It is the end of February and the Swiss Watch version of the annual garden party has come and gone. The SIHH (Salon International de la Haute Horologie) annual watch fair in Geneva has brought together a select cadre of elite swiss watch manufacturing houses and the world's premier watch dealers and press. The purpose is to debut new products and to provide the most opportune time for orders to be placed for the coming year.
The SIHH or Geneva Fair is the outgrowth of the schism created when The Vendome Group began to accelerate it's acquisition of leading elite brands and the subsequent competition for space and prominence in the traditional watch fair in Basel. The Vendome Group merely created their own fair to showcase their many brands and allied companies. Today the participants in the Geneva Fair are Vendome Group Brands: Cartier, Baume & Mercier, Piaget, Jaeger LeCoultre, Vacheron Constantin, Mont Blanc, IWC and Officine Panerai and Roger Dubuis and allied but independent brands Audemars Piguet, Girard Perregaux, Jean Richard, Urwerk and Parmigiani Fleurier.
Despite the diversity of these many brands it is evident that there is a commonality of purpose and methodology in this vertically integrated industry where virtually every watch manufacturing concern is intimately associated with the same suppliers for parts and services and the worlds distributors and retailers are a small and select group that the brands are in constant battle for influence over and prominence amongst the press, watch retailers and the public.
In such an integrated industry how does innovation flourish and how does one's technological advances remain secret in a world where the brands are nearly all owned by one of three giant conglomerates? Very carefully and rarely for long. When Richemont or Vendome Group seek competitive advantages in styling or technical innovation it is immediately adopted by its subsidiaries as an economy of scale in an effort to capture market share and the spotlight from other groups such as Swatch Group (Omega, Longines, Glashutte Original, Blancpain, Breguet, Tissot etc. and LVMH (Tag Heur, Boucheron, Louis Vuitton and Hublot.)
O.K. So what is new for 2009? Nothing truly innovative but variations on existing themes and despite the social veneer movers and shakers are very very worried about the economic firestorm in the major watch consuming markets of the U.S. and Asia. When the recovery begins we will see more new products and aggressive advances in technology but for now the industry is preparing for a very difficult year. Charles Darwin would tell you that next year we will know who did the best job of overcoming 2009 as a challenge to survival.
February 24, 2009
January 11, 2009
Watch Afficianado's...BUY NOW !
After years of steady increases in price and expansion of brands and production, the Swiss Watch Industry has hit the economic wall. The worldwide economic crash is being felt in the boardrooms and workshops of the legendary companies that make the world's finest timepieces.
Some of these companies have been around since the last big downturn in fortunes, known as "the Great Depression" and records show these companies were fortunate to survive it and most did not prosper until the 1980's and 1990's. The emergence of a larger and more informed middle class in the industrialized nations is the force behind the reach for luxury items such as elite Swiss timepieces.
Many of the elite makers are new incarnations of ancient identities that died out before the new world order that came from the consolidation of brands by The Big 3 (Swatch Group, LVMH and Richemont). Thirty years ago most of the great watch manufacturing brands were family owned, and today Patek Philippe and Audemars Piguet are the last of these family owned firms.
We are entering a new and much more challenging chapter and not all the companies will survive and just as fortunes are being lost in the market, the value of one's treasures may be in decline as well. Prices of high end watches will soften and the choice will be made company by company of how to address the diminishing demand. Some firms will reduce staff and production, some will reduce prices and the retailers will run more and more sales to encourage interest in stagnant inventories. Opportunities for buyers are already much improved and trending towards more siginificant discounts as small retailers fight for survival and large retailers reduce overhead and staff to deal with siginificantly reduced business.
It is notable that Ferrari sales have plummeted from record levels to the point that sales have fallen reportedly 75% in recent months.
For the buyer, with the wherewithal to leverage his interests, opportunities to buy at fantasticly reduced prices are here and will continue to grow as the smaller firms fail and the public companies are stressed. Collectors whose fortunes were made on Wall Street are liquidating their prized acquisitions to keep roofs over their heads and only the top of the food chain of most sought after collectibles will retain their inflated market values. The wise collector will see that it is smart to be a buyer when much of the world is selling at distressed levels. The coming months might be the best time to buy in the last 20 years.
Some of these companies have been around since the last big downturn in fortunes, known as "the Great Depression" and records show these companies were fortunate to survive it and most did not prosper until the 1980's and 1990's. The emergence of a larger and more informed middle class in the industrialized nations is the force behind the reach for luxury items such as elite Swiss timepieces.
Many of the elite makers are new incarnations of ancient identities that died out before the new world order that came from the consolidation of brands by The Big 3 (Swatch Group, LVMH and Richemont). Thirty years ago most of the great watch manufacturing brands were family owned, and today Patek Philippe and Audemars Piguet are the last of these family owned firms.
We are entering a new and much more challenging chapter and not all the companies will survive and just as fortunes are being lost in the market, the value of one's treasures may be in decline as well. Prices of high end watches will soften and the choice will be made company by company of how to address the diminishing demand. Some firms will reduce staff and production, some will reduce prices and the retailers will run more and more sales to encourage interest in stagnant inventories. Opportunities for buyers are already much improved and trending towards more siginificant discounts as small retailers fight for survival and large retailers reduce overhead and staff to deal with siginificantly reduced business.
It is notable that Ferrari sales have plummeted from record levels to the point that sales have fallen reportedly 75% in recent months.
For the buyer, with the wherewithal to leverage his interests, opportunities to buy at fantasticly reduced prices are here and will continue to grow as the smaller firms fail and the public companies are stressed. Collectors whose fortunes were made on Wall Street are liquidating their prized acquisitions to keep roofs over their heads and only the top of the food chain of most sought after collectibles will retain their inflated market values. The wise collector will see that it is smart to be a buyer when much of the world is selling at distressed levels. The coming months might be the best time to buy in the last 20 years.
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