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Luxury Watch Sales In Hard Economic Times: The Good, The Bad, And The Immune

To say that luxury watch sales are down in these difficult economic times is obvious, but the picture is not that simple. Some areas are actually doing quite well, while others are more or less not effected by the economic situation. For the higher end watches, a lot of people see the slow down in sales as a psychological reaction in the minds of wealthy buyers to not wanting to spend so much when the economy is down. Thus, the most effected segment of the market are roughly those watches in the $2000 - $50,000 range. Yes this is a big range, but across the board this segment is suffering - in two ways. First, people are going down a notch in price points when purchasing. If they would have spent $10,000 on a watch a few years ago, today they are spending $2,000 - $5,000. Alternatively people aren't buying watches at all in this segment, and waiting until things get better to buy.

One segment that is doing remarkably well is the $100 - $500 segment. Typically not really considered part of the luxury watch group, watches in this range are gaining a lot of momentum.. Buyers are looking to decrease the amount of money spent on watches, but still want to buy watches, which is why this segment is doing remarkably well. A major point of this finding is that people will always want watches, and the demand is still there. Although retailers are typically loathe to offer these lower margin watches, the economic reality of today is forcing them to amend their points of view on this price segment.

Tags: economy, industry, luxury, sales, watch

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Chopard To Cut Jobs On Low Sales Forecasts

by Ariel Adams (RSS feed) —

Filed under: Timepieces / Watches

I won't say that Chopard is hurting, but they are anticipating an economic sting based on lower than hoped-for sales at Baselworld later this month.The independently owned watch and jewelry maker employs a total of about 1,800 workers. Chopard's Karl-Friedrich Scheufele recently stated that the company would be laying off 36 employees, from their manufacturing and administration arms. The cut does not represent an immense portion of their labor force, but such companies are not known for making hasty lay-off decisions. The move is a direct result of the poor demand for luxury watches in the current economic atmosphere. The lay-offs will occur in a month or two according to Chopard. Competitors such as the Richemont Group and Cartier have also experienced job cuts, or are considering them. Until the world economy is able to begin a recovery, the luxury markets will continue to suffer demand loss.

Via Forbes.

Ariel Adams publishes the watch review site aBlogtoRead.com.

Tags: Chopard, economy, industry, jobs, layoffs, luxury, timepiece, watch

Richemont Owned Roger Dubuis Watch Brand To Cut Jobs

by Ariel Adams (RSS feed) —

Filed under: Timepieces / Watches

Last year the Richemont Group added Roger Dubuis to its luxury watch collection of brands. Richemont owns such prestigious brands as A. Lange & Sohne, Jaeger LeCoultre, and Panerai. The acquisition of the Roger Dubuis occurred in the midst of wild growth in key markets such as Asia and the Middle East. With surges expected, Roger Dubuis promoted a liberal hiring policy adding new staff quickly.

Recent revenue disappointments have resulted in a decision to lay off as much as one sixth of the Roger Dubuis work force, or about 70 people. The move will emphasize a marketing refocus for the brand that hopes to increase its presence in retail stores as well as complete production on highly sought after high-end models.

Roger Dubuis seems eager to express that this move does not signify an end to the esteemed watch maker, nor does it indicate a slew of bad management decisions. No one is immune from the current economic market, and Roger Dubuis was perhaps a bit too optimistic with its growth and watch production capacity. Unlike "Tier One" luxury watch brands with the most valuable brand names, Roger Dubuis is less known (making them "Tier Two'), even though they still offer a very high quality and complex watch product line. This can negatively affect the value proposition of buying their watches in hard times for some consumers.

Despite this news, Roger Dubuis customers are still eagerly awaiting the release of its most expensive watch date, a $500,000 complex multi-timezone perpetual calendar timepiece. Pictured, is a Roger Dubuis Excalibur with a 45mm white gold case, minute repeater, perpetual calendar, tourbillion, and double rotors.

Via Bloomberg News.

Ariel Adams publishes the watch review site aBlogtoRead.com.

Tags: cut, cuts, EX45 0829 0 N9C.71R, Ex4508290N9c.71r, excalibur, industry, jobs, richemont, roger dubuis, RogerDubuis, timepiece, watch

Swatch Group Posts 2008 Profits: Little In The US

by Ariel Adams (RSS feed) —

Filed under: Timepieces / Watches

Despite the state of the world economy, watch and jewelry sales were up 6.6% in 2008 for the Swatch Group. This statement is not indicative of all watch and jewelry brands as many companies have seen decreased sales in 2008. A press release from the Swatch Group helps to shed light on the their performance in the watch market. The Swatch Group is involved in more than just watches, with arms in the automotive, electronic, optics, and other markets with group growth of 4.3% last year. Regardless, the core business of the Swiss watch conglomerate are still watch sales. The purpose of the press release seems to be a note to the public that despite everything, you don't need to worry about the Swatch Group's future.

The press release admits that hurting currency exchanges and a drop in demand are the immediate causes of the watch industry sales and profit slowdown. Nevertheless, growth in certain markets has been strong enough to compensate for poor performance in other markets. As such, the Swatch Group states, "the slowdown was more acute in the USA in the last few months of 2008, which was offset to a certain degree in other growth markets." Markets that did display impressive growth are the Middle East and certain Asian countries most notably China. This does not necessarily mean that traditionally well performing markets such as Europe are doing poorly, but rather that growth is slow or nonexistent.

Key areas of growth involve a high demand for watch movements as well as an increase in retail watch distribution in many markets. I guarantee that news of impressive growth in China and the Middle East will garner attention by a number of industries including other watch companies. My hope is that such attention will not flood these markets and result in over saturation. Outlooks for 2009 are unclear, but I am glad the Swatch Group isn't speculating much. We shall wait and see.

Ariel Adams publishes the watch review site aBlogtoRead.com.

Tags: earnings, group, industry, swatch

Villemont Geneve Watches Sadly Goes Belly-Up

by Ariel Adams (RSS feed) —

Filed under: Timepieces / Watches

Watch maker Villemont Geneve recently filed for bankruptcy after the boutique brand declared it was insolvent. After closing its doors, the brand made no mention of being purchased or saved, though their website is still operational. This comes as sad news as the weakening economy is beginning to have a serious effect on watch makers, especially those with a low volume output. Villemont produced only 311 watches last year, with a volume around that amount on average each year. The company employed just over a dozen employees.

When a watch maker sells only a small amount of watches each, it relies on a good deal of profit from each watch. A large dip in sales from a company with already slim distribution can spell disaster. Larger companies with higher volume and wider distribution are not immune from the economic situation, but can hold on much better.

In stronger economic times, boutique brands with niche products offer wonderful variety to the watch industry. The current economic situation will likely spell disaster for many unique brands just like Villemont, and larger companies may be less likely to offer experimental or overly avant garde watch designs until the economy improves.

Ariel Adams publishes the watch review site aBlogtoRead.com.

Tags: bankrupt, industry, luxury economy, LuxuryEconomy, timepiece, villemont, watch

FiFi Award Winners Announced

by Nicole Weston (RSS feed) —

Filed under: Cosmetics and Fragrance

The fragrance industry just hosted their 34th annual FiFi Awards, the industry's biggest event. The FiFis recognize the best scents, best packaging and best ad campaigns in the industry. Top honors for women's and men's luxe fragrances went to euphoria by Calvin Klein and Armani Code by Giorgio Armani, respectively. The other 2006 winners included:

Best Women’s Direct Sell : So in Love by Victoria’s Secret Beauty
Best Men’s Direct Sell: Today. Tomorrow. Always for Men by Avon
Best Women’s Popular Appeal: Spirit by Antonio Banderas for Women
Best Men’s Popular Appeal: Stetson Black
Best Packaging Women's and Men's: Armani Privé by Giorgio Armani
Best Televised National Advertising Campaign: Lovely by Sarah Jessica Parker

The Senior Corporate Vice President of Estée Lauder, Evelyn H. Lauder, was honored with the Lifetime Achievement Award for bringing "extraordinary ingenuity, dedication and inner resources [to her company and] to the fragrance industry as a whole."

Source

Tags: antonio banderas, armani, armani code, armani prive, avon, awards, best, calvin klein, estee lauder, euphoria, fifi, fragrance, industry, lovely, packaging, perfume, sarah jessica parker, stetson black, victoria's secret