The Time of Crisis Has Not Yet Struck Watches
The watch industry looks at 2013 with confidence, judging from what we saw at the International Exhibition of Luxury Watches in Geneva this January.
In spite of a challenging macroeconomic scenario and recession affecting historical markets such as Europe and Japan, 2012 was a record year in terms of value for the exports of the Swiss watch industry (significant for the whole industry considering the more than 90% of luxury and mechanical watches are made in Switzerland). According to Federation of the Swiss Watch Industry data, CHF 21.4 billion worth of watches were shipped in 2011, a hefty +32,5% with respect to 2010. Hong Kong, the US and China remain the first three major markets, followed by France, Germany, and Italy.
In such a positive context, the best economic and financial results where achieved by large groups such as Richemont (with its Cartier, Vacheron Constantin, Jaeger-LeCoultre, IWC, and Officine Panerai brands), as well as Swatch, but also by independent brands. These results have enabled brands to pursue growth strategies in their core business through vertical integration and the development of productive capacity. The search for higher integration, either upstream, by acquiring historical suppliers of components in order to secure control of the supply chain, or downstream, by strengthening the existing network of monobrand retail points, due to the fact that independent, multibrand retailing is in dire straits at the moment. But investments in retail are eclipsed by those geared toward increasing manufacturing capacity.
Product strategy, the veritable driver of watch brands, on one side remains focused on supporting traditional collections and/or iconic models, which are key for the brand DNA but also for profitability. On the other hand, watchmakers are investing in innovation, by introducing innovative micromechanical solutions and new materials, such as silicon, aluminide, carbon fiber, and hi-tech ceramics. Traditionalists won't be disappointed, though: gold watches remain the strong point of new collections. The tendency is also toward mechanization of women's watches, traditionally a quartz-dominated market.
From a style perspective, compact watches have made a comeback, also in sports models, with more elegant and essential designs being manufactured. There is a growing desire for purchasing the timeless classic, which is an investment guarantee, to be transmitted to future generations.
The continuous evolution of watchmaking technology, first introduced in the 19th century, has led to miracles of microengineering, ever more sophisticated moving parts to be assembled by experienced watch craftsmen, as one can witness in ateliers such as Journe and Richard Mille that have made mechanical sophistication a distinctive and appreciated trait of their watches. Connoisseurs and collectors the world round keep sustaining the value of an object made precious by the unique confluence of advanced microengineering and craftsmanship tradition