women’s version of its round B Zero 1 watch, while Gucci launched a ladies’ timepiece with a small rectangular face and slender bangle bracelet.
Overall, the trend for large unisex timepieces continued and merchants said they welcomed so-called fashion watches, including timepieces with pink, blue and yellow faces and bracelets. Yellow and rose gold were also an important trend.
Neiman’s Marshall said that the upscale fashion category of watches had assumed more importance as a growth category.
“Three years ago, the high-end fashion watch category didn’t really exist,” Marshall said. “Now the category accounts for a substantial part of our business. At first, we were skeptical that the category would endure. We’ve invested a lot getting into it and now it’s growing fast. When a woman buys a pair of Dolce & Gabbana pants and a pair of Manolo Blahnik stilettos, she now buys a watch to match. Fashion watches are the new accessories.”
Although colorful watch faces and diamond-pave bezels were well-received, some retailers said they embraced the conservative slant many watchmakers took this year, producing variations on existing models rather than introducing new timepieces.
“Being conservative is the key,” said Block. “What I’ve seen is good for business: taking existing lines that sell well, and expanding on them. It’s a safe, and welcome, approach.”
Donald Levinson, president of Chicago’s Trabert & Hoeffer Jewels, said consumers gravitated to “big items.”
“If it’s specialized and unique, we can sell it,” said Levinson. “If it’s a small, so-so item, then forget it. It’s not going to sell. There’s still a lot of money chasing specialized items.”