It’s no secret that the Swiss watch industry has been enduring problems, problems that have continued into 2017 and which follow the same pattern of the previous couple of years. Top of list is the issue of brand manufacturers engaging in stock buy-backs to counter a persistently-fractious demand from buyers. The buy-back is a comprehensive distortion of free-market economics and while the retail mirage may well be maintained, the end-of-year results will reflect the costly reality.
The Richemont conglomerate has been involved in retail stock adjustment, as have other luxury brands, but Swatch Group is one company that has no plans to buy back watches.
“Why should we?” a Swatch Group spokesperson said some months ago. “Our products aren’t food products that have a date of expiration.”
The buyer uncertainty in the market is plaguing the marketing campaigns of luxury watch brands at a time when the full range of superb new Baselworld releases is pushing out to global retail outlets.
Baselworld Swiss Exhibitors’ Committee president François Thiébaud reported at the pre-show media conference that Swiss watch exports decreased 9.9 per cent in value terms to CHF19.4 billion (AU$26.4 b) in 2016. This follows a 3.2 per cent decline in 2015 and watch exports have been further penalised by the valuation of the Swiss franc.
This capricious and volatile buyer behaviour, which has its roots in the 2009 Global Financial Crisis (GFC), has been renewed by the November 2015 terrorist event in Paris, the enduring corruption clampdown in China and a deep-seated, global suspicion of the polarised ideologies of those entrusted with steering the national economies into a stable future.
There is global uncertainty arising from the Brexit disruption in the UK, the US election result, claims of Russian electoral interference and politicians everywhere lacking the courage to deal with pressing global issues. It’s therefore unsurprising that luxury watch buyers are quietly retreating.
The show uncovered
The difficult commercial climate is one thing but what’s new at Baselworld 2017?
Well, the Swiss still make the best watches even if they are seriously mistaken in their refusal to supply the essential parts to service them, a position based on contrived nonsense.
Of the new releases for 2017, the big brands walked conservatively and thus it was a fairly quiet year for tech-heads, barring a few excellent exceptions from Patek Philippe and Tag Heuer.
Patek has re-mastered the silicon balance spring to provide an exceptionally good rate specification of -1/+2 s/day in series production but only about half this error level on the arm – a most remarkable result. Patek also demonstrated another innovation for activating its calendar complication that dispenses with the need for multiple conventional parts.
Over at Rolex, the big news is less about product and more about reputation. While other Swiss-made watchmakers are suffering the well-earned negative effects of a period of servicing mistrust that involves dishonesty and price gouging, the Swiss watch brand has topped the Global RepTrak list of most reputable companies in the world for a second year in a row. With a score of 80.38, Rolex’s result marks the first time in the ranking’s history that a top-ranked company has recorded an overall excellent score, categorised as a score of 80 points or more. This is indeed worthy of mention.
Tag Heuer continues to take great strides adapting to the hybrid possibilities evolving from new smartwatch technologies and certainly has been well rewarded by a loyal buyer following.
A visit to the Académie Horlogère des Créateurs Indépendants (AHCI) stand is always good value. Here can be found fierce independence, deep understanding and profound horological knowledge. Buyers from one of the AHCI makers are assured of superior, outstanding quality, pricing related to work done and, most importantly, face-to-face communication with those who make the timepieces – unique in the industry today.
Throughout Baselworld, high-end clock makers reported better than expected results following strong orders at Baselworld 2016.
AHCI member Bob Bray took over the Sinclair Harding clock-making company in 1995, and the business has since flourished. At Baselworld 2017, Sinclair Harding sold more than 45 new pieces with a retail value exceeding £1 million (AU$1.7 m).
Matthias Naeschke clocks, which exhibited in the AHCI section, reported pleasing trading with new and existing customers.
“The first two days were very quiet then the weekend turned out very well,” second-generation operator Sebastian Naeschke said during the event. “I met my most important customers and they placed orders. I also found new customers but I did notice that there were a lot less visitors, especially from Asia. I read that 4,500 journalists attended Baselworld but only one visited the AHCI stand.”
Close by the AHCI stand was Bavarian clockmaker Erwin Sattler, which will soon celebrate 60 years of manufacturing floor and wall clocks. Production manager Markus Gloeggler commented: “Yes, the show was good for us and we have a good workload. Additionally, we are already preparing next year’s 60th anniversary of the Sattler company so there’s a lot to do.”
A look at tools
Elma Schmidbauer, a company that manufactures equipment including watch cleaning machines, jewellery ultrasonics and steam cleaners, has exhibited watch and jewellery tools at Baselworld for more than 30 years. Like Naeschke, divisional manager Miguel Bonillo also noted a fall in visitor numbers, stating, “Visitors from Asia, especially China and India, were significantly less than last year.”
Tools no longer enjoy a dedicated hall at Baselworld as the number of exhibitors has decreased in this past year. This may be due to the dedicated tools expositions emerging in Switzerland that are competing with Baselworld and attracting a focused clientele.
This brief review provides only a fleeting glimpse of this spectacular event. The Baselworld perfect storm notwithstanding, the great brands did produce the usual superb collection of new watches of exquisite beauty and perfect finish – the indomitable cornerstone of the always amazing Baselworld event.
Martin Foster FBHI attended Baselworld as an accredited media representative.
Take a look at all the new timepiece releases from Baselworld 2017 here »