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Israel: in search of a new direction

TRAVEL NOTES 🇮🇱 ISRAEL

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August 2018


Israel: in search of a new direction

In their narrow local market, Israeli retailers are counting on the rise of tourism to boost watch sales. Geopolitical tensions however jeopardise this ambition. Europa Star travelled there to get a feeling for the market in the company of two renowned local retailers. And to meet a fiercely independent Israeli watchmaker...

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n the Old City of Jaffa, at the heart of the world’s oldest civilisations – among the first that ever attempted to capture the passage of time – stands the friendly workshop of Itay Noy. He carefully assembles just under 200 original watches each year. That’s right, Israel does include at least one fiercely independent watchmaker!

Itay Noy in his studio
Itay Noy in his studio

Itay Noy is fascinated by the concept of “duality”, to which a number of his creations make reference. Beginning with the series Duality, of which each design features two sides that tell the time. The Part Time operates on a day/night theme: the left side of the dial reveals the hours between 6 a.m. and 6 p.m., when daylight dawns; while the right side of the dial takes over and comes to life at sundown. As for the Full Month, featuring Arabic or Hebrew digits, traditional hour markers are replaced by the days of the month for another different take on the traditional watchmaking codes.

This independent Israeli watchmaker is never at a loss for creativity, and he also has a keen interest in the notion of “transparency”. While on the theme, we cannot resist citing the Open Mind, a memento mori that goes beyond the habitual skull to reveal what is concealed within the mind itself: in this case, the mechanical activity of the cogwheels and a continual tick-tock. And of course the well-named X-Ray, with a dial decorated to reflect the gear trains of the movement concealed within the depths of the timepiece for a cross between mise en abyme and a subtle unveiling...

FULL MONTH by independent Israeli watchmaker Itay Noy
FULL MONTH by independent Israeli watchmaker Itay Noy

Itay Noy is certainly one of the most truly creative watchmakers of the moment, and moreover he occupies a very interesting and unusual niche for such a limited production, at under 10,000 francs a piece. And he hopes to create a following. As an instructor at the establishment that he himself attended, the Bezalel Academy Of Art and Design Jerusalem, he attempts to encourage upcoming generations to get involved in watch design. “I don’t want to remain the only independent watch designer in Israel!” he states.

“Zero watch culture”

But what, precisely, makes up the Israeli watchmaking ecosystem? With just over 80 million francs in imports last year, the Israeli watch market is situated just outside the top 30 world destinations for Swiss watches, behind Malaysia and ahead of Greece. It is therefore a medium-sized market: not insignificant, but not exactly a prized opportunity for the sales departments of Swiss watch brands.

Benny Padani, Israeli watch retailer
Benny Padani, Israeli watch retailer

“The irony is that foreigners tend to purchase here, and locals purchase abroad!”

“You know, Israel is a land of refugees, and they came here penniless. When it was established, the wealthy Jews remained in the world’s capitals such as Paris, New York City and London. Moving to the desert certainly did not appeal to them! That is why there is not a major watch tradition among the people who came to live in Israel,” states Benny Padani, a true “memory keeper” of the country’s watch trade. He is in charge of a chain of nine boutiques today, and is probably the most prestigious watch retailer in Israel, particularly as a representative of Patek Philippe.

He recounts a juicy anecdote from his long professional experience in perfect French (being born in Brussels): “I remember a Breitling report from the time that described Israel with one definitive sentence: ‘Zero watch culture!’ However, thanks to new information technologies, the inhabitants of Israel – like people elsewhere on the planet – are learning an increasing amount about watches.”

Padani store in Tel Aviv
Padani store in Tel Aviv

Medical tourism and high-tech industry

So who are the essential clients of the luxury boutiques of Israel? The situations are different for Padani – whose clientèle is predominantly foreign – and Chronotime, a retailer with one boutique in Tel Aviv and another at the prestigious King David Hotel in- Jerusalem, and which among others represents Zenith, IWC and Vacheron Constantin: “Our clientèle is about 70% Israeli,” explains its director Ro’i Aharoni. “In particular, the high-tech industry, which is currently booming in Israel, brings in a lot of clients.” Indeed, a local version of Silicon Valley (called “Silicon Wadi”) has become established in the surroundings of Tel Aviv. For example, Israeli engineers invented the USB device concept in 1999!

Benny Padani is also quite familiar with this new hightech clientèle... But he insists that this generation is difficult to fathom: “Some turn towards the Apple Watch, while others do not change their consumption habits when they begin to earn a lot of money. They are very different from previous generations.”

Padani store in Jerusalem
Padani store in Jerusalem

The two retailers agree on the increasing importance of retail tourism and in particular medical tourism, a prosperous field in Israel. “We often receive calls from Russia or the United States from clients who announce that they will be visiting Israel in the next month,” explains Ro’i Aharoni. “Today’s world has become a global village. And by investing in the Israeli market, Jews abroad feel that they are supporting the country. In the long run, I believe that prices throughout the world will become equal. It is service that will make the difference.” In fact, the retailer runs a Service Centre located in City Garden in downtown Tel Aviv.

Attracting more tourists?

Tourism therefore appears to be the best way to breathe new life into the watch industry in this cramped territory. With nine boutiques throughout the small country, Padani ensures a form of omnipresence: “Nine might even be too many, since the territory is not that big!” considers Benny Padani. “You especially need to be quick on your feet, ready to cover the most strategic areas. For example, Eilat is no longer a true ‘hot spot’ for watch sales.” Today, the country is attempting to attract more tourists, between Tel Aviv – the “Miami” of the Mediterranean – and Jerusalem, with its unparalleled cultural and religious legacy. For example, the first three stages of the recent Giro d’Italia were hosted in Jerusalem, with millions in sponsorship. But it all depends on the geopolitical situation. “The tourist industry has never been as great as it could be,” pursues Benny Padani. “Many people still fear coming to Israel.”

Despite the arrival of low cost companies such as EasyJet, the country continues to be considered an “exotic” destination by Europeans, compared with Greece, for example. The retailer generally considers that more affordable watches are purchased by locals and the most expensive are bought by foreigners. “The major clients do not come from Israel. Israelis prefer to purchase their watches abroad because they are reimbursed the VAT. The irony is that foreigners tend to purchase here, and locals purchase abroad!”

Ro'i Aharoni - Chronotime
Ro’i Aharoni - Chronotime

No competition from own-brand boutiques

As you travel through the country, you get an idea of the high cost of living. “Everything is expensive in Israel,” complains Ro’i Aharoni. “We try to adapt by proposing more affordable prices for higher volumes of sales. But in my view, the general level of watch demand is unfortunately stagnating. And that has an effect on everyone. We have a Hebrew saying: ‘When it rains, everyone gets wet!’” The small Israeli market, under the influence of regional and worldwide pressure, remains a difficult terrain for watch sales, according to the retailer: “Clients have various demands. Even the presence of the Maltese Cross on a Vacheron Constantin dial can pose a problem for some.”

The limited space of the territory could, however, be an advantage for well-established retailers, since they do not have to deal with the forceful confrontation of ownbrand boutiques on their territory, unlike their foreign counterparts: “Even though business is sensitive overall, because retailers’ profit margins are diminishing, we have not had to face that particular phenomenon,” confirms Benny Padani. “But the limited space of the territory is also a limitation in terms of sales: moving 20 to 30 pieces more or less per year can make the difference.” The web is also changing the daily lives of watch retailers, in Israel as elsewhere in the world. At Chronotime, Ro’i Aharoni launched the Chronoclub, a digital watch club that enables him to gather precious information on the clientèle. “We have to use all the means available to us. But we do not try to ‘educate’ them or reinvent the wheel! In the end, there are two approaches: you can do it all from your iPhone, but you’ll lack a human touch; or you can come speak with a connoisseur. My impression is that people do seek out information on the internet, but they still want to come and see the watch in the store before purchasing.”