Fendi- Crazy About Their New Watch - 29/06/10

It’s a nice face but not sure about the name. Fendi, the Italian Roman born company created in 1925 with a wonderful injection of key IT handbags over the years (remember the Baguette bag mania circa 1997 and the Spy Bag 2005), has now released the Crazy Carat watch- the first fine jewellery timepiece to be designed by the brand. I suppose if you had asked us about naming a handbag Baguette we may have said 'je ne comprend pas' or 'non capisco' in 1997 but it is now an accepted name that runs off the lips, and perhaps Crazy Carat will have the same effect. Yet, we just can’t help thinking of Crazy Horse!

The timepiece really is unique and innovative, especially with LVMH group being the sole majority shareholder of Fendi, coupled with the creative drive of Fendi creative director, Silvia Venturini Fendi. Retailing from US $2,400 to $15,000, with the option of personalising your timepiece with custom made carats, you can expect to be waiting six months or more for your design.
Image credit: wwd.com

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Cartier Launch New Men's Watch In Sydney - 25/06/10

The anticipated Calibre de Cartier, Cartier’s newest watch for men, was unveiled in Australia on Wednesday. The launch was held at the Blue Hotel in Sydney’s Woolloomooloo, and involved an impressive short film to truly capture the essence of this new timepiece.

Targeted firmly at the male market, the Calibre de Cartier is strong and confident, reinterpreting the round form in watchmaking. What is most important about this new timepiece is that it honours Cartier’s first in-house automatic movement. This is certainly no mean feat when it comes to timepieces and the manufacturing of the total product.

Image credit: worldtempus.com

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April A Great Month For Swiss Exports - 01/6/10

Some great news for the timepiece industry as Swiss exports rose in April. The demand is coming straight from Asia, with China and Hong Kong leading the way in the request for luxury watches.

The result has seen Switzerland’s merchandise trade surplus rise at a staggering rate, from 2.022 billion francs from a previous 1.696 billion in March.

With results like these, we are sure Switzerland will be saying a huge thank you, or rather, merci beaucoup, to the demanding markets.

Image credit: swatchgroup.com

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Bulgari Watch Revenue Is Down, But Australian Sales Are Strong – 20/4/10

Although the mood has been described as brighter for the luxury watch industry, Bulgari is said to be doing it tough.

We read in the Financial Times that the group fell to a net loss of €47.1m (US$63.9m) in 2009 from a profit of €82.9m in 2008. Sales of watches were down 24.5 percent, jewellery was down 14.4 percent, perfumes slid by 14.9 percent and accessories by 27.2 percent.

Bulgari’s CEO, Francesco Trapani, said he expects Bulgari to produce higher turnover this year, but “there will not be a real recovery before the second half of 2010 and, in terms of absolute value, it will not be back to the levels of 2007 before 2011-12”.

Trapani also said, “Customers are now more cautious and demanding in spending, and a logo is not enough any more to justify a high price.”

An interesting finding in this article was that “sales in directly owned stores were stronger in China, South Korea and Australia.” We thought it was good that Australia was mentioned as a positive performing country, as our results are often amalgamated into Asia Pacific results.

Ironically on the same day, we found an article in the Financial Times (entitled Swiss Watchmakers Wind Up For A Brighter Year) with more proof that watch exports are recovering. So perhaps things will also brighten for Bulgari, but then again, wasn't the CEO of Swatch Group recently rumoured to be eyeing the Italian brand for a potential buyout? (Click here for our earlier report).

Image credit: lussori.com.

Richemont’s IWC: A Standout Brand To Watch – 15/4/10

Today, we turn our luxury spotlight onto luxury watch company IWC.

What we like about this company is their innovation and "zealous" brand protection. We read in the Times Online that they released a weighty 4-kilo book last month to celebrate their history.

Another interesting revelation in this article is IWC’s male-skewed audience. It supposedly sells 70 percent of its watches to men.

Whilst speaking about the global economy, IWC CEO Georges Kern, said "The brands that are losing ground now are those with a loose image.” Kern believes brands that are successful are those with history, tradition, values, content and reassure consumers in terms of quality, with classic designs.

Kerns also recognises that more than anything, luxury is about selling a dream. He said, "We're storytellers. We have inspiring names and mythical products." Not that this is new news, most CEOs will roll out this passionate rhetoric, however the difference is those that 'do' and those that say but don't do. IWC is a 'doer' and therefore is a standout here.

Watch image courtesy of www.iwc.com

Swatch Is Not In Talks To Buy Bulgari – 31/3/10

Swatch are tripping over themselves to back away from the 'rumour' of a takeover let alone a hostile one... (see yesterday’s MO Down for details). It's got many a radar up and also a share price rise for Bulgari, not a bad result. Should Bulgari consider?

A Reuters article revealed that Bulgari says that the “controlling family is not keen to sell.” Swatch’s CEO, Nick Hayek, said, "The Swatch Group has not expressed any desire to acquire Bulgari, and Bulgari has not expressed either the desire to be bought by Swatch Group."

What is interesting to note is that "Bulgari shares rose as much as 5 percent on Monday after Swatch Group chief executive Nick Hayek told the German magazine Focus he regarded the Italian jeweller as a potential big brand that could be developed." The power of Swatch it seems does represent additional value to existing and future shareholders.

Image courtesy of theswisscenter.wordpress.com

Swatch To Buy Bulgari? – 30/3/10

We don’t have a definite “yes” to that question, but a Reuters article has evidence that the Swatch Group “had signalled interest in Italy’s luxury watchmaker Bulgari.”

Swatch’s CEO, Nick Hayek (pictured), said, "I do not deny that there are interesting big brands that have potential to develop," and he cited Bulgari as "an example."

We find this development most interesting. It wasn’t that long ago that we were wondering if LVMH were interested in buying Bulgari (see our 16 February report).

Still on the luxury watch industry, a WWD Baselworld round-up has suggested “the mood is brighter” at Baselworld.

Hayek was also causing waves at Baselworld, with WWD suggesting:
"In many cases, brands had a hidden agenda for showcasing their expertise. Swatch Group CEO Nick Hayek has threatened to stop supplying the rest of the industry with movements and components, and the issue of who makes the parts that go into the engine of a watch has become a hot topic. Most brands rely on Swatch to supply them with movements, although other suppliers exist, namely in Asia. Hayek warned that the Swiss watch sector faces a crisis unless there is more innovation and investment."...

Image credit: www.daylife.com

Luxury News In Brief – 25/3/10

Reports have emerged from the Basel World Watch Fair that the luxury watch industry is not confident that rising watch sales is a true sign of recovery.

Luc Perramond, Hermes’ watch CEO, said the Swiss watch industry could still see a double dip after showing signs of recovery. He is also worried about “a possible real-estate bubble” in China. "One has to remain cool-headed," he told Reuters.

Philippe Pascale, head of LVMH watches and jewellery, is also concerned about the sector, suggesting rising orders might have more to do with retailers than consumers.

According to the Business Financial News wire – Burberry shares have been downgraded to an add from a buy.

Image credit: hermes.com

Luxury News In Brief – 22/3/10

After “reporting its first quarterly loss in 10 years” (see last week’s MO Down), Italian jeweller Bulgari has announced it wants to double the size of its accessories business over the next three to five years. CEO Francesco Trapani said, "We are not known for accessories; people think about many other brands than Bulgari for a bag...We want to change that." Click here to read more.

While Bulgari looks to accessories, Hermes is aiming to increase annual watch sales by 10 percent over the next five years, as it introduces more complex models at higher prices.

Luc Perramond, CEO of Hermes’ Swiss watch unit, says the brand plans to open 12 to 15 shops dedicated to watches and jewellery in the next three years, in locations like New York, Russia and China. He also said China will be the “main driver” for growth over the next two decades, and Hermes will introduce more jewelled and enamelled pieces that are popular in China. Click here to read more.

Lastly, still on watches. We’re glad to discover that Swiss watch exports rose 14.2 percent in February. LVMH’s watch brands, Hublot, Tag Heuer and Zenith, all said the year had started strongly and they expected double-digit revenue growth for 2010. Click here to read more.

Image credit: bagmix.com. It shows Bulgari’s A/W ad campaign.

LVMH To Buy Bulgari? – 16/2/10

We are watching LVMH more closely than usual, with news that the luxury group’s watch sector is “confident of returning to profitable growth.”

Also, according to Reuters, the head of LVMH’s watch and jewellery unit, Philippe Pascal, is not ruling out future acquisitions.

Pascal said, “With Hublot, we showed that we can undertake purchases if the financial terms are reasonable and the brand has potential for development.”


And the answer you’re watching for:

Q: Is LVMH interested in buying Italian jeweller Bulgari?
A: Pascal said, “No comment. We'll look at interesting offers, but Bulgari is not relevant now."

This article continues LVMH’s “relatively upbeat” attitude towards its watch and fine jewellery divisions. See our article for February 8 (Business Is Improving For LVMH) for more details.

Image is courtesy of: www.louisvuitton.com

Swiss Watch Exports Rise For The First Time In 14 Months – 22/2/10

The Federation of the Swiss Watch Industry have reported growth, and it’s not a second too soon after “14 months in the doldrums" (their official words, not ours).

They also told Reuters that "growth was back in the frame.” This growth has been linked to strong demand in China, Hong Kong and Singapore.

See our earlier report on Swatch for more details on the Swiss watch rebound.

Swatch To Take Over Tiffany & Co.? – 15/2/10

Since our story about Swatch last week, Swatch shares have jumped significantly (4.8 percent) as analysts began to hint at a possible Tiffany & Co. takeover.

According to the Financial Times, “the rumours were fuelled by the company's unexpected decision to cut its dividend for 2009, which Nick Hayek, the group's Chief Executive, said would give it flexibility to react if a takeover opportunity arose this year.”

An analyst at Sanford C Bernstein suggested “Tiffany was within Swatch's reach as it already owned the US group's watch business.”

We have nothing concrete on this at this time, but we’ll keep watching this story for developments.

Watch How Swatch’s Sales Continue To Rebound – 11/2/10

This week, we’ve heard positive reports from Prada, LVMH and Hermes (click on the brand names for their news). Now, it’s Swatch’s time to hog the spotlight…

After an increase in sales in both January and February, Swatch announced they hope that 2010 “will be their best year ever.”

Swatch’s CEO Nick Hayek said, "We see high double-digit sales growth in January and also in February so far and this should be possible for the whole of 2010."

This news follows Swatch’s revelation last month that business was showing signs of “a significant rebound” (refer to January 22 for details).

The news wasn’t all good though. According to Reuters, the company posted a 9 percent drop in full-year profit this week to 763 million Swiss francs (AU $818 million), but still ahead of the average forecast of 698 million francs (AU $748 million) given by analysts.

Luxury News In Brief – 29/1/10

Burberry has won more than $1.5 million in a counterfeit court case against a New York-based importer and online seller. The British luxury brand had sought $6.5 million in damages, but a win is a win… Click here to read more at WWD.

Inter Parfums, the French maker of perfumes for Burberry, Lanvin and Van Cleef & Arpels, has forecast 2010 sales to rise 7 percent after a smaller fall last year than expected. This news comes after last week’s announcement that Inter Parfums has signed a perfume deal with Richemont’s luxury pen maker, Montblanc. Read more about both developments at Reuters.

High-end watchmaker Bulgari has decided to integrate the Gérald Genta and Daniel Roth collections with the Bulgari brand. This new alliance will be obvious on the new watch designs, where the Bulgari brand will be featured along with the Gérald Genta and Daniel Roth logos. Click here for more information in Bulgari’s press release.

Cartier Celebrates New Adjustment-Free Watch Design – 27/1/10

The luxury watch industry has faced testing times in the Global Financial Crisis. But due to this hardship, Cartier has strived to be better than its competitors by creating an adjustment-free watch.

Traditionally, Swiss watches need to be regularly serviced at quite a high cost, so this new Cartier watch will be very attractive to customers. In fact, Cartier’s CEO, Bernard Fornas, sees “these innovations as the way to gain clients from rivals”, according to Bloomberg.

Cartier’s new prototype has put them in an “optimistic” mood, Fornas said, adding that the Asian market is “buoyant.” He also suggested, “Cartier could have as many as 65 shops in China within about four to five years compared with 30 now to tap demand from that country’s growing economy.”

With this new development, plus Swatch’s recent news of “a significant rebound (see January 22’s report),” we’ll be watching this industry closer for more signs of improvement.

Swatch Shows Signs Of A “Significant Rebound” – 22/1/10

Fortune appears to be shining on the luxury industry this week. After celebratory news from Burberry, Richemont and Tiffany & Co. (click on the company names to see our earlier reports), there are also smiles on dials at Swatch due to a "significant rebound".

MarketWatch also said that Swatch had a "phenomenal record" month of December.

For last year as a whole, they reported a 6.3 percent fall in total gross sales, but said it was the third-best year for sales in the group's history.

A Swatch spokesperson said, "The last months of 2009 showed a very positive development, with clear signs of market normalization and increased consumer confidence. To some degree, the economic crisis [of] 2009 has separated the wheat from the chaff."

So despite hard times last year (see the MO Down for 17 August for a brief rundown), it seems like it’s now time to celebrate…

LVMH Joins Forces With Singapore’s Sincere Watch Ltd. – 4/12/09

Thankfully, it’s time for some positive news on the luxury watch industry. We heard from Bloomberg that LVMH plan to invest in Sincere Watch Ltd, a Singapore-based retailer of luxury timepieces.

LVMH plans to back Sincere when negotiating for retail space and share its database of high net-worth customers.

Tay Liam Wee from Sincere said, “We are seeing signs of improvement in luxury spending as the global economy recovers. With the backing of two of the strongest global icons, we will be able to sharpen our competitive edge and accelerate our growth plans.”

Alarm Bells Ring As Watchmaker Chopard Is Forced To Cut Costs – 24/11/09

Another watchmaker has hit a rough patch. Chopard, Switzerland's largest family-owned watch and jewellery company, has had to temporarily close a store in Palm Beach, Florida, and lay off workers. It is also expecting sales to fall by up to a fifth this year.

We read in the Wall Street Journal that Karl-Friedrich Scheufele, co-president of the watchmaker, says that despite these cost-cutting measures, he realises the 149-year-old company will have to invest for their long term future. In the past Chopard has sponsored some of the biggest social events of the year, including the Elton John AIDS Foundation's annual White Tie & Tiara Summer Ball.

Johann Rupert To Be Richemont’s New C.E.O – 16/11/2009

Shares in Richemont surged 5 percent last week, after news that Executive Chairman Johann Rupert will be taking over the C.E.O. job at the luxury group.

According to Reuters, Rupert, a South African billionaire known for his hands-on approach, will take over from Norbert Platt as C.E.O from April 1. Platt is resigning due to health reasons.

This article also suggests that consumers' appetites for watches and jewellery, which represent about 78 percent of Richemont's total revenues, is beginning to increase, with Platt commenting that “this year's Christmas sales were likely to be better than last year's.”

For background information on the Richemont watch slump, go to our October 26 report (Swiss Watchmakers Are Alarmed Over Another Sales Slump.)

Swiss Watchmakers Are Alarmed Over Another Sales Slump – 26/10/09

Time has not healed all for the Swiss watch industry – in fact Reuters revealed that demand slipped 26 percent in September, reversing the improvements seen in the previous two months.

These latest figures revealed, “Exports to Hong Kong, the industry's biggest market, slumped 30 percent, while demand in the United States fell 43 percent. China was down 1.1 percent and exports to Singapore fell 3.3 percent.”

Due to this disappointing data, Richemont shares also dropped 1.6 percent.

How times have changed. If we go back to late August (see the MO Down’s special Richemont report), Swiss watchmaker IWC, part of the Richemont Group, was said to be performing “astonishingly well” with “Hong Kong proving to be robust.” It looks like luxury customers are back to watching their spending…