Steady, As She Goes

The Swiss watch industry continues to mature with a focus on hefty investments on production capacity and a trend for more austere models. Exports grew by a modest 2% in 2013 matched with a decline in the total number of timepieces, signalling an increase in the average price of a watch. According to the Federation of the Swiss Watch Industry (FHS), Swiss watch exports were US$813 on average, or 5.9% more compared to 2012, which is a value that has doubled in the last 12 years.

These statistics show a continued change in perception for what was largely considered a disposable, utilitarian accessory a couple of decades ago. The big watch companies - Richemont, Swatch Group, Rolex and LVMH - continue to reap the benefits, taking up majority of the world’s mechanical watch sales.

Richemont has in fact been investing in its facilities, with a proposed US$333m allocated this year to increase production capacity at each of the group’s maisons. According to Co-CEO Richard Lepeu, a large number of projects are either underway or have just been completed, including Neuchatel for Panerai, Plan-les- Ouates for Vacheron Constantin and Piaget, Meyrin for Van Cleef & Arpels, and Couvet and Le Locle for Cartier. In the last five years, the group has increased its work force in Switzerland by 30%.

At LVMH, Chairman and CEO Bernard Arnault revealed that despite volatility and a slower European market, 2013 was still an excellent year in terms of performance, with profit exceeding the US$8.1bn mark for the first time. Hublot’s Jean-Claude Biver has been appointed head of the group’s entire watchmaking arm, bringing his business acumen and marketing savvy to the fore, not only for Hublot but for Zenith and Tag Heuer. Louis Vuitton and Bulgari have reported satisfactory results as well, with the entire watch and jewellery group recording a revenue growth of 4%. Tag Heuer acquired a movement manufacturing facility last year, a Geneva facility for Louis Vuitton, and a 100% expansion for Hublot.