Font Size

- Aa +

Font Size

- Aa +

Luxury watch brands are facing more competition than ever to stay relevant in an ultra-tech environment while remaining true to the centuries-old artisan craftsmanship

Seconds out: fighting for success in the luxury watch sector

Developed over centuries of fine craftmanship, the Swiss watch industry is a key pillar of the country’s economy

Time waits for no man. That is certainly the case in the luxury world of horology, where traditional brands are being forced to marry the historical legacy of a centuries-old craft with a generation that craves modernity.

Forced is possibly too strong a word, as watchmakers are rising to the challenge in a marketplace where the competition is fierce. The industry has been on a collision course with tech giants for several years now. Smart, wearable healthcare watches that can show texts and emails are growing in popularity. In terms of Apple, its wearables and accessories category produced revenue growth of 54 percent to $6.5bn last year, led by gains in sales of its hugely popular Apple watch.

And yet, according to Matthieu Haverlan, chief commercial officer of Ulysse Nardin, the luxury watchmaking company founded in 1846 in Le Locle, Switzerland, there is definitely room for both.

He tells Arabian Business: “The good news is for the industry, young people like watches and that’s very important because when you see on one side the trend of Apple, who is producing more watches each year than the whole Swiss industry, you can see that as quite frightening. On the other hand, when I’m travelling to Asia and America and Dubai, I see young people wearing mechanical watches.

“Sometimes they can have the Apple watch or Samsung on one wrist and a proper mechanical watch on the other one. That’s very important and reassuring for the future.”


The Tag Heuer Connected Modular watch workshop in Switzerland

In his comments, meanwhile, Tag Heuer CEO Stéphane Bianchi says there’s no threat to ‘traditional’ watch sales from connected ‘smart’ watches which have become increasingly popular over the last several years.

In Tag Heuer’s case, the company launched its first connected watch in 2015, and now has several different models.

“Connected watches will of course be important in the future, even if traditional watches remain the main [focus] for Tag Heuer,” he says. “But what we see is that people who buy smart watches wouldn’t have bought a traditional watch, so there’s no cannibalisation of customers.”

Additionally, Bianchi says that in about 80 percent of cases, buyers of Tag Heuer connected watches “get to know the brand” and then move on to buy other watches.


Each Bovet timepiece is created by a skilled ensemble of artisans and technicians

“It brings more customers to traditional watches,” he says. “It’s a very good match between these two kinds of watches.”

Luxury on the wrist

According to the 2020 Wealth Report from Knight Frank, luxury watches increased in value by 2 percent last year and 60 percent over the past ten years. That may seem slightly insignificant compared to rare whiskeys, which rose in value by five percent last year and a mammoth 563 percent since 2009, but there is nothing insignificant about walking around with a luxury timepiece on your wrist.

Pascal Raffy, CEO of watchmaker Bovet, tells Arabian Business: “If you differentiate yourself with quality, with sustainability, with a real attention to every single detail, there is room and it depends of course on your personal project, are you seeking quantity, or are you seeking, as we do in the house, much more quality? Quality being the essence, quantity being not so important.”


Founded in 1822, Bovet combines traditional know-how with an avant-garde spirit

Quality is front and centre of Bovet watchmaking. Every Bovet timepiece – including its ‘entry level’ 19Thirty models – boasts a level of artistry and finishing that is exceptional, even in the haute horlogerie sphere that the brand inhabits.

“It’s not the house at the haute couture of watchmaking, where you can do 10,000 watches per year. We do 800 timepieces per year and it is at the real pleasure of the collectors around the globe.”

The fine art of Swiss watchmaking

According to figures released by the Federation of the Swiss Watch Industry, Swiss watch exports from the start of 2019 through to September totalled CHF15.9bn ($15.9bn). The US, China, Japan and Singapore are the biggest markets, with the UAE coming in ninth, with watch exports in 2018 totalling CHF911.9m ($911.9m).


Pascal Raffy, CEO of watchmaker Bovet

That, however, does not mean the Middle East market is of less importance to the Swiss horological giants.

Watch sales in the Middle East represent a growing sector for the Swiss industry, and in recent years have seen a range of timepieces featuring symbols of the region, from desert-inspired colour combinations and metiers d’arts depictions of Arabian wildlife, to actual sand in dials and, of course, editions featuring the colour green, a hue that resonates with the Islamic culture and heritage of the Middle East.

Bianchi says that the company increasingly views Saudi Arabia and the wider Middle East as a “very important market”.

“That is especially true in Saudi Arabia. We think this country will become the next big [market] in the Middle East,” he says. “We invest a lot in Saudi Arabia.”


Skilled craftsmen play an instrumental role in producing excellent Swiss timepieces

As a sign of the company’s increased focus on the kingdom, Bianchi points to a green limited edition Aquaracer watch made specifically for the Saudi market in September.

The 200 watches – each of which were priced at approximately $2,000 – quickly sold out.

“Next year, we’re going to have another one [limited edition Saudi watch]. I can’t tell you about it, but it will be amazing as well,” he says. “We believe this is a fast-moving market and is going to get bigger and bigger over the coming years. For us, it’s strategic to be there.”

Haverlan, meanwhile, reveales sales from the brand’s flagship store in Dubai Mall for the first two months of the year made up 40 percent of its annual target.


Bovet timepieces are well known around the world for their high quality and rich decoration

The boutique store, which opened its doors on the first floor of the Fashion Avenue extension in Dubai Mall in September last year, witnessed “record sales” in January, with the high levels of interest continuing into February.

He says: “During the month of January and over 20 days in February we have achieved almost 40 percent of our annual budget from January to December.”

Part of that success has been down to the popularity of the Freak X, an entry-level variation on the epic and iconic Freak, launched in January 2019, which comes in at around one fifth of the price of the Freak (starting at $21,000).

Haverlan says: “We wanted to bring the Freak to a much wider audience, even though we produce very limited quantities, and also trying to talk to younger consumers.


Kern was named Breitling CEO in September 2017

“What we see today in terms of sales, we have sold quite a few Freak X to people dreaming about owning a Freak, but who could not afford. Freak X probably represents about 15-20 percent of what we sell here in the boutique.

“For a watch that retails between 20,000 – 30,000 Swiss Francs ($20,000 - $30,000) that’s not bad.”

While Georges Kern, Breitling CEO, says the Middle East ranks fourth or fifth globally for the company and provides that perfect customer blend.

He explains: “Dubai in particular is dependent on tourism but we are always mindful of our local clients and also the large number of foreign nationals who live here. The market is very mature and we need to ensure we cater to the needs of the different customer segments.

“Looking at 2020, Dubai Mall is currently one of the leading boutiques in the world. Moving forward we will continue to develop our boutique network in the region, with a particular focus on expanding our offering in Saudi Arabia.”

Of course, the luxury watch industry is not immune to world events and the clock is ticking on how long the current coronavirus can last and exactly how much damage the crisis will do.


The Breitling Navitimer is one of the world’s most popular mechanical chronographs

The drop-off in the Chinese market, in particular, is having a serious impact. But Haverlan is confident they have enough to weather the storm.

He says: “If you look at the luxury business as a whole it is affected by coronavirus and it’s not just the luxury industry. But if we talk about our industry, and especially if we talk about the region, I think Dubai Mall relies for about 35-40 percent for the luxury segment for the Chinese. If you do focus too much on the Chinese, you are definitely suffering.

“The good news for Ulysse Nardin is that we are very much balanced and actually the Chinese are just one customer type among others who are purchasing here in Dubai.”

Kern, however, fears the impact could be more severe and certainly longer lasting. He tells Arabian Business: “The industry is not in any sort of existential danger but it’s possible to imagine that in the years ahead, there could be some consolidations in terms of truly global and relevant brands. It is important that the industry and the watch brands adapt to the changing environment as they have done successfully in the past.”


Time to be creative

Maximilian Büsser, CEO of MB&F, explains why current trends don’t matter

The challenge in the watch-making industry is to remain creative, according to Maximilian Büsser, CEO of MB&F.

A relatively new kid on the block in terms of its competitors, MB&F was founded by Büsser in 2005 and is based in Geneva.

The Horological Machines are MB&F’s first line of wristwatches and are inspired by science fiction and Büsser’s childhood.

He tells Arabian Business: “It’s important to dare to be creative again, and take risks. We should look at introducing art directors to replace marketers, so the focus becomes creativity above everything else.”

In 2018, the Middle East barely represented six percent of sales. Büsser expects that to rise to around 13 percent this year. “The region is, with the US, our biggest growth over the last two years,” he says. That’s thanks, in part, to the brand becoming more widely known and appreciated.

Büsser says: “For many years MB&F was only known in the region by the “watch-geeks”. The die-hard super knowledgeable aficionados. We can sense in the last 18 months that suddenly the brand has jumped onto the radar of the next tier of watch aficionados.”

For all the latest Style news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.