WATCH AFICIONADO

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Web & iPad SpecialUSA & CANADA VOL.49 N°02 APRIL/MAY 2013

CONSOLIDATIONOF THE EMPIRES

www.corum.ch

Canada : Chateau d’Ivoire, 2020, Rue de la Montagne, Montréal (Québec) H3G 1Z7, 514 845.4651 USA : Levinson Jewelers, 888 E. Las Olas Blvd, Ft. Lauderdale, FL 33301, (954) 462-8880

Watch with linear power-reserve display, 18K red gold case. Sapphire crystal back.CORUM superlight titanium baguette-shaped movement (7 gr).

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Pierre Maillard

T he figures are there, impressive,unmistakable: in 2012, the Swisswatchmaking industry passed

the historic barrier of CHF 20 billion atexport (figures declared at customs), reach-ing 21.418 billion.This is a growth of nearly

10 per cent compared with 2011 and 32.5per cent over 2010. To this we have toadd the Swiss domestic market, then mul-tiply everything by a factor of 3, 4 or 5…depending on the margins that vary greatlyfrom one brand to another to estimate theglobal turnover of the Swiss watchmakingindustry. Let us say, for the sake of argu-ment and for want of any means of meas-uring the statistics more precisely, thatthis is around CHF 60 billion.Whatever the details behind these figuresare, one thing is becoming more and moreobvious: Switzerland—a dwarf in termsof the number of watches produced world-wide, accounting for a mere 3 per cent(36 million watches) of the 1.2 billiontimepieces produced each year—holdsthe lion’s share in value at 60 per cent, andreigns supreme at almost 100 per cent interms of image.

The true average price:that of the mechanical watchOf course, these triumphant figures needto be looked at more closely in order todraw any conclusions. Two elements inparticular are of interest to anyone who istrying to discern any strong trends behindthe statistics: the developments in the num-

ber and value of watches exported andthe distribution of these exports amongthe different producers. The first thing wenotice is that, in terms of volume, thenumber of pieces exported is down 2.7per cent compared with 2011 but that thevalue has increased by 11.3 per cent. Thisautomatically means that the average price

of a Swiss watch at export has increased.In 2012 the average price of a Swiss Madewatch at export was officially CHF 693.But this average price needs to be put intocontext. It needs to be compared with amuch more significant average price: thatof the mechanical watch.This is CHF 2,222!So around 6.9 million mechanical watchesthus account for CHF 13 billion, leaving

CHF 4.8 billion to be spread across justover 22 million electronic timepieces (manyof which are from Swatch) for an averageprice of CHF 219.This means that some 7 million watchesaccount for 75 per cent of the value ofSwiss exports (the difference also includes

movement exports, which we have nottaken into account).In global terms and by extrapolation, wecan therefore say that only 7 million piecesrepresent almost half of the total value ofthe global watch industry. According tothe statistics, this share is increasing everyyear, following the same trend as the curveshowing the distribution of wealth aroundthe world. Although the watch industry isstill quite wide of the mark, since accord-ing to the Global Wealth Databook pub-lished by Credit Suisse, which can hardlybe considered as leftist propaganda, 1 percent of the population holds 43.6 per centof the world’s wealth and 10 per centholds 83 per cent. But the trend, logically,is working hard towards this.

War machinesThe second observation is that the empiresare absorbing the lion’s share. The SwatchGroup, Richemont, Rolex and LVMH aloneaccount for almost 50 per cent of the globalsales of the world’s watch industry, the

rest being shared among a multitude ofdifferent companies.Each in turn, the groups announced strongincreases in their operating profits. Whilethe multibillionaire Rolex may remain tight-lipped and impenetrable as usual (as a foun-dation, Rolex has no obligation to make its

The Swatch Group, Richemont,Rolex and LVMH alone account

for almost 50 per cent ofthe global sales of the world’s

watch industry

6.9 million mechanical watchesalone account for CHF 13 billion!

EDITORIALThe log and the speck

COVER STORYPatek Philippe: in search of the perfect balance

RETROPERSPECTIVEConsolidation of the empires

LVMHLVMH, increased firepower

ARCHITECTUREWhen architecture is the message

SWATCH GROUPA billion more reasons to bank on Bienne

MAJOR INDEPENDENT MANUFACTURERSEstablished big brands carve out their paths

INDEPENDENTSThe great laboratory of the independentsArmin Strom

JAPANFrom the land of the rising sun

SCANDINAVIAWhen watches come in from the cold

NEWCOMERShinola – Built in Detroit

SPORTS WATCHESSport for all

RETAILER CORNERLes Ambassadeurs – Opening the doors tothe leading brandsTürler – the pride of Paradeplatz

SERVICE, PLEASE!Service at the independent manufacturers

LETTER FROM CHINATian Wang – the famous stranger

LETTER FROM FRANCEEldorado is within reach

WORLDWATCHWEB®WorldWatchReportTM 2013 highlights thetrends impacting the luxury watch industry

LAKIN@LARGEPlaying with time

www.europastar.com/watch-aficionado

Ref. 5227 by Patek PhilippeThis new reference in the Calatrava collection comesin a 39mm diameter case in 18-carat gold and has aface of the most refined sobriety. The lacquered dial incream is punctuated only by the three hands, sleek hourmarkers and a minute scale, plus the date at 3 o’clockand the Patek Philippe inscription.The slender 9.24mmthick case conceals a tiny pusher for opening thehinged officer-style case back, behind which the PatekPhilippe self-winding calibre 324 SC can be admiredthrough a transparent sapphire crystal case back.

www.patek.com

CONSOLIDATION OF THE EMPIRESRETROPERSPECTIVE

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figures public), Nick Hayek recently saidthat his group “has the potential to reach 9billion in turnover in 2013 and 10 billion by2014 or 2015”. Richemont, whose finan-cial year runs to May, should see an increase

of about 10 per cent and therefore exceedthe €8.87 billion for 2011-2012 (althoughthe third quarter results announced inearly January, with growth of 9 per centyear-on-year, “disappointed” analysts).The watches and jewellery arm of LVMHsaw an increase of 6 per cent to reach€2.84 billion, with Bulgari consolidatedinto these results since June 2011.It’s clear to see that these three groups,without even considering Rolex, exceedCHF 20 billion in turnover, which is theentirety of the Swiss figures declared atcustoms for export, giving an idea of thetrue size of their increasing weight.The big groups, shepherded by the stockexchange, have become veritable warmachines, but they all believe that theycannot continue to exhibit double-digitgrowth indefinitely, especially in China.Nick Hayek, for example, predicts “growthpotential for the industry of 6 to 7 per centin 2013”, adding in passing that “theindustry has become less cyclical. Varia-tions and amplitudes have largely beensmoothed out (…) The watch industry hasbecome much more stable.At least for theSwatch Group…” he adds mischievously.

Colossal investmentsThe considerable advances by the groupswill increase mechanically as a result oftheir considerable and continuous effortstowards industrialisation. We don’t wantto go back into the detail of ETA’s decision

to stop deliveries, if only to say that a finalagreement with the COMCO (Switzerland’scompetition commission) is expected soon(at the time of writing, we do not knowwhat the tenor of this agreement will be).

Whatever is decided, the considerableinvestments already made or planned bythe big groups which are competing withthe Swatch Group should allow them togain an increasing amount of industrialautonomy for components and move-ments. But they will need another decadeto reach this objective. At the start of2012, the total investments in the watch-making industry were over CHF 650 mil-lion. Richemont led the pack, planning toinvest CHF 100 million in a new produc-tion site for Cartier, the same amount toturn Val Fleurier into a centre of move-ment production, 25 million for a newPanerai factory in Neuchâtel, 20 million to

build a new production facility forVacheronConstantin (out of a total of 130 millionannounced over the coming years), 15million to extend Piaget, not counting the100 million already spent on IWC over thepast ten years.Similar efforts are under way at LVMHwith 25 million to create a new TAG Heuer

factory, between 15 and 25 million for aLouis Vuitton factory in Geneva, 30 millionto double the size of the Hublot factoryand another 25 million to reorganise Zenith.Not forgetting Rolex, which inauguratedits new flagship in Bienne in 2012: 100million invested for movement produc-tion. It’s a similar story with the independ-ents. Recently,Audemars Piguet put down25 million to build a factory in Geneva,and Chopard continues to increase theproduction of its own movements, to givejust two examples.Far from just watching these offensives,the Swatch Group has also reacted.Recently, Nick Hayek announced that hisgroup would continue its efforts in 2013and planned to invest another 400 to 500million “to finish buildings under construc-tion, launch new industrial projects andadd to our machine park”, at the sametime mentioning in passing that ETA,whichis finishing a new production centre in theSwiss Jura, is now capable of “producing14 million movement components per day”.

Room for progressThe recent decision by the Swiss nationalcouncil (the parliament) to agree to theFederation of the Swiss WatchmakingIndustry’s insistent demands to increasefrom 50 to 60 per cent the value of Swisscomponents required in a watch in order

for it to be awarded the label Swiss Made,although contested by around 10 per centof the industry, will undoubtedly strengthenthe process of industrialisation that isunder way. But it also risks increasing thecost price of the watches! Unless newindustrial solutions, using greater automa-tion, can compensate for this.

The considerable effortstowards industrialisation willmechanically increase thegroups’ domination.

A Swiss Made at 60% willboost industrialisation but may

also increase the cost.

LVMH INCREASEDFIREPOWER

Under the leadership of FrancescoTrapani, the watchmaking andjewellery arm of LVMH (TAGHeuer, Hublot, Zenith, Bulgari,Vuitton, Chaumet, Fred, de Beers)will be entering this year’s editionof BaselWorld with increased fire-power, thanks mainly to the successof TAG Heuer, Hublot and Zenith,and the increasing power of LouisVuitton watches.The recent announcement that TAGHeuer’s emblematic CEO Jean-Christophe Babin would be transfer-ring to the luxury steamer Bulgariat the end of June 2013 surprisedobservers, especially given the manof indefatigable dynamism’s closeattachment to the “values” of thesporty brand.But it is his undeniablesuccess at the head of TAG Heuerthat destined him for this very dif-ficult (and unofficial) mission tobring Bulgari up to the same levelas Cartier. (...)

TAG HEUERBREAKSTHE

BILLION BARRIER

The brand has considerably strengthe-ned its industrial integration and pro-duction of its own manufacture move-ment (the Calibre 1887, an integratedcolumn-wheel chronograph with oscil-lating pinion) has now reached its fullcapacity and allows TAG Heuer grea-ter autonomy, which is welcome giventhe current extreme tension in themovement market. (...)

François Thiébaud, CEO of Tissot (SwatchGroup) recently told us that “with theincrease in the standard of living in emerg-ing countries the potential for growth isenormous and Switzerland could quicklytake 10 per cent of the world watch mar-

ket in terms of quantity, increasing fromthe current 20 billion at export to 100 bil-lion! But for this to happen we need tocontinue our massive efforts towards indus-trial expansion, because we need entry-level products as well as 'grands crusclassés', which we are fortunate to havebut which are not our daily bread andbutter.” [See the interview in this issue.]But apart from the Swatch Group, withTissot producing several million watchesper year, the entry-level segment, or eventhe mid-range segment, has largely beendeserted by the other groups, which areall investing in the high-end (with theexception, perhaps, of TAG Heuer or Cartier,which have strengthened considerably the“lean” production of their entry-level prod-ucts—if we can call them that, since aTank Solo in steel with a quartz movementstill costs nearly CHF 2,000, comparedwith Tissot’s new self-winding, COSC-cer-tified chronometer, which sells for CHF800).The incessant move higher up in rangeseen over the past years, which some-times seemed to be running away withitself, may well soon reach its limits inmarkets that are starting to become satu-rated with high-end timepieces.

If China stalls...Everywhere we can sense a vague anxietyin the air, a small but insistent refrain ofmarket turnaround.The signals from China(Europa Star, present in China since 1994,opened a permanent office in Shanghai inApril 2012, managed by Jean-Luc Adam)

are contradictory to say the least. TheChinese market clearly stalled last year,with a tiny +0.6 per cent compared with2011, which was undoubtedly a recordyear with +49.2 per cent. It’s thereforeeasy to conclude that we have stocked

the shelves for several years! This impres-sion is confirmed by our local observers,who are astonished to see huge flamboy-ant stores everywhere but with fewapparent customers. But China is still offi-cially the third biggest market for Swisswatches, with 1.6 billion in exports.And for some brands, including big names,this market is the main source of sales.But the signals sent out by the politicaltransition that is under way, the fight—announced for the umpteenth time—against corruption, sinecures and otherbusiness “gifts” (many of which are Swisswatches), campaigns against luxury, banson advertising… are starting to cast ashadow. What if, stigmatised, the Swisswatchmaking industry became a hostage

to China’s internal political struggles?“Luxury, Beijing’s bargaining chip”, ranthe recent headline in the Le Mondenewspaper. In her analysis, Nicole Vulserexplained that “Beijing is concernedabout the possible damage that luxurycould cause in its internal market amongless well-off members of the population,

who dream of logos, and the insolence ofprices that highlight the chasm betweenthe richest and the poorest.” And sheadds that, for export markets, “China usesa quid pro quo for luxury at the WTO (…)Because it is helping to make Old Europericher, China is starting to let people knowthis and use it in its negotiations with theWTO (…) pulling on the sensitive stringsof luxury to obtain concessions else-where”.So there are numerous indicators thatsuggest we may not be able to count onthe sustainability of the Chinese Eldoradoin the same cultural, social and regulatoryframework.This is also one of the reasons why theentry-level and mid-range have a funda-mental role to play, precisely for a long-term view of the Swiss watchmakingindustry’s development. The same is truewhether we talk about China or newcommercial battlegrounds such as SouthAmerica or India, an eternal promise thathas never really been kept. In battles youneed a lot of foot soldiers. Basic but qual-ity foot soldiers!

Service at the heartof the battleA recent survey conducted by Europa Starin China highlighted the strategic impor-tance of customer service. Neglecting this

could have serious repercussions over thelong term. In a market like China, the neg-ligence of watch brands is sometimesshocking and we heard from a number ofoutraged people. [Read our new sectionService, Please! in Europa Star 6/12]. Andas the country’s watchmaking culture

“China is pulling on the sensitivestrings of luxury to obtainconcessions elsewhere”.

“we need entry-level productsas well as 'grands crus classés'”

(continued on page 10)

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ZENITH,ATEXTBOOK CASE

Zenith achieved sales of around CHF150 million in 2012 after selling around25,000 watches (including 100 high-end pieces like the Colombus) and hasjust invested CHF 20 million in theextension and refurbishment of itshistoric factory building, which datesback to 1908. (...)

VUITTON,VERTICAL

INTEGRATIONFROM ABOVE

An exceptional watch recently crea-ted (and sold) by Louis Vuitton isthe perfect example of the brand’swatchmaking strategy. This uniquepiece costing 520,000 euros does notsignal a change in business strategy(the average price of a Louis Vuittonwatch is around 5,000 euros) but itis emblematic of the Paris-basedcompany’s increasing watchmakingclout. (...)

Read the full article in Europa Star N°318 oron www.europastar.com/watch-aficionado

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Pierre Maillard

1 932. The Stern family buys PatekPhilippe.The same year, Reference96 is launched and is promised

a great future under the name Calatrava.And so the story of a collection starts.Yet nothing appears more "simple" thanthis Reference 96, whose round shape andabsolute sobriety are dedicated entirely toa single function: that of displaying thetime with the greatest possible perfection,in a timeless form.The influence of the Bauhaus movement,whose minimalist principles stem from the

conviction that "form follows function", isevident. The success of this "essential"watch is no doubt due to a precise coordi-nation, a perfect balance between thepurity of its form and the simplicity withwhich it carries out its function. A balancewhich, contrary to appearance, is far fromeasy to achieve. Do we not rightly say that"making things simple is one of the mostcomplicated tasks"?Because in a shape that is as fundamentalas the circle, the slightest of details canmake or break the balance of the whole,and all of them are interdependent. This iswhere the creators of the Reference 96

followed another precept of the Bauhausmovement, whose founder,Walter Gropius,said in 1919 that there is "no real differ-ence between the artist and the artisan".So the Reference 96 is, in its own way, a"work of art" that accomplishes its horo-logical function to perfection. It is withoutdoubt this particular quality that has madethe model so successful throughout the20th century. It now enters the 21st cen-tury showing no signs of age.

A long line of variantsOver the past 80 years the Reference 96has been reinterpreted and produced in

different variants in a line of timepiecesthat only took on the generic name ofCalatrava in the 1980s. The original gents’watch had a 31mm diameter—whichseems minuscule by current norms, sincethe average size of a Patek Philippe todayis around 37-38mm. Its shape has gradu-ally increased in size but has also takenon many different nuances, both in termsof the materials used—white gold, rosegold, platinum—and technical innova-tions introduced for the functions (such asthe Reference 2597 from 1958, whoseadjustable hour hand allowed the timezone to be changed at will).

i Ref. 5227 by Patek Philippe

PATEK PHILIPPE – IN SEARCH OF THE PERFECT BALANCECOVER STORY

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Having evolved progressively over the yearswithout ever losing the sobriety that givesit its profound identity, it was also offeredin ladies’ models, in self-winding watcheswith coloured guilloché dials,with diamond-set bezels and even with dials in cloisonnéenamel or precious wood marquetry.But in 1973 a model was launched thatwould become the undisputed flag-bearerfor the collection, Reference 3520D. It wasthe first Patek Philippe timepiece to have

Clous de Paris on its bezel. This type ofdecoration, which is also called "diamondtips", was first seen in medieval times butmade popular much later by Parisian jew-ellers (hence its name) and is a type ofguillochage that consists of grooved, criss-crossed lines that form small pyramidsarranged next to each other. It is geomet-rically delicate and,while it makes the watchall the more precious, totally respects thesobriety of the piece, even underscoring itwith elegance.This emblematic Clous de Paris model, witha genuine timeless beauty, has even becomethe symbol of a union between two people,particularly in the Asian markets, where itis offered in a box containing two identi-cal watches that differ only in size, one forthe lady and one for the gentleman.

"Officer and gentleman"Another traditional model from the PatekPhilippe manufacture is the "Officer" stylewatch. Its origins date back to the first worldwar, during which small pocket watcheswith a hinged back cover were transformedinto wristwatches, which were much eas-ier to read in the heat of battle. Originallyconceived for officers, these watches kepttheir designation when they transitionedto "civilian" life. Ever since, Patek Philippehas given certain high-ranking models adiscreet cover to protect their transparent

case back (which is also perfect for anytype of personalised engraving).You may think that it’s quite an easy taskto produce a hinged cover according to thenormal industry standards. Far from it. Inthe case of the new Calatrava Reference5227, in fact, it is a veritable artisanalchallenge.Because the new "treasure" in the Calatravacollection is fitted with an "Officer" typehinged cover, bringing together in onetimepiece two of Patek Philippe’s purestexpressions of watchmaking.

The importance of the caseWhen the connoisseur thinks of PatekPhilippe, he often considers above all theexcellence of its mechanical movements.But he also knows that the case is equallyimportant. A watch is an ensemble andthe production of cases, their design, con-struction and finishing have always beentreated with the same rigour by the watch-makers at Patek Philippe.For a long time, long before all the work-shops that were spread across Genevawere brought together in a huge manu-facture, Patek Philippe has had control ofall the operations and professions involvedin designing and manufacturing cases.They are cold stamped in solid metal inhydraulic presses that exert pressures ofseveral tonnes, then "sculpted" by dies

and punches developed within the manu-facture. The laborious manual polishingoperations that follow are also done inter-nally. But in the specific case of the Officerwatches, the production of the delicatehinges used on the cover requires differ-ent production methods, high-tech for theprecision of the components and manualfor their adjustment, which is done to athousandth of a millimetre. This is all themore important, given that the remit wasto imagine, conceive and produce aCalatrava with a particularly thin case anda sapphire crystal back fitted with a coverwhose hinge remains totally invisible.

Calatrava Reference 5227The new Calatrava Reference 5227 comesin a round—of course—case with a 39mmdiameter, stamped in 18-carat gold. Fromthe front, it has a face of the most refinedsobriety, enhanced by a smooth bezel witha slightly concave profile and curved lugs.Under a slightly domed sapphire crystal,its cream lacquered dial is a model ofreadability and uncluttered elegance. Thespace is punctuated only by applied"bâton" style hour markers in gold betweenthe small gold dots of the minute track. Adate display at 3 o’clock is framed by awindow whose frame is cut out of gold.Two facetted gold "dauphine" type handsindicate the hours and minutes, while aslender hand with a counterweight beatsout the rhythm of the seconds.From the side, the case shows fine curvedgrooves that look as if they have been cutout of the solid gold with a gouge andthen painstakingly polished. But the flatprofile of the case, which is only 9.24mmthick, shows no hint of a back cover con-cealing the sapphire crystal.You can barelysee, under the crown, the small "ear" toopen the cover!The invisible hinge, as modest as it mayseem, is in fact the result of great crafts-manship. Machining the components andadjusting the cover require more than justmicroscopic precision. Its assembly requirespatience, dexterity and know-how to ensurethat, once the cover is closed, there is novisible join. And astonishing as it may

REF. 96200 by Patek Philippe REF. 5119G by Patek Philippe

THE CALATRAVA CROSS

The Calatrava Cross emblem has been used byPatek Philippe since the end of the 19th centurybut did not give its name to the line of watchesdescended from the Reference 96 until the1980s. As a symbol of mastery and perfection itwas adopted from 1158 by Cistercian monks inthe Calatrava Order, whose name comes from theCalatrava fortress which these soldier-monks hadthe duty to defend. Later attached to the Spanishcrown, the monks from the Order of Calatravatook on the conquest of Granada.

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seem, this also requires good hearing, tomake sure that closing the cover gives therequired "click", characteristic of the well-made mechanism.

An avant-garde motorOnce the cover is opened, the eye canwander across the self-winding calibre324 SC that powers the watch. The levelof care apparent in its traditional finishing,most of which is done by hand—bridgeswith edges bevelled to a round profile,Côtes de Genève, gilt engravings, solid-gold oscillating mass decorated with cir-cular graining and a Calatrava Cross—arein contrast with certain avant-garde char-acteristics of this movement, the stabilityand precision of which conform to thestrict requirements of the Patek PhilippeSeal (-3 to +2 seconds of variation in rateper day). Beating at a frequency of 28,800vibrations per hour (4Hz), it is fitted with alarge Gyromax® balance with four arms,which has a Spiromax® balance spring inSilinvar®, which brings together all thesilicon components that Patek Philippe hasdeveloped over the past ten years. Thisvery high-precision technology offers the

significant benefits of a lack of any need forlubrication and improvements in isochro-nism (and therefore in precision), thegeometry of the components and resist-ance to shocks and corrosion.

Over 80 years after it first appeared on thewatchmaking scene, the Calatrava pushesthe Bauhaus philosophy even further. Formis the pure expression of function and thelatter must strive to get ever closer to itshorological ideal of precision, stability andreliability.The Patek Philippe Calatrava Reference5227 (which Patek Philippe calls the "Officerand gentleman" watch) is offered in 18-carat yellow, white or rose gold (5N) andcomes with a hand-sewn large-scale alli-gator leather strap in shiny chocolatebrown for the yellow-gold version, shinyblack for the white-gold version and shinydark chestnut for the rose-gold version,each with a pin buckle in the correspon-ding metal.

For more information aboutPatek Philippe click on Brand Index at

www.europastar.com/watch-aficionadoREF. 5227 by Patek Philippe

ART DECO IN THE SILICON AGE

Patek Philippe’s proprietary silicon-based components are used in the newly developed calibre 28-20 REC 8J PS IRM C J manually-wound movement to offer a power reserve of over one week incombination with a day-date display. Although such an impressive endurance is not new to thebrand (Patek Philippe presented its Ref. 5100 with a ten-day power reserve in 2000), this new cal-ibre is all the more remarkable for its ability to incorporate the energy-sapping functions of dayand date display while guaranteeing a power reserve of at least 192 hours.The Pulsomax® escapement used in the movement, which consists of a pallets and escape wheelmade in Silinvar®, is friction-free, which saves energy on each contact between the pallets andthe escape wheel.With the 4Hz movement producing 5.53 million such contacts over the eight-day power reserve, the energy saving is considerable. Furthermore, the anti-magnetic and corro-sion-resistant Silinvar® is also two-thirds lighter than steel, which means that even more energycan be saved compared with a conventional escapement.Two in-line mainspring barrels, hidden beneath a large mainspring barrel plate visible through thesapphire crystal case back, provide the necessary power for the timepiece once armed by 134turns of the crown.Alongside this dominant feature are Patek Philippe’s distinctive three bridgesfor the going train and escape wheel and the generously dimensioned balance cock. All surfacesare decorated in the best Patek Philippe tradition with Côtes de Genève, chamfered and polishededges, longitudinally grained sides and gold-filled engravings.The ensemble is enclosed in an 18-carat white-gold case of Art Deco distinction—a rounded rec-tangle with protruding, rounded flanks that is meticulously crafted from solid-gold bars at thecompany’s Geneva workshops.The time is displayed by “Dauphine” hands against polished white-gold “baton” style hour markers on a blue or silvered dial, matched by a shiny blue or matt blackalligator leather strap with a pin buckle in 18-carat white gold.

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(continued) spreads, the customer expectsmore in terms of what the product promises.The disappointment is all the greater andthe confidence dentedwhen one has to waitsix months, moving from centre to centre(and paying at each one), or even beingsent to the competition, as a web-savvyChinese collector of high-end pieces told us.“The giants of luxury, who have so farsold in abundance without asking too

many questions, should seriously rethinkhow they attract this rich clientele,” NicoleVulser says in her analysis.It is now more strategic than ever to offera customer the best possible service. Heretoo, industrial power is a clear advantage.Isn’t one of the Swatch Group’s strengthsthe fact that it has been selling ETA “trac-tors” worldwide for decades, which thou-sands of watchmakers around the worldare capable of servicing? It’s a way todrastically reduce lead times for repairs,especially when so many “manufacturemovements” have to be sent back to Swisspastures for attention!Service, Please! is our name for this newsection that provides good and not-so-good examples, because service has becomeimperative and should be included in theSwiss Made label.

Concerns amongthe independentsWe often reflect the concerns of the inde-pendents in our articles because we believethat a broad-based industrial fabric, con-sisting of various brands and independentsub-contractors, is vital for the good healthof the entire industry. Biodiversity is vitalfor any organism that hopes to survive andwhen only the dinosaurs remain, they slowlybecome extinct or start eating each other.But beyond this “ecological” question,

there are also serious economic conse-quences at stake. Only a diverse industrialfabric will allow us to explore new avenuesand assist creation and innovation in avaried and bustling industry, producingeverything and anything.

But besides a handful of big and robustindependent brands (which produce any-thing from machines for millionaires, like

those of Richard Mille—a real phenome-non—to a powerful Raymond Weil in themid-range segment, via a series of bigbrands which I will leave you to list your-self... Patek Philippe clearly alone in itsown separate category), there are numer-ous fragile cases.In difficulty upstream, with the Damoclessword of movement supply hanging overtheir heads, and downstream, with itbecoming increasingly difficult to gainaccess to retailers, independent brands

are experiencing tough times that mayeven put their survival at stake.Condemned to watch the strategy gamesbeing played before their very eyes by thegreat watchmaking powers who want tooccupy all battlegrounds, they have nochoice but to fill in the gaps.All the groupshave brought their operations togetherunder subsidiaries and control the terri-tory directly. The profession of agent isunder threat and there are fewer and fewer

middlemen. Those who are not alreadybacked up by a retail network have to godoor to door, from one already full showwindow to another. Sometimes the edictcomes from above and they are asked tomove on!Among those who manage to get by arethe brands who are active in über hor-logerie, producing tens or even hundredsof pieces per year. Singapore, among othermarkets, loves them because of their icon-oclastic way of breaking codes, or eveninventing new ones. Here too, there hasbeen a lot of excess, but the most talentedand the sharpest have done well and arenow a fully-fledged part of the watchmak-ing landscape, like De Bethune, Urwerk,MB&F and others, or in an entirely differ-ent category, Laurent Ferrier, for example.And come what may, there will always be ademand, from a rich and passionate minor-ity, for these beautiful “egoist” machines,as Max Büsser himself calls them.

Retailers in the hot seatAnother watchmaking profession, theretailer, also has some cause for concern.Following the trend started by the bigfashion groups, watch brands have forsome years been increasing dramaticallythe number of their own-name stores. They

claim that these are not in any way in directcompetition with existing retailers, butthis often smacks of wishful thinking. Atthe same time, the big brands have also“streamlined” their distribution networks,closing a number of doors. “The aim is toachieve a quarter of our total turnoverthrough our own stores,” Marc Hayekrecently explained to Le Temps’ BastienBüss, regarding the distribution of Blancpainand Breguet. This example is as good as

Biodiversity is vital for anyorganism that hopes to survive

Besides a handful of big androbust independent brands. . .

there are numerous fragile cases

WHENARCHITECTURE IS

THE MESSAGE

Two big Parisian brands, Hermèsand Chanel, who have both acqui-red a horological legitimacy withcompletely different styles, are coun-ting on their “pavilions” to conveytheir message.

HERMÈSIN FLUID CURVES

Hermès entrusted the creation andimplementation of its new stand – or“pavilion” – at BaselWorld to Toyo Ito,a refined architect, who was inspired asmuch by imperial Japan’s tea pavilionsas he was by the most futuristic or softtechnologies. (...)

CHANEL,A MONOLITH IN

BLACK ANDWHITE

To mark its ten years of presence inBasel, Chanel, now in Hall 1, inaugu-rates a new three-storey stand (1,580m2), designed by American architectPeter Marino, who is popular with thebig fashion houses. (...)

Read the full article in Europa Star N°318 oron www.europastar.com/watch-aficionado

Ernest BorelSwiss Made since 1856

Please visit us at Baselworld 2013 from April 25 to May 2 - Hall 2.2 - Stand B05ERNEST BOREL

76 Littleton Road, Rt.110 - Chelmsford, Tel: 877 566 1824 / Fax: 855 566 1824

www.ernestborel.ch - usa@ernestborel.ch

– 12 –

any, with margins which, in some territo-ries, are well above a quarter.But paradoxically, as we have often beentold, these closures have offered newopportunities to independent brands, whohave been listened to more attentively.Niches have been opened up and, naturehating emptiness, independent brandsfilled them up straightaway. So all is notsaid and done. And while the watch busi-ness may well be moving towards fewerbrands, fewer intermediaries, fewer showwindows, we must also take into accountthe social and cultural changes that areaffecting our worried society.

To be or to have?In a recent report entitled Luxe Redux:Raising the Bar for the Selling of Luxuries,the Boston Consulting Group sought toidentify the changes that are under way.The first trend observed, and the most sig-nificant according to the authors of thestudy, was the move away from a luxuryof possession to a luxury of experience.While the baby boomers behind the suc-cess of luxury from the 1980s to today arenow getting old and are less interestedin accumulating wealth, generation Y isdefined more by doing than having, byexperience rather than possession.A watch

may therefore increasingly have to competewith an extraordinary trip, for example.

Furthermore, by expanding, luxury alsoloses its singularity. As with fashion, itsboundaries dissolve, like the great design-ers who have produced so-called capsulecollections for major retailers such as H&M.But according to the report’s authors, theglobal watch industry should escape this

confusion of masstige (prestige for themasses) and is given as an example ofone of the only sectors where a piece thatcosts $50,000 can co-exist alongside onethat costs $50. Indeed!

Recruit and trainAnother major challenge that the watch-making industry faces in its development

is the growing difficulty of finding suffi-cient personnel. Because the huge invest-ments we listed above imply recruitingand training competent staff.“This year, Swatch Group created threenew jobs in Switzerland every day, perhapseven more,” says Nick Hayek. Accordingto the watchmakers’ employers organisa-tion (CIPH), “we will need to train or find3,200 new employees by 2016.” A hugefigure, especially for little Switzerland,whose catchment area now extends wellinto France [see the report by Antoine

Menusier in this issue on Switzerland’sborder regions].All professions are affectedby this, from watchmakers to polishers,dial makers, microtechnology designersand micromechanics.

But this urgent need for qualified staff isnot just felt on the production side butalso in distribution and service. The salesstaff in a shop is an important advocate

and can influence the customer’s pur-chases in a decisive way. For brands, thequality, training and loyalty of the salesstaff have become crucial. And it is wheredemand is strongest, in the emergingeconomies, that it is the most difficult tofind personnel with the necessary qualifi-cations. The brands are well aware of thisand have started to set up comprehensive

programmes.The same is true of customerservice. In China, for example, where thenotion of service itself is embryonic, theseefforts will also require a real change inculture to be pushed through as thedemands of an increasingly knowledge-able customer increase.

And the show goes on...BaselWorld takes on a special importancethis year. Not just because it has beengiven a prestigious new architectural show-case but also because this embellishmentdoes not correspond with an increase inexhibition surface but actually hides areduction in the space available. So in theend there will be less room—but with ahigher quality and at a higher cost—andfewer brands present, but with biggerstands.This conscious reduction in the number ofstakeholders present on watchmaking’s bigstage fits well with our analysis of the sec-tor, where the “marginal” offer is increas-ingly being lost to the mainstream. Sosmaller brands will have to paddle evenharder to make headway. But the magicalthing about the watchmaking industry isthat, notwithstanding all the difficultiesand obstacles, it still holds a considerableattraction for young entrepreneurs, design-ers, watchmakers or quite simply dream-ers. And as long as a profession makespeople dream, it has a future.

As long as a profession makespeople dream, it has a future.

For brands, the quality, trainingand loyalty of the sales staffhave become crucial.

ESTABLISHED BIGBRANDS CARVE

OUT THEIR PATHS

Focussing on a strong theme; high-lighting heritage and history; aesthe-tic adventures; technological break-throughs... the established big brandsare stepping up their efforts to keeptheir places in the watchmakinghierarchy.

CORUM:CONSISTENT AND

LEGITIMATE

Having started at Corum in 2005 asvice-president of operations, AntonioCalce became CEO in 2007 and, whenSéverin Wunderman died in 2008,also became a minority shareholder inthe brand, alongside the SéverinWunderman foundation.From the moment he arrived, AntonioCalce set about restoring consistencyto a brand which had definitely comeback under the spotlight (notably withthe Bubble phenomenon) but had losta little clarity, or rather consistency,not just with its products but also withits distribution. Today, Antonio Calce,who has not held back, believes thathe has returned credibility, legitimacyand sustainability to the brand esta-blished by René Bannwart. (...)

Read the full article in Europa Star N°318 oron www.europastar.com/watch-aficionado

– 13 –

NOMOS. German for Less. Less is more, Mies van der Rohe used to say. At NOMOS Glashütte, this principle applies especially to design. You’ll find few decorative embellishments on a watch by NOMOS Glashütte, but many elements of functional aesthetics reminiscent of the Bauhaus design criteria. Perhaps that is one of the reasons why NOMOS Glashütte has more and more fans.Orion—the watch above—is one of many fine mechanical watches crafted by NOMOS Glashütte in the German Ore Mountains. NOMOS retailers in the US: Philadelphia: Govberg; Palm Beach: Tourneau; Las Vegas: Tourneau; New York: Wempe Jewelers. www.nomos-store.com and www.nomos-watches.com

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T he organisers of BaselWorldpromise that almost all thestands in Hall 1 this year will be

brand new, so we can look forward to see-ing an entirely redesigned Swatch Grouppavilion that houses, in various shapes,sizes and heights, the brands that makeup the formidable watchmaking machinebased on the shores of Lake Bienne. Butthe biggest surprise of all is that Swatch,the brand that revolutionised the industrythirty years ago and gave its name to thegroup, will for the first time be repre-sented with a stand at the show.

Celebrate!The model that will take pride of place onSwatch’s new stand will be the “SwatchEst. 1983”, which celebrates the brand’s30th birthday in the simple and playfulway that has made Swatch watches sosuccessful over the past thirty years. Manymodels and concepts have been seen fromthe creative minds at Swatch since thefirst 12 models were launched on 1 March1983, including designs by famous artists,

numerous limited editions and collector’spieces, an attempt to establish Internettime (although BMT—Biel Meantime asthe reference for the “Beat” never reallywent viral) and,more recently, touch screendigital models. But the 30th anniversarymodel goes back to the roots of the brandwith the now iconic round plastic casethat is most clearly identified with thebrand and time indications on the dialreplaced by each of the thirty years from1983 to 2013. Although gold is usually

associated with 50th anniversaries, we canforgive Swatch the exuberance of a goldfinish to the movement, visible througha transparent dial, especially since thesnappy “Celebrate” printed twice on atoothed driving wheel visible at 8 o’clockclearly evokes the trendy and upbeat imageof the brand that revived the Swiss watchindustry. Here’s to another 30 years! (...)

Read the full article in Europa Star N°318 oron www.europastar.com/watch-aficionado

After adding a cool one billion Swiss francs in sales in 2012 (+14 per cent), the Swatch Group clearlypleased its shareholders, who saw the value of their bearer shares jump by almost 50 per cent over theyear and can look forward to an increase of 17 per cent in their annual dividends.When the SwatchGroup’s CEO Nick Hayek announced these impressive figures in March, he also committed to a furtherinvestment of between CHF 400 and 500 million this year alone, to match a similar amount that the groupinvested last year.The group’s growth will also bring more new jobs, in addition to the 900 new jobsthat it created last year in Switzerland alone. In the first of three articles about this veritable powerhousein watchmaking, whose ETA division alone is now producing a staggering 14 million components perday, we take a look at what to expect from a number of brands in the Swatch Group at BaselWorld thisyear. In two subsequent articles, Pierre Maillard takes a closer look at Tissot and Blancpain.

SWATCH GROUP – A BILLION MOREREASONS TO BANK ON BIENNE

THE SWATCH GROUP’S WELL-OILEDWATCHMAKING MACHINE

FROMTHE LAND OF

THE RISING SUN

SEIKO CELEBRATES100YEARS OF

THE FIRST JAPANESEWRISTWATCH

With a touch of humour, Shinji Hattori,the great-grandson of the founder ofSeiko, Kintaro Hattori, and currentchairman and CEO of the Japanesewatchmaker, says that he thought fora moment that "BaselWorld musthave been thinking about the 100thanniversary of Seiko and Japan's firstmechanical wristwatch (the companywas established in 1881) when theychose 2013 as the year to inauguratethe new exhibition centre." (...)

CITIZEN SOLAR

Solar power has been part of Citizen'shistory for decades. In the early 1990s,with the development of amorphoussilicon solar cells (which can be depo-sited in thin layers), it became possi-ble to fit a solar panel beneath thedial, paving the way for new functionsand aesthetics. The solar-poweredEco-Drive 7878 calibre, launched in1995, was the pioneer in this newtechnology. (...)

THE G-SHOCKGOES MECCANO

Did you know that the first G-Shockwas presented in April 1984? Almost30 years later tens of millions of thesewatches have been sold worldwidebut the G-Shock does not seem tohave aged one bit. Has it become aquartz icon? (...)

Read the full article in Europa Star N°318 oron www.europastar.com/watch-aficionado

the elements of danish design

UltraSlim DesignSINCE 1989