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ULYSSE NARDIN HANNIBAL MINUTE REPEATER
SECTION II
CHOPARD MILLE MIGLIA GTS POWER CONTROL 01
TIME
HONORED
Watchmakers at Baselworld this week will unveil an array
of styles, from classic to high-tech, as they battle sharp
currency ﬂuctuations in the quest for market share.
■ SURVIVAL
STRATEGIES
■ JEAN-CLAUDE
BIVER’S PLAN FOR
LVMH WATCHES
■ FOOD, FERRIES,
FURNITURE, FUN
CHANEL J12 SKELETON FLYING TOURBILLON
LOUIS VUITTON TAMBOUR EVOLUTION GMT
WWD THURSDAY, MARCH 19, 2015
WWD.COM
SECTION II
WWDBASEL
Ferry across the Rhine.
A look from Minimal Design.
Scene
Bausele Australia
Docks in Basel
Paul Gauguin’s
“Nafea Faa Ipoipo” at
Fondation Beyeler.
From furniture to food to ferries — a few things to
check out in Basel. By Haig Simonian
The Papiermühle
restaurant.
ART CLASS
Art has always been big in Basel, given
the city’s strategic location on the River
Rhine bordering France and Germany
and the plutocratic patrons who made
billions in chemicals and pharmaceuticals. The yearly Art Basel fair draws
thousands, but the recent closure of the
public Kunstmuseum for a lavish renovation and extension will put even more
focus on the beautiful Fondation Beyeler,
a private collection in a leafy suburb.
Links between the two have just
grown closer than ever: among the
highlights of the Beyeler’s stunning
new Paul Gauguin show is the French
artist’s “Nafea Faa Ipoipo” (which
means “When will you marry?” in
Tahitian), a typically colorful South
Seas masterpiece formerly on longterm loan to the Kunstmuseum.
But after the show closes, the work
will vanish from Basel’s walls, ostensibly
because its private owners are unhappy
about the Kunstmuseum’s lengthy facelift. It was widely reported in the art world
that the masterpiece was in fact sold for a
staggering $300 million to ultraacquisitive
Qatar as another trophy asset.
Fondation Beyeler
101 Baselstrasse
4125 Riehen / Basel
Tel.: +41-61-645-9700
Web: fondationbeyeler.ch
Running through June 28
Hours: 10 a.m. to 6 p.m. daily,
Wednesdays until 8 p.m.
IT’S ALWAYS CHRISTMAS
Almost as much an institution as the
galleries, Johann Wanner has for three
decades — and all year-round — been
selling traditional handmade Christmas
ornaments from his landmark shop in the
heart of the old town. Originally into antiques, Wanner discovered glassblowing
and Christmas decorations while on visits to remaining craftsmen in traditional
manufacturing areas of eastern Germany,
northern Poland and Bohemia. His dark,
maroon and gold store is a treasure trove.
Wanner’s services include consultations on decorating Christmas trees,
and for taking a break, he even owns
a “Christmas Parlour” around the corner for coffee, tea and snacks or smallscale entertaining.
Johann Wanner
14 Spalenberg, 4051 Basel
Tel.: +41-61-261-4826
Web: johannwanner.ch
Hours: Monday, 12:30 to 6:30 p.m.;
Tuesday to Friday, 10 a.m. to 6:30 p.m.,
Saturday until 5 p.m.
Johann Wanner’s Christmas shop.
EAT BY THE WATER
The Papiermühle is more of a café than a
restaurant, set near the Rhine for relaxation after visiting the nearby Museum of
Contemporary Art and the Paper Museum
— from which it derives its name.
Lunches are light, with daily specialties
and a changing limited monthly menu
based on fresh seasonal ingredients.
There are cakes and sandwiches
in the afternoons and big brunches on
Sundays. Dinner is served on Fridays
only, with other nights often reserved
for private or corporate entertaining.
Chef Appukuddy Sivalingam and
his team even run to traditional Tamil
meat and ﬁsh curries and vegetarian
dishes from his native Sri Lanka on
special occasions.
Restaurant Papiermühle
35 St. Alban-Tal, 4052 Basel
Tel.: +41-61-272-4848
Web: papiermuehle.ch
NO FRILLS
Furniture is not a Basel specialty, but
Minimal is an exception. As his store’s
name suggests, Stephan Wenger has
made “less is more” his mantra.
Simple but elegant craftsmanship is
the overriding theme, with pieces —
often designed by Wenger himself —
STATS & FACTS
stretching from cool functionality to tables made of old wood still sometimes
bearing the traces of former owners.
Much of the material is sourced from
small, Swiss craft workshops.
Minimal Design
9 Rosshofgasse, 4051 Basel
Tel.: +41-61-262-0140
Web: minimal-design.ch
DON’T FORGET THE FERRYMAN
No trip to Basel would be complete without a ride across the Rhine on one of the
city’s four traditional ferries — Wilde
Maa, Leu, Vogel Gryff or Ueli. All four of
the small, partly covered vessels, which
cross the broad river at different points,
work without motors, using the power
of the strong river current and tethered
cables as their main propulsion.
They’re not just a tourist attraction
— although they do keep longer hours
in the summer — but are popular among
locals, too. The ferries are supported by
a nonproﬁt association and each has its
own dedicated ferryman. And it’s a bargain, too: a one-way trip across the river
costs less than $2 per person.
Further information on locations,
operating times and fares is on the
Web site — though in German only.
Web: faehri.ch
BASELWORLD
(AND JANUARY’S SIHH IN GENEVA)
BASEL POPULATION:
170,000
TRADE FAIR FACILITY:
1.5 MILLION
SQUARE FEET
ARE SWITZERLAND’S TWO
BIGGEST WATCH AND
JEWELRY TRADE SHOWS.
SALES BY SWISS WATCHMAKERS IN 2014:
22.2 BILLION
SWISS FRANCS
($22.53 BILLION)
Bausele is bringing the Australian
outback to Baselworld.
The Sydney-based company
is the first Australian watch
brand to take its products to the
fair, booking a 151-square-foot
stand (#F36) in Hall 2.2 to show
seven new collections and 28
styles, boasting Swiss, as well as
Australian, components.
Prices start at $550 for The
Vintage, a 36-mm watch with
Ronda 507 movement, with the
midrange Yachting II, a new 43-mm
version of Bausele’s best-selling
Yachting style, with IsaSwiss 8270
movement, costing $950 to $1,100.
The most expensive timepiece is the new $3,480 Terra
Australis, a 46-mm watch featuring the Soprod A10 caliber
movement. It’s housed in a case
made from Bauselite, Bausele’s
proprietary lightweight ceramic material that was developed in partnership with
Flinders University’s Centre
for NanoScale Science and
Technology, in South Australia.
The Bausele name is an acronym for “Beyond AUStralian
ELEments,” and every timepiece
has a unique hollow crown ﬁlled
with raw Australian elements —
either beach sand, red earth from
the Red Centre or crushed coal.
Kangaroo leather, which is used
for many of the watchbands, will
be showcased on custom-made
Ross Didier chairs at Bausele’s
Oz-themed Baselworld
booth, which will also
serve St Hugo wines and
play Australian music.
The company
was founded in
2011 by Swiss native Christophe
Hoppe,
former
chief financial officer for TechnoMarine
and the Swatch Group’s
Universo, who moved to
Sydney in 2010 with his
Australian dancer wife. Bausele
The watches cur- Australia’s
rently sell through the Yachting
bausele.com Web site II style.
and select boutiques
in Australia and Indonesia, but
Hoppe said he hopes to grow
his current volume of 2 million
Australian dollars ($1.5 million at
current exchange) tenfold within
the next ﬁve years.
“The idea is to create an
Australian luxury brand — right
now, it’s watches, but I want to do
sunglasses and accessories,” said
Hoppe. “I’m an ex-cfo, I’m an exPWC consultant, I’m an ex-boring
guy, and being able to express my
creativity is pretty cool. The fact
that Australia gave me that opportunity is amazing.”
— PATTY HUNTINGTON
BAUSELE WATCH PHOTO BY ANDREW GREEN, COURTESY OF BAUSELE
2
The master watchmakers of ‘La Fabrique du Temps Louis Vuitton’ have captured the 24 time zones
on a hand-painted dial whose color palette draws inspiration from legendary cities around the world.
The hours move around the dial while at the center, the yellow arrow remains motionless.
ESCALE WORLDTIME. EXPLORE A WORLD OF COLOR.
4 WWD THURSDAY, MARCH 19, 2015
WWD.COM
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WWDBASEL
Biver Winds Up
PHOTO BY DOMINIQUE MAÎTRE
The LVMH watch division chief is just getting started — again. By Joelle Diderich
JEAN-CLAUDE BIVER is a division, which also includes
Bulgari, Chaumet, Fred and
man on the move.
As head of the watch division De Beers. The department’s
at LVMH Moët Hennessy Louis sales in organic terms rose
Vuitton, the 66-year-old execu- 3 percent in the fourth quartive is on the road more often ter, with LVMH noting that
than not, drumming up business throughout 2014, “watches
for the luxury conglomerate’s were penalized by the cauthree Swiss watch brands: Tag tious behavior of multibrand
retailers in an uncertain ecoHeuer, Hublot and Zenith.
On a Tuesday in February, nomic environment.”
Among Biver’s initiatives:
he was in Paris to pore over
contracts with two potential ■ Spearheading a drive to
megapartners in Tag Heuer’s refocus Tag’s offer with inﬁrst smartwatch venture. Two troductions in the $1,000 to
days later, he appeared in New $3,000 segment;
York, posing alongside basket- ■ Reviving the old “Don’t
ball star Dwyane Wade and Crack Under Pressure” adverIsraeli model Bar Refaeli at the tising slogan;
fashion week event introducing ■ Redirecting research-anddevelopment efforts from
her as the new face of Hublot.
Having eased out of day-to- high-performance chronoday operations at Hublot in 2011, graphs toward the planned
leaving his longtime lieuten- smartwatch, which he hopes
ant Ricardo Guadalupe to take to unveil next year.
A handful of competitors,
over as chief executive ofﬁcer,
Jean-Claude Biver
including Swatch Group,
the man considered an icon
will arrive at the
in watch industry circles
been skeptical of the appeal of perhaps be less strong, and if
Baselworld watch
appeared ready to desmartwatches, and initially dis- you want to increase your revand jewelry fair
vote more time to his
missed the Apple watch as “not enues in a market that is not
this year with a
other great passion:
sexy at all.” Biver has since re- expanding, you need to win
connected watch
Making cheese in
vised his opinion of the eagerly market share,” he noted.
in their coffers.
the Swiss Alps.
Biver hopes to achieve this
awaited offering from the tech
Biver is deterInstead, he not
giant, expected to hit stores through his time-tested methmined to make
only took charge
od of focusing on a small numApril 10 for pre-orders.
Tag’s offering difof timepieces at
“The Apple watch is quite ber of models — a technique
ferent and unique,
LVMH last year,
exceptionally coherent with he likens to that of Australian
with innovative apbut also in December
the Apple brand. If they had hunters killing lizards with
plications and microadded the role of ceo
Zenith Academy processors.
taken the same approach poisoned blow darts.
of Tag Heuer — ofﬁChristophe
“The arrow has to be exthat I would have mistakenly
“We are different
cially on an interim
Colomb
Hurricane
followed — a slightly sexier tremely small but very sharp,”
from Swatch Group
basis, though Biver
Grand Voyage
watchmaking approach — I he explained. “That gives a
in that we don’t have
sees himself holding
think it would have been not strong penetration.”
the knowledge, the
the position at least
Accordingly, he scrapped
right. So I had to recognize
capacity nor the protwo years.
that they’re right, in terms of the launch of Tag’s much-hyped
duction expertise
“I can do 10, I
their logic, and I was sorry I new chronograph movement,
in Switzerland for
don’t care,” he says.
the CH80, to focus on producspoke too soon,” he said.
the watch we want
“But I would like to
Biver is reasonably optimis- tion of its existing model, the
to make,” he said,
be able to leave in
tic heading into Basel. Though CH1887. Tag Heuer is also phasnoting that he
two years’ time, not
he agrees with the Federation ing out high-concept watches
uses the Swatch
because I want to,
of the Swiss Watch Industry’s such as the Mikrogirder chronoAccess connected
but because that’s
forecast that Swiss watch ex- graph, unveiled with great fanwatch as a ski pass.
part of my mission:
ports will remain stable this fare in 2012.
“We ﬁgured that
Training people, preIts Basel novelties will
year, he hopes to snatch busiif we want a smartparing a succession.”
span from two vintage-inness from his competitors.
A larger-than-life Hublot Big Bang watch that is not in“We have entered a phase spired Carrera chronographs
ﬁgure with indefatiga- Unico Full Magic spired by the Swatch
where the market’s growth will to the futuristic Monaco V4
Access, we needed to
ble enthusiasm, Biver
Gold watch
Phantom, an all-black
sign partnerships
is reputed for his
carbon-ﬁber watch.
golden touch, turning around with very, very big playMeanwhile, Zenith is
the fortunes of Blancpain and ers,” he added.
refocusing its offer on
If the contracts are
Omega before taking over as
the Chronomaster 1969
inked this spring, Biver
ceo of Hublot in 2004.
chronograph, which
The brand has seen rapid expects to develop a smartcomes equipped with
growth, thanks to the launch watch that, like Tag Heuer,
its award-winning El
of watches like the Big Bang is anchored in the sports
Primero movement. In
and the signing of brand am- universe. But whereas Tag
June, it unveiled a limbassadors including Usain has deep-rooted links to
ited edition of the timeBolt, Pelé and Kobe Bryant. motor racing, the smartpiece in partnership
Biver has also inked a slew watch could also appeal to
with the Rolling Stones.
of timekeeping partnerships fans of soccer or basketball
Biver is also shaking
with organizers of events in- with dedicated functions,
up Tag’s roster of ambashe explained.
cluding the FIFA World Cup.
sadors. He revealed that
“So with a bit
His motto? “Be ﬁrst, be difit will part ways with
of luck, in addiferent, be unique.”
Leonardo DiCaprio, who
Now he has turned his la- tion to having a
has been with the brand
serlike focus to Tag Heuer. watch produced
since 2009, and Cameron
The first order of business with two giants,
Diaz, who joined its roster
was streamlining produc- we will also
in 2012.
tion, which prompted the have innovaIn January, Cara
ﬁrm to ﬁre 46 employees in tions that the
Delevingne was named
September and put another 49 others don’t
as the new face of Tag
on temporary unemployment have,” he said.
Heuer. The announceSuch
zeal
until year-end.
ment was made at an
This resulted in heavy one- might seem surevent during Men’s
The Tag Heuer Carrera Caliber 6 chronograph
time costs that hit revenues at prising from a man
and a Tag Heuer ad featuring Cara Delevingne. Fashion Week in Paris
LVMH’s watches and jewelry who has previously
that was originally due to feature Biver and the British
model locked in a cage with
an adult lion, his tamer and a
lion cub — until the executive
kicked up a stink.
“I said: ‘I’m 66 years old, I
don’t want to die because of some
stupid lion,’” Biver recalled.
“They found an elegant way
to back out of it. They used the
excuse that the lion did not
want to come out of its cage,”
he added with a chuckle.
With her fondness for
wearing onesies and pulling
silly faces, Delevingne might
not seem like a poster girl for
Formula One-inspired watches, but Biver is keen to expand
Tag’s traditional demographic
of 25-to-45-year-olds.
“The 15-to-30 set is exactly
the target audience I’m seeking for Tag. Why? Because
they are my future customers, and someone like Cara
Delevingne, who is very active
on social media — that’s the
communication tool of tomorrow’s generation,” he said.
Tag Heuer will also announce soon that it has recruited DJ David Guetta as
brand ambassador.
The brand will hold its traditional party at the Basel fair,
but Biver is also exploring more
novel ways of reaching out to
distributors. Last month, 600
sales associates were invited
to 15 hotels across the United
States for a cocktail reception at
which the executive addressed
them via an 18-minute movie
projected on giant screens.
“I want to communicate
that Tag Heuer is avantgarde,” he explained.
Notwithstanding the tech
trappings, Biver is anything
but a Big Brother ﬁgure. He
has pledged to have breakfast
with all of Tag Heuer’s 800
staff members in the next few
months. At the two sessions
held so far, he mingled with
around 40 employees for two
hours, sharing his cheese and
answering questions.
“The business world suffers from a lack of proximity.
Bosses are often ex cathedra —
they are either on the top ﬂoor
of the building or somewhere
else entirely. I want everyone
to be in communication with
me. At the end of the breakfast,
everyone gets my home phone
number, work phone number
and e-mail,” he said. “When
you do that as a boss, you create a team, you create a soul,
you create solidarity.”
After decades in the business, Biver would be justiﬁed
in considering he’s seen it all
and done it all. So how does
he keep his fervor intact?
“You know, Paul McCartney
isn’t blasé,” he replied. “He was
in The Beatles, he reached the
pinnacle of success, yet he’s
still singing. He just recorded a
song with Rihanna and Kanye
West. Why? Because you can’t
retire a passion.”
NST 101
COLLECTION
6 WWD THURSDAY, MARCH 19, 2015
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WWDBASEL
Follow the Money
Juggling currency swings and adjusting prices are key to surviving in a difﬁcult market. By Joelle Diderich
and other taxes, and that our dealers
can operate within a sound financial
framework,” explained Thierry Stern,
ceo of Patek Philippe.
Aldo Magada, ceo of Zenith, agreed it
was vital to reassure retailers and consumers in order to restore a measure of
serenity to the market.
“I can’t do much about the economic
environment, so my strategy is simple:
ers could hedge themselves against the
strength of the Swiss franc by buying
companies that record their sales in
other currencies, especially euros.
“Keeping cash in Swiss francs nowadays is a cost, because you have a
negative rate on your bank account,”
he said. His top picks for acquisitions
were Audemars Piguet, Chopard and
Patek Philippe.
Tudor North Flag
TUDOR PHOTO BY OLIVIER FOULON; MOVADO BY GEORGE MAURO STUDIO LLC
Frédérique Constant also appears
GRABBING MARKET SHARE will be
well-poised to ward off the threat of the
the key battle of Baselworld this year.
Apple Watch, set to go on sale in April.
The Federation of the Swiss Watch
The Geneva-based firm and its sister
Industry predicts Swiss watch exbrand Alpina will arrive in Basel with
ports will remain stable in 2015 after
more than 10 models of their horologieking out 1.9 percent growth last year.
Therefore, brands must win a bigger cal smartwatches for women and men.
Described as “the bridge between
slice of the pie in order to post growth.
Silicon Valley and Switzerland,” they
To do this, they will have to vanquish hurdles including sharp curren- feature traditional watch faces rather
cy fluctuations, a recent slowdown in than digital screens, and are the fruit
of a venture with California-based
U.S. sales growth, political turmoil in
Fullpower Technologies, which aims to
Ukraine and Hong Kong, and the potential impact of lower oil prices on Middle bring its MotionX activity tracking technology to the Swiss watch industry.
Eastern demand.
The fair’s organizers predict busiLeading watchmakers including Swatch
ness as usual. The number of exhibiGroup and Patek Philippe have adjusted
prices ahead of the show in reaction to the tors is set to remain stable at 1,500, with
150,000 visitors and 4,000 journalists
decision by the Swiss National Bank in
expected to attend.
January to de-peg the Swiss franc
“[Exhibitors] have high
from the euro, causing the curexpectations in terms
rency to appreciate sharply
of buyers coming and
not only against the euro,
the media impact of
but also against the dollar
Baselworld all around
and the yen.
the world. They are
Others, like Ulysse
convinced that it will
Nardin, have shortened
give a positive impact
their staff ’s working
to the world market in
hours as volatile dewatches and jewelry,”
mand for luxury timesaid Baselworld director
pieces forces them to
Sylvie Ritter.
scale back production.
Swatch Group ceo Nick
Tough market conditions
Hayek Jr. stoked market buzz by
notwithstanding, executives
— mindful of gaining a mental Movado Bold announcing that the world’s biggest watchmaker plans to bring
edge on their competitors — proa smartwatch with functions
jected confidence heading into
including communication,
the show, which runs today
mobile payments at stores
through March 26.
and applications that
“The current economic
work with Windows and
situation is challengAndroid.
ing for every player in
The group, whose
the luxury business,”
brands range from highFawaz Gruosi, founder
end Blancpain timeand creative director of
pieces to plastic Swatch
Swiss jewelry and watch
watches, has raised pricbrand de Grisogono, aces for some of its brands
knowledged. “Forecasts
between 5 and 7 percent in
are difficult to make, and
select markets to compensate
markets are fluctuating and
for the unfavorable currency
very unstable.”
situation, which Hayek likened
He added, “Luckily, our
Louis Vuitton
segment is less impacted, as Escale Time Zone to a “tsunami.”
Patek Philippe said even
hard luxury products seem
before the SNB’s surprise move,
to hold on well.”
that currency fluctuations creSwiss watch exports rose 3.7
ated sharp distortions in
percent in January after two
the prices of its watches
months of losses, though
in different markets. In
analysts said this partly
early January, a complireflected a surge in orcated watch such as its
ders from retailers beRef. 5960 annual calfore major watch players
endar chronograph in
push through price hikes
platinum cost 33 percent
in select markets, in parmore in Hong Kong than
ticular the euro zone.
it did in Switzerland.
Figures for February are
“The significant price
due to be published today.
differences in the magni“I think the mood is still
tude of plus-20 to plus-25 perfairly positive. In some markets
there is clearly so much disrup- Frédérique Constant cent in Asia and the U.S. compared to Switzerland and the
tion that it hurts sales, but we
Swiss Horological
euro zone, attributable mostly
see, for example, already in
Smartwatch
to foreign exchange trends,
February, that it is pretty much
rebounding, if we look at the global level,” destabilizes local markets by enticing
customers to buy their watches abroad
said Peter Stas, cofounder and chief exand could lead to the development of a
ecutive officer of Frédérique Constant.
gray market,” it said in a statement.
Benefiting from its positioning in the
Patek Philippe therefore cut prices
accessible luxury segment, the brand
outperformed the market last year, by 5 percent in Switzerland, 3 percent in
posting sales growth of 16 percent. In Asia and 7 percent in North and South
America, as well as Hong Kong. It simulthe wake of the Swiss bank’s decision,
taneously hiked prices by 7 percent in
it raised prices in the euro zone by 8
percent and lowered them by 5 percent Europe and 5 percent in Japan, beginning
in Switzerland and between 3 and 7 per- Feb. 10 and effective until the end of June.
“Within this new and difficult concent in Asia.
text, it is my objective to make sure that
“I see less competition and I see continuous development in growth for our our customers in the individual markets
can expect fair prices, excluding VAT
company,” Stas predicted.
It is to ensure that Zenith products are
quite homogenous in terms of price,”
he said. “I have to avoid creating imbalances that could trigger an avalanche on
one side or the other.”
Magada noted that even if the euro
stabilizes at around 1.08 Swiss francs,
versus the low of 0.97 francs hit in
January and the previously maintained cap of 1.20 francs, it is also losing
ground against the dollar, which has repercussions for territories as far afield
as Dubai, Hong Kong and China.
Magada is among a slew of executives
in new roles at Basel. Among the other
ceo’s appointed in the last 12 months are
Jean-Frédéric Dufour at Rolex; JeanClaude Biver at Tag Heuer; Antonio
Calce at Sowind Group, parent to GirardPerregaux and JeanRichard; Stéphane
Linder at Gucci Watches and Jewelry, and
Laurent Dordet at La Montre Hermès.
Efraim Grinberg, chairman and ceo
of Movado Group Inc., noted that it recently hired former Apple executive Jo
An Lawson as general manager of wearable devices. “But we are moving in that
area cautiously, because we want to
make sure that we can introduce beautiful products,” he said.
The group also has a new president,
Ricardo Quintero, in charge of accelerating its global expansion.
“I think there are always opportunities. You have an improving economy in
the U.S., and I understand that there are
challenges in other parts of the world,”
Grinberg noted, “but you also have declining oil prices, which ultimately benefits consumers all over the world.”
Movado Group, which produces
watches under brand names including
Movado, Ebel, Coach, Tommy Hilfiger,
Hugo Boss and Scuderia Ferrari, raised
its prices on March 1 for the first time in
six years. But Grinberg expects markets
to have partially digested the Swiss franc
shock by the time the fair kicks off.
“Currencies will begin to settle to
their natural balance, and I think that
will create a better air of calmness in
the industry,” he said.
Mario Ortelli, senior analyst at
Bernstein Research, said Swiss play-
“We believe that Richemont will
focus its attention on high-end brands,
and Swatch Group on midtier brands.
In the case of Swatch, any acquisition
they make could potentially run into antitrust issues because of their dominant
market position in movement production,” he added.
The central bank decision has fueled
fears that the export-dependent Swiss
economy will slide into recession. The
KOF Swiss Economic Institute, a leading
economic think thank, expects Swiss gross
domestic product to fall by 0.5 percent in
2015 and remain stagnant next year.
“Investments in equipment will become
increasingly restrained as the exchange
rate adjustment has made Switzerland
even less attractive as a manufacturing location, having already been hampered by
doubts over progress in the bilateral approach,” it said in a recent report.
Nonetheless, several major players
are sticking with plans to ramp up their
output from Switzerland.
Movado Group is launching Hugo Boss
Swiss Made timepieces, though the sudden currency swing means they will be
priced around 8 percent higher than initially planned at 399 euros to 699 euros, or
around $450 to $800 at current exchange.
Fossil Group is moving ahead with
long-term plans to increase its capacities to assemble mechanical movements
and manufacture cases in Switzerland
as the firm expands its selection of
Swiss-made products for brands such as
Emporio Armani, Burberry and Fossil.
“Our diversified manufacturing
base and global distribution puts us in
a strong position to limit impact from
currency fluctuations,” said Martin
Frey, managing director of Fossil Group
Europe. “We react more to market-driven changes than currency-driven changes. Investing in vertical manufacturing
in Switzerland continues to be a big opportunity for us and our strategy will not
change based on recent policy changes.”
The group expects to produce close
to 200,000 movements in 2015, up from
110,000 in 2014. Its Basel launches will
include limited-edition Diesel timepieces
featuring Swiss movements, and it is work-
WWD THURSDAY, MARCH 19, 2015 7
WWD.COM
Baselworld runs today through March 26 at the Messe fairgrounds.
Kering’s Watch Strategy
some ways, they don’t really understand these [emerging] customers, or don’t know how to influence and touch them, teach them
or introduce themselves to them
in the right way. I think that is the
challenge and the opportunity
that everybody is going through
right now in China,” Yao said.
In a recent report, Bernstein
Research forecast that the rise
of these sophisticated consumers
and an improvement in the political situation in Hong Kong will
contribute toward ending the destocking cycle in Mainland China
in the second half of the year.
With the effect of the clampdown on Chinese gifting finally
stripped from comparable data,
Bernstein forecasts the global luxury watch market could post growth
of 3 percent in 2015, though it sees
’’
Forecasts are difficult to make,
and markets are fluctuating
and very unstable.
’’
— FAWAZ GRUOSI, DE GRISOGONO
China, the number-three market
for Swiss watch exports in 2014.
Exports to China fell 3.1 percent
last year and were down more
than 15 percent from 2012 levels,
according to the Federation of the
Swiss Watch Industry.
The drop in demand has been
largely blamed on a government anticorruption campaign, but Franklin
Yao, managing partner and cofounder of Shanghai-based consultancy
SmithStreet, believes the shifts in
the Chinese market run deeper.
“I wish that I could say that
2014 will be like a bad dream that
you wake up from and in 2015, everything will go back to the way
that it was, but that’s not going to
be the case,” he said.
Yao sees two main factors at
play: Very wealthy consumers in
China are starting to spend in a
more rational way, while a credit
crunch is limiting access to capital for rich entrepreneurs.
On the upside, a generation of
upper middle-class consumers is
emerging and they are spending
more than they were before.
“They might be two or three
years out from being completely
immersed in spending on luxury
as part of their lifestyle,” he predicted. Capturing these consumers
will require a more sophisticated
approach to retail and marketing.
“I think the fundamental
issue for brands in China is that
they have been really set up to
serve the VIP customer, and they
haven’t been set up to serve this
emerging customer. Maybe in
a two-speed recovery, with midpriced watches recovering more
quickly than those at the high end.
“We argue that the rising tide
of demand will not float all boats,
and the most ‘desirable’ brands
with evergreen products or compelling new launches will emerge
as clear winners,” it said.
“In a market where over-exposed brands are in decline, and
where customer sophistication is
rising internationally, the need
to innovate is higher than ever,”
Bernstein added.
Louis Vuitton, which launched
its first watch in 2002, is banking
on creative design as its advantage
in a competitive playing field. It’s
launching a more accessible version of its Escale Worldtime men’s
watch, unveiled last year, featuring a simplified movement and a
printed dial, in lieu of the original
hand-painted version.
The timepiece will retail for
5,200 euros ($5,900), compared with
$67,600 for the high-end version.
“We think it’s a strong idea. I
also think it’s different from everything already out on the market,” said Hamdi Chatti, vice president of fine jewelry and watches
at Louis Vuitton.
“I think a lot of customers will
continue to buy beautiful watches,
but they will gravitate either toward
very classic timepieces or something very original and new. We
don’t have 150 years of watchmaking
history, though we do have a 160year brand history. Therefore, our
credo is to innovate,” he concluded.
WWD: What was your assessment of the
watch-and-jewelry division at Kering when
you took over, and what were the initial
measures you took?
Albert Bensoussan: Kering remains a mediumsized group in terms of watches and jewelry
in light of the heavy sector consolidation that
has taken place over the last 15 years. At the
same time, inside this newly created division,
there are seven brands with a distinct and
separate identity that don’t cannibalize each
other. They mostly have distinct business
models and organizations, which facilitates
the task of analysis and collaboration with
each brand. This also makes it easier to
develop different visions for strategic
development of brands that range from
those that one could qualify as being at
the start-up stage, like Qeelin, to others
that already boast a long history and many
achievements, as is the case for Ulysse
Nardin and Girard-Perregaux
in watches, and Boucheron and
Pomellato in jewelry.
At Kering, we favor the
organic development and the
independence of each brand.
The principle of ‘One brand, one
ceo’ made sense to us, [so] we
streamlined the organization.
An important part of my role is
to be a sparring partner to the
brands, an ambassador for their
messages and needs at the group
level, but also a challenger.
WWD: How did Kering’s watch and
jewelry division perform in 2014
and what is the outlook for 2015?
A.B.: In 2014, watches and jewelry
faced volatile market conditions.
Performances of our brands
were positive in jewelry, in
Albert
Bensoussan
PHOTO BY DOMINIQUE MAÎTRE
ing on a ladies’ mechanical movement to be marketed next year.
Meanwhile, Tudor — the sister brand of Rolex — will unveil
its first manufactured movement
as it enters the next phase of the
brand’s global relaunch, initiated
in 2007. The Tudor MT5621 caliber will initially equip its North
Flag model, which boasts a power
reserve of around 70 hours.
“Manufacturing an in-house
movement allows for more industrial independence,” said Philippe
Peverelli, director of Tudor Montres.
“The introduction of this new caliber is the first step of a major industrial strategy aimed at equipping
more and more Tudor watches with
Tudor’s own movements.”
Indeed, innovation will be key
to capturing increasingly discerning consumers, especially in
ALBERT BENSOUSSAN’S arrival at Kering
signaled that, while it is a relatively modest
player in hard luxury, the French group is
serious about growing the category.
The former LVMH executive took over
as chief executive ofﬁcer of Kering’s
newly created luxury watches and jewelry
division in May 2014, just as growth in the
segment was slowing because of a sharp
reduction in demand from Asia and a drop
in spending by Russian tourists.
Sales of hard luxury grew just 1 percent
at constant exchange rates in 2014,
according to an estimate by Bain & Co.
Bensoussan is in charge of seven
brands, ranging from Place Vendôme
jeweler Boucheron to more recent
acquisitions such as Sowind Group, Qeelin
and Pomellato. Ulysse Nardin joined the
fold on Nov. 1, while Gucci Watches and
Jewelry is operated separately under the
responsibility of Gucci ceo Marco Bizzarri.
In his ﬁrst year on the job, Bensoussan
installed new management at several
brands. Antonio Calce took over as ceo
of Sowind Group, parent of Swiss luxury
watch brands Girard-Perregaux and
JeanRichard, succeeding Michele Soﬁsti.
And Christophe Artaux was named ceo of
Qeelin, the Chinese jewelry brand, after
its cofounder, Guillaume Brochard, left to
pursue other interests.
Kering group revenues rose 4 percent in
2014 to 10.04 billion euros, or $13.34 billion
at average exchange. The luxury division
generated sales of 6.76 billion euros, or $8.98
billion, with watches representing 4 percent
of the total and jewelry 6 percent.
Though it does not break out detailed
ﬁgures, the group said watches and jewelry
— excluding Gucci — posted a mixed
performance last year, with a drop in
revenues at Sowind Group due to a shakeup of its distribution network in Asia for
Girard-Perregaux and volatile tourist ﬂows
in Europe and the Middle East.
In an interview, Bensoussan discussed
the challenging economy, cleaning house
and fostering organic growth.
— J.D.
particular at Boucheron, which delivered
a more-than-satisfactory year. In watches,
Sowind remained under pressure in a
market climate still marked by caution of
wholesalers. Regarding 2015, at this point
there is still market volatility [in the watch
industry] and distributors remain cautious.
WWD: Can you provide details about Ulysse
Nardin’s decision to shorten working hours
for its staff in response to slowing demand?
A.B.: This concerns only a limited [number]
of the staff. Historically, Ulysse Nardin
has been a very autonomous brand. The
management is used to taking temporary
measures to preserve the brand’s future
when the market environment toughens.
Several other brands in the industrial hub
of La Chaux-de-Fonds announced similar
measures in November and December. The
measures implemented at Ulysse Nardin
are not surprising, but rather reflect a
commitment to sound management.
WWD: Kering chairman and ceo François-
Henri Pinault recently referred to possible
synergies between Girard-Perregaux and
Ulysse Nardin. Can you provide specifics?
A.B.: We are very attached to preserving the
identity and independence of each brand.
It is not a question of being territorial or
refusing to share resources. Each brand has
techniques, know-how and product lines
that are specific to them, but sometimes
also similar manufacturing facilities. The
brands have no plan to manufacture for
each other or exchange parts. However, we
do exchange information regarding knowhow, industrial processes and resources
such as suppliers.
We also stick to a simple principle of
having a speciﬁc distribution network for
each brand. With few exceptions, they
don’t share sales teams. When we do share
resources, it tends to be on the ﬁnancial,
accounting, administrative and logistics side.
WWD: There are reports that the marketing
team at JeanRichard has been dismissed.
What is the future of the brand?
A.B.: There has been a big repositioning
at JeanRichard that is now nearing
completion. We’ve revised the internal
organization to reflect the fact that
Girard-Perregaux accounts for the bulk
of revenues at Sowind Group, so it’s
natural for the focus to be on [that
brand]. JeanRichard is what we
would consider a start-up brand
within the division, and, as such, we
want to adapt its modus operandi
and costs to its business model.
WWD: What are your strategic
priorities for 2015?
A.B.: Our mission is to focus on the
organic growth of our brands and
to help them increase their global
presence, develop new collections
and hone their product pipeline.
It’s a long-term process that does not
require any changes or turnaround
in the identity of each house,
Girard-Perregaux but rather an emphasis on
Vintage 1945 Lady quality of execution.
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