Over the next couple of months, watch magazines & blogs will discuss the recently launched pieces at SIHH 2015. Variations of Tourbillons, Perpetual Calendars, and Skeleton dials will be fawned over. Many of the themes seen over the last few years continue: watch sizes remaining around 40mm, more focus on mechanical ladies watch (more later), and a greater focus on US buyers as Asian demand remains weak. In this month’s article, we look more closely at three key take-aways.
Ladies watches are in focus
Over the last couple of years, manufactures have increased attention towards their female clientele. During SIHH, Richard Mille said that ladies watches were currently about 20% of total sales and he hoped to increase that to 30-35% over the coming years. Actions speak louder than words, and the RM 19-02 Tourbillon Fleur ladies watch, at an expected retail price of $800,000, emphasised where he is putting his resources. Vacheron Constantin launched 2 limited edition pieces for ladies, one chronograph & the other a dual time. Jaeger LeCoultre Rendez-Vous ladies collection was expanded to include a moon phase complication. We are encouraged to see mechanical complications rather than simply “bling” in addressing such an important market.
Increase in value of Swiss Franc
The last decade has been a golden period for Swiss watchmakers. Year after year, price increases were accepted as natural law. A shock for watchmakers arrived during SIHH; the Swiss National Bank decided to remove their peg to the Euro, and in doing so allowed the Swiss Franc to increase in value by nearly 20% versus the Euro and 15% versus the US Dollar. This led to quick discussion on whether we can expect higher prices for Swiss watches, both new & vintage. While some brands may take some time to decide on their pricing strategy (hopefully sharing some of the pain with customers), Vacheron Constantin were quick to announce a 7% increase in retail prices across Europe. Reflecting the uncertainty of the moment, other manufactures delayed price confirmations for their SIHH launches. 2014 was a tough year for Swiss watch sales with minimal growth. 2015 doesn’t look any better, firms are forecasting sales to be flat at best.
Competing with the Apple Watch
The 2014 launch of the Apple Watch had industry insiders & observers cautiously discuss the impact on the Swiss watch industry. An initial air of arrogance & indifference was exuded by the Swiss. Experts predict Apple will sell 30 million devices in its first year (estimated sales of $10bn to $15bn). If accurate, that would make Apple the largest watch company by revenue, bigger than Swatch & Richemont. Watch manufactures have already realised there is minimal demand for them to create something similar & compete. In an interesting acceptance of the demand for smart wearable devices, Montblanc has announced the launch of the e-Strap, a nato-inspired strap with a electronic module located at the buckle position. In addition to notifying you of calls, texts, emails, social media, etc., it will also provide you with an activity monitor / tracker that can feed into a phone app. Montblanc isn’t the first to market such a device (see Kairos T-Band), but it is the first watch manufacture to address it. For those who want the functionality of smart devices without giving up your vintage Rolex GMT, this is a cool compromise that we applaud.