A country that can defend a 21st-century brand of socialism and at the same time harbour a passion for luxury isn’t lacking in contradictions. In May, a BBC documentary revealed that Venezuelans are among the world’s biggest drinkers of vintage malts, and that the country has overtaken Mexico for Blackberry sales, with more than 1.6 million users. Even Hugo Chávez, President of the renamed Bolivarian Republic of Venezuela, owns several watches. According to certain sources, he has a Tissot, a Victorinox, a Rolex and even a Franck Muller Aeternitas, estimated at over CHF 100,000 (EUR 77,000).
Louis Vuitton, a prestigious name if ever there was, announced in May that it would be closing its Caracas store.
Despite this, the revolutionary government in Caracas continues to denigrate the luxury industry while taxing its products heavily. Brands weren’t slow to react: Louis Vuitton, a prestigious name if ever there was, announced in May that it would be closing its Caracas store until further notice. It quoted the prohibitive exchange rate for “non-essential” items and the ban on importing more than $300,000 worth of goods per month. Not to mention the socio-political climate and the potential for social upheaval as a result of these transformations.
Venezuela outstrips the region's number one
Yet the birthplace of Simón Bolivar, El Libertador, is in love with Swiss timepieces to the point of outbuying, under certain criteria, the region’s number-one market for watches, Mexico. “The Venezuelan market has experienced strong growth in recent years, possibly the strongest of any country in the zone,” comments Charles Marin, who represents brands such as Harry Winston and Roger Dubuis on the sub-continent. “The main difference with Mexico is that Venezuela is concerned with quality rather than quantity, and has even overtaken the region’s number one in the complicated watch segment.” This explains why Vacheron Constantin presented an exquisite limited edition to mark the bicentennial of Venezuela’s independence. The chosen timepiece for this commemorative watch is the Patrimony Contemporaine, equipped with a Calibre 1400, a characteristic movement of the Genevan Manufacture. With production limited to 10 watches in rose gold and 9 in platinum, this timepiece confirms the privileged relations between Vacheron Constantin and Venezuela since 1922.
“I think we can make a clear distinction between two types of customer in Venezuela,” continues Charles Marin. “On the one hand are the collectors who know each brand down to the smallest detail and are seeking watches that demonstrate genuine technical innovation. The second group comprises customers who pay more attention to design. In my view, this second group has taken on more importance over recent years.” In the absence of official figures, insider sources say that Rolex and Cartier are the top-selling names at the high end of the market, followed by Breitling, Audemars Piguet, Panerai, IWC, Breguet and Roger Dubuis.
This hasn’t prevented several independent firms from putting in the overtime and winning a foothold in the Venezuelan market. Brands such as Hautlence and Franc Vila took advantage of October’s Salón Internacional Alta Relojería in Mexico City to travel to Venezuela and meet distributors and customers in Caracas. “The situation is nothing short of surreal,” declared Franc Vila. “One of my customers is in jail and certain others might want to start worrying. I may well end up going to prison to sell my watches!”
Not all potential customers belong to the opposition camp. In a country divided by political differences, it seems luxury goods and watches have the power to unite advocates of seemingly irreconcilable views. Despite the fact that the President’s opponents, who ran as the Mesa de la Unidad Democrática coalition, claimed victory in the parliamentary elections on September 26th, Chávez’s socialism remains in power after winning a relative majority in the National Assembly. “New wealth has emerged based on political affiliations and circles of friends with direct connections to those in power,” said an important source in the sector. “The people in power are also the biggest consumers,” declared another authority in the branch, who also preferred not to be named.
Venezuela has more to contend with than purely institutional problems. The country’s economy, which relies heavily on oil, has seen better days. The prosperity that is sweeping Latin America – the World Bank is forecasting growth of around 6% for 2010 – will pass the Bolivarian Republic by. Inflation is expected to climb to 30% this year, according to the Venezuelan Central Bank.
Still, the luxury sector hasn’t said its last word. Says Charles Marin: “There are no limits to the Venezuelan market. Depending on the brand, there is no reason not to be able to sell large numbers of complicated timepieces, particularly tourbillons and perpetual calendars. The country’s political situation has largely contributed to the development of the watch segment in general, and high-end watches in particular. In 2009, all brands reported excellent figures for sales of complication watches.”