Luxury watch trade fairs have opened in Geneva this week amid signs that wealthy shoppers are again splashing out on prestige timepieces.
Cautious optimism is on show in Geneva alongside pricey new wristwatches at the 20th Salon International de la Haute Horlogerie (SIHH) and the new Geneva Time Exhibition, which features small independent brands.
“We shouldn’t count our chickens before they’ve hatched at the end of the salon, but we are much more serene than last year,” Fabienne Lupo, SIHH director, told swissinfo.ch.
2009 was a very difficult year for the SIHH and the watch industry in general.
“It was a period of great uncertainty,” Lupo said.
Last year the SIHH opened for the first time in January as part of a strategy to make it “more selective” compared with its big Swiss cousin, the Baselworld watch fair, which takes place in March.
This change also coincided with the peak of the global financial crisis.
“We were in the eye of the storm,” Lupo added.
The recession hit hard, leading to a 24 per cent drop in Swiss watch exports in the first 11 months of 2009.
Around 13 per cent of the watch workforce lost their jobs or became temporarily unemployed. Many firms repositioned their products in lower price brackets to stay afloat.
Renewal of exports
But there are signs that things might finally be changing.
The Geneva-based luxury giant Richemont, which organises the SIHH, posted positive sales growth on Monday. Richemont’s sales rose two per cent in the third quarter of 2009 to €1.585 billion (SFr2.3 billion).
This comes just days after jewellery firm Tiffany & Co said its profits should beat expectations after a rise in holiday sales.
Recent Swiss watch export data also signal the beleaguered sector may be emerging from its sharpest drop in demand in 20 years.
In November Swiss watchmakers exported products worth SFr1.36 billion ($1.32 billion), their best monthly result this year.
This value represented a drop of 10.6 per cent compared with November 2008, possibly marking the end of the decline. In October exports fell 22.7 per cent.
“We think December and the start of the year will confirm this renewal of exports,” said Jean-Daniel Pasche, head of the Federation of the Swiss Watch Industry. “2010 should be better.”
While he remained cautious over growth forecasts, Rene Weber, a financial analyst with Vontobel bank, stuck his neck out.
“We’re at a turning point. We’re looking at a four per cent increase in sales in 2010 compared with the previous year,” he said.
“The main driver is Asia – not just China, but Singapore, South Korea and Taiwan are growing watch markets. The US is coming back slightly but not Japan or Europe.”
Weber also felt stock levels had also been “cleaned up” over the year.
But Pasche and Lupo were both guarded over the fate of watch subcontractors and suppliers.
“It’s a critical period,” Lupo said, adding that it was too soon to talk about the industry coming out of recession.
Inside the Geneva world of luxury, well-heeled buyers spent the day eyeing the latest Baume & Mercier or Cartier models and getting down to business in the chic cappuccino-coloured lounges.
The number of registered visitors at the SIHH is up this year: more than 12,000, including 1,300 journalists. This is still a long way off the 14,000 who sashayed through the SIHH halls in 2008, but much higher than in 2009, when attendance fell by 20 per cent.
“The Americans have come back in force alongside people from Asia – apart from Japan, that is,” Lupo said.
Positive energy was also apparent a few kilometres down the road at the first-ever Geneva Time Exhibition watch fair for professionals and collectors, which opened on Sunday.
“We’ve had a phenomenal success which has exceeded our expectations,” said salon director Florence Noel.
Some 2,500 visitors are expected through the doors of the Geneva International Conference Centre this week.
“In two days I’ve had contact with two big buyers from Asia,” said exhibitor Gilles Robert, owner of the Geneva-based historic watchmaking firm Robert & Fils, which was founded in 1630.
Rather than separately showing off their collections in hotels across town, this year 38 independent, mostly Swiss watchmakers, have joined forces to seek better visibility.
“Here exhibitors are all very different; modern and traditional firms can make themselves heard,” said Robert.
Apart from these two major fairs, 20 other watch brands are also showing off their collections at hotels in Geneva this week.
Simon Bradley in Geneva, swissinfo.ch
The 20th Salon International de la Haute Horlogerie (SIHH) is taking place from January 18-22 at the Palexpo exhibition hall. The SIHH remains a private fair for professionals from around the world.
The brands presenting their new models are: A. Lange & Söhne, Alfred Dunhill, Audemars Piguet, Baume & Mercier, Cartier, Girard-Perregaux, Greubel Forsey, IWC, Jaeger-LeCoultre, JeanRichard, Montblanc, Officine Panerai, Parmigiani Fleurier, Piaget, Ralph Lauren Watch and Jewelry Co, Richard Mille, Roger Dubuis, Vacheron Constantin and Van Cleef & Arpels.
The first Geneva Time Exhibition is taking place from January 17-22 at the Geneva International Conference Centre. The exhibition is also a private fair for professionals from around the world.
Some 38 small independent watchmakers are participating, mostly from Switzerland. Watch prices range from SFr500-SFr300,000.
The world's biggest watch and jewellery fair – Baselworld – will take place in Basel from March 18-25.