Baselworld 2011 News Stories.

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NY Times - Gears Mesh Again for Swiss Exports
Published: March 17, 2010, By VICTORIA GOMELSKY

BASEL, SWITZERLAND — In the fat years, large-faced, chunky sports watches were all the rage. So what is the message behind the return this year to lean and slender?

At the Baselworld luxury watch fair this week, spring is in the air. After the freeze last year, Swiss watch exports are back to growth; wholesale inventories have reportedly shrunk, and expensive timepieces are selling again, buoyed by resilient Asian economies and a better-than-expected holiday season. But caution remains the rule.

“The question is: Did we touch the bottom or a bottom?” said Jean Paul Girardin, vice president of Breitling. “There is a recovery, for sure. But we are still a bit suspicious.”
In 2009, Switzerland’s watch exports slid 22 percent from the previous year, to 13.2 billion Swiss francs, or $12.2 billion, according to the Federation of the Swiss Watch Industry.

But anecdotal evidence and industry data suggest the tide turned late last year. Strong retail sales since November have helped to empty the wholesale pipelines, inspiring retailers to start restocking, particularly in the hard-hit U.S. market. By December, Swiss watch exports were only 7.2 percent below year-earlier levels, and in January they actually grew by 2.7 percent, the federation’s figures show.

“Our sell-through is up over 40 percent,” Philippe Bonay, president of A. Lange & Söhne North America, said in mid-February, referring to the proportion of inventory purchased by consumers. “There’s been a sharp turnaround among the top retailers and that has had a big effect.”

The relief was palpable at the buying shows in Geneva this year, when exhibitors at the Salon de la Haute Horlogerie and the Geneva Time Exhibition, a new event showing the work of 38 independent watchmakers, presented timepieces notable for slender profiles, clean and sober aesthetics and classic combinations of the complex features known as complications.

Vacheron Constantin paid homage to its mid- 20th century heyday of manufacturing thin watches with a low-profile addition to its Historiques collection. The Ultra-Fine 1955, at 4.10 millimeters, or 0.16 inches thick, is the world’s slenderest mechanical hand-wound watch.

At Ralph Lauren Watches, a year-old collaboration between Ralph Lauren and Financière Richemont, a planned foray into Asia has resulted in a slight downsizing of the brand’s Slim Classique collection.

“We wanted to target a clientele with smaller wrists,” said Guy Chatillon, the chief executive.

The reduction in case sizes has coincided with a drop in prices, as Swiss watchmakers have adjusted to a changed market.

“We had last year a move to less expensive watches,” said Jean-Daniel Pasche, president of the federation, citing falling demand for watches with export prices exceeding 3,000 francs.

At Baselworld this week, Breitling’s answer to that shift is the Superocean, a steel diver’s watch competitively priced at $2,695.

Chopard, meanwhile, is presenting its L.U.C. 1937 chronometer, incorporating a new automatic movement manufactured in-house, expected to retail for less than €10,000, or $13,500, considered an entry price for such an offering, said Karl-Friedrich Scheufele, the company’s president.

Higher up the price ladder, however, Chopard — which is celebrating its 150th anniversary this year — is also unveiling a limited edition in its manufacture collection, nicknamed the L.U.C. 150 “All In One” watch for its medley of complicated features.

For those rarer pieces, “we are looking at around €250,000,” Mr. Scheufele said.
The wide differential in the prices of the two Chopard novelties is evidence that, for all the emphasis on affordability, the high end of the Swiss watch market is still alive and well.

There is a substantial difference, however, between the six-figure models that are coming to market now and many of the high-priced pre-recession offerings.

In the boom years before 2008, “a lot of brands moved upmarket, but they didn’t increase their value, and when the recession hit, they got slammed,” said Keith Strandberg, international editor for Europa Star, a trade magazine in Geneva.

“Everybody’s now saying they’re giving value for the money,” he said.

In practice, that means more watches featuring mechanisms manufactured in-house, and incorporating a cornucopia of legitimate horological innovations.

At the Geneva salon, for example, Montblanc introduced two complicated models produced at its atelier in Villeret: the Metamorphosis, a two-faced watch from the new TimeWriter series of concept timepieces, priced at $263,100; and the ExoTourbillon Chronographe, priced at $249,600.

The firm pricing was a reminder that no matter how low the economy goes, there are always big fish to be caught, with the right bait.

Sometimes, that bait is scarcity. “Even though we have four major product launches in 2010, we’re cutting our production by 10 to 15 percent,” said Maximilian Büsser, founder of the niche brand MB&F. “We could easily sell 180 to 200 pieces, but I want the desirability to be pushed and everybody to battle to get the pieces.”

Of the 143 watches that MB&F produced in 2009, half went to Hong Kong and Southeast Asia, underscoring the year’s lasting lesson for manufacturers: When the United States falters, Asia is now there to save them.

That is hardly news to the Swiss. Asia now accounts for 48 percent of Swiss watch exports — a gain of 10 percentage points in two years. Indeed, the real news in the watch industry concerns the sleeping giants of the BRIC economies — Brazil, Russia, India and China.

“In terms of geopolitics, everybody is waiting for India, everybody is waiting for Brazil,” said Juan-Carlos Torres, chief executive of Vacheron Constantin.

Everybody, that is, but Mr. Torres, who has opted not to wait. He flew to New Delhi this month to preside over the official opening of a Vacheron Constantin boutique and after-sales service center to accommodate Indian customers who buy in places like London.

Globally, it is true that the high-end watch business has fallen far from the heights it reached in 2008, a record year for the Swiss. But removed from that context, the state of affairs seems less dire.

Jean-Marie Schaller, founder and chief executive of Louis Moinet, an independent brand named after Napoleon’s watchmaker, would affirm this. At the Geneva Time show, he exhibited the Meteoris objet d’art, an extraordinary and, at 4.9 million francs, extraordinarily expensive planetarium composed of four meteorite-encrusted tourbillons.

“We think it will be sold quickly,” he said. “This high-end segment has been hit because it’s really when people want to buy a mechanical dream, an expensive toy, and they lost the appetite.”

“Now I can feel the market is different,” Mr. Schaller added. The wealthy are not exactly starved of luxury, “but they are hungry again.”