What in the world is going on in the watch industry? Is it really as bad as it appears? To get the answers, Europa Star went directly to the front lines, the retailers who are dealing with customers every single day.
We concentrated on US retailers as the economic crisis started there and should be where the recovery begins as well.
We have also included a smattering of international retailers, to determine if things are different around the world.


Q: Are you going to Basel?

A: Ali Soltani, David Orgell (and Ritmo Mundo), Beverly Hills:
“I’ll be going to Basel, while my brother and father went to SIHH. I think both shows will be dead, though Basel will most likely have a chance to do better than expected. The SIHH was too early and retailers either 1) don’t have money, 2) have too much money, or 3) are afraid to commit. By Basel, there will be more certainty about global economic matters and given that retailers who attend will not run away to Geneva, it ought to be a good show compared to expectations. However, if you have good product, design, and value, people will still purchase.”

A: Candy Udell, London Jewelers (New York):
“Yes, we are going to Basel. We are going because we want to see all the new product that will be available. We feel that it is important to support our vendors in good times and bad. This is a treasured relationship that we have and just as they support us, we like to do the same.”

A: Robin Levinson, Levinson Jewelers (Florida):
“We did not go to SIHH. It is too busy a time of the year for us to leave. We are still regrouping from the holiday season and also we just opened our new store. We are not sure about Basel yet.”

A: Dorian F. Parkinson, Watch Buyer, Shreve & Co., Jewelers (San Francisco):
“I went to SIHH, but I am not sure about Basel yet. I go there for Patek and Chanel, and am hoping that I can see product and meet with them in NYC.”

A: Denis Boulle, de Boulle (Dallas):
“No, since I have plenty of inventory in all categories.”

A: John Simonian, Westime (Los Angeles):
“Absolutely! Actually I am glad that this year I will have time to spend the whole fair in Basel. Usually, I have to run to Geneva after a few days and I never have time to visit all the booths, all the new comers, and all the related industries (packaging, tools…). I think it is important to have a clear picture of the whole industry, not only the brands you are used to working with.”

A: Andrew J. Block, Tourneau (US Nationwide):
“Yes, we are going to both. Our belief is that 2009 can be a year of opportunity if you plan it as such. We are always looking for opportunities and Basel and SIHH could be full of surprises.”

A: Denis Asch, L'Heure Asch (Geneva, Switzerland):
“I don’t want to miss these two events. As a watch collector and as a retailer, I need to see and feel the tendencies, and first of all see the watch novelties. As long as I can, I won’t miss any shows.”

A: Mariela Szuldiner, Director of Marketing & Communication, The Watch Gallery (Buenos Aires, Argentina):
“Yes, I´ll be there. Our team has travelled there for 15 years, and despite the financial situation we are facing, we consider that both from a strategically and a political point of view, we cannot miss it.”





Q: How is business?

A: Candy Udell:
“Business was good for us through the end of October. November and December became more challenging for us. The biggest challenge for us in the last few months has been the department stores and some of the weaker independents and chains. They have ruined the image of some of our most luxurious brands in our industry by dumping product at very low prices.”

A: Denis Boulle:
“Much slower than last year but we are still making sales daily.”

A: John Simonian:
“It is ‘different,’ meaning that we are going from high demand for small availability to the opposite. It requires more work and new strategies; it is really a time where you have to be more inventive!”

A: Denis Asch:
“Business is OK. Because we focus on top level brands (Richard Mille, Greubel Forsey) and offer to our customers some very rare (or even unique) timepieces such as the RM 012 Diamond Face, we are not reliant on fashion in horology.
“Most of our customers have a real passion for watches and some of them are collectors. We are lucky as their passion does not depend on the international situation.
Also, our aim is to make sure our customers buy the right product at the right price. As an example, we do appreciate working with Vulcain because they offer a wide range of high quality watches starting at around CHF 4,000.”

A: Mariela Szuldiner:
2008 ended with a lower rate of growth that we had expected comparing with 2007 results but it finished with a growth and that is really important. Between January and February we will prepare 2009 budgets, which will certainly be very conservative.”


Q: What is the outlook for this year?

A: Candy Udell:
“We think that the media has been the worst it has ever been for the consumer, luxury brands and shopping. The media has made people, even people with money, feel guilty for shopping. The luxury brands must put pressure on the media not to be so negative if they continue to want their advertising dollars.
“This year will be very tough. This will be a year that will separate the men from the boys for sure and the cream will rise to the top. When this is done and the economy improves there will be a lot less competition. As for improvement, we are hoping that by the third quarter things will improve hopefully.”

A: Dorian F. Parkinson:
I am being optimistic and hoping for a September or October turnaround. The US was really one of the first to go into this recession and I’m hoping we’ll be one of the first out of it!

A: John Simonian:
Things will get better that's for sure, I have been through four crises in this country already and the positive thing is that there is always good after bad. Now, as far as to predict when…. we know that those “slow” cycles always go for 18 months to 2 years.

A: Denis Asch:
"Back to 'Haute Horlogerie', expertise and value. Customers will be more demanding concerning the information about the watches they buy. As a watchmaker myself, they trust me when I recommend them a brand and/or a model. I feel like I took the 'Haute Horlogerie' train at the right moment. This year and for the years to come, the clients will trust and rely on even more authentic brands. Every year I have to fight with the grey market, I feel like this year this fight will be stronger and stronger.






Q: What is the mood of the consumer in your area?

A: Dorian F. Parkinson:
“Cautious, maybe spending approximately five thousand less than normal.”

A: Denis Boulle:
“Very confused and scared to death.”

A: Mariela Szuldiner:
“At this point, our clients have lost a big amount of their assets and they are in a very bad mood. We think that this will continue for at least 6 more months. And at the end of 2009 people´s mood will start to change.”


Q: What are your plans this year?

A: John Simonian:
When the market is really good, everybody is spending like crazy. And when it goes down, everybody is pulling out. Shouldn't it be the contrary? When things are tough, you should promote your products more. While being very cautious we have to continue to advertise and promote, otherwise you die. Unfortunately, that's what will happen for a few in the industry.

A: Candy Udell:
“We are planning on pulling back on expenditures. We all have to watch our spending now and be very careful of waste. As for advertising, we feel that we have built a very special watch store unlike any other in the United States. We are a showcase for all of the finest brands in the industry and as a result we think that the advertising will still be very important to continue. By everyone cutting back this will make us stand out more. We will just be wiser as to where the ads will be going. It will be much more selective advertising that is really right for our market.”

A: Robin Levinson:
“I will be cautious in my buying. We will continue to advertise and promote but maybe in a more creative way.”

A: Dorian F. Parkinson:
"I cut all orders except for special pieces/sold orders back in September so I’m in a good position with my inventory levels. I do not plan on ordering much, just getting educated on new product. I imagine the brands have cut their introductions back dramatically in response to the economy.

A: Denis Boulle:
“We have already slashed all expenses including advertising and promos. We are watching cash flow like a hawk and with these changes expect to make a decent profit in 2009.”

A: Andrew Block:
“Advertising and marketing is the one area that we feel that we have to keep supporting. Think self-fulfilling prophesy; if you plan down then you will be so.”

A: Denis Asch:
“We have a very targeted media plan for 2009. Also, we will organize three or four events during the year and go on informing the press and our customers worldwide with our monthly newsletter. I will keep on advertising. It’s important to be visible constantly.
”On the other hand, I will keep on communicating through the Internet and the press, promoting and creating exclusive events."

A: Mariela Szuldiner:
“We will try as far as possible to limit the cutback in our internal overheads. And we will also try to maintain our marketing and dynamic budget levels.”


Q: Will you add or drop any watch brands this year?

A: Dorian F. Parkinson:
“I won’t add any brands unless there is a big turnaround in the economy. I might drop a brand or two. I have one brand in particular that is on the line. We are already discussing it with the brand president. There is one other brand that we are not happy with but it still represents a big piece of business for us.”

A: Candy Udell:
“We will drop some of the weak brands that aren't performing. There is no sense beating a dead horse! However, there may be a possibility of adding something very special to our list of brands if opportunities arise.”

A: Andrew Block:
“We will most likely add one or two new brands; it’s the Tourneau DNA to bring newness to the marketplace. This is one of the areas of opportunity that we hope to explore in Basel and Geneva. At the same time, it’s more than likely we will pare down our brand offerings.”

A: Denis Asch:
I will probably drop some brands, but I don’t know when and who. Some of the brands I work with have not maintained their efforts in terms of creativity, and communication as well. That’s what is happening sometimes when the soul of the creator is not there anymore.

A: Mariela Szuldiner:
“We will not add any brands right now. Our strategy will be focused on strengthening and taking care of the business supported by the brands we represent.”


Source: Europa Star February-March 2009 Magazine Issue