G&G Joyeros storefront in Lima, Peru

G&G Joyeros storefront in Lima, Peru

Swiss Brands Start Turning to Latin America

New York Times, November 25, 2010

LIMA — Earlier this year, Jack Gomberoff and Michael Grimberg, partners in G&G Joyeros, a jeweler based in the upscale Miraflores neighborhood here, treated 15 Peruvian clients to the ultimate male-bonding trip.

Meals at Michelin-starred restaurants and first-class accommodations in Geneva provided a sumptuous backdrop to the 10-day journey. But what really drew the men was the opportunity to visit five high-end Swiss watch factories and stake claims on their 2010 models, many of which had just been presented at the Baselworld luxury fair. In exchange for such rarefied access, G&G asked the men to abide by just one rule.

“No couples,” Mr. Gomberoff said. “We didn’t want the wives saying, ‘No, you can’t buy that.”’

The absence of spouses proved fruitful for the watchmakers, to say the least. The men, aged 30 to 79, and representing a mix of industries — textiles, fishing, mining — placed $3 million in orders, collectively, for timepieces ranging from $25,000 to $250,000, including limited-edition tourbillons, diamond-studded complications, and jewelry watches for their wives, who, as it happens, weren’t the only ones left behind.

“We had demand from 25 people, but the factories couldn’t handle that many,” Mr. Gomberoff said.

The strength and sophistication of the Latin American market for high-end timepieces may come as a surprise to casual observers of the Swiss watch business. In recent years, the industry has unequivocally shifted its focus to Asia, the receiving end of more than half of Switzerland’s watch exports.

But the excitement over Asia has obscured the growing potential of Latin America. Long considered a luxury backwoods of high duties, challenging bureaucracies and rampant trans-shipping — a term referring to covert distribution tactics employed by some authorized retailers to siphon merchandise to the gray market — the region is now home to a thriving collector community that is attracting Switzerland’s serious attention.

“We’ve always dreamed about South America like we’ve dreamed about China,” said Dominique Y. Gerente, vice president in charge of Latin America for Richard Mille Americas, the Los Angeles-based distributor of the prestige Swiss brand. “Deep down, they have this interest in watches that can be hard to find in America.”

It is not the first time Switzerland has taken notice of the region. When Hugo Buchser began Europa Star, a watch trade journal based in Geneva, in 1927, his first issues were sent to Brazil and Argentina.

“These markets were El Dorados for the Swiss,” said Philippe Maillard, the publisher of Europa Star.

Patek Philippe was among the first on the scene in 1872, when the firm signed the jeweler Gondolo & Labouriau, in Rio de Janeiro, as its exclusive Brazilian distributor. The partnership spawned a club of loyal collectors, nicknamed the “Gondolo Gang,” as well as a specially commissioned pocket watch, the Chronometro Gondolo, which today lends its name to the Gondolo collection of wristwatches.

Gondolo & Labouriau finds its modern-day equivalent in Berger Joyeros, a retailer based in Mexico City. Founded as a diamond business in 1912, the company maintains a flagship boutique in the upscale district of Polanco, where it sells 50 or more watch brands to a coterie of big spenders.

“It is difficult for the brand presidents to understand why in Mexico we’re doing this tremendous business,” said Berger’s watch buyer, Eric Kogan, alluding to a recent visit by Patek Philippe’s president, Thierry Stern. “But he spoke to the clients and he was very impressed. They know the references by heart.”

Numerous watch executives have come to similar conclusions about the booming Mexican market after participating in the Salón Internacional Alta Relojería, an invitation-only annual gathering of watch lovers at the Four Seasons Hotel in Mexico City. Held in late September, the four-year-old event drew more than 3,300 attendees, including 438 journalists.