SwatchGroup

Swatch Group Vows That ETA Will Stop Selling Watch Movements To Competitors

This news is a huge deal for the watch industry. About two years ago the Swatch Group announced that its watch movement making division ETA would stop selling watch movements to watch makers who are outside of the Swatch Group brands in 2010. ETA is the largest and most popular watch movement maker in all of Switzerland - supplying movements to most Swiss watch brands and anyone else who utilizes Swiss movements. ETA makes a wide range of movements from high end mechanical movements to quartz movements.

Swatch Group brands include companies such as Swatch, Hamilton, Tissot, and Omega. These brands receive their movements from sister company ETA, while ETA also currently sells movements to outside brands. According to Chairman Nicolas Hayek of the watch group, that is all about to change. He is reaffirming Swatch Group's position that ETA will cease providing movements to competitors. The wisdom of the decision is arguable, but it looks like it is going to happen.

ETA has been under investigation by Swiss government authorities on whether this move is illegal and anti-monopolistic. Probes have been launched in the past as well to identify whether or not ETA was engaging in unfair pricing and related charges. The current probe is likely interested in whether such practices of shutting out Swiss watch brands that are important to the Swiss economy is a legal move by the Swatch Group.

A real question emerges of where watch brands will now go to get Swiss watch movements, or any movements for that matter. The move could spell death for legions of brands who are reliant on ETA to offer "Swiss Made" watches. In fact, it will likely spell death for many brands. At the same time it is a golden opportunity for competitors to come in and provide watch movements. While the creation of the tiny parts for movements is highly sophisticated, ETA does have Swiss competitors. Companies such as Sellita and Ronda may quickly step in ETA's shoes to fill the gap.

Most of ETA's high volume movements are not covered under intellectual property rights any longer. Such patent rights only have limited times of protection until their covered technologies can be produced by anyone with the skill. As such, ETA movements such at the 2824-2 have been "copied" by brands such as Sellita (with their SW200 movement) for a while. Plus, some brands might turn to the Japanese who have been making quality movements for years. While Japanese movements don't have the same special power to excite consumers that "Swiss Made" movements do, we may see watch companies turning to them out of sheer need.

Sometime in 2010 ETA will cease or begin to stop selling watch movements to outside Swatch Group brands and the market will have to adjust. We will wait until that time to see what the resulting watch industry reaction is.

Ariel Adams publishes the luxury watch review site aBlogtoRead.com.

Tags: 2010, competitors, ETA, movements, Swatch Group, SwatchGroup

Jaquet Droz President Manuel Emch Resigns

by Ariel Adams (RSS feed) —

Filed under: Timepieces / Watches

Just as I anticipated, the stream of fallen luxury watch company heads continues. This time it is not from the Richemont Group, but from Swatch Group's boutique luxury brand Jaquet Droz. No one is particularly happy about this news, and I am sure Maunel Emch himself suffered for long enough before calling it quits.

Why the departure? Sources seems to indicate that new company for Swatch Group (acquired in 2000) president struggled with the heavy hand of conservative and old school thinkers who simply could not conceive the needs of the modern watch market landscape. Emch is 37, while the average age of a watch company executive is much older. The poor economy likely resulted in a slew of bitterness and resentment, not to mention oppressive and unnecessary micromanagement when it was undue. Emch is well regarded as the one who made the Jaquet Droz brand as interesting as it is, but I must disagree with the giant plastic glasses. He took some risks, but overall made the brand what it is today. Despite what looked like success for the brand, the pressure on Emch was apparently too much. We can add his name to list of recent watch company casualties. Who will be next?

Via Business Montres (in French).

Ariel Adams publishes the luxury watch review site aBlogtoRead.com.

Tags: jaquet droz, JaquetDroz, maniel emch, ManielEmch, president, resign, swatch group, SwatchGroup

Swatch Group's Tourbillon Boutique For High-End Watches To Open In New York City

by Ariel Adams (RSS feed) —

Filed under: Timepieces / Watches

The Tourbillon Boutique is a chain of retail stores operated by the Swatch Group that offers its most exclusive watch brands (and Swatch). While most of the shops are located in Switzerland, the US is about to see its second Tourbillon Boutique store, due to open in New York City sometime in May, located in the Financial District on Wall St. Recently, Swatch owned Omega opened up its flagship store on 5th Avenue, and this second new opening indicates a distinct focus on the US market for the Swatch Group watch brands.

Until now, the only Tourbillon store in the US was located in Costa Mesa, just south of Los Angeles. The purpose of the store is to house the most luxurious brands and timepieces that the Swatch Group offers. This includes Breguet, Jaquet Droz, Blancpain, Glashutte Original, Leon Hatot, Omega, and Swatch (though I am not sure how the Swatch branded watches fit in as they are mainstream as opposed to luxury watches for the most part). The Tourbillon Boutique stores are not limited to watches with the expensive and complex tourbillon complications, but any of the firm's best timepiece offerings.

Questions arise as to why the Swatch Group is currently expanding during difficult economic times. My guess is that the US market has more promise in terms of expansion than Europe, while at the same time the Swatch Group is investing in the future when the economy will eventually bounce back. Lower real estate prices and the availability of labor makes it an enticing environment for market positioning once the demand for fine timepieces edges its way back up, once again.

Ariel Adams publishes the popular watch review site aBlogtoRead.com.

Tags: boutique, new york, NewYork, store, swatch group, SwatchGroup, tourbillon

2009 Tiffany Watch Co. Ltd Brand Watches Underwhelm

by Ariel Adams (RSS feed) —

Filed under: Timepieces / Watches

Let me get this straight? For years Tiffany & Co. have been selling watches with their name on it. I don't just mean the watches that they append their name on, but their own watches. Now Tiffany & Co. Ltd. is claiming that they just launched something new with Tiffany Watch Co. Ltd. What about the existing watch brand? This leaves me scratching my head. They can of course claim that under the new Swatch Group ownership, their watch division is "under new management." Maybe that is what they mean. Just to clarify, Swatch now owns the watch making division of Tiffany & Co., not all of Tiffany & Co.

At Baselworld the new line of watches was displayed. There weren't many, and at least one line, the "Atlas watch," retained a name carried over from the existing Tiffany & Co. watch line. The new watches come in quartz and mechanical varieties - each heavy on the use of Roman numerals that Tiffany & Co. is well known for. The watch designs were nice, but not Tiffany & Co. nice. There was no magic appeal or charm, and the timeless look that Tiffany & Co. watches typically have was absent - in my opinion. As of writing, the Tiffany & Co. website is still stocked with their existing line, with no mention of the new watches, but that is to be expected so soon after launch.

While the Swatch Group has the ability to produce beautiful watches, I am concerned that due to their many brands, they will attempt to segment Tiffany Watch Co. into a niche, so as not to compete with its other luxury watch brands. On a plus side, Tiffany & Co. is also known for carrying other watch brands in their stores such as Patek Philippe and Baume & Mercier, so there will still be a nice variety of watches at each retail location.

It is likely that as the Swatch Group becomes more comfortable with the brand, design will improve. For now I feel like the watches don't have enough stylistic staying power to still look good a few years from now as poignant luxury watches. We are seeing a lot of the similar designs in entry level or designer watch brand, and that is simply not what buyers of Tiffany & Co. watches have come to expect.

Ariel Adams publishes the watch review site aBlogtoRead.com.

Gallery: Tiffany & Co. Watches Basel 2009