The annual Swiss “rich list” may name only one watch retailer – but these purveyors of luxury are a force in their own right.
The annual Swiss “rich list” may name only one watch retailer – but these purveyors of luxury are a force in their own right.
SU JIA XIAN Independent watch journalist, industry observer and collector www.watchesbysjx.com.
Each year, Swiss business magazine Bilanz publishes a list of the 300 richest people in Switzerland. Not surprisingly, many are wealthy foreigners living in low-tax cantons, a diverse demographic that includes Ikea founder Ingvar Kamprad, Brazilian author Paulo Coelho, a Heineken beer heiress and assorted Russian oligarchs.
The watch industry has its very own section of the Swiss rich list, encompassing famous names like the Hayeks of the Swatch Group, Patek Philippe’s Stern family and even Franck Muller of the eponymous brand. A watch industry “power list” would no doubt include all these easily recognisable names, plus the chief executives of major brands, as well as notable watchmakers like Francois-Paul Journe and Maximilian Busser.
Less visible to the public but equally influential in the business of luxury timepieces are watch retailers, the men and women who helm companies with shops along luxury and high streets worldwide. Some watch retailers are well known to tourists in Switzerland looking for a fine timepiece. The likes of Bucherer are among the first stops in the Alpine nation for Asian tourists itching to splurge on luxury goods.
That has helped elevate Bucherer family patriarch Jorg onto the Swiss rich list, putting him alongside the men whose products he sells, though he is the only retailer on the list. But the real power in watch retail lies with retailers in Asia. In the heyday of the free-spending Chinese consumer, before the crackdown on corruption began in 2013, watch retailers in China and Hong Kong rapidly grew into behemoths.
In 2014, the turnover of Xinyu Hengdeli, the world’s largest publicly listed watch retailer, peaked at US$2.2 billion (S$3 billion). It is important enough that both the Swatch Group and LVMH own signifi cant stakes in it. The following year, revenue promptly fell 10 per cent, with profi ts declining almost 70 per cent.
Despite Singapore’s small size, it too boasts a home-grown champion of watch retail, The Hour Glass. Its revenue passed $700 million for the first time last year, putting it among the 10 or so biggest retailers globally. Though it has suffered like its peers, The Hour Glass still managed to keep sales over the $700 million mark for the latest financial year.
The reason watch retailers are powerful is that they decide what watches consumers see and touch, as “gatekeepers” to the consumers’ hands and wrists. Though watchmakers have progressively been moving towards owning their own distribution channels, retailers still play a huge role, especially now with the poor state of demand.
Luxury conglomerate Richemont, the owner of brands like Cartier and IWC, has been the most aggressive in building its own stores, but still relies on independent retailers for about half its sales. With business being lacklustre, watch retailers have more leverage now than in the past, allowing them to pick and choose what they want to sell.
While the big, establishment brands will always have a space on retailers’ shelves, niche brands are finding it harder to secure representation, as most retailers now want to play it safe and stick to sure bets. So, some independent brands are playing musical chairs, switching retailers as necessary, while others are going straight to the consumer, aided by the Internet.
But this lull in business could be an opportunity for retailers to seek out up-and-coming names, brands that just might be the stars of tomorrow. After all, the late Briton George Daniels, considered the best watchmaker in the world during his lifetime, was making watches in relative obscurity for several decades, and Philippe Dufour took about a decade to achieve widespread acclaim.
“WITH BUSINESS BEING LACKLUSTRE, WATCH RETAILERS HAVE MORE LEVERAGE NOW THAN IN THE PAST, ALLOWING THEM TO PICK AND CHOOSE WHAT THEY WANT TO SELL.”
