Vacheron Constantin Ultra-Fine 1955

Vacheron Constantin Ultra-Fine 1955

Gears Mesh Again for Swiss Exports

New York Times, March 17, 2010

BASEL, SWITZERLAND — In the fat years, large-faced, chunky sports watches were all the rage. So what is the message behind the return this year to lean and slender?

At the Baselworld luxury watch fair this week, spring is in the air. After the freeze last year, Swiss watch exports are back to growth; wholesale inventories have reportedly shrunk, and expensive timepieces are selling again, buoyed by resilient Asian economies and a better-than-expected holiday season. But caution remains the rule.

“The question is: Did we touch the bottom or a bottom?” said Jean Paul Girardin, vice president of Breitling. “There is a recovery, for sure. But we are still a bit suspicious.”

In 2009, Switzerland’s watch exports slid 22 percent from the previous year, to 13.2 billion Swiss francs, or $12.2 billion, according to the Federation of the Swiss Watch Industry.

But anecdotal evidence and industry data suggest the tide turned late last year. Strong retail sales since November have helped to empty the wholesale pipelines, inspiring retailers to start restocking, particularly in the hard-hit U.S. market. By December, Swiss watch exports were only 7.2 percent below year-earlier levels, and in January they actually grew by 2.7 percent, the federation’s figures show.

“Our sell-through is up over 40 percent,” Philippe Bonay, president of A. Lange & Söhne North America, said in mid-February, referring to the proportion of inventory purchased by consumers. “There’s been a sharp turnaround among the top retailers and that has had a big effect.”

The relief was palpable at the buying shows in Geneva this year, when exhibitors at the Salon de la Haute Horlogerie and the Geneva Time Exhibition, a new event showing the work of 38 independent watchmakers, presented timepieces notable for slender profiles, clean and sober aesthetics and classic combinations of the complex features known as complications.

Vacheron Constantin paid homage to its mid- 20th century heyday of manufacturing thin watches with a low-profile addition to its Historiques collection. The Ultra-Fine 1955, at 4.10 millimeters, or 0.16 inches thick, is the world’s slenderest mechanical hand-wound watch.

At Ralph Lauren Watches, a year-old collaboration between Ralph Lauren and Financière Richemont, a planned foray into Asia has resulted in a slight downsizing of the brand’s Slim Classique collection.

“We wanted to target a clientele with smaller wrists,” said Guy Chatillon, the chief executive.

The reduction in case sizes has coincided with a drop in prices, as Swiss watchmakers have adjusted to a changed market.

“We had last year a move to less expensive watches,” said Jean-Daniel Pasche, president of the federation, citing falling demand for watches with export prices exceeding 3,000 francs.

At Baselworld this week, Breitling’s answer to that shift is the Superocean, a steel diver’s watch competitively priced at $2,695.

Chopard, meanwhile, is presenting its L.U.C. 1937 chronometer, incorporating a new automatic movement manufactured in-house, expected to retail for less than €10,000, or $13,500, considered an entry price for such an offering, said Karl-Friedrich Scheufele, the company’s president.

Higher up the price ladder, however, Chopard — which is celebrating its 150th anniversary this year — is also unveiling a limited edition in its manufacture collection, nicknamed the L.U.C. 150 “All In One” watch for its medley of complicated features.

For those rarer pieces, “we are looking at around €250,000,” Mr. Scheufele said.

The wide differential in the prices of the two Chopard novelties is evidence that, for all the emphasis on affordability, the high end of the Swiss watch market is still alive and well.

There is a substantial difference, however, between the six-figure models that are coming to market now and many of the high-priced pre-recession offerings.