The past two and a half decades have been boon years for the Swiss watch industry. Sensing the free flow of cash, brands sprung up like weeds after a strong wind. But any boon inevitably has its bust, uprooting greedy prospectors and sending them packing to try their luck elsewhere. And while cleanup in the aftermath is never a pleasant chore, the process forces a true reckoning. After the collapse of world markets in the final months of 2008, the Swiss luxury watch brands had to re-group. Unfortunately, the Geneva and Basel shows came slap dab in the thrust of uncertainty for both the brands and consumers. Now that the economy has stopped its violent keeling, companies can get a more realistic sense of the landscape.
The JCK show in Las Vegas, which was held May 30 through June 2, offered a good barometer for the brands to evaluate their position. Happily, the news is quite good. “We saw more customers this year than last year and retailers are starting to replenish inventories, which had been diminishing,” says Lisa Roman, Marketing Director of Breitling, USA. Ulrich Wohn, North American CEO for TAG Heuer, confirms that consumers have once again begun to crack open their piggy banks: “Over the last several months retail sales have increased and we’re optimistic that this trend will continue.”
Retailers have realized that they need to stick to brands that provide real value and brands they can count on long-term.
The hallmarks of luxury watches still attract buyers
But sales are not the slam-dunks they once were. Now that the heady smoke of hype has dissipated, people are taking a hard look at merchandise and weighing their options before committing to a purchase. “Over the last nine months, many retailers have weeded out slow moving brands and brands that don’t give them the margins they need to pay their overheads,” says Patrik Hoffman, President of Ulysse Nardin, North America. “Retailers have realized that they need to stick to brands that provide real value and brands they can count on long-term.”
The hallmarks of luxury watches, quality and exclusivity, still attract buyers. Lisa Delane, Director of Public Relations for Corum, USA, whose company also distributes Franc Villa in the States, relays such an example with a new client. The American gentleman, who is a long-term patron of Wynn and Co., a jewelry store in the Wynn hotel, flew in for the afternoon on his private jet with his family to visit several watch manufactures. Knowing this gentleman preferred very limited editions, the assistant manager of Wynn and Co. brought him up to the Franc Vila suite, where he chose half a dozen pieces for him to view. After speaking with the creator Franc Vila himself, the gentleman not only purchased one of the limited editions of 8 the brand produces, but also the watch from Vila’s wrist, which was a one-off of his original watch.
The importance of keeping the romance alive
Certainly, the excitement of beginning a new relationship can’t be denied. However, the brands realized, particularly during this economic sea change, the importance of keeping the romance alive with established connections. Since many retailers didn’t make the trip to the Swiss fairs this year, attending this show ranked an essential item on the agenda. “More than ever, JCK provided a crucial opportunity for TAG Heuer to listen to our partners, understand their business needs and utilize their input as the “front line” for consumers in a challenging retail environment,” states Wohn. Hoffman of Ulysse Nardin echoes the sentiment when he says, “We clearly understand that our retailers represent a very important link to success and without their support we would not be where we are today.”
Hoffmann felt attending the show was extremely worthwhile, particularly because Ulysse Nardin had more appointments this year than in years past. And, in contrast to Basel, which can be quite hectic, Hoffmann appreciated that JCK Las Vegas allowed them to spend more quality time with retailers and their employees, as well as with writers and editors.
Watches still sing with the irresistible sweetness of the Sirens
Despite several companies restructuring due to balance sheets suffering from red-ink wounds, watches still sing with the irresistible sweetness of the Sirens. While on the plane flying from Los Angeles to Las Vegas, I sat next to an established jewelry designer with his line in many stores, including Neiman Marcus and Saks Fifth Avenue. He professed his love of watches and confided his desire to create a watch line of his own. Fortunately, he didn’t just want to stamp his name on a stylish case without horologic value inside. Moreover, he understood the savvy consumer would easily spot the masquerade of an inferior product. That’s why he was carefully doing his research to discover the best way to enter the market, if at all.
The JCK show affirmed the luxury brands are on the right track, demonstrating solid value with the quality of their timepieces and the support shown to retailers. Normally, I wouldn’t recommend laying down your money in Vegas. However, at the luxury watch counters, I’d make an exception. By any accounting, this year the odds look very favorable.