Analysis: The Pain Of Swiss Watch Industry

Geneva international advanced

It is one of the two top watch exhibitions in the world. It was held in March at the same time as the Basel world watch and Jewellery Fair, another top watch and clock show.

However, the Swiss central bank made a shocking move four days ago. It decided to terminate the three year French franc peg exchange rate system, which brought the Swiss Franc back to its previous state, soaring prices. This caused a threat to the Swiss watch making industry. The Geneva international advanced watch and clock show was also covered with layers of shadows.

What will happen to the Swiss wrist watch industry? What are the new products of the Swiss wrist watch industry? How do they cope with the crisis?

In the first 11 months of 2014,

The export volume rose by two point three percent to 20 billion 400 million francs, accounting for 22 billion 440 million US dollars at the average exchange rate. According to the records of the past years, the situation was not too bad, and the main sales markets were all improved, especially in the US.

In China, as the economy slows down, the government is cracking down on gift giving. Though the clock market is becoming more and more important, it is full of uncertainty.

The biggest market for Hongkong and Swiss watch makers is still opaque, while Russia and some Middle East are worried about geographical and political constraints.

To make matters worse, many European countries are almost stagnant due to different political factors resulting from economic contraction.

However, the Swiss central bank lifted the ceiling of the Swiss Franc to the euro exchange rate of 1.20 to 1 on 15 th.

The sudden end of the exchange rate policy, which has been in operation for more than three years, shocked the global market.

This has pushed up the Swiss Franc exchange rate and posed a serious threat to the Swiss watch making industry.

Fourteen thousand and five hundred dealers, exporters and interested parties are trying to find a way out. The motive force behind the Geneva international advanced watch exhibition, which has been studied for a while, has pointed out that its clocks and jewellery brands, such as Cartire and earl, will rise by five percent to seven percent under the euro standard.

On the other hand, Swatch group (Swatch), a rival and Basel World Watch Jewellery Show, also said its price increase is roughly to the extent that it may also rise to ten percent, though it is cautious about some low-end brands.

Since the action taken by the bank, the franc, which had already been in a period of turbulence, eventually rose to a stable level of fifteen percent to twenty percent against the euro, which led to a very vulnerable period for Swiss watch makers.

In order to meet the planned demand and to cope with the shortage of important parts caused by third parties, the industry suffers from sustained huge investment.

Many manufacturers invest heavily in specialized internalization production, such as clock, watch boxes, watchbands, and even the entire operating parts, which can be purchased from other sources before.

Vacheron Constantin, one of its top brands, will expand its development in Geneva in August.

The expansion of another top brand count will be completed in a year.

Before the exhibition, Patek Philippe, an independent watchmaker, said it would spend 450 million francs on the location of the Geneva international advanced watch exhibition, or at the current rate of 513 million dollars.

The clock manufacturers did not bring the impact of the franc to the eurozone dealers, which also reflected that they preferred to accept low profits or to endanger long-term market growth and affect dealer relations.

If we try to shift all this influence, the sale of the euro area market will be a heavy blow.

On the contrary, if no adjustment is made, it will encourage the original area or the "grey area" to import Switzerland. The clocks priced in euros will take away their business in their native land.

Not surprisingly, the impact of currency has eclipsed everything in the exhibition, including the product discussion of Apple Corp SMARTWATCH, which was supposed to be a topic worthy of study, but in the end it was hardly mentioned.

The main topic of discussion is when prices will rise to an uncontrollable topic: some brands say they will act immediately; others recommend that they wait until February or even March to decide whether to act or not. First, let dealers in the euro area clean up their existing stocks, and if possible, profit from this short sales boom, because buyers will surely lock in products before prices rise.

"For the time being, we will not take any measures at the moment," said Jean-Marc Jacot, chief executive officer of independent tabulating company Parma Jonny.

He said that it is reasonable and correct to share pain with dealers with ultra-low profits. Even though no measures are taken, 50% of the profits can be obtained. Compared with other brands with the same decision, they also have a profit of 40%.

"Usually the best way is to do nothing and let it go with the flow.

This is not a crisis, but a monetary adjustment period. "

Juan Carlos Torres, an experienced CEO at Vacheron Constantin, agrees.

Torres issued a limited edition Harmony series at the Geneva international advanced watch and clock exhibition to celebrate the establishment of 260th anniversary. The limited edition products are priced from the forty-three thousand and eight hundred US double time zone table to the three hundred and fourteen thousand and six hundred dollar Tourbillon chronograph.

Another hot topic is the concern about price customers' Reflection on price rise.

Everyone thought that the price adjustment to the middle end position was the least flexible.

They also expressed their views on the reflection of affluent customers.

Jean-Marc Pontroue, President of the exclusive brand of the group, admitted: "it is difficult to predict the outcome at present.

Will the wealthy Chinese travel to Switzerland in the future? Will more people choose to buy in Paris or Frankfurt? To be honest, I have no way to look at it. "

For those Swiss Franc products with a price of up to one hundred thousand, he believes that as long as the products are valuable, the noble's customers will not be too concerned about the price.

Relatively speaking, StephenForsey, one of the more high-end high perfus brands, is more cautious.

Forsey unveiled a "first in hand" brand watch worth 290 thousand francs, compared with its brand's cheapest 320 thousand worth of watches. "We will try our best to bring a series of irresistible customers," he said.

But at the same time, they will tell them where they are worth.

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The chief executive of the brand believes that Switzerland has already stood the test and confidently told everyone to share the same boat with you.

Even Wilhelm Schmid, which is different from the ordinary German manufacturing (non Swiss made) A.Lange & Sohne brand executive, is expected to have some currency effects, because its product components are from Switzerland.

This shape has also prompted Lange to invest in new facilities. Schmid has unveiled Zeitwerk Minute Repeater, a watch that is different from the traditional one, which combines traditional knitting and mechanical digital display. It is worth 440 thousand euros or 501 thousand and 600 dollars, and says, "if we don't have confidence in it, we will not build it up."

"Switzerland, as in the past, will know how to deal with it," said Georges Kern, CEO of IWC, a rapidly developing subsidiary of the group.

Our productivity is high, team quality is excellent, flexibility is strong, economy is enlightened, and there are a series of difficulties solving experience.

Like others, he believes that the euro's fall in Franc will continue to grow.

The chief executive of the count, Philippe Leopold-Metzger, added, "we have seen that the euro has fallen from 1.6 to 1.2 against franc, and we have also adjusted it.

No matter what difficulties are encountered, only good product problems can be solved.

Many people emphasize that there will be more wealthy customers in the world. This fundamental trend will ensure the demand of watches.

"In the medium term or long term, we are very positive and optimistic," said Nicolas Bos, President of VAN Cleef& Arpels, the top jewelry and watch brand of the group.

"The market will not grow much at 2015, and it will remain stable or even fall, so the market share will be a battle."

Francois-henry Bennahmias, the president of the independent watch business, reminds him that he and many other presidents have mentioned that the appreciation of the franc will inevitably require us to pay attention to the cost again.

But Bennahmias is confident that as long as the product is valuable, its demand will remain in place.

He said: "take all the top brands as an example -- for example, those brands whose price is higher than Rolex, Omega and Breitling, most of their sales last year were not more than 600 thousand to 700 thousand.

Therefore, we are still waiting for us by a large number of potential buyers. If you are doing the right thing, it can only mean that the market has not yet been opened.

The new products that have not yet been announced can make us more sober and have more women watches and jewellery products, which has been considered a trend in last year's exhibition.

Cartire, Lifeng group watches and jewellery brands, has announced more than 100 new products, especially the Cle De Cartie women's products. It focuses on simplicity, featuring novelty modeling, has a new generation of mobile devices, and has two sizes of two polished varnish, including yellow gold and belt, worth thirteen thousand and five hundred euros, or fifteen thousand one hundred and twenty dollars.

The value of diamonds with rectangular diamonds is 850 thousand euros, or 952 thousand dollars.

Cartire's international image, tradition and style director predicted: "next year, creativity is more important than ever."

IWC has devoted its sense of space to its medium version Portonino series, which has been released in the autumn.

The feature of this series is that the frame is studded with diamond, moon face and equipped with automatic device.

The IWC brand is well known for its highly skilled masculine products. This series is a very important element for women's market.

In fact, half of the sales in Asia confirmed Kern's opinion, which he believes has made a brilliant start.

He hinted that IWC could develop more products for women, possibly including the best-selling Portuguese series, the 75th anniversary celebration of this year.

Ralph Laure has also launched a leading women's evening dress series with two sizes.

This series highlights another trend, inspired by decorative art design, showing a black suede Necklace studded with diamonds. This design echoes the diamond version of the tuxedo.

The matching of watches and jewellery is also reflected in the brand of Audemars Pigeut (Audemars Piguet). Its main highlights are the matching of innovative stripes and the "punk wind diamond" high-end watches, priced at $879 thousand and 200. It is said that this accessory is inspired by the brand's surrounding landscape, which takes nine months to build.

"This is a proof," Bennahmias said. "We want to tell you that we can break through the rules."

Van Cleef & Arpels (Van Cleef& Arples)