Tuesday, Feb 21, 2012

Gulf News

Dubai: The Swiss watch industry is ticking along nicely. Last year it exported 19.27 billion Swiss francs (Dh77.41 billion) worth of timepieces, which is solid progress from the 13.22 billion francs recorded during the worst phase of the downturn in 2009.

So whats with the recent talk of another impending crisis in the industry? There were concerns raised by some segments due to the perceived shortage of watch movements caused by the decision of the Swatch Group to reduce supplies to other manufacturers, Jean-Marc Jacot, CEO at ultra-premium label Parmigiani Fleurier, said.

A large number of these watch brands were reliant on Swatch to supply their movements, i.e., the very fundamental component of the watch.

Rebound

"The word crisis is a misnomer though, as the Swatch decision to reduce the supply of movements was essentially caused by the growing worldwide demand for Swiss watches, which has rebounded more robustly than expected from the recession."

Also, the brand itself is well insulated from any concerns over supplies.

"We manufacture each component ourselves with the exception of the watchstraps which are crafted for us by Hermes," he added.

Tinkering

If at all some tinkering is required, it will be to raise production from the current capacity of 5,000 watches a year. But as with any action taken by the watchmaker where on average a new model takes about four years to head from the drawing board to the showroom the new capacities will take time to come through.

"We are working at doubling the current rate of production over the next few years to 10,000 pieces a year," Jacot said. "The robust, ongoing demand for Swiss watches worldwide has led to a lot of Swiss manufacturers looking at extending their capacities."

The additional output will come in handy as luxury timepieces are coveted buys for any wealthy Chinese shopper. And there are quite a few of them around.

Booming

"The incremental growth taking place in the sale of Swiss watches in the emerging markets of Asia and the booming economies of the GCC is a welcome development for the industry as a whole," Jacot said. "Industry figures indicate that the increase in interest in non-European and American markets is pronounced proof that demand for Swiss watches is now even more widespread than before.

"We look on this as a very positive development and we look forward to serving hundreds of new customers in Asia and the Middle East. This does not mean that growth is all one-sided though, as there is considerable growth in demand even in our traditionally strong European and US markets, though at a relatively slower pace."

Getting as wide a retail network as is commercially feasible is what the brand is emphasising in the GCC and other emerging markets.

"It is our ongoing effort to present our customers with the very best experience while they find the watch that they need, whether it is at our partners' outlets or at our ateliers," Jacot said.

"Our ateliers bring a little bit of Switzerland and the spirit of Parmigiani Fleurier into the cities they function in. We will continue to look at opening our ateliers in locations where we feel there is most need for them."

Bucking trend: loyal to tradition

Jean-Marc Jacot is clear where he stands in the debate about tradition versus trends in the Swiss watch industry.

"While there may be a few that dabble in digital formats, the vast majority of the current leaders in Switzerland are not likely to deviate far from their traditional strengths," Jacot said. "Their watches are the gold standard in the industry; the complicated movements are unique in their efficiency and beauty and are inimitable. These are the attributes that keep Swiss brands at the forefront of the horological world."

By Manoj Nair, Associate Editor

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