All gain and no pain?

Christophe Roulet - At just a few days’ interval, the two key events in the watchmaking year, namely Baselworld and the Salon International de la Haute Horlogerie (SIHH), ended very much on a positive note.

At just a few days’ interval, the two key events in the watchmaking year, namely Baselworld and the Salon International de la Haute Horlogerie (SIHH), ended very much on a positive note. Some 106,800 people toured the 2,087 stands in Basel, 5% more than the previous year, while 14,000 retailers and journalists visited the sixteen brands exhibiting at the SIHH, 8% more than in 2007. But visitor numbers isn’t all. Bearing in mind that the fairs are also when companies fill their order books, bringing in the bulk of their revenues for the year, the prevailing sentiment when the doors finally close gives the temperature for the entire business year.

Following on from the sector’s record performance in 2007, with exports growing 16.2% to reach CHF 16 billion, one could be forgiven for thinking 2008 would be a year of consolidation… no bad thing in an industry that appears to struggle to keep pace with its growth. And yet the first post-fair indications paint quite a different picture. Jean-Claude Biver, CEO of Hublot, even declared that his brand had had to turn down orders worth CHF 100 million because of insufficient production capacity. For the moment then, the subprime crisis that has shaken the financial world, beginning with UBS, and threatens to send the United States into recession - which would mean a slowing-down of the world economy – has no hold on the watch sector. In fact according to professionals at the fairs, Uncle Sam is showing no signs of flagging, even though US customers are more hesitant than before.

So has Swiss watchmaking found the miracle cure? The antidote to financial crises that confirms its anti-cyclical nature and its ability to navigate the economy unscathed? Having carefully upgraded their product offering over recent years, watch and jewellery firms now address an audience that is both larger and more affluent, regardless of which way the markets are heading. Hardly surprising then that Fine Watchmaking should be driving the industry as a whole. However, brands would be ill-advised to leave the other market segments wide open to the competition: in the Elysian fields of watchmaking, there will never be room for all. ■

Christophe Roulet

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