Watching out for watches

October 2003

The good news… watch sales in the UK are doing fine, right across the board, at all price points. The strange news… The Bank of England has just announced that personal financial debts in the UK amount to £888 billion, which means that every one of us, man, woman or child, owes a bank, a credit card scheme, or somebody, about £15,000. Have we all just bought for ourselves a nice additional wristwatch… or what is going on?

My thoughts are prompted by the recent news from the FH that, during the first six months of 2003, exports of watches by value from Switzerland into the United Kingdom increased by no less than 10.3%. Now, of course, our retailers' stock rooms may be overflowing with unsold timepieces, perhaps awaiting those often mythical pre-Christmas buying sprees. Or maybe sales are, put simply, very good. I decided to ring around to try to establish what is indeed going on.

Jean-Marc Lacave is the CEO of the LVMH group in the UK, and confirmed to me that the year started slowly, but picked up sharply during the March-June period. His top brand is TAG Heuer, which retails through about 350 shops (called 'doors' in the trade), and its strong performance has been aided by Tiger Woods' first appearance in a TV advertisement, which first went out in April. He also guided the fortunes in the UK of Ebel, through 120 doors where sales are up on last year, with new lines coming through. Zenith has an exclusive 50 doors, and is, as ever, driven, as it were, by the El Primero and Elite movements, which feature very prominently in advertisements here. Chaumet's doors number just 10, including its shop in Knightsbridge. The brand that is really flying for LVMH is Dior. Its doors total 150 at present, but many more are being added, on the back of the fact that Dior's unit sales doubled in the first six months this year, against 2002.

Selfridges, the huge department store in London's busiest shopping thoroughfare, Oxford Street, houses the International Watch Room and over 40 brands. IWC and Dunhill are now back on display, and benefit from the department's reliance on customers' belief that certain brands can actually be trusted, regardless of model choice. The word 'trust' is one that the manager there frequently hears, and so do I in my many conversations. It comes down to the power of advertising, and that the watches work!

Patek Philippe is a widely quoted case in point, and one that Mark Hearn, who handles its sales operation in this country, well appreciates. He calls his sales since April “excellent”, with Russians visible, and better than ever sales outside London, and “the Euro exchange rate has helped us too.”

Jewellery watches are selling very well this year. Theo Fennell, who has a top-end store in central London which attracts a famous clientele (yes, including David Beckham!), put a clear perspective to me: “… the more diamonds the better please.” He sells lots of Franck Muller, and is enjoying a newish brand, Jacob & Co., which he found at BaselWorld. This year's event also provided William & Son (a Mayfair shop run by William Asprey) with a new brand to stock. It is Voltime, and, to quote Asprey, “at one point earlier this year we were selling a Voltime once a day.” He also stocks, exclusively, the British Masters makes, and F.-P. Journe.

Mike Luckford, Sales Manager for Hermès, has suggested to me that the increase in Swiss exports may be partly accounted for by higher ex-factory prices. His shops' figures for the year so far are well up. Elsewhere he reckons that Rolex, Omega, Longines and Raymond Weil are enjoying solid sales, but suspects that Gucci and some of the leading Richemont brands “are having a hard time.” He is looking forward to the new Dressage model from his company this October.

Over at Cartier, Arnaud Bamberger, Managing Director, reports demand for Richemont brands to be “stable”, highlights IWC and Panerai, and looks forward to expanding the market here for Vacheron Constantin. He also made an interesting point to me about that increase in Swiss exports to the UK. Perhaps, he suggested, Swiss makers have been overcoming their own supply problems, and are more readily meeting previously existing marketplace demands. So perhaps we need to talk less of the Iraq war, SARS, more Russians, fewer Middle East customers, Americans in London, September 11th, etc., and more about the increasing general desire to own more than one wristwatch!

PS: Long hot summer continues here; very unEnglish!