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To grow or not to grow…
Point of View

To grow or not to grow…

Thursday, 24 January 2019
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Franco Cologni
President of the FHH Cultural Council

“Talent demands effort, dedication and hours spent perfecting a gesture which, day by day, becomes a gift.”

An entrepreneur at heart, though a man of letters, Franco Cologni was quick to embark on a business career that would lead him to key roles within the Richemont Group.

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3 min read

Time and again, observers seize upon watch industry figures, all too happy to use them to illustrate their generally bad tidings. When all’s well, the merchants of doom will gleefully declare that the situation isn’t as rosy as it seems. When things get bad, they’ll pour oil on the fire with claims that the difficulties are in fact even worse than they appear. We’re accustomed to seeing our eminent specialists play around with the numbers to support whatever it is they want to say. Unfortunately, countering this habit using hard fact isn’t an option, for one simple reason: these figures are issued by the Federal Customs Authority and, as such, do not account for sales to the end customer. All we have to go on is an indication of how many watches and components were exported from Switzerland, in volume and in value. How many watches were actually bought in the markets, and for how much, is impossible to know. From the amount of retailer inventory to the number of watches coming back to Switzerland; from the number of units sold on grey markets to the difference between export (ex-works) price and retail price, all we can do is surmise. Even the quantity of sales made in Switzerland comes down to pure… speculation.

It’s a well-known problem and one we just have to live with as figures aren’t, and never will be, more specific. So what does the latest batch tell us? That at the end of the first eleven months of 2018, Swiss watch exports grew by 7% in value, that Asia is the driver for this growth, and that Fine Watches again performed above average. If this excellent news is confirmed for the month of December, which we’ll discover in a few days’ time, it means the Swiss watch industry will have made up for the soft patch of 2016 and 2017, returning to levels observed in 2015, i.e. CHF 21.5 billion in exports. I’ve always warned against taking these numbers as the gospel truth. They clearly indicate a trend, nonetheless. A marked trend. We can look for confirmation in the financial reports of the main publicly-listed groups in the industry, such as Swatch and Richemont, but also LVMH, Kering, Hermès, Movado and even Chanel, which last year started publishing its accounts. Or to get away from numbers, we can consider what the brands exhibiting at the Salon International de la Haute Horlogerie think. And, after this marathon week, the consensus is: there is a very real upturn.

We can always hold forth on the extent of this growth, quibble over the uncertainties that lie ahead, minimize prospects in the main export markets. When it’s green lights practically all the way, any objection would be a sign of ineptitude. It’s by seeking out confirmation of the aforementioned statistics that we can convince ourselves they are grounded in fact. And while this isn’t about indulging in wide-eyed optimism, we can only welcome the news that Swiss watchmaking has returned to better days. That this should be put to the test is all the more stimulating.

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