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Agreeing to disagree
Economy

Agreeing to disagree

Wednesday, 26 November 2008
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Christophe Roulet
Editor-in-chief, HH Journal

“The desire to learn is the key to understanding.”

“Thirty years in journalism are a powerful stimulant for curiosity”.

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Who will be hit by the crisis as it sets in? Will it be long-term or short-lived? These are the questions currently haunting watch companies, in particular those whose mid-range positioning leaves them more exposed on export markets, as figures from the Federation of the Swiss Watch Industry show.

But what will happen to the thirty-plus brands, some newcomers and some newly revived, that have entered the branch over recent years? The majority are clearly positioned at the high end of the market which should, in theory, leave them immune to the ups and downs of the economy. Opinions diverge as to how true this is, as do financial analysts’ view of the situation.

Kepler set the cat among the pigeons when it recently forecast a 10% drop in Swiss watch exports next year, and stagnation in 2010. According to the broker, watchmaking’s super-cycle, which lasted from 2004 to 2008, is now a thing of the past. It’s a different story over at BAK Basel Economics. Quoting full order books and the ongoing appeal of luxury watches, the economic research institute expects the branch to progress 11% this year, and a further 7.1% in 2009. Vontobel bank occupies the middle ground: it forecasts lower growth next year but still at around 5% in Swiss Francs. Answer in twelve months’ time.

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