Strik­ing a Bal­ance

It was busi­ness as usual at Geneva’s an­nual SIHH, re­ports Sean Li, de­spite Switzer­land’s de­ci­sion to go its own mon­e­tary way

Hong Kong Tatler - - Style Watched & Jewellery -

he watch in­dus­try is one that ab­hors sig­nif­i­cant changes, whether on a mi­cro or macroe­co­nomic level. If you peel back the lay­ers of glitz and glam­our ap­plied by part­ner­ships with in­ter­na­tional celebri­ties and the sto­ries of me­chan­i­cal wiz­ardry gained from age-old tech­niques, it’s an in­dus­try that is still, at its core, re­liant on some very small links in the sup­ply chain. En­tire de­liv­er­ies of a new watch col­lec­tion can be brought to its knees by some­thing as seem­ingly triv­ial as a pin buckle—all that needs to hap­pen is for the sup­plier to make a small mis­take in the pro­duc­tion of a part, and the sup­ply chain comes to a grind­ing halt. There are very few sub­sti­tute parts, even in a watch with hun­dreds of com­po­nents, so ev­ery­thing has to come to­gether in a pre­cise sched­ule be­fore the watch is even de­liv­ered to the bou­tique.

You can imag­ine, then, how it went down when the Swiss Na­tional Bank pulled the rug out from un­der the Swiss watch in­dus­try on Jan­uary 15, when it de­cided that it would no longer peg its na­tional cur­rency to the euro and would let the mar­kets de­ter­mine the ex­change rate. Pan­de­mo­nium en­sued, with the value of the Swiss franc rock­et­ing up by 30 per cent, be­fore set­tling at a level roughly 20 per cent higher. You would think that those hold­ing Swiss francs would be ec­static. How­ever, for an in­dus­try that re­lies on ex­port­ing more than 90 per cent of its pro­duc­tion, it means that the cost of those goods rose in­stantly, just a few days be­fore the “open­ing bell” of the new watch in­tro­duc­tions for the year at the Sa­lon In­ter­na­tional de la Haute Hor­logerie (SIHH) in Geneva.

The stock mar­kets took this im­me­di­ately into ac­count, ham­mer­ing the stock prices of both Richemont and the Swatch Group, mir­ror­ing the rise of the Swiss franc. Un­for­tu­nately for those share­hold­ers, while

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