GENEVA — Luxury is making a comeback, and nowhere does the sigh of relief seem as, well, mountainous as in Switzerland, the world’s watchmaking hub.
Retailers and watchmakers that attended last month’s Baselworld: The Watch & Jewelry Show, in Basel, and the Salon International de la Haute Horlogorie here were brimming with confidence after several challenging seasons. And that’s news in itself. After all, the 2003 shows were marred by the economic slowdown, the war in Iraq, terrorism and SARS. Last year’s outbreak of the epidemic in the Far East prompted the Swiss government to bar exhibitors from China, Singapore, Hong Kong and Vietnam, and 40 percent of U.S. retailers canceled their trips to Switzerland.
This year, they were back in force: Baselworld’s attendance was up 38.8 percent from 2003 and 8.3 percent from 2002 to 89,350 visitors, while SIHH had more than 10,000 visitors, which was a return to the level of 2002 and up 10 percent from 2003, according to show organizers.
“Business in January through March has been at record levels with double-digit growth,” Stanislas de Quercize, president and chief executive officer of Cartier in the U.S., said. “Stores have low inventory levels and they are here to buy.”
Bulgari’s ceo Francesco Trapani noted: “We were happy last year with the results from Basel, and this year was even more positive, with especially good news for watches…We are looking for growth everywhere, but especially [from] emerging markets such as China.”
Andrew Block, Tourneau’s senior vice president of marketing, said: “The mood in Basel and Geneva was very upbeat, and there was more energy this year compared to last year with SARS and the war. The attitude about the product and the rest of the selling year was very positive.”
Like much of the luxury sector, the Swiss watch industry had its challenges last year, but in the past three months, the momentum has picked up. According to the Federation of the Swiss Watch Industry, watch exports are growing at record levels. The organization reported that in March, total Swiss watch exports increased by 15.9 percent, its highest leap since February 2001 and the best March performance ever recorded.
Finished watch exports grew 16.8 percent to $621.8 million. For the period from January through March, the U.S. represented the largest export market at $299.1 million, up by 14.4 percent against last year. In comparison, Hong Kong, the world’s second-largest market for Swiss watch exports, was down 2.9 percent to $266.1 million, while third-place Japan declined 9.3 percent to $155.6 million for the same period. Dollar figures were converted from Swiss francs at the current exchange rate.
The weakness of the U.S. dollar has prompted many Swiss watch companies to increase their suggested retail prices by 6 to 8 percent for fall, but retailers said they don’t anticipate a drop in demand. In fact, several retailers said they expect quite the opposite.
“I think the weakness of the dollar has benefited the U.S. retailer,” said Richard Horn, president at San Francisco-based jeweler Shreve & Co. “You always used to be able to go to Europe and save 25 percent by purchasing a watch in Switzerland, but obviously that’s not the case anymore. The prices are more even worldwide, and I think it’s kept our customers buying at home where they know and feel comfortable with their local jeweler.”
There were many trends to choose from at Baselworld and SIHH, and retailers praised the fact there was a growing focus on women’s watches. Among the key trends:
l Cocktail Hour: While large and oversize watches continue to be dominant, many firms introduced petite evening watches reminiscent of those worn in the Forties. These designs were often presented with thin synthetic satin straps or diamond-set bracelets. Jaeger-LeCoultre offered a small rectangular case Joaillerie Etrier watch adorned with baguette-cut diamonds on a satin strap, while Corum’s Debutante watch was available on stackable, interchangeable citrine, blue topaz and pink sapphire bands. Others launched smaller versions of existing watch styles, including David Yurman, which unveiled a scaled-down model of its best-selling Madison watch.
“In the jeweled watches, it was back to small watches but still with much presence,” said Richard D. Eiseman, president and ceo of Dallas-based jewelry retailer Eiseman Jewels. “But that won’t mean oversize watches are going away. They were offering women more of an alternative.”
l Get Strappy: This year, many companies toyed with their strap looks, offering stingray, white crocodile skin and leather cuffs. For instance, Zenith launched its Baby Star on a leather cuff and Gucci introduced a watch available in a beige or black logo fabric cuff or a beige leather cuff.
l Pearl Jam: Mother-of-pearl made a comeback for watch faces. While the look has been around for decades, it was more widely used at the moderate end than in expensive watches. Now, the mother-of-pearl face is often dyed or engraved — Chopard, for instance, unveiled its Happy Sport with an engraved horseshoe motif.
According to retailers, highlights at the shows included Cartier’s new Santos Demoiselle and the women’s diamond version of the Roadster; Patek Philippe’s diamond-set Twenty-4 on a satin strap; Rolex’s Cosmograph Daytona on a leopard strap with brown diamonds; Chanel’s J12 with pink sapphires and alligator strap; Jaeger-LeCoultre’s Gyrotourbillon, Joaillerie Rivière and Joaillerie Etrier; Zenith’s Baby Star on a cuff and Star Love with visible movement through a heart-like opening on the face; Piaget’s rectangular diamond Limelight on a cuff; Baume & Mercier’s Hamptons Spirit on a white strap; Bedat & Co.’s new No. 8 with a round dial; Audemars Piguet’s diamond jewelry pieces, and Breguet’s Queen of Naples.
Other notable introductions included Bulgari’s Ergon, which features an ergonomic case design and an integrated bracelet. It is available in white gold with a gray dial and a black alligator strap. Movado, meanwhile, introduced a watch on an interchangeable silk scarf strap in honor of Mikhail Baryshnikov, who stars in the brand’s spring ads.
U.S. watch retailers praised the trends, and said the women’s watch business is in a healthier state than it has been in a long time.
“We have had a good run with high-end complicated watches like IWC, Jaeger-LeCoultre, Patek Philippe and Vacheron Constantin. Panerai and Cartier have been very strong, and that trend is continuing,” Block at 16-unit Tourneau said. “In fashion watches, Michele has always done well and Tissot has been strong. Brands at the middle price point had a bit of a resurgence this year with Concord, Corum and Baume & Mercier.”
Ruediger Albers, U.S. president of Wempe, which has 18 units worldwide including one on Manhattan’s Fifth Avenue, noted: “The watch business is on the upswing. The economy is picking up, people received a bonus [this year] instead of a pink slip — which hurt business last year — and this year, people are more confident and treating themselves to fine wristwatches.”
Mark Udell, chief executive officer at five-unit London Jewelers with headquarters in Manhasset, N.Y., said: “The watch business is exceptional. We are finding that the higher-end watches sell. The more exotic the watch, the more desire and demand there is.”
In that vein, Udell pointed to such introductions as Rolex’s safari-inspired Cosmograph Daytona, Patek Philippe’s Twenty-4 on a satin strap, Chanel’s white J-12 with a pink-and-white strap and Cartier’s diamond-adorned Roadster. He also praised Chopard’s Haute Joaillerie pieces, and the overall diamond assortment at Van Cleef & Arpels, Harry Winston and Audemars Piguet.
“The strong brands continue to do a good job at tweaking their existing lines, such as Rolex,” said John Green, president and ceo of West Hartford, Conn.-based jeweler Lux, Bond & Green. “People are doing their homework, and coming out with something they understand will meet the market demand.”
Retailers lauded the increased offerings for women, particularly those in fashion colors and adorned with diamonds.
“I saw a lot of colors that coincide with jewelry trends, like pinks and spring pastel tones, which is great because women are becoming more educated on what you can and can’t wear with a watch or jewelry,” said Aida Alvarez, vice president of merchandising at jewelry chain Mayors Jewelers. “Women want to be able to tell time, but use it as an accessory.”
This year, watchmakers offered more watch complications, including Tag Heuer, which launched its Monaco V4 Concept watch featuring a mechanical watch movement with 13 drive belts rather than the expected pinions. Women’s watches, too, feature more chronographs and tourbillon movements, and several watchmakers introduced “skeleton” designs where the movement is visible on the watch face. Retailers generally welcomed more watch complications for women, though the consensus on the market readiness is disparate.
“Women are getting more educated in complications,” said Barbara Simonian, vice president at two-door watch retailer Westime in Los Angeles. “There are more professional women, and I would say 40 percent of women ask for complications, when two years ago it was still under 10 percent.”
Korosh Soltani, vice president at David Orgell Beverly Hills, however, noted: “Overall, I saw more complicated watches for ladies, but I don’t think the market is ready for it yet. There is a very unique client for ladies’ complicated watches, but diamond watches are much easier to sell.”