Crunch Time
The watch industry has recovered from its slump, but does that mean the risk of future crashes is over? Nicolette Wong mulls over the latest developments
The watch industry is in a state of flux. A full-blown crisis, precipitated by the unstable global economic and political conditions of recent years, has been averted, resulting in the recent uptick in Swiss watch exports (up 3.9 per cent globally and 9.5 per cent in Singapore, according to data released by the Federation of the Swiss Watch Industry (FHH)). But there is nonetheless a sense of uneasiness within the industry. Small rumblings indicate that the ground may soon be shifting under the Swiss manufactures.
FAIR PLAY
News broke last December that both the Salon International de Haute Horlogerie (SIHH) and Baselworld watch fairs would once again realign their schedules, a decade after the two parted ways. Instead of SIHH running in January and Baselworld in March, they would run one after another from 2020 onwards. SIHH takes place from April 26 to 29, while Baselworld will be held from April 30 to May 5. This synchronisation is largely seen as a positive move for the industry, especially in light of the fact that both fairs had seen several withdrawals from participating brands. Baselworld was the most strongly hit—the Swatch Group upset the natural order and very publicly pulled out all of its 18 brands, including Blancpain, Breguet and Omega, from this year’s fair, citing an acrimonious relationship with the fair’s management. SIHH did not remain unscathed—van Cleef & Arpels did not exhibit this year and its absence filled by Bovet, while independent brands Richard Mille and Audemars Piguet have both ended their final showing in January and will not be continuing with SIHH in subsequent years. The secession of Richard Mille and Audemars Piguet is particularly interesting. According to Swiss newspaper Le Temps, Richard Mille has stated that “the universe of the grand salons no longer corresponds with [our] ultra-selective distribution strategy”, while Audemars Piguet CEO François-henry Bennahmias stated that the format of the fairs no longer suits the brand, and that it would depart to focus on the end consumer instead of the journalists and retailers, who regularly attend the fairs. It indicates that both
brands (and indeed, some other luxury watch marques) intend to exert more control over the distribution and communications process. Instead of releasing information on the year’s new watches all at once, both brands have elected to show only a portion of their new watches at the fairs, releasing information about later releases closer to the date at which the watches become available in stores. This means that keen collectors are no longer left chomping at the bit for months before they can see the watches in the metal. Plus, both Richard Mille and Audemars Piguet are phasing out their network of retailers to focus on selling products through their own flagship stores. Bad news for retailers, but sound business strategy, especially given that both brands have far more customers than watches available at the moment.
IN THE HOT SEAT
An even greater indicator of an impending sea of change is the record number of young executives who are stepping into the C-suite at major brands. All of this is happening at a time when the market is questioning its relevance in the lives of young people, whose interest in luxury mechanical watches is seen to be lower than previous generations. The idea is, of course, that the young executives will be more in touch with the younger generation’s consumption habits. According to The New York Times, Richemont Group chairman, Johann Rupert, had announced in 2016 that he wanted to “see less grey men” in top management. Subsequent C-suite changes saw his words become gospel. In the years since then, 50-year-old Jérôme Lambert has taken on the newly revived position of Richemont CEO, while various brands saw young blood take over as head honcho. Catherine Rénier took the reins at Jaeger-lecoultre, as did Geoffroy Lefebvre at Baume & Mercier, Chabi Nouri at Piaget, Christoph Grainger-herr at IWC Schaffhausen, and Louis Ferla at Vacheron Constantin. Elsewhere in the industry, Julien Tornare took the top seat at LVMH’S Zenith, and Patrick Pruniaux took the helm at both of Kering’s watch brands, Ulysse Nardin and Girard-perregaux. All of them are in their early to mid 40s, well below the usual age range of top-ranking officials at luxury houses. The impact of their work has yet to be felt, because watchmaking takes time, and all of them have only just stepped into the role some one to two years ago. But one thing is clear: they must change the role of watches—or watch it slide into obscurity. Now that watches no longer have a practical function, thanks to the ubiquitous smartphone, their relevance to the lives of consumers must be reinforced both with strong, compelling products, and a robust communications strategy.
THE ONES TO WATCH
The product offerings of recent years, while decent, have been unadventurous—perhaps due to the slump in luxury watch sales (down 13 per cent between 2014 and 2016, according to FHH), but also indicative of the risk-averse creative sense of the brands that prefer the path well trodden. What about the offerings from 2019? They are good, but not amazing. Our favourite of the lot is probably the new Cartier Privé line, a new tonneau-shaped men’s watch collection that manages to tick all the right boxes. It is elegant, technically robust, and unmistakably Cartier, but also
represents a step outside of the brand’s usual comfort zone. The collection pays tribute to the Collection Privée Cartier Paris (CPCP), a line of high-end mechanical watches produced between 1998 and 2008. It was discontinued because of its lack of market demand, but was very well liked by appreciative collectors. The new Cartier Privé has two models: a time-only two-hand model, and a skeletonised dual time zone, which comes equipped with two crowns. The latter is a revival of the old CPCP Tonneau XL dual time model, which featured two separate mechanisms for the home and local time zones. This time around, however, Cartier ups the ante by incorporating both into one tonneau-shaped skeletonised movement with a single linear gear train. Other noteworthy releases include Jaeger-lecoultre’s new Master Ultra Thin Moon Enamel and Rendez-vous Moon, which emphasise the watchmaker’s expertise in what it calls the metiers rares, the decorative techniques only used by certain prestigious houses. The marque is already well known for its ability to create excellent movements, both for itself and other brands, but is less renowned for its decorative capabilities. Omega’s recent announcement about its reintroduction of its historic calibre 321 (pictured above) has also tickled the fancy of many horology fans. The movement was first produced in the 1940s, and was used in several notable historical references, including the Speedmaster ST 105.003, the model first qualified by Nasa for space missions and worn by astronaut Ed White during the first American spacewalk, and the Speedmaster ST 105.012, the watch that made it to the moon. The calibre was discontinued in 1968, and reviving it was no easy task. Omega took two years to reconstruct the movement, using historical research, original plans, as well as digital tomography of a vintage Speedmaster ST 105.003 worn by astronaut Eugene “Gene” Cernan on the Apollo 17 mission in 1972. The result is a calibre that has been rebirthed to its original specifications. As for why, well, we hear that the 50th anniversary of the moon landing is coming up in July. The recreation of the calibre 321 is a fairly exciting piece of news for Omega fans, but the truth is that its appeal still relies on references of the past. How long can vintage-inspired pieces sustain interest? We hope that SIHH and the upcoming Baselworld will prove us wrong, but should we be right, 2019 will be the latest in a string of tame years for the watch industry. Vintage-inspired pieces and rehashed partnerships are all well and good, but do not make for very compelling propositions. And as you can imagine, if industry professionals are not excited by these watches, then new consumers—the very ones that the industry needs to court— would less likely be impressed. And if the watch industry isn’t careful, they might find themselves on shaky ground.