FT SPECIAL REPORT Watches & Jewellery

Thursday March 27 2014 www.ft.com/reports | @ftreports

Price cuts are a sign of the times Inside » Budgets blown for Swiss fairs Brands cannot Market expectations afford to stay away for Baselworld are despite rising costs Page 4 likely to be subdued, reports James Shotter Rethinking China New data suggest s record-breaking years go, appetite for luxury 2013 was a somewhat down- beat one for Switzerland’s watches may be on watchmakers. Although the rise again exports hit an all-time high, Aat SFr21.8bn ($24.8bn), they were just Page 8 1.9 per cent above the level achieved in 2012. For an industry used to double-digit Generation Y growth, the slowdown was something hits saleroom of a shock. So it is no surprise that as members Collectors in their of the industry gather in Switzerland at the annual Baselworld trade fair, 20s and 30s set which opens in the city on the the pace in Asia French-German border today, there is more than a little caution in Page 10 the air. “I think it will be a difficult year,” says Michele Sofisti, who doubles as Exclusive and head of Gucci’s watches division and irreverent chief executive of Sowind Group, the Swiss haute horlogerie company that Anticipation: the Baselworld fair opens in Switzerland this week Getty Inside the private owns the Girard Perregaux and Jean- Richard brands. world of designer “Of course, things can improve; it change of direction in an industry everyone pays very close attention to “For example, if we have a collec- showy watches, reflecting the zeit- Glenn Spiro depends on the world economy. But that has seemed able to raise price, to ensure that customers are tion of watches with prices ranging geist,” he says. I’m not sure when the turnround will them almost at will in recent years. getting very good quality for their from €1,000 up to €6,000, we might Mr Linder agrees. “I think there Page 21 come. I think there is quite a lot of “There has been a change,” com- money. The years when you could put now have more watches close to will be a return to simplicity, and a inventory out there.” ments Jean-Frédéric Dufour, chief any price on a product are over,” he the lower end than we had in the focus on timeless and classical Analysts agree. “Market expecta- executive of Zenith, one of LVMH’s says. past.” watches. tions for Baselworld will be prudent stable of brands. Even watchmakers that are not This mood of caution is also likely “The industry goes in waves and, this year,” says Thomas Chauvet, lux- “Lots of watchmakers are pulling overtly cutting prices are reviewing to be reflected in the types of time- for the past five to six years, there On FT.com » ury goods analyst at Citigroup. “The prices down a bit to make sure they the balance in their collections pieces that shimmer behind Basel’s has been a focus on extreme products, mood is unlikely to be bullish after a are competitive. This trend was between more and less expensive plate glass cases, reckons Jon Cox, over-design, oversize. I think there Wearable wars disappointing 2013 performance for already there [at SIHH] in Geneva, watches. head of Swiss equities at Kepler Cheu- will now be a shift back to more the Swiss watch industry.” and I can imagine that Baselworld “We are changing our mix,” con- vreux, a Europe-wide financial serv- simple and understated watches,” he Join us on Twitter A sign of this caution is that a will confirm it.” cedes Stéphane Linder, who took over ices company. says. March 28 4-5pm number of brands are considering Mr Sofisti takes a similar line. “I as chief executive at TAG Heuer, “In terms of new collections, I cutting prices in 2014 – a noteworthy think this will be a year in which another LVMH brand, last summer. expect the there to be fewer glitzy and Continued on Page 2 GMT #FTLuxury 2 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches & Jewellery News

Diversification Assembly plant shows fashion leader’s commitment. By James Shotter

Chanel begins to lift the lid on its Swiss secret

ashion, Coco Chanel once staff at its Swiss site from about 270 “Especially at the high end, custom- other arrivals from the world of fash- Precision: a watchmaker at work in the habits of the industry by being said, is “not something that to 350. And it opened a factory in 2012 ers want to know where their watches ion has been bigger than such rela- Chanel’s factory in Switzerland feminine,” she says. exists in dresses only”. Cou- that more than doubled the floor have been made. We felt it was impor- tively small figures might suggest – In terms of market share, the ture houses have often taken space from 8,000m sq m to 18,000 sq m. tant for people to know that their total Swiss watch exports were worth impact of the new arrivals will be felt her at her word, expanding In recent years the notoriously watches are made in Switzerland to SFr21.8bn last year. at the lower echelons of watchmak- Ftheir offerings beyond the items that secretive brand has admitted journal- the highest standards,” he says. “Our “I think we have helped create a ing. “Chanel has had huge success made them famous. ists to the plant, a sleek oblong com- manufacture is a very important part new market,” he says. “There was a and it is able to sell watches for Chanel was one of the first fashion plex on a windy incline just outside of what we do.” time when women’s watches were between SFr3,000 and SFr5,000 on brands to move into watches, intro- La Chaux-de-Fonds – a town also pop- Chanel does not disclose figures just men’s made smaller. Now, there average, but apart from them, most of ducing its Première range in 1987. ulated by workshops for other watch- about how many watches it makes, or is an understanding that you need the other fashion brands’ watches Others, ranging from Hugo Boss to makers, such as Breitling, TAG Heuer what the division’s sales and profits to design watches specifically for have typically sold for between SFr200 Calvin Klein, have followed suit. and Patek Philippe. are. Analysts’ estimates range from women.” ‘Now, there is an and SFr500,” says Stéphane Linder, To underline its commitment to Nicolas Beau, the privately owned 25,000 to 30,000 units a year, with reve- Laurence Nicolas, chief executive of understanding that you who took over as chief executive at horlogerie, in 1993 Chanel bought brand’s international director of nues between SFr100m ($114m) and Dior’s timepieces and jewellery busi- TAG Heuer last summer. Châtelain, a watch assembly plant in watches, says the greater openness is SFr120m, but most concede this is a ness, makes a similar point. “We are need to design watches Analysts largely agree. “They are a La Chaux-de-Fonds, the heart of the in part a response to a growing desire rough guess. very small. We don’t want to be arro- bit of a threat, but not to the high Swiss watch industry. Since 2011 the among customers to understand the However, Mr Beau says the impact gant, we are a drop in a big masculine specifically for women’ end,” says René Weber, an analyst at company has increased the number of provenance of the watches. on the watch industry of Chanel and market. But I think we have changed Vontobel, the Swiss private bank.

Price cuts loom as industry sounds note of caution

Continued from Page 1 Bank Vontobel in Zurich. “[The US market] is still “In these lukewarm [eco- below the peak it reached in nomic] situations, people 2008, whereas in all the are less keen to show off. other markets we are ahead They want a watch that of 2008 levels.” they can wear on any Beyond the vagaries occasion.”. of different geographical Despite the caution on markets, two issues are display among executives, likely to figure in conversa- however, most analysts are tions around the stands in still predicting the industry Basel’s exhibition centre. will grow at between 6 and One is the advent of 8 per cent this year, more smartwatches. Last year, or less in line with its long- Samsung launched its Gal- run average. axy Gear, and other tech As ever, though, much Wearable: Galaxy Gear 2 groups – including Apple – depends on China. are developing models. Last year, exports to the Some analysts have sug- country – which following a ever, he says Chinese cus- gested that smartwatches decade of roaring growth is tomers have switched away could pose a threat to more now the third largest mar- from expensive gold traditional watchmakers. ket for Swiss watches – fell watches towards more mod- However, for the moment, 12.5 per cent, according to estly priced steel ones, now watch executives are rela- the Federation of the Swiss that they are buying for tively relaxed about the Watch Industry. themselves rather than to phenomenon, although they This was partly the result impress people with whom are following developments of a slight economic slow- they have political or busi- with interest. down. But by far the big- ness relationships. “I had my technicians gest cause was a crackdown “The bad news is that buy some smartwatches to by the Chinese leadership they are buying less; the see what they were like, but on the practice of giving good news is that they still the interface is not yet that luxury gifts, such as love watches,” he says. good, and you need to have watches, to win political or your phone nearby. And the economic favours. idea of having to charge Combined with a 5.6 per luxury watches kills the cent decline in Hong Kong, One concern was a dream a bit,” says Mr the largest market for Swiss Linder. “At the moment, it watches, the Chinese drop crackdown by the seems like a lot of hassle was the main reason for the Chinese on giving for little benefit.” slowdown in overall Swiss The second, more immedi- watch exports. So even a luxury gifts to win ate, challenge is the Swiss tailing off of this decline competition commission’s would be enough to give the political favours decision last October to industry’s figures a health- allow Swatch Group to cut ier glow in 2014. back on the number of Some improvement seems The changing dynamics movements – the mechani- likely. But how quickly it among Chinese consumers cal heart of a watch – that will come is open to ques- are also likely to play a big it supplies to its rivals. tion. “There has been so role in how fast the Euro- Big groups have been able much conflicting informa- pean market grows this to invest in their own man- tion,” says Mr Cox. year. This is because sales ufacturing facilities to cush- “One issue is the crack- in the region have been ion the impact of this down on gifting; another is buoyed in recent years by change, but for some the crackdown on unde- the shopping sprees of smaller brands 2014 could clared watches at the Hong Asian tourists. be the year in which they Kong-China border. But In other parts of the start to feel the pinch. clearly, over the medium world, the outlook is sun- “There is a trend towards term, with the middle class nier, with the US, in partic- consolidation going on continuing to expand, ular, catching the attention already in the industry, and growth will come back.” of both executives and ana- it will accelerate,” says Mr Mr Dufour is also confi- lysts. Weber. “You need a lot of dent of China’s long-term “I think the US should be money to be independent, attractiveness. quite strong this year,” says and some brands don’t have In the short term, how- René Weber, an analyst at much money to spare.”

Contributors »

James Shotter Camilla Apcar Andy Mears Switzerland correspondent Researcher, Picture editor How to Spend It Adam Thomson Steven Bird Paris correspondent Elisa Anniss, Anthony Designer DeMarco, Rachel Felder, Elizabeth Paton Meehna Goldsmith, For advertising details, Luxury industry correspondent Stephanie Gray, Simoney contact Charlotte Williamson Kyriakou, Christina Ohly, +44 (0)20 7873 4038 Rachel Sanderson Jim Shi, Robin Swithinbank, [email protected] or Milan correspondent Syl Tang, Arthur Touchot, your usual FT representative. Kate Youde, Simon de Burton, Freelance journalists All FT Reports are available Nicholas Foulkes on FT.com at ft.com/reports Contributing editors, Helen Barrett Follow us on Twitter at: How to Spend It Commissioning editor @ftreports FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 3 Watches & Jewellery News LVMH shake-up targets product mix and strategy

of Bulgari in 2011 for €3.7bn signifi- analysts agree that the division has market, we are successful.” Changes The French cantly boosted the luxury group’s the potential to account for closer to To achieve that, divisions must watches and jewellery division and 15 per cent of operating profit. develop their presence with single- group’s reshuffle is accounted for more than a quarter of So what do Mr Belloni and Mr Biver brand stores using LVMH’s experi- its roughly €2.8bn annual revenue have in mind? Mr Solca says that the ence in getting real estate. “In multi- broadly welcomed, last year. plan is to bring Mr Belloni’s organisa- brand stores, you can only show the But some analysts say the Paris- tional skills to bear on Bulgari’s retail product,” he says. “In our stores, we says Adam Thomson based group has yet to make the most operations. Operating profit margins can show the history, the emotion and of the purchase, arguing that the have already improved at the Italian the dreams of the brand.” product mix is too thin – and too jewellery maker from about 7 per cent He insists that investing in watch- hen it comes to manag- expensive – while the retail strategy of sales in 2007 to about 12 per cent movement facilities is critical given ing its brands, France’s needs a serious overhaul. today. the changing industry – to acquire LVMH Moët Hennessy Luca Solca, a luxury analyst at Much of that has come from the independence from suppliers and Louis Vuitton likes to Exane BNP Paribas, says, “The Bul- obvious synergies of centralising rivals and to “give a deeper industrial take a laisser-faire gari stores are too big and the sales advertising and promotion, as well as substance to our brands . . . I believe Wapproach. Autonomy and independ- per square foot are disappointing.” LVMH’s muscle when it comes to in the DNA of every brand”. Hublot, ence rank highly on its list of priori- As for brand positioning, John Guy, securing prime retail real estate. But for example, is now only 35 per cent ties. So when in January the group, an analyst at Berenberg Bank, says the group has said that it wants to dependent on movement suppliers controlled by Bernard Arnault, the that Bulgari was missing its target. take margins at Bulgari to 20 per cent. compared with almost 100 per cent a French billionaire, announced a “For a long time, there was a sense Its revamped store on New York’s few years ago. “That trend is not reshuffle of top management oversee- that the advertising strategy was not Fifth Avenue could be the way for- going to stop,” he says. ing its watches and jewellery division, aligned with the brand’s heritage,” he ward. Unlike the past when there was He adds that having your own man- the luxury industry took note. says. Men on a mission: Jean­Claude Biver and Antonio Belloni a confusing mix of products there is ufacturing facility is an essential part Starting this month, Antonio LVMH’s watch brands also face now a clear delineation between of the creative process. “How can you Belloni, the group’s managing direc- challenging times. With about 10 per watches and jewellery. create a new alloy if you don’t have a tor, took on responsibility for the divi- cent of the Swiss watch market in expansion in Asia more difficult. builds movements, it is very expen- Moreover, people with knowledge of metallurgy department?” he asks. sion with an eye to bolstering the value terms, the group’s main brands Meanwhile, manufacturers are invest- sive and it puts your margins under the store’s performance say that it “How can you develop a new screw if jewellery business centred on Bulgari, have the scale necessary to compete ing heavily in their own abilities to pressure,” he says. It is, he adds, also had already achieved its full-year 2013 you don’t have a screw department?” Chaumet, Fred and De Beers. effectively. produce watch movements following complicated. target by mid-November – before the Put all of the changes together, and As part of the change, Jean-Claude But competitors such as Swatch changes in Switzerland’s competition “There are 150 or 200 different com- traditionally higher sales during the Thomas Chauvet, an analyst at Citi- Biver, current chief executive at Group, the market leader with brands laws, under which the Swatch Group ponents, all small and difficult to put Christmas period. In an interview group, is optimistic about the coming Hublot, has taken charge of watches, including Longines, Breguet and is phasing out supplying rivals. together. It is not like Meccano.” with the Financial Times, Mr Biver years. “The performance of LVMH’s dominated by TAG Heuer but also Omega, have more muscle and influ- That poses obvious challenges, says Overall, LVMH’s watches and jewel- says that his goal at LVMH’s watches watch and jewellery brands has not including Zenith and Hublot. ence over independent retailers in Jon Cox, head of Swiss equities at lery division accounts for almost 10 is to outperform the market: “If the been as consistent as some of its The changes have taken place at a Asia because they can offer a wider Kepler Cheuvreux. per cent of group revenue but only industry does three, then I want us to peers, but things are starting to go in critical moment. LVMH’s acquisition choice of brands, making LVMH’s “If you want to set up a factory that 6 per cent of operating profit. Most do four or more. If we beat the the right direction,” he says.

Turnround specialists Jean-Claude Biver and Antonio Belloni

When the proliferation of There are few people as cheap quartz movements in central to LVMH as Antonio the 1970s and 1980s began Belloni, the group’s to threaten the Swiss watch managing director. Known to industry, Jean-Claude Biver many just as Toni, he has took a stand. acquired a reputation over “Since 1735 there has his career as a supreme never been a quartz organiser. Blancpain watch,” read the But that is hardly advertising campaign he surprising – Mr Belloni cut launched, while head of the his teeth at Procter & Swiss company that he Gamble, joining the US revived. “And there never consumer products company will be,” it concluded. when he was just 24. During The slogan caught on, not the following 22 years, he only reviving Blancpain’s occupied a range of fortunes – he bought the positions in Europe and the name in 1981 for SFr22,000 US and finally became after the manufacturer had chairman of P&G Europe in gone out of business and 1999. sold it 10 years later for At LVMH, which he joined SFr60m – but also marking in 2001, he has become the a turning point for the entire right-hand man of Bernard industry. Arnault, the group’s founder Little wonder that LVMH, and largest shareholder. the French luxury goods Analysts say that his group, this month appointed greatest contribution has him head of its watches been in perfumes, cosmetics division where he will be and selective retailing. responsible for developing Return on net assets – the group’s Hublot, Zenith which is used to measure a and Tag Heuer brands. company’s financial Mr Biver, who was born in performance – in selective Luxembourg but moved to retailing has risen from less Switzerland with his family than 4 per cent in 2004 to when he was 10, fell in love 14 per cent last year, for with Swiss watches in 1975. example. That was the year he caught “Procter & Gamble is a sight of a skeleton watch marketing school that belonging to Jacques Piguet teaches you how to of the Frederic Piguet relentlessly win market share movement factory. from competitors,” says “It looked like a steam Luca Solca of Exane BNP engine to me. I was totally Paribas. “Belloni learned the amazed,” he says. “Then I lesson very well.” said to myself, ‘if you loved Analysts say that Mr steam engines as a boy, Belloni’s role at the watches why wouldn’t you love and jewellery division is likely watches as an adult?’.” to be one of the overarching Within a few days, he had strategist rather than as a found a job at Audemars day-to-day manager. LVMH Piguet where he learnt all has a reputation for allowing aspects of the business – the heads of each of its 60- from how to design and odd luxury brands to make watches to how to operate fairly independently. distribute and sell them. Mr Belloni, who is Italian The 64-year-old Mr Biver, and studied economics at who has his own cheese Pavia University, has a label that only supplies reputation for “ruthlessness friends and restaurants he in ensuring that the section likes, has spent most of his he oversees runs well”, as career as a turnround one analyst put it. specialist. His successful Perhaps that skill helps revival of the Blancpain explain why he was France’s brand opened doors at the highest-paid executive in Swatch Group, which offered 2009 with a salary of him a seat on the board and €5.4m, according to local the mission to rescue the media. group’s Omega brand. In spite of that, the 59 Thanks to uncanny year old remains intensely marketing skills, including private. He is married with celebrity sponsorship and four children, played product placement in the competitive basketball in his James Bond films, profits at younger days and enjoys the division grew almost skiing, golf and scuba diving 300 per cent. in his spare time. At Hublot, his next One person who knows project, profits grew so fast him describes him as highly after he joined in 2004 that personable and always LVMH bought it in 2008. making jokes. He is also His latest role is, refreshingly independent: he therefore, something of a sometimes wears suits made departure. As he says, “I by Brioni, which is owned by have been used to turning Paris rival luxury group brands into a success. Now Kering. He is also said to for the first time in my life I wear a Rolex. have to manage three Adam Thomson successful brands.”

Special agent: product placements in James Bond films boosted Omega 4 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches & Jewellery Fairs Budgets are blown as luxury groups beat a path to Basel

Irresistible allure: Graff will exhibit its diamonds and watches at the fair Exhibitors Prices are up but brands cannot for the first time afford not to attend, says Robin Swithinbank this year

he world’s largest and most be attributed to increased income ($11.4m) for the structure alone. Basic access to its wireless networks. Yet It will take the position on the first presents its collections in a villa in costly watch and jewellery from Baselworld. According to ground rent, paid to the organisers, is despite the soaring costs, brands say floor of hall 1 vacated by Harry Win- the town centre. “We are there exclu- fair begins in Basel, Switzer- sources, MCH expects it will take at SFr420 per square metre. According to they cannot afford not to be there. ston, which joins the Swatch Group sively for the press – we don’t have land’s third city, today and is least 50 years to amortise its invest- Baselworld, the largest stand covers “It’s a high investment, of course,” brands on the ground floor this year buying and selling sessions,” says expected to attract more than ment in the halls. But it believes it 1,625sq m. It would not confirm who says Jean-Frédéric Dufour, chief exec- after its $1bn buyout last spring. Hamdi Chatti, the brand’s director of T120,000 visitors from 100 countries will be worth it. rents it, but it is widely thought to utive of Zenith, a watch company that “Baselworld . . . provides the perfect watches and jewellery, by way of during its eight-day run. Baselworld has become the lifeblood belong to Rolex. is part of the LVMH Group. “But it environment for us to continue the explanation. Mr Chatti says this strat- The show is open to the public, who of the watch and jewellery industry, Brands then pay an undisclosed pre- gives you a good return on your expansion of the Graff Diamonds egy has not harmed the brand, citing will join retailers and press in scruti- and – along with Richemont Group’s mium dependent on the width of the investment. We do up to 50 per cent of brand and our watch division glo- more than 1,000 press visitors in 2013. nising the 1,400 exhibitors, for whom smaller but hugely influential Janu- gangway to the exhibitor opposite, our annual business there.” bally,” says François Graff, the com- But consensus remains that being Baselworld is the business fulcrum of ary fair, the Salon International de la which is at its most generous in the Mr Dufour will not be drawn on pany’s chief executive. inside the halls is critical. Rob Diver, the year. Haute Horlogerie held in Geneva – it area where Rolex and Patek Philippe exact figures, but admits his invest- Emporio Armani has returned to TAG Heuer UK’s managing director, The near-century-old show was dominates the annual schedule. are located. According to Ms Ritter, ment is between SFr5m and SFr10m. the show after a decade-long hiatus, says: “As much as I believe we could renamed in 2003 (it was previously This is not lost on its organisers. prices were fixed last year until 2017, “But not going to Baselworld would while British brand Bremont, which is do our business without it, it gives us called just Basel), since when its “The worldwide impact of the show is justifying the 2013 increase. be a mistake,” he says. reporting more than 40 per cent the opportunity to show the trade in importance has grown exponentially, tremendous,” says Sylvie Ritter, On top of these fees, Baselworld Thierry Stern, Patek Philippe’s chief growth over the past 12 months, has particular what we’re about.” as have its rates. Last year, following Baselworld’s managing director. “If charges exhibitors separately for executive agrees. “Basel gives me the also taken a stand for the first time. Despite the stranglehold Basel- a $454.5m makeover to the halls, price you are a brand presenting your prod- water, electricity, air conditioning and opportunity to meet all our partners, “We tried not to do it for so long,” world’s organisers have over brands, increases of a reported 20 per cent uct at Baselworld, you can be sure distributors, affiliates and retailers,” says Giles English, who co-founded Ms Ritter stresses the symbiotic were imposed on exhibitors. that the most important buyers from he says. “It’s like a family meeting the brand in 2007. “But it got to a nature of the relationship. “I don’t The site and the event are owned by all over the world will be here.” that can only take place there. It’s point where it was doing us damage think ours is a position of power. The MCH Group, a public company that The investment for exhibiting ‘It was doing us damage also the largest press platform for us.” not being there. We’re too big not to return on investment is important for returned a half-year operating income brands is significant. Insiders suggest not being there’ Such is Baselworld’s draw that this do it now.” brands – that’s why they spend such a of SFr344.9m ($390m) in the first six the largest stands at the show, some year Graff will exhibit at the fair for One brand still ploughing its own lot of money. They aren’t supporting months of 2013, a 30 per cent rise on of which are three or four storeys Giles English, Bremont the first time, despite the fact it does furrow is Louis Vuitton. While offi- Baselworld because they are in love the previous year. Much of that can high, can cost in excess of SFr10m not sell its products wholesale. cially under the event’s umbrella, it with us. It’s a business case.” Industry prepares to unveil its showstoppers

Brands As Baselworld opens its doors, Nicholas Foulkes previews the watches that are likely to become the talk of the town

At time of writing the doors are closed, the turnstiles locked and the stands under construction. But behind the scenes, 2014 is shaping up to be a year of surprises with a flurry of new releases from watchmakers. Thierry Stern, president of Patek Philippe, sounds a Preparation: Baselworld opens this week Bloomberg warning. “2014 is going to be a challenging year, in particular for companies complication,” says Luc vice-president of Breguet, that made opportunist, Perramond, chief executive. says: “We will present the short-term choices of This year’s launch, L’Heure final version of the extra- moving all interests in new Masquee – or veiled time – thin tourbillon that was markets,” he says. appears to show only pass- presented last year as a “For us it was important ing minutes but on the prototype.” He describes to help our established mar- press of a button the hour it as “the thinnest auto- kets before trying to hand is revealed. matic tourbillon in the develop new ones. This Jacquet Droz, the niche world”. pays off today. The US mar- brand at Swatch Group, is However, Jean-Christophe ket is catching up in a more esoteric. The brand Babin, chief executive of strong way.” was known in the 18th cen- Bulgari, says that his Among new launches tury for automata – brand’s new Octo Finissimo from Patek Philippe at mechanical models – that model “will be the slimmest Baselworld will be what Mr were the centre of attention tourbillon movement in Stern calls “interesting pre- at the royal courts of watchmaking history, at miers in the segment of Europe. 1.95mm, a world record.” men’s steel complications”. Last year, the brand cre- Nicolas Hayek’s an- “This year we introduce a ated The Charming Bird, a nouncement about 12 years new steel Nautilus compli- moving sculpture captured ago that the Swatch Group cated model, combining the in a timepiece. This year it would cut back on supply- chronograph and two-time is showing a “signing ing its movements to com- zones Travel Time indica- machine” the size of a petitor brands sent shock- tion,” says Mr Stern. “We waves through the indus- also launch a first version try. in steel-on-steel bracelet of Many new movement the Annual Calendar chron- ‘Many believe launches, such as the six ograph.” movements announced over 2014 promises to be an vertical integration the past year by Ulysse interesting year for Jean- Nardin, have their roots in Claude Biver. Bernard has shaped a more decisions taken up to a dec- Arnault, chief executive of mature horological ade ago, as the brand’s LVMH, has appointed Mr chief executive, Patrik Hoff- Biver to oversee TAG industry’ mann, explains. Heuer, Zenith and Hublot. “Roll back 10 or 12 years Hublot, a sponsor of the ago when Hayek made the Fifa World Cup, is launch- smartphone. It promises to announcement and at that ing a football chronograph. be the articulation of what time Rolf W Schnyder José Mourinho, the man- Jacquet Droz calls “the art [Ulysse Nardin’s late ager of Chelsea FC, is of astonishment”. owner] made the decision to scheduled to present the But such technical jeux become independent.” watch at Baselworld. d’esprit are underpinned by The vertical integration Hublot has established a a serious mood. that many companies boast knack for using new materi- The drift in recent years today can be traced to als and this year will show towards smaller watches is Swatch Group’s decision. osmium crystal in a watch. industry-wide and is notice- While controversial at the “Osmium is the rarest able in women’s watches. time, there is a belief that it metal on our planet,” says Dior, for example, has sig- has shaped a more mature Mr Biver. “It is crystallised nalled a return to the petite and interesting horological using a highly sophisticated femininity of small cases industry producing ever process. This enables it to with the launch of a case more advanced models. reach its melting point that measures just 25mm Mr Hoffmann speaks for (3,033 degrees centigrade), across. many when he says, “I changing its structure and In men’s watches this think it is about more depth transforming it into trend has led to records – not just complications. osmium crystal.” being claimed for thinness. The history of a brand is Hermès is strengthening This January at the SIHH very important and it its presence in what it calls fair, Piaget claimed to have matches what we are doing “time-to-dream territory”. made the world’s thinnest today. “For us the major high- mechanical watch and there “Today’s consumers value light will be the presenta- will be similar claims at that and those true values tion of a new complication Baselworld this week. count more than they did which we call a singular Christian Lattmann, five or six years ago.” FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 5 6 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches & Jewellery Fairs

There are even a few companies exhibiting in both Basel and Freiburg, including Miiori, a luxury jewellery Rival events brand. Melissa Vance, US sales direc- tor, says the company wanted to try something new. “Although we still consider Basel- world among the most important events of the year, we are excited for offer lower-cost the fresh perspective that Freiburg has to offer,” she says. “In years past, the lack of lodging in Basel has dis- couraged people from attending the show. We hope that Freiburg can pro- access to luxury vide a solution to this problem.” Diamond companies seem to be the most enthused about new exhibitions. About 70 will be exhibiting in Freiburg, primarily from Israel and client base Antwerp. Another 70 diamond and diamond-jewellery firms will be at The Diamond Show in the Markthalle building near Basel’s railway station. “The reason we started it, honestly, is because people wanted to be in Basel during the show with a dia- mond-focused event,” says Alissa Goren, show director. “The show is

‘The quality of traffic Alternatives Many exhibitors feel priced out during the past two of Baselworld, says Anthony DeMarco Glittering hopes: Basel’s Markthalle will be the venue for this year’s Diamond Show event years has declined sharply’

aking part in Baselworld is However, while attendance rose, the The larger of the two is the Europe manufacturers and distributors and filling another gap in the European open to the trade as well as private proving to be expensive for number of exhibitors fell by nearly 20 Jewellery & Gem Fair, being held bring them into a new market, along jewellery industry. collectors and investors.” many brands. Several exhibi- per cent to 1,460, and there will be from April 1-4 in nearby Freiburg, with European companies. The dates “At other trade shows, direct sales Leibish Polnauer, president of Lei- tors complained privately approximately 1,400 exhibitors attend- Germany, organised by UBM Asia, a overlap with Baselworld (March 27- on the show floor are not allowed. bish & Co., an online fancy coloured last year that they were ing this year, according to Baselworld Hong Kong-based trade fair and pub- April 3), which is no coincidence, Sales and transactions happen any- diamond and jewellery dealer based in Tpressed into building larger, more officials. lishing company. allowing those in the trade the oppor- way. It’s not official, but it still hap- Israel, may be speaking for many elaborate and more expensive spaces, Jean-Claude Biver, chief executive The second is The Diamond Show, tunity to attend both shows, as pens to some extent,” he adds. when he explains why he chose to and into moving to less desirable loca- of watch brand Hublot, owned by on March 27-28 and 30-31 in Basel, Freiburg is only about an hour away The positioning of the fair seems to leave Baselworld. “Baselworld has tions. LVMH, said last year his company organised by the Rapaport Group, by train. be a hit, as space is sold out at the made very successful efforts to brand A few said they were priced out of invested SFr3.3m ($3.7m) for a 10-year best-known as a diamond industry “A lot of the mainstream jewellery Messe Freiburg exhibition space, with its Basel show, giving centre stage to the show altogether. The cost of lease in Hall 1.0, the featured space in publisher. Baselworld officials refused in Europe is no longer the stuff you more than 420 companies signed on, luxurious watches, but leaving exhibiting in Hall 1.0, the most impor- the exhibition centre, but the com- to comment on the other fairs. see at a fair like Basel,” Mr Diener about twice the number expected, the diamond, jewellery and gemstone tant area, was as high as $5m for pany expects that investment to Wolfram Diener, UBM’s senior vice- says. “The retail price tag of $300 to organisers say. dealers as second-grade operators on long-term leases, according to several result in a turnover of SFr200m. president for Asia, said the Freiburg $2,500 is no longer well served by the About 100 exhibitors are from the back stage,” he says. sources last year. “Basel is a fantastic deal,” he says. fair is aimed at jewellery industry pro- existing shows. We received a lot of abroad, including some who have “With exploding costs, the quality The $454.5m renovation of the However, if you do not have that fessionals in search of middle-market encouragement from the European never sold at a European fair before, of traffic during the past two years Messe Basel exhibition grounds was amount of investment capital, it may products and services who are based industry to go into the market and fill such as precious gem dealers from declined sharply,” he adds. “We undoubtedly a success in terms of the not be such a good deal. within a six-hour drive or train com- this gap.” Colombia and manufacturers from believe that the Rapaport diamond attendance at the 2013 edition of As Baselworld becomes more luxuri- mute from the city. As one of the The fair is billed as Europe’s first Thailand and Hong Kong. show will provide us with a platform Baselworld. It attracted a record ous and exclusive, two other trade world’s largest jewellery trade fair “international jewellery sourcing “We are bringing some products that is better suited to our fancy col- 122,000 attendees, a 17 per cent fairs have entered the market to fill companies, UBM Asia hopes to capi- fair”, meaning attendees can purchase that people could only find overseas,” our diamonds and fine jewellery increase on 2012. the void. talise on its international network of products on site and take them home, Mr Diener explains. brand . . . at a more sensible cost.” Chinese retrenchment fosters cautious mood

SIHH Show points to Show-stoppers Eye-catching pieces another subdued Jaeger-LeCoultre Master Ultra Thin Minute year, but long-term Repeater Flying Tourbillon prospects are good, One of the most striking ultra-thin watches is by says James Shotter Jaeger-LeCoultre. At 7.9mm thick, the group says it is the thinnest minute-repeater The Salon International de on the market, with a flying la Haute Horlogerie (SIHH) tourbillon, a flying balance traditionally offers the and a self-winding system. year’s first – admittedly partial – snapshot of the state of the watch industry. On the evidence of this Cartier Ballon Bleu Floral- year’s show, which took Marquetry place in Geneva at the end Parrot watch of January, another uncer- Petals might not seem an tain 12 months lie ahead. obvious material for On the face of it, the watchmakers, but Cartier numbers look encouraging. used them on its latest According to the organising Ballon Bleu. The eye is committee, about 14,000 emerald and beak onyx. guests attended this year’s Cartier will make 20. The event, an increase of 9 per price has not been cent on 2013. disclosed. But numbers rarely tell the whole story, and among the executives and guests milling around the sleek exhibition booths in the Montblanc Meisterstück city’s Palexpo centre there Heritage Perpetual was a noticeable sense of Calendar caution. Montblanc’s latest range of “The watch sector is in a watches includes this consolidation phase,” says Perpetual Calendar. Fabienne Lupo, chair- Strikingly, it is also available woman and managing in steel for $12,800. director of the Fondation de la Haute Horlogerie, which organises SIHH. “We’ll have some growth, as in previous years, especially in Asia. in force, however, and Mr tives said this year’s SIHH But I think that brands are Cox says the mood among suggests that there has more cautious at the North American and Euro- been some success. moment, and I think they’re pean retailers was “very “Over the past three or right.” bullish”. ”Perhaps the most four years there has been François-Henry Bennah- optimistic they have been an evolution. Watches are mias, chief executive of for five years,” he adds. on women’s radar. You see Audemars Piguet, one of 16 The main themes of the this in fashion shoots, you watch brands exhibiting in fair, according to Ms Lupo, see it in advertisements. Geneva, takes a similar were similar to those in Watches are becoming part line. “I think SIHH in 2014 recent years. “We saw more of a woman’s wardrobe,” confirmed the trends of and more mechanical says Mr Bennahmias. SIHH in 2013, which is that watches; lots of ultra-thin As well as the excitement the industry is in a period watches; more and more surrounding women’s and of transition,” he says. watches for women. And we ultra-thin timepieces, the One of the main reasons also saw a lot of activity in caution surrounding the for the uncertainty hanging métiers d’art,” she says. industry was evident in the over the industry has been Analysts broadly agree. more understated nature of the drop in demand in “If I had to sum up this this year’s offerings. China, after a clampdown year’s themes, I would say: “Last year, sales of solid by the country’s new lead- thin, female, understated,” gold watches came under ership on the practice of says John Guy, an analyst pressure, as customers put gifting, and several partici- at Berenberg. more emphasis on white pants noted a smaller Asian Ultra-thin watches had gold or platinum pieces,” contingent at SIHH than in attracted a lot of attention says Mr Guy. “That fed previous years. before the show – and through at SIHH.” However, Jon Cox, head records duly fell. For the long-term, how- of Swiss equities at Kepler “This was the most im- ever, watchmakers remain Cheuvreux, said this could portant trend,” says René optimistic. “We are still be down to the fact that Weber, an analyst at Bank very far from reaching our SIHH last year launched an Vontobel in Zurich. “Piaget potential. There are tens of Asian spin-off called broke the record for the millions of millionaires in Watches and Wonders, thinnest mechanical watch, the world, and the number rather than reflecting Jaeger-LeCoultre came with is growing – but [the indus- diminishing Chinese inter- some very thin watches, try] only did SFr21bn est in Swiss watches. and Cartier produced the ($24bn) of exports last “Given that SIHH held a thinnest divers’ watch.” year,” says Mr Bennahmias. fair in Hong Kong in Sep- Watchmakers have also “And those millionaires all tember, maybe some people spoken for several years of have at least two houses, decided to stay closer to the need to do more to they all have two cars – but home,” he says. attract women to haute hor- very few of them have a Other regions turned out logerie. Analysts and execu- nice watch.” FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 7 8 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches & Jewellery Markets Luxury tourists set a trail for hungry exporters

Chinese consumers Findings The figures tell only half the World Watch Report 2014 story – China is still driving ● Global consumer interest in luxury industry growth, writes watches grew 5.7 per cent in 2013. Robin Swithinbank ● China led the way with 23.25 per cent of all search, after a domestic rise of 59.43 per cent year on year. alk of a slowdown in Chinese luxury consumption has ● The US and the UK came in been well documented. On second and third, with 20.69 per cent the face of it, exports of and 10.04 per cent of global search Swiss watches to China have respectively. Tfallen significantly in recent years. But while the figures are technically ● Bric markets performed well, with accurate, there is mounting evidence China, Russia and India returning the that they tell only one side of the highest year-on-year increases. Brazil, story. however, saw a 2.9 per cent drop, When the Fédération de l’Industrie which is likely to be a concern going Horlogère Suisse (FH) published its into the year it hosts the World Cup. annual report detailing world distri- bution of Swiss watches in 2013, it ● Rolex, Cartier and Omega are the confirmed that exports to China were most searched-for brands in China. down 12.5 per cent on 2012. But closer analysis of the figures – and the ● Interest in women’s watches is led results of a new report into Chinese by China (up 145.50 per cent), India interest in luxury watches – suggest (up 27.65 per cent) and Russia (up China is still driving watch industry 11.67 per cent). growth and will continue to lead the way for years to come. Compiled by Digital Luxury Group, Analysts say exports to mainland Geneva China have decreased because Chi- nese consumers are more aware that domestic prices are pushed sky-high Priced out: exports of Swiss watches to mainland China have fallen on the back of high rates of consumption tax and import duties by VAT, import duties and China’s 20 per cent consumption tax on watches costing more than Rmb10,000 ($1,600). destinations popular with Chinese The report also shows a rise in Jaeger-LeCoultre’s global head of “Watches at lower price points cent year on year in China, higher Another reason is that Chinese people tourists have risen steeply. interest of 145 per cent in the ladies’ strategy. aren’t used for gifting”, says Mr Ram- than any other country. For Vacheron are travelling more, visiting countries The FH’s report shows exports to watch category. The drop in exports means some bourg. “And if you look at the higher- Constantin, the increase was 34.59 per where watches are considerably the US up 12.8 per cent over the past Based on these findings and assum- brands have overspent in China. Few end brands, the risk you take if you cent. Much of this growth can be cheaper. two years, with the UK increase at ing that crippling Chinese domestic seem concerned, though – part of offer those is that the person you’re attributed to the explosion of mobile According to research published in 44.5 per cent. Exports to South Korea, taxes remain at today’s levels, some their strategy is to drive awareness of offering them to might not know the phones in China. BusinessWeek in January, Chinese considered an upmarket destination experts believe the current trend will products among the travelling elite. It brand.” Baidu reports that mobile searches outbound tourists made 97m overseas for sophisticated Chinese travellers, continue. appears to be working. Juan-Carlos Torres, chief executive for haute horlogerie brands in 2013 trips in 2013, up from 83m in 2012. The were up 35.6 per cent over the same “We don’t think the main challenge “We have overspent in China,” says of high-end watch brand Vacheron were up 120 per cent. number of passport holders is also ris- period. will be developing the demand for lux- Jean-Marc Pontroué, chief executive Constantin, confirms this. “We are The report shows the most ing rapidly. A report published in “People assume luxury equals ury products in China, but boosting of Roger Dubuis, the Geneva haute not a brand used in the corruption searched-for haute horlogerie brand China Youth Daily last month indi- China, but it doesn’t – luxury equals local consumption,” says Pablo Mau- horlogerie brand. “Our communica- business,” he says. on mobile was Patek Philippe. For cates buying luxury products is “one Chinese,” says Mr Rambourg. “China ron, DLG’s general manager for tion budget in China is by far higher “To understand our brand, you have Thierry Stern, the brand’s chief execu- of the major reasons” Chinese nation- accounts for 8-10 per cent of sales China. in ratio to sales compared to the rest to have a certain level of knowledge. tive, this is cause for optimism. als travel abroad. through the luxury sector, whereas “That said, we remain optimistic for of the world, because we believe we Most of our Chinese customers are “There is a very strong interest in “You used to be able to sell in Chinese account for around 35 per future growth because tier two and need to be exposing ourselves to the individuals, and if they are gifting, it haute horlogerie coming from Chinese China because people didn’t know cent.” three cities are still largely unex- travellers who buy our products when is to a partner, not as part of a busi- customers and it is the sign of future there was such a price gap,” says The World Watch Report 2014, pub- ploited [compared with China’s tier they travel. We don’t consider China a ness or political transaction.” long-term market potential,” he says. Erwan Rambourg, HSBC’s Hong lished yesterday by the Geneva-based one cities – usually defined as Beijing, territory, but at least 40 per cent of Mr Torres, whose brand has 15 bou- DLG’s research suggests the luxury Kong-based global co-head of con- strategy and research company Dig- Shanghai, Guangzhou and Shenzhen], our standard business is addressed to tiques and 12 further points of sale in watch industry’s growing reliance on sumer and retail research. ital Luxury Group (DLG), backs up and because of the increasing number Chinese.” China, says the global Chinese com- China – or rather Chinese consumers “Now, you’ll find it very difficult to suggestions that Chinese appetite for of Chinese luxury travellers.” Another factor contributing to the munity accounts for more than 50 per – may not be misjudged. find a single Chinese consumer who luxury watches is rising sharply. The Others feel the disparity between decline in exports to China is the cent of Vacheron Constantin’s sales. CLSA, Asia’s leading independent doesn’t know that they should not be report indicates that 23 per cent of all exports and domestic interest may not impact of President Xi Jinping’s cam- “There’s no slowdown worldwide of brokerage and investment group, esti- buying local, but buying while they’re global searches for luxury watches be long-term. “As in all markets, there paign to curb corruption. The gifting Chinese customers,” he says. mates that by 2020 Chinese will make travelling.” last year originated in China, an can be a lag effect between interest of luxury watches in deals is believed According to the World Watch 200m overseas trips a year, double the While exports of Swiss watches to increase of 59 per cent over 2013 and and acquisition or repeat purchase,” to have been sharply reduced since Report, growth in interest in haute current figure. Luxury brands will be China have gone down, exports to more than in any other territory. says Zahra Kassim-Lakha, the campaign was introduced in 2012. horlogerie brands was up 13.16 per banking on it. Growth in Africa’s GDP adds to its attraction for luxury brands

for minute repeaters and Emerging markets high-end pieces in London.” In common with many, Big watchmakers are Mr Hoffmann sees South investing heavily in Africa as an established market where he has a the continent, says number of concessions in Nicholas Foulkes larger outlets. But compa- nies find the lack of estab- lished commercial infra- Africa is hardly synony- structure elsewhere on the mous with wealth and lux- continent challenging. ury, but the African Devel- North African countries opment Bank says this may had been considered stable be about to change. A third business environments, but of the continent’s countries since the political upheaval are recording GDP growth in the region during the rates above 6 per cent. Arab uprisings of 2011, As a result, many of the many have seen sales fall. world’s biggest watch Nicolas Garzouzi, chief brands are investing in executive for Audemars stores and distribution net- Piguet in the Middle East works on the continent. and Africa, says: “Retailers For marketing purposes, interested in opening watch most watchmakers split the stores are still very cau- South Africa is an established market for Cartier Bloomberg continent into three tious when investing in regions: the Maghreb, cen- representative collections, tral, and South Africa. [although] we obviously Brands are most strongly Montblanc Targeting new middle class don’t want to limit our- established in the latter. selves to a few pieces here “We started to open a dis- and there.” tribution network in Africa Montblanc started about to start doing Jean-Frédéric Dufour, some five years ago,” says distributing its products in business in Tanzania. chief executive of Zenith, Jean-Claude Biver, head of Africa in the late 1990s, Besides the expanding says: “It is a continent with the watch division at writes Nicholas Foulkes. economies, Africa’s great potential, but because LVMH, which sells products At present, the brand is population is its biggest the structures and the hab- in South Africa, Nigeria, investigating countries such asset, according to Mr its are not what we con- Botswana and Angola. as Ethiopia, Kenya and Lambert. Young, well- sider as standard in Europe, “These last three devel- Congo for distribution educated Africans are it is sometimes a little diffi- oped astonishingly well, as expansion. contributing to the growth of cult.” Despite this, he says our product met the taste of According to Jérôme a middle class. Africa compares favourably the newly rich,” he says. Lambert, chief executive, Business travellers are with other developing mar- “We plan to open a store in markets such as Sudan, another growth area. Mr kets. “It is a little bit easier Angola, where we have Senegal and Uganda are Lambert notes that in the than India.” established a strong brand showing potential. past, travellers between Its reputation for instabil- presence.” Montblanc has point-of- African countries or between ity notwithstanding, Africa According to Peter Harri- sale presences in 15 Europe and Africa would has long been taken seri- son, chief executive of Rich- countries, including Egypt shop outside their domestic ously by one of the luxury ard Mille Europe, Middle and Morocco in the market. sector’s most successful East and Africa: “Nigeria is Maghreb; Ghana, Nigeria and Now they can buy brands. the force today. Obviously, Ivory Coast in west Africa; Montblanc at home. Cartier has been active a country of a 100m-plus Mauritius, Mozambique and “And of course,” says Mr there for several decades. people and a lot of raw Zimbabwe in east Africa; Lambert, “it is the local The company has three materials . . . is going to be and Botswana, Namibia and clientele in each market boutiques, two in Morocco strong. But you can’t forget South Africa in the south. that over the next few years and one in South Africa, places such as Angola.” It has recently appointed will become more and more and Cartier watches, fra- As proof of this affluence, a partner in Algiers and is valuable to the brand.” grances and eyewear are Mr Harrison cites the exam- distributed in 20 countries. ple of a limited edition “We are looking to extend watch costing about £55,000 our presence in the near and made in a series of 10 future,” says Alessandro that was marketed in story, he says, as tourists helpful in building aware- Patti, managing director of Angola’s capital, Luanda, from the continent also ness, even if big purchases Cartier Africa. “We believe and sold out in days. boost sales. are made elsewhere. The that African clients, who “Africa is up 20 per cent However, Jean-Daniel company has opened a shop are very attentive to the in the year to November,” Pasche, of the Federation of in Abuja, Nigeria’s capital. notions of quality, excep- says Jean-Marc Pontroué, the Swiss Watch Industry, Patrik Hoffmann, chief tional craftsmanship and chief executive of Roger points out that exports of executive, says the region’s beauty, will gain impor- Dubuis, comparing that Swiss watches to Africa are importance has increased. tance over the next dec- increase with a global rise less 1 per cent of output. “What is new are markets ade.” in sales of just 2 per cent. Nonetheless, Swiss com- such as Nigeria, Angola and As Mr Dufour says: “Eve- Africa’s growing home pany Ulysse Nardin says a Ghana, and we see custom- rywhere that has potential, market is only part of the presence in the region is ers from Nigeria shopping you find watchmakers.” FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 9 Watches & Jewellery Interview

The CV Founded 1860 – just in Angelo Bonati 1980 joins the Vendôme Group (now Richemont), becoming sales director for niche luxury brands including Dunhill, Yves Saint Laurent time for the 21st century and Ferrari 1987 director of sales and marketing, Cartier Italy

1993 executive sales and marketing roles, Ginori and later Trussardi Groups

1997 chief executive, Officine Panerai

Brand development A relative newcomer in the international market, Officine Panerai draws on its maritime heritage, writes Elizabeth Paton

any established watch no aspirations to be – a Rolex or a as its figurehead vessel, Eilean. Mr brands are extremely Patek Philippe. We will never stray Bonati found this “beauty of a boat” wary in the current too far from our core aesthetic rotting on a Antigua beach; the market. Which makes DNA.” brand has spent four years and Officine Panerai’s That is not to say that Panerai 60,000 workers’ hours restoring it. Moptimism about its prospects and its does not break new ground when it “Our relationship with yachting bullish strategies for growth all the comes to design and innovation. The encapsulates so many of the positive more surprising. latest round of Luminor and values and hallmarks that we want The company started life in 1860 as Radiomir timepieces unveiled at the to be associated with. It’s an exciting a Florentine workshop and school SIHH fair in Geneva in January form of active storytelling that that provided the Italian navy with featured dials and precious metals, moulds our past, present and specialist diving instruments, but its as well as power reserves lasting future,” says Mr Bonati. timepieces only hit international days rather than hours – in keeping “I really believe being a young retail markets as recently as 1997 with the brand’s historic naval links. brand gives us an opportunity to when it was acquired by Richemont, Panerai also draws on its maritime create our own heritage and destiny. the luxury holding group. heritage with its sponsorship of We are elevating ourselves to a Personally selected by Johann yachting events and regattas, as well position for the 21st century.” Rupert, Richemont’s chairman and owner, to spearhead the launch of the new brand was Angelo Bonati, Right, Angelo chief executive. Bonati. Below, “A lot of people told me I was the Panerai crazy to take on an unestablished Luminor brand in such a fiercely competitive environment,” says the amiable industry veteran, who over a 34-year career has also worked for Ferrari, Cartier, Dunhill and Yves Saint Laurent. “And to some extent I agreed with them – I certainly took a great risk professionally. But coming to Panerai has been the best experience of my career. To take a thousand watches and a two-page business plan and build what we have achieved in so little time is extraordinary.” Mr Bonati’s sentiments echo those of its owner. Mr Rupert has described Panerai as “his baby”, and his decision to acquire the brand as “one of the best of my career”. “A watch landed on his desk 18 years ago and he fell in love with it immediately. He saw enormous potential in the product, and that it could captivate the mind of the modern consumer,” Mr Bonati says. “The past does not need to be our focal point.” Today, in the wake of high demand from mature and emerging economy consumers – and despite a softening luxury market – the two men are forging strategies for long-term growth. “I don’t mean to sound too Italian, but if you don’t dream then you can’t realise,” says Mr Bonati. “It’s important for Officine Panerai to continue aiming high.” The brand unveiled a 1,0000 sq km manufacturing workshop in Neuchâtel, Switzerland, this year, centralising its manufacturing, marketing, research and development operations under one roof. It is a move that Mr Bonati believes will hand Panerai a powerful degree of autonomy. “Every quality luxury label is judged by its craftsmanship, and we want to be known as a strong manufacturing watch brand,” he says, adding that the company’s old offices were bursting at the seams. “It’s vital that we take this step towards total in-house vertical integration and independently create our watches. It will strengthen us and protect us against headwinds encountered by [our] rivals.” Major expansion at home is a bold move, but one mirrored by a steady roll-out of boutiques abroad, fuelled by demand from the brand’s passionate fans – known as the Paneristi. There are now 63 stores worldwide and, while the US and Europe continue to show steady growth, Mr Bonati has looked east to invest and capitalise on what he sees as the most lucrative potential sales. “More and more shopper traffic in mature markets comes from emerging market tourists these days,” he says. “We now have 25 boutiques in the Far East and a further 12 in India and the Middle East to cater for this new customer closer to home.” He says that Panerai’s designs – clean, contemporary lines, an oversized face and a more accessible price point than some rivals – give the business a strong advantage. “Other brands’ watches – those with highly complicated movements and adorned with gold and diamonds – have their market with ultra high net worth individuals. But the upper middle class is booming in Asia, and it could be a site of considerabl e growth for us,” he says. “They like that, while we offer some of the biggest watches in the world, we are also proud to be a simple sports watch. We are not – and have 10 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches & Jewellery Collecting New generation of collectors sets the pace in the saleroom

Hong Kong Discerning buyers in their 20s and 30s are helping Sotheby’s break records in Asia’s regional market, writes Simon de Burton

hile some believe Asia’s The results gave Sharon Chan, the Above: Watches by Richard Mille, our auctions in search of the very rare Ms Chan says she is seeing a age group,” she says. “Now, however, voracious appetite for recently appointed head of the Asian Ulysse Nardin, Girard Perregaux and very valuable pieces that even the marked rise in female bidders buying there are many more in their 20s and buying luxury watches watch department at Sotheby’s, good and Patek Phillippe for auction in absolute VIP clients can no longer get pieces for themselves as a result of 30s who are buying out of an interest at retail might be reced- reason to be quietly optimistic for her Hong Kong. Right: Sharon Chan hold of direct from the brands,” says the drive by high-end brands to in horology rather than as a means of ing, there seems little sale on April 8. It is replete with the Ms Chan. increase their offerings of mechanical investment. Wsign that the regional auction market type of contemporary, high-end watch “The group of such collectors has watches for women. “One couple in their early 30s, for for pre-owned pieces is in anything that holds strong appeal for the become pretty large, but we are also “Included in the April sale, for example, have consigned part of their but rude health. region’s collectors. seeing quite a few new clients in the example, is a 2009 ladies’ Richard collection of modern watches, which Last year, Sotheby’s Hong Kong The star of the show is set to be a middle and lower ranges. Asian buy- Mille tourbillon with a diamond-set is made up of pieces by independent watch department recorded its best platinum-cased Patek Philippe minute ers are now realising that it’s possible dial in the shape of a celtic knot. It’s a brands such as Urwerk and MB&F performance, shifting a record $58.8m repeating tourbillon with perpetual for a watch to be second-hand but still design that symbolises longevity and that are notable because they display of timepieces in four sales. On April 8, calendar, and day-and-night indica- in excellent working order. the endless cycle of life, some- the time in unusual ways. They now the house hopes to set the ball rolling tion – the third most complicated “Most, however, only want pieces thing that appeals to the want to sell some of them in on an equally impressive run of auc- wristwatch the prestigious maker has that are in pristine condition. If they Asian culture. Sophisti- order to be able to buy others. tions, when it stages its first event of produced, and one that is virtually are buying for themselves, then they cated women seem “It’s likely they will lose 2014 at the Hong Kong Convention impossible to obtain new. The exam- will accept watches that do not have drawn to watches money on some of the and Exhibition Centre. ple on offer is a year old and has been packaging, but if they are buying for a with complex watches they have The blockbuster catalogue contains consigned in its original, sealed pack- gift everything has to be as it was movements, and decided to sell, but they 480 lots with a combined value of aging with a $790,000 high estimate – when the watch was new.” we’re confident don’t regard that in a more than $12.8m, among them a more than $100,000 below the retail Ms Chan expects about one-third of that this piece negative way. They sim- broad selection of complicated pieces price. the lots to be bought by local bidders, will fetch ply see it as the price including tourbillons and minute The piece is expected to be hotly with a significant portion being upwards of that has to be paid in repeaters carrying six-figure esti- contested, as is one of three platinum snapped up by clients from around $180,000.” order to gain knowl- mates. Breguets made in 1997 to commemo- the world using Sotheby’s online bid- According to Ms edge.” Rival house Antiquorum tested the rate the 250th anniversary of ding system. Chan, the buyer waters in Hong Kong last month with Abraham-Louis Breguet’s birth “Many of the people who buy in this demographic is also Sotheby’s Hong Kong, the first major international watch ($280,000-$410,000), a 2003 Girard- ‘People are in search of the way are highly experienced,” she changing. Important Watches: on view auction of the year, an event that Perregaux Opera Two minute repeat- says. “As well as reviewing the large- “Until quite April 3-7 at the Hong Kong grossed $5.3m for the 200 watches ing tourbillon ($180,000-$260,000) and a rare pieces that even VIP format, high-resolution images [in] recently, I would Convention and Exhibition sold. Among timepieces crossing the six-year-old Greubel Forsey tourbillon, clients can no longer get our online catalogue, they frequently say that buyers Centre, 1 Expo Drive, block was a 2009 Patek Philippe tour- one of 11 white gold versions, which ask for more pictures of particular were invariably Wan Chai, Hong billon minute repeater, which went could realise $320,000. direct from the brands’ details. They are very knowledgeable in the 40-plus Kong; sale for $798,000. “Increasingly, people are coming to in terms of design and technology.” April 8

The battle is Spot the difference The test for legal rulings Time is a vital ingredient on to stop for New York super-chef

The collector alligator band is extremely Maguy had the exact precise, which counts for a date and time I first trademark Eric Ripert lot in a restaurant. It isn’t walked into the restaurant valuable because of its – June 11 1991 at 7.40am – He explains his love gems and gold, but because inscribed on the watch of its complications. It is case. of watches to the most accurate and infringement Christina Ohly technically sophisticated CO Which of your watches timepiece available. It are you most likely to takes a few years to make wear in the kitchen? Eric Ripert’s love for just one. ER For more casual Cheap imitations Group. Its pretender time- beautiful, finely crafted occasions I often opt for a piece retailed at hundreds timepieces was sparked by CO How do you care for Rolex, but all of my Audemars Piguet of pounds rather than the a Cartier Santos watch, a your watches? watches work well with thousands charged for a gift from his mother, ER Watch collectors are my daily uniforms: the has won a landmark genuine Royal Oak (the Monique, when he was 15. typically cautious, but I do jeans and trainers I victory to protect a entry-level men’s model Now, at 48, the chef and not put mine in a vault or commute to work in, and costs £9,800), yet the US Dis- owner of the three regard them purely as later, my chef’s whites. design icon, writes trict Court for the Southern Michelin-starred Le investments. I wear my District of New York ruled Bernardin in New York watches while cooking, and CO How important is Simon de Burton that selling it still consti- Stewart Cameron of but the key to the law in the property law. An obvious can list watches by Patek at night for formal accurate timing to a chef? tuted an act of unfair com- Glasgow-based patent UK is that an object does example is the Coca-Cola Philippe, Rolex and occasions. Much like the ER A minute can be an Anyone contemplating petition. attorneys Cameron not infringe the rules if it bottle, which is a registered Vacheron Constantin in his wines I collect, I prefer to eternity in the kitchen, making a fast buck by To arrive at the $9.8m Intellectual Property says the conforms a different overall design. If someone were to collection. drink rather than save and even 5-10 seconds launching a line of “clone” payout, the court awarded laws regarding aesthetic impression on the informed copy that to sell their own Accurate timing is them. I like the ritual of matter. We are all about watches based on the clas- the full amount of the design rights can be complex user. In the case of a watch, brand of drink, it would be a essential for the master of winding them – it creates a serving 80 diners hot, sic models of existing defendants’ profits from the and ambiguous. But cases an ‘informed user’ might be clear infringement. modern French cuisine, relationship between the delicious food, so brands might want to think sale of the Trimix Diver and such as that involving the considered by one judge to “It is often said that who trained at La Tour wearer and the watch over everything must be again. trebled them for “bad faith” Swiss Legend and Audemars be a watch aficionado, altering a few elements of a d’Argent in Paris and later time. perfectly timed. Audemars Piguet was conduct. Swiss Legend has Piguet watches (above) boil whereas a different judge particular design can make it with chef Joël Robuchon awarded $9.8m in damages also been banned from mak- down to the simple matter of might say it could be any sufficiently different to get before moving to the US in CO Were all your watches CO Do you choose watches in a recent US court case ing watches that might whether or not one object member of the public. around the problem. That is 1989. received as gifts? to match your sartorial after a judge ruled that the infringe other trademarks, looks too much like another. “How different an object a fallacy. It still needs to Mr Ripert’s collection ER My collection includes style? trademark rights of its and may have to pay Aude- “There are jurisdictional needs to be is one of most conform to a different overall includes casual watches a dozen watches that all ER I often make the effort Royal Oak model had been mars Piguet’s legal fees. differences around the world, uncertain areas of intellectual impression.” SDB (Rolex) as well as formal, have special meaning. to dress well to show infringed by an imitator. Audemars Piguet’s chief statement-making pieces (a Some I have bought for respect – to my colleagues, The Royal Oak, which executive, François-Henry limited edition, rose gold myself because I loved the to a restaurant or to was launched in 1972 and Bennahmias, said after the along and copy what we for example. It is the most operates a proper distribu- Vacheron Constantin). He look and feel of them on friends – and watches are remains the company’s sig- judgment: “The Royal Oak have worked extremely copied brand in existence, tion operation and which is considers them “essential my wrist. Others have a big part of this. nature creation, is notable was the first of its kind and, hard to achieve. yet its watches sell like hot legitimately run. instruments” for running been special gifts, and one for having a bezel secured 40 years later, it remains “My strategy from the cakes.” “That is why Audemars his restaurants. of my most prized is a CO Which watch do you by exposed screws, a dis- unmatched among prestige very beginning has been to Equally passionate about Piguet was able to bring the Vacheron Constantin hope to pass down to your tinctive, octagonal case and sports watches. give a hard time to the peo- fighting the fakers is Jean- case to court. It is far more Christina Ohly Why do you American [19]21 given to children? a textured “tapisserie” dial. “[It is] an authentic icon ple who copy. When you Claude Biver, the chairman difficult to fight the type of collect timepieces? me by my partner, Maguy ER A vintage Breguet, as The work of the watch that is making an indelible make a watch with no dial of Hublot and recently fakers who operate under- Eric Ripert Just as you Le Coze, to commemorate they were the original designer Gérald Genta – imprint on the history of or back and an unusual appointed president of the ground and are run by cannot measure flavour, my 20th anniversary at Le inventors of the tourbillon, who is said to have created modern watchmaking. thus, case shape, as we do, copy- watchmaking division of shady organisations.” time is intangible and Bernardin. or a Patek Philippe. it in a single, overnight we are fully committed to ing becomes difficult. But LVMH. He adds: “The fact that difficult to measure This watch was sketching session – it is enforcing our rights to the “We estimate 1m copies of these watches were being accurately. Watchmaking originally made in the CO And which do you regarded as being among a Royal Oak design and insist Hublot watches are made sold for a fraction of the and cooking are very 1920s and is often referred particularly admire? small group of all-time clas- our trademarks be fully every year – the 142,000 price of a genuine Royal similar – each has to be to as a “driver’s watch” ER I’m always amazed by sics that includes the Rolex respected.” ‘Such products pieces we seized last year Oak is irrelevant. What carefully calibrated to because the 12 o’clock the design, quality and Submariner, the Jaeger-Le- Mr Bennahmias would dilute the genuine probably accounts for 10-15 matters is the fact that such create a beautiful final position is slightly price of Swatch, and by the Coultre Reverso and the not comment further on the per cent of what was actu- products dilute the genuine result. I hope that by turned so that a fact that they supply many Cartier Tank. case, since elements of it design and affect ally made,” Mr Biver says. design and affect the exclu- collecting, I am helping racing driver of the big watchmakers Its success has resulted in are continuing – but some “The fake watch is a sivity of your brand. to keep this could read it with parts. the production of many of his colleagues in the the exclusivity of tragic consequence of a “It results in damage to watchmaking tradition with his hand direct fakes – copies passed watchmaking industry who your brand’ brand’s success, because both prestige and exclusiv- alive. on the CO If money were no off as having been made by suffer similar problems the people who produce ity because, quite frankly, steering-wheel. object, which watch would Audemars Piguet – but the were more vociferous. them only copy what they the copies are not worn by CO What is your latest you buy? recent court ruling con- Richard Mille, founder of now it is obvious that peo- can sell.” He laughs: “So it the sort of people you want acquisition? Ripert: every ER Without a doubt, a cerns a watch that was sold the high-end watch com- ple are taking legal advice is also a tragedy if your your brand to be associated ER The watch I am second counts Vacheron Constantin Tour by the Swiss Legend brand pany that bears his name, about just how far they can products are not copied, with. wearing is a rare in the kitchen de l’Ile [$1.5m]. There were under the model name says: “The Audemars go to copy the spirit of a because that means they “In my opinion, the US tourbillon by Vacheron only seven of these Trimix Diver. Piguet ruling at last demon- particular brand without are not popular enough.” court’s award of $9.8m to Constantin that was produced in 2005, to mark Swiss Legend, which strates that judges are stepping over the line in the Mr Biver points to an Audemars Piguet was recently given the 250th anniversary of advertises a range of 2,000 beginning to understand way Swiss Legend seems to important distinction: “But, entirely fair. In fact, I think to me as a the company. It has an models on its website, was that legitimate brands are have done. in the Swiss Legend case, $50m would have been fair. gift. This incredible combination of launched about 10 years ago investing millions in infra- “It is difficult to measure these were not fakes. They How do you judge the value rose gold horological complications and belongs to a big US structure and design, only the financial effect,” adds were watches made by a of potentially having your version and astronomical watch distributor, the SWI for these parasites to come Mr Mille. “Look at Rolex, genuine company, which image destroyed?” with an indications. FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 11 Watches & Jewellery Retail

Pace setters Halo strategy The premium models Baume et Mercier Clifton 1892 Flying Tourbillon Baume & Mercier has added a flying tourbillon to its Clifton collection, a watch limited to 30 pieces that is sets right tone the most complicated and expensive model in the brand’s line-up. £39,600

Cartier Rotonde de Cartier for fine tuning Astrocalendaire Cartier’s perpetual calendar displays the day, date and month on a novel three-dimensional dial. At the heart of those concentric circles is a on a grand scale flying tourbillon. Only 100 will be made. £153,000

Oris 110 Years Limited Edition Calibre 110 Oris’s first in-house movement in 35 years, has a unique pairing of complications, namely a 10-day power reserve and a non-linear power reserve indicator. The watch Emblems High-end collections give brands is also remarkably priced given its specifications. a reputational boost, says Robin Swithinbank £9,950

n luxury watch marketing, one executive. “It creates a very good is our next challenge,” he says. “At 2010 and the 1904-CH MC chrono- plications, Calibre 110 is Oris’s first At this year’s edition of Salon Inter- strategy never goes away. Topping image of innovation and avant garde- that price, it’s important to be able to graph, which was launched last year. in-house movement since 1979. national de l’Haute Horlogerie in off a collection with an excep- ism, and it means we can be better communicate that we produce For both brands and many others, “Calibre 110 shows our capacity, Geneva, it unveiled the Clifton 1892 tional piece to demonstrate prow- when we do commercial products.” in-house. My feeling is that when you in-house movement capacity has knowhow and ambition to create our Flying Tourbillon, a high-end watch ess is a typical tactic in an indus- Those commercial products mainly go above SFr5,000, you need a move- become the holy grail. own movement,” says Ulrich Herzog, that will retail for £39,600 – more than Itry where generating noise is often retail for between $1,500 and $7,500. ment that’s a bit more special than Following the Swiss Competition Oris’s chief executive. four times the next most expensive the difference between success and According to research company GfK the others.” Commission’s decision last October to Between 1904 and 1979, Oris made watch in the brand’s collection, and at failure. Retail and Technology, TAG Heuer Like TAG Heuer, Cartier has allow Swatch Group to withdraw sup- 229 in-house movements. The new cal- least 20 times more than its core Yet for today’s watchmakers, the has a UK market share of 29.5 per invested heavily in high-end watches. ply of its movements and parts to ibre marks a return to former glories, pieces. This it believes will play a motivation for adopting a so-called cent in that segment. Its Fine Watchmaking collection, third parties, sustainable autonomy is and signals – the brand hopes – a pivotal role in creating the right pro- “halo strategy” is not always prosaic. But Mr Linder says the figures drop introduced in 2008, has radically now more desirable than ever. bright future. file for the brand. For TAG Heuer, it masks far larger off rapidly once prices pass that point. altered perceptions of the brand. A halo strategy can provide brands “We will focus our marketing activi- “If you want to be impactful and ambitions. The brand’s Haute Horlo- TAG Heuer’s solution is Calibre 1969, “People used to think Cartier was a with a leg-up as they look to achieve ties across the globe on this new sustain the message that you are a gerie collection is spearheaded by its second in-house chronograph cali- creative watchmaker, but not neces- that goal. movement and we strongly believe it Swiss watchmaker, you have to dem- pieces such as this year’s Monaco V4, bre. Developed at a cost of about sarily a credible one,” says Thierry For some smaller brands, conversa- will give our brand a significant onstrate your expertise,” says Alain a belt-driven tourbillon that will retail SFr20m ($23m), it is intended to stim- Lamoroux, the brand’s international tion pieces are not always simply increase in awareness,” says Zimmermann, the brand’s chief execu- for SFr150,000 ($172,000). Revenue gen- ulate growth at a higher price point. marketing director for watches. about drawing attention to them- Mr Herzog. tive. erated by the collection supports the If it works, Mr Linder believes that “Not any more. The collection has selves. In Baume & Mercier’s case, the chal- “If an emblematic piece is consist- brand’s volume business and, more by 2016 TAG Heuer will be Switzer- helped raise desirability among people At Baselworld this week, independ- lenge is to establish and perpetuate a ent with the brand, it will be success- specifically, its in-house movement land’s leading chronograph brand, interested in watches, particularly col- ent watch company Oris will launch position as an affordable watchmak- ful, because it will show who you are. programme. producing 100,000 units in-house. lectors.” Calibre 110, a novel movement with a ing brand, appealing to a price-con- If a customer sees and is inspired by a “Haute Horlogerie is a laboratory “Calibre 1969 is an important move- It has given Cartier leverage to 10-day power reserve and a non-linear scious consumer while trying to build piece, they might not be able to buy for making exceptional pieces,” says ment because it will enable us to sell develop its own base calibres, the power reserve indicator. As well as a reputation as a legitimate Swiss it, but they go for a more affordable Stéphane Linder, TAG Heuer’s chief products for SFr5,000-SFr7,000, which 1904-PS MC automatic launched in having a unique combination of com- watchmaker. piece and get the same philosophy.” Internet revolutionises vintage collectors’ world Online Buyers are getting younger, says Rachel Felder

Vintage watch collecting buy something cool and of because it allows them to was once the preserve of substance, who are using ask for the price they feel is well-informed enthusiasts. things such as Facebook, right, and also adjust prices But that has all changed Tumblr, Instagram and the quickly according to what thanks to specialist web- internet to find things.” the market is doing.” sites and a handful of inter- Selling on the internet Auction houses are also national dealers and through social media taking note of how “[The internet] is proba- has made it easy for dealers the internet can be incorpo- bly the best thing that hap- to serve customers from rated into their business pened to the watch busi- around the world, no mat- in new ways. Last October, ness,” says Matthew Bain, ter where those dealers are. Christie’s held its first one of American’s leading Mr Bain, for example, online-only watch auction, vintage watch dealers, who lives and works in Miami. including collectables now sells the majority of Another top dealer, Tom such as a 1970s stainless his watches online. Bolt, is based in Mayfair in steel Patek Philippe Nau- “It has brought the watch London. Rolex specialist tilus. world closer together, and Eric Ku is based in Los The company is adding a made it a lot more knowl- Angeles, while another dedicated watch sales area, edgeable, and it’s created American vintage Rolex Watch Time, to its website more collectors.” seller, Andrew Shear, works in June. The new venture Two types of collectors in New York. Andrea Foffi will offer timepieces to buy are drawn to buying vin- and Marlon DeSimone are (rather than for auction), tage watches online, and both well-respected dealers which is also how Sotheby’s both are growing in num- located in Italy, a centre of presented 26 specially bers in the market, Mr Bain curated watches in Novem- says. Some are shoppers in ber in a week-long digital markets that are compara- pop-up shop. tively new for watch collect- ‘Dealers are Although there are plenty ing, such as China, South understand of important watches avail- America, and even second- able online with no cap to ary and tertiary cities in that there are what serious collectors will the US, that benefit from spend, the “sweet spot” the ease the internet customers in their price in terms of buying on affords. early 20s and 30s’ the internet is, according to Others are young collec- Tom Bolt, £2,000-£15,000. tors, often more familiar Some general luxury with a mouse than an auc- vintage watch collecting resale websites are having tion room hammer. Stephen since the 1980s. success with the addition of Pulvirent, associate editor While these dealers oper- watches at the lower end of at Hodinkee, a website dedi- ate their own websites, that price range. On The cated to vintage watches, some sell to a wider audi- RealReal site, for example, says: “Maybe, 20 years ago, ence through auction vintage timepieces, which it vintage watch collecting houses such as eBay. began carrying in 2012, now was something reserved for Increasingly, Twitter and account for more than a 70-year-old men in their Instagram are popular (and quarter of the retailer’s jew- country houses who were profitable) avenues, offering ellery business. going to auctions and read- a more discreet way to sell Sellers are finding ingen- ing all the catalogues. to obsessive collectors by ious ways for potential cus- “It was kind of a club and simply posting a photo- tomers to inspect items you had to be an insider to graph of a timepiece with- online. At Sotheby’s, for participate. Dealers are now out a price or detailed example, e-catalogues offer understanding that there description. magnification, and some are customers in their early As Mr. Bain explains, pieces are photographed at 20s and 30s who want to “There are groups of us on enough angles to offer a social media who all know 360-degree view, making one another; we say: ‘Look details easier to see on a what I found today’. We do computer screen than in business and no one knows person. we’re doing business. Insta- Watch forums, such as gram has become huge in those on Timezone.com, the past year and a half in allow collectors to swap the vintage watch commu- information and sometimes nity.” buy and sell directly with Leaving prices unlisted is one another. a sales strategy that is not Yet, no matter how easy reserved for social media. the internet can make pre- “You see more and purchase research, buyers more important dealers still need to be cautious and who don’t give prices discerning. John Reardon, on their website, espe- international co-head of cially for the vintage watches at Christie’s, says: pieces,” explains Jul- “It comes down the same ien Schaerer, manag- things as a bricks-and-mor- ing director of tar auction house: trust, Antiquorum, an value, and expertise. auction house “People are now comfort- specialising able with the medium of in watches. buying online, and, com- “ T h e y bined with a trusted source, just say that client has a level of ‘ u p o n comfort that it’s safe to request’, buy.”

Connected dealer: Matthew Bain 12 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches & Jewellery Trends

G-Sensor

Hour hand G’s scale

G-Sensor hand

Rotary G-Sensor to visualise the longitudinal and lateral forces Power reserve indicator

Bottom pusher to reset the G-Sensor to zero Minute hand

G-measurement orientation

Function indicator Rotating bezel in brown ceramic

Tourbillon cage Function selector

Fixed bezel and caseback in titanium Caseband in carbon nanotubes

Source: G-Sensor FT graphic

Deconstructed Richard Mille launches its Sébastien Loeb tribute G-sensor watch

With his hands furiously working the serves as a wrist-mounted G-force meter Tourbillon Competition G-Sensor instantly reset with a prod of the button from grade five titanium and the dial is Even the winding crown is special, steering-wheel of an 875hp Peugeot 208 to gauge how hard the wearer’s body is Sébastien Loeb is undeniably impressive. protruding from the centre of the dial. hewn from sapphire crystal. featuring a “gate” system similar to that as it scorched up Colorado’s Pikes Peak being accelerated, slowed down or The rotary G-sensor might be a mere The eye-watering price of the RM Indeed, the engineering that has gone of a car’s gear lever, with different hill climb last summer in a record eight shoved sideways in extreme situations. 17mm in diameter, but it contains 50 36-01 is further accounted for by the into this watch almost rivals that of Mr positions for winding, hand-setting and minutes, 13 seconds, it is unlikely that Some might say the watch is nothing components and can display forces of fact that its case band is made from an Loeb’s record-breaking Peugeot. The “neutral”. Sébastien Loeb, nine-times World Rally more than a gimmick, but it is widely up to 6G through a moving weight anthracite polymer (a form of carbon manual winding movement features a But if you have the inclination to own champion, had much opportunity to accepted that the world of haute connected to a needle, which oscillates fibre) injected with carbon nanotubes – tourbillon escapement, 70 hours of an RM 36-01 – and you have the check the time. horlogerie has become less about the between a green zone (for mild force) microscopically small tubes made from power reserve, a shock-resisting free- necessary cash – you will probably have But that has not stopped Richard Mille anodyne business of timekeeping and and a red zone (critical). The direction a web of rolled graphene sheet, which is sprung balance wheel and a modular to drive as fast as Mr Loeb to get one, creating a $625,000 limited edition more about the demonstration of in which the force is to be measured exceptionally strong and rigid. time-setting mechanism that is separate as just 30 are being made. wristwatch in the driver’s honour. As well technical prowess. can be set by turning the brown The back, movement baseplate and from the main movement for ease of as displaying the hour of the day, it In that regard, the RM 36-01 ceramic bezel, with the display being bridge screws, meanwhile, are made maintenance. Simon de Burton

Appeal of aviation theme is more than a flight of fancy

Design Pilots’ watch sales are taking off, writes Robin Swithinbank

According to some industry lection of watches that, Thames to the west of Lon- business is producing observers, pilots’ watches according to Mr Dufour, don, and won the Global watches for the military, accounted for 10 per cent of accounts for 26 per cent of Connections Competition, a including squadrons that all luxury watch sales last Zenith’s sales. contest organised by HSBC fly Boeing aircraft. year. Long-time pilots’ watch to find Britain’s most inno- The first watches to come During peace time, pilots’ manufacturer IWC fre- vative and forward-thinking out of the relationship will watches have seldom been quently revisits its Pilot companies. be launched at Baselworld more popular, as buyers in Watch family of models, In January, Bremont and will feature Custom mature watch markets con- while Breitling has built a signed a five-year deal with 425, a material Boeing tinue to show a preference brand around its aviation Boeing, the US aircraft employs in its aircraft that for classic designs over con- links. has never been used in temporary equivalents. Its activities at Basel- watchmaking before. Many modern pilots’ world this week will centre For its part, Boeing will watches reflect designs on the 30th anniversary of ‘There is a dream of use Bremont as a vehicle to from the golden age of avia- its flagship Chronomat celebrate its 100th anniver- tion in the first half of the pilots’ watch. liberty and freedom sary, in 2016. 20th century, while their The rookie by those “We always wanted association with adventure standards is Bremont, the connected to pilots’ Bremont watches to be all- is a lure that watch buyers British brand that has watches. They purpose watches you could find hard to resist. staked its future almost wear in the boardroom or But few pilots’ watches entirely on the enduring excite people’ up Mount Everest,” says sold today will ever be used qualities of pilots’ watches. Bremont co-founder Giles to calculate speed, distance, It launched its first watch English. fuel consumption or, as in 2007 and in the interven- manufacturer, which gives “A pilots’ watch falls per- some are able to monitor, ing years has become a it access to Boeing’s fectly between a sports drift angle – a complex watchmaking success story Advanced Manufacture watch and a dress watch – measure of the angle and a flagship for British Research Centre in Shef- and in the past few years, between heading and track industry. field. Bremont has been austerity cool has given the – but the knowledge that Last year, the company working indirectly with understatement of pilots’ they can is a fillip to sales. opened a watchmaking Boeing for a number of watches a place. And they In recent years, this surge facility in Henley-on- years – 20 per cent of its don’t age. You look at in popularity has encour- pilots’ watches from the aged several brands to refo- 1940s, 1950s and 1960s and cus their attention on they still look brilliant.” pilots’ watches; others to “They are not fashion introduce a collection for watches – they are here to devoted buyers of pilot stay.” watches; and others still to Bremont, IWC, Breitling, take their first steps into Hamilton, Longines and the market. Oris have led the pilots’ Shortly after taking the watch line since the 1930s, helm at Zenith in 2009, some of them as official Jean-Frédéric Dufour dis- suppliers to the armed covered the brand owned forces. the licence for using the Hamilton produced more word “pilot” on a watch than 1m timepieces to sup- dial. port the second world war “I checked all the names effort. That kind of heritage we had registered and I cannot be artificially manu- found that we had forgotten factured. this,” he says. “It was the “It’s easy for newcomers very first step. I told myself, to say: ‘We do pilots’ ‘we have so much legacy, watches’,” says Mr Dufour, we have the name, we have whose company made the design, we have the his- pilots’ watches until the tory, we have the testimoni- quartz crisis of the 1970s als from Louis Blériot – so and 1980s. why aren’t we carrying the “They’re easy to design – collection in our line?’” they’re classics, and the Louis Blériot wore a largest part of the industry Zenith watch when he is in classic watches. But completed the first cross- we were there at the begin- Channel flight in 1909. ning. Emotionally speaking, In an attempt to compete there is a dream of liberty for pilot-watch dollars, and freedom connected to Zenith has tapped into its pilots’ watches. They excite aviation heritage with a col- Legacy: Louis Blériot wore a Zenith watch people.” FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 13 Watches & Jewellery Watchmakers fall in love with everyday heroes

Brand image Real-life achievers are replacing celebrities and film stars in advertisements as marketing moves on, reports Syl Tang

reaking away from the Its charity fundraising received local usual practice of hiring a coverage but did not feature heavily movie star to be the face of in the media. However, it started to the brand, watchmakers draw the attention of top Panerai col- such as JeanRichard, Offi- lectors, many of them race winners, cineB Panerai and Bovet 1822 are focus- who have donated the use of their ing on celebrating ordinary people boats and crews to Ms Boisvert and doing extraordinary things. her charity. JeanRichard’s 208 Second watch Some may see Panerai’s involve- was created to commemorate the ment in good causes such as these as crash-landing of US Airways flight an indication that celebrity endorse- 1549 on the Hudson river in New York ment has become tired and uncon- in January 2009, when the lives of all vincing as a marketing tool. 155 people on board were saved by the However, Karen Giberson, president skill of the pilot. of the Accessories Council, says the The timepiece, which marks the day-to-day struggles of ordinary life fifth anniversary of the event, has play a part in consumer spending. indicators around the dial to show the “People are looking for authenticity 208 seconds that it took Captain Ches- in what they buy, what it represents ley “Sully” Sullenberger and his crew and who we look up to now. People to land the plane. want their accessories to align with Captain Sullenberger, who found their personal values but also their himself unexpectedly in the limelight daily concerns,” she says. five years back, says that timing is Throwing money at fixing the world crucial in creating “ordinary” heroes. is something Bovet 1822 is also doing. Ten years previously, he believes, his In 2013, the watch brand raised $1.8m own story would not have been given for film-maker Paul Haggis’s Artists as much attention. for Peace and Justice, a charity fund- “There are many people who do ing education and healthcare pro- notable things. They just aren’t pub- grammes in Haiti. licly tested as I was. You decide what Having just announced a five-year kind of a person you’re going to be commitment to the charity, Pascal long before anything like this happens Raffy, chief executive of Bovet, to you, if it ever does. But the event says: “Sometimes, after 10 minutes gave people hope, which is why we conversation, you understand on still think of it.” the spot that you share the same There is a logical connection values. between pilots and timepieces. “This is what happened with Paul “For a pilot, the concept of time is and I when he was talking about edu- inherently important,” says Mr Sul- cation and the goals of the children of lenberger, who as well as the 208 Sec- reality. Selling watches wasn’t the Everyday miracle: Captain Chesley Autism Speaks after their son was battle against polio. In the 1930s, Haiti. This is not about selling ond has a 1973 Rolex he received from main objective – it was finding the Sullenberger of the Hudson river crash­ diagnosed with the condition. research had stagnated until Presi- watches, but we have a chance to give the American Fighter Aces Associa- right people to convey that message. I landing, marked by watchmaker “For a company such as Panerai to dent Franklin D. Roosevelt’s involve- with modesty and humility.” tion. “You have a finite amount of don’t know if it’s the right message, JeanRichard’s timepiece get involved in a cause of this type ment led to the creation of a founda- Mr Haggis confirms that Bovet’s resources before you have to return to but it’s our message.” draws big company money,” Mr tion that became known as the March support comes with no strings earth, so you have to manage these Another brand celebrating extraor- Greenburg says. “You don’t associate of Dimes. With the money raised, the attached. “With our sponsors, it was resources well – similar to managing dinary achievements by people previ- autistic kids with luxury goods, but first polio vaccines were developed. crucial that they all didn’t ask for the time we are given in life well. ously unknown to the wider public is this is one of the fastest-growing dis- Panerai has backed other initiatives anything in return. That’s why we “Time is a constant reminder that Officine Panerai, which has joined orders. It’s an epidemic and you can’t to help those living with serious medi- said ‘yes’. It’s about shared values, we never know what tomorrow may with Ari Greenburg, a Hollywood raise enough money just from individ- cal conditions. In 2011, it extended its dignity and passion. Now, we can bring, and a constant reminder to agent, in his charity work to raise uals to have power globally. Classic Yachts Challenge sponsorship sponsor a hospital and we’ve built a prepare.” awareness of autism. Its watches have “You need awareness and money in to Sailing Heals, run by Trisha Bois- cholera clinic and so forth.” But can a campaign of this kind sell no shortage of celebrity fans (such as Washington DC to shake out federal vert. Based in Bradford, Massachu- APJ, which built Haiti’s first free watches? Bruno Grande, chief execu- Ryan Reynolds and Orlando Bloom) funds to have public health initia- setts, the charity allows cancer secondary school last year, has incred- tive of JeanRichard, indicates that but executives were captivated by Mr ‘With our sponsors, it was tives. Then, instead of $20m, you get patients and their families to “escape ibly lofty goals. “It’s about giving profit is not the reason his company is Greenburg’s passion for his cause an NIH [National Institutes of Health] for a spirit-lifting day at sea”, drawing Haitians education and the chance at focusing on good deeds. “If a brand after meeting him through the com- crucial that they didn’t ask bill worth a couple billion a year.” on what it sees as the healing power taking back and running their own can make someone dream, it has to be pany’s Hollywood store. for anything in return. Bringing companies such as Panerai of being out on the ocean. country,” says Mr Haggis. a dream they can touch, share and Mr Greenburg, a partner at William on board will, Mr Greenburg hopes, With a fan base among the sailing The days may be over when all a reach. In difficult times, people need Morris Endeavor, and his wife, That’s why we said yes’ bring the kind of breakthrough for community, Panerai has often used luxury brand needed was celebrity to see that crazy dreams can become Andrea Lee, became fundraisers for autism research that was seen in the glamorous regattas in its marketing. endorsement. Industry mourns maestro who defied quartz crisis to go solo

Obituary Indeed, until a few years ago he is said to have still Raymond Weil been travelling to the firm’s Geneva headquarters Simon de Burton by motor scooter, his favoured method of looks back at the life negotiating the city. of the pioneering “He was a quite extraordinary man who Swiss watchmaker recognised the importance in business of forming good relationships,” says Even those with nothing Mr Weil’s grandson, 33- more than a passing year-old Elie Bernheim, the interest in luxury horology firm’s director of will probably have heard of marketing. Raymond Weil, if for no “When he launched the other reason than the fact company, he personally that watches bearing his travelled around the world name are found throughout to establish the brand. His the world. first retail outlet was in Mr Weil, who died in New York as a result of a Geneva on January 26 at contact he established at the age of 87, became one the Basel fair. of the most successful and “But he was also a highly regarded figures in pioneer in that he took the the business, after setting brand to India and China up his watch brand during during the early 1980s, and the height of the “quartz part of our present day crisis” in 1976. success is down to the fact By then, he had worked that his foresight meant in the industry for 27 we became established in years, having started his such countries a long time career in 1949 with the before many of our Camy watch company competitors.” where he worked his way A life-long music lover – Away from horology, Mr up to the rank of his daughter, Diana, is a Weil was a connoisseur of managing director. virtuoso pianist – Mr Weil 20th-century artists such as Ironically, Mr Weil said decided from day one to Mark Rothko and Wassily it was the threat faced by develop the brand’s DNA Kandinsky and built up an the Swiss watch industry around the theme of Raymond Weil impressive collection of from inexpensive, quartz- classical opera. At a glance works. He also had a great powered imports that The Raymond Weil love of flying. spurred him to establish watch range still includes ●Joins Camy watches “His second passion after his own dial name. families named after in Geneva in 1949 and watch making was He felt frustrated by Richard Wagner’s Parsifal rises to the post of probably aviation,” says Camy’s refusal to adapt to and Giuseppe Verdi’s managing director. Elie Bernheim. the situation and market Nabucco among others. ●Leaves in 1976 to “When he launched the its products as high-end, The brand is an official establish his own brand company, he was 50 and it artisan creations which partner of the Nordoff at the age of 50. left him with so little spare were intended for a far Robbins music therapy ●Sells 5,000 watches time that he didn’t get in the first year of more sophisticated buyer charity, the Brit Awards trading. around to qualifying for than the mass-produced and the Albert Hall. ●Pioneers sales in his pilot’s licence until he offerings of its new Olivier Bernheim, Mr China and India during was almost 60. competitors. Weil’s son-in-law, joined the early 1980s. “He subsequently bought Mr Weil’s aim was to the company in 1982 and ●Develops Raymond his own Dakota aircraft prove that it was possible took over as chief Weil into an and even taught my to make luxury watches at executive in 1996 – but Mr international brand. brother, Pierre [sales affordable prices, and he Weil remained a director ●Steps down in 1995 director], how to fly.” displayed his first creations for more than 15 years, from longstanding role Mr Weil’s company at the Basel watch show in only stepping down from as president of the remains one of the few 1977, presenting them to the board last September. Exhibitors’ Committee of high-profile, privately retailers on a folding card the Basel watch fair. owned Swiss watch brands table from a 16m sq stall. ●Steps down as chief to survive as a family It was a humble executive in 1996, giving business. beginning but, by working ‘We became control to his son-in-law. Its founder has left it in hard and travelling far established in India ●Retires from the rude health with 3,500 and wide to spread the board in September points of sale around the word, he managed to sell and China a long 2013, leaving the world, 15 monobrand company with 3,500 5,000 pieces in the first time before many points of sale around boutiques and an annual year. That figure rose to the world. production of 200,000 40,000 in 1978, to 50,000 in of our competitors’ watches with an average 1980 and 70,000 by 1982. retail price of about £1,300. 14 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 15 Watches & Jewellery Marketing

Brands weigh the challenge of change Time machine Classic has a facelift Omega’s classic watch, the really nicely done. Speedmaster Mark II is It’s like a true re-edition of receiving a facelift for the the 1969 model.” first time in 45 years. In But he admits that he July 1969, it was worn on was surprised when Design strategy Subtle variation lies at the heart of any attempt to revamp a classic, writes Arthur Touchot the first moon landing, Omega announced the new since when it has been Mark II. “To be brutally known as the Moonwatch. honest, I didn’t see this eceived wisdom advises Stephen Urquhart, one coming.” against changing a winning president of Omega, says: While he is an Omega team. But should watchmak- “The challenge is to create collector, he does not ers change a winning a product that expresses expect to see aficionados design? the essence of the original seek it out. RBrands have been struggling with while producing a fine “You have a lot of the question for decades, some reissu- contemporary wristwatch.” Speedmaster collectors but ing old and classic models with subtle To achieve this, Omega’s they are really focused on changes, others opting to leave well design team made only the Moonwatch, the alone. subtle aesthetic changes to Speedmaster Professional, In 2012, Audemars Piguet rein- the original model, such as and the models from 1957 vented its Royal Oak for the model’s the inclusion of a date to 1966,” says Mr Broer. 40th anniversary, while Jaeger-Le- window at the 6 o’clock “Only a few are really Coultre, TAG Heuer and IWC have position, while focusing into the Mark II, Mark III, reissued classic models in recent inside the watch for the Mark IV and Mark V years. “This is a subject that comes bigger developments. series.” up consistently,” says Elizabeth The new version has the But Omega is not Doerr, author of Twelve Faces of Time, immediately recognisable targeting that market. a book about the history and impor- tonneau-style case shape “This is a Speedmaster tance of haute horlogerie. “A few of that defined the 1969 Mark II for a new these are iconic watches that have model, while the familiar generation of enthusiasts,” been around for 40, 50 years, and they orange chronograph says Mr Urquhart. do need freshening to appeal to the second hand and bright Omega’s demographic next generation.” hour markers are also has broadened, attracting Luca Solca, head of global luxury at back, set against a dark younger customers in Exane BNP Paribas, the investment grey background. recent years. This is “a company, says classic models some- However, the automatic very positive development,” times pose sales challenges. An age- coaxial calibre inside the says Mr Urquhart. ing bestseller, he says, “is a big prob- case has a silicon balance The most effective way lem, as you risk erosion of your mar- spring, which represents a of keeping younger buyers, ket position”. significant technological Omega says, is by According to Mr Solca, the best way evolution from the original promoting its heritage. to revamp a classic is by introducing calibre 861, as it adds to “We’ve found that “a variation on a theme” – he cites the movement’s durability. tapping into the pioneering the example of Burberry’s checked The result is a spirit that defined that era pattern, which was introduced as a mechanism that is “fully in resonates with people who lining for its coats in 1924. The brand the keeping with innovative had not been born when has in recent decades reproduced the watchmaking,” says Mr the original Speedmaster pattern on items such as fragrance Urquhart, just as the Mark II was packaging and sunglasses. original Mark II was introduced,” says In watchmaking, he says Jaeger-Le 45 years ago. Mr Urquhart. Coultre has tackled the problem most Robert-Jan Watch writer effectively with its Grande Reverso Broer, an Jason Heaton, Ultra-thin Tribute to its 1931 model, a industry a child reissue faithful to the original, except watcher who when the larger and thinner. In both cases the blogs about original brands introduced subtle changes. time pieces was But Mr Solca says not all reinven- Moon landings: surprised the industry when it reis- models, believing their design to be Omega will be hoping to do that at Fratello released, tions are successful: “Different brands Nasa astronauts sued its Moonwatch for Baselworld “perfect as is”, says Ms Doerr. when it reissues the Speedmaster Watches.com, recognises have different degrees of success.” wore Omega 2013. Mr Solca says that because Panerai Mark II, a model first issued 45 years defends the the pull of Reissues are important for brands Speedmaster The model called Dark Side of the is “a niche brand, which has built a ago, and not touched since. redesign, sentimental hoping to stay relevant to a new gen- watches on the Moon, is an “amazing evolution”, says business on its iconic models,” there “I’m OK with a brand revamping saying that it designs: eration, and they can help a brand moon in 1969 AFP Ms Doerr, from the original model, is low risk of déjà vu for consumers. anything it chooses, and I encourage respects the “Most of us like “grow in a growing market,” says Mr worn by Nasa astronauts. “We “I am more concerned for Rolex,” he it. I’m quite happy to see a lot of spirit of the watches that have Solca. haven’t been to the moon since 1972,” adds. “Rolex is mainstream and very brands innovating, and experimenting original. some element of . . . “The Swatch Group – Omega in par- says Jason Heaton, author of Build big, and it competes head to head with new materials, sizes, and move- He says: nostalgia, and I think ticular – has been exemplary in how the Ultimate Watch Collection. “It’s with large brands such as Omega, ments,” says Mr Heaton. “As long as “The case Omega is doing a good to go big and wide with an industry kind of a crazy thing to keep referring Cartier and TAG Heuer.” they’re building quality products, I looks very job of that.” icon and attract a consumer that to, but they’re very successful at it.” The best approach, according to like that these brands are taking similar. The probably didn’t care about watches Other brands, such as Rolex, and Mr Solca, would be “continuously to risks. If a watch always stays as it bracelet is Arthur Touchot before,” says Ms Doerr. The brand Panerai, choose not to revamp nourish and update your best-sellers”. was, what’s the point?”

Anything can happen when an industry pushes the boundaries

have been trying to enlarge Spin­offs their customer base by introducing more affordable Offering products products. other than watches “This segment of the mar- ket has grown strongly over is no longer the past year, including in questionable, writes China, and could partly off- set current weakness at the Meehna Goldsmith [luxury] end”. With the purchase of a factory in Villeret, Switzer- Luxury fashion brands have land in 2007, Montblanc long expanded from their continued to build on its founding products into manufacturing capabilities other categories such as and started producing its jewellery, sunglasses and own movements. To mark shoes. In contrast, haute the 90th anniversary of its horlogerie brands have, Meisterstück flagship line until recently, focused on of pens this year, the com- watches alone. pany has produced a perpet- However that has ual calendar, priced in changed. Trailblazing com- stainless steel at $12,800. panies have begun to offer Above, MB&F’s MAD gallery. Below, Montblanc’s While most watch compa- side products such as Meisterstück watch, produced to mark its flagship pens nies are based in Switzer- leather accessories, sports land, a company called equipment and even art gal- Shinola wants to make the leries in attempts to gain boundaries. In 2006, he pre- company established in US a viable watchmaking market share and attention. sented Horological Machine 1906, has reversed the proc- centre. It launched as a Carlo Croco founded No. 1, described by Mr ess. It entered the luxury watchmaker in Detroit in Hublot in 1980, but the Büsser as “a machine that watch market in 1997, build- 2011 with a social mission brand was reinvented when just happened to tell time” ing a manufacturing centre to bring quality manufac- Jean-Claude Biver became but was designed to be in Le Locle, Switzerland. turing to the US and create chief executive in 2004. worn like a watch. It was Montblanc was already a jobs. Seen as a progressive unlike anything the sector successful lifestyle com- Watches are assembled by leader, he quickly side- had seen. pany, also offering leather hand in its factory, but Shi- stepped the rules. Mr Büsser says MB&F goods. Jérôme Lambert, nola is design-driven, also Mr Biver introduced the “feels like an alien” in the chief executive, says the offering leather goods, bicy- Art of Fusion as Hublot’s watchmaking world, so in progression into watches cles, art books, and even chief creative concept, start- 2012 he opened the MAD made sense, because Mont- footballs. “Watches are ing with the Big Bang gallery in Geneva as a place blanc had worked with the arguably the most compli- watch in 2005. The concept to showcase watches and precise mechanics of pens cated product to craft,” says broke with tradition by for artists and designers to for more than a century. Steve Bock, chief executive. using what were then unu- display their wares. “I love to see people open- “If we can make quality sual watchmaking materi- “My only hope was not to ing their eyes to the reality watches that meet the high- als, such as ceramic, rubber lose too much money in the of watchmaking at Mont- est standards, our craftspeo- and carbon fibre. venture,” he says. blanc,” says Mr Lambert. ple have the ability to The brand has since The gallery is also “That is our mis- design and build anything,” branched out to produce a sort of laboratory. sion.” he adds. winter sports- and music- Last year at watch Mr Lambert says Shinola was conceived of related products under the fairs, MB&F pre- c u s t o m e r s as a lifestyle company that Big Bang sub-brand, which sented the Music demanded the would aim to provide a vari- includes sunglasses, sleds, Machine – a move, but adds ety of products. Mr Bock bikes and headphones. musical box in that having sev- also points out that with a Mr Biver denies the move the shape of a eral categories small, but growing, brand it is about sales. “We are cer- spaceship, in of products is important to hedge tainly not targeting revenue c o l l a b o r a - has had a against market volatility. growth, which should of tion with p o s i t i v e “Diversification is obvi- course come first,” he says, Reuge, a effect. ously a critical necessity,” “and 99 per cent comes 1 5 0 - y e a r Thomas he says. “The greater the from our core business, old Swiss Chauvet, diversification, the greater which is exclusive and pres- mechanical a luxury the ability to absorb down- tigious watches.” musical box analyst at turns in a particular seg- Instead, he thinks the company. C i t i g r o u p , ment or niche.” company is increasing the Mr Büsser puts it more Most luxury watch sympathy and desirability says the idea b l u n t l y : brands have great pride in of the brand while creating came about “Following years retaining an insular prod- “buzz” that gets noticed. because one of of strong price uct line. However, compa- Like Mr Biver, Max Reuge’s musical inflation and nies that have had the Büsser, chief executive of boxes was in the expansion into temerity to create alterna- MB&F (Maximilian Büsser gallery. haute horlogerie, tive products are opening and Friends), has no Meanwhile, Mont- Montblanc and a few the industry to new and qualms about pushing the blanc, a luxury pen other watchmakers creativity possibilities. 16 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches and jewellery Repairs and research Time and place are the essence of good service

Aftersales Watchmakers are slashing repair times – and building customer loyalty – by opening local workshops, writes Jim Shi

ftersales workshops are less number,” says the 30-year-old, New glamorous than boutiques Jersey-based sales executive. His war- but are vital to luxury watch ranty is extended for one year after companies. Now, Chopard each service but more important to and Patek Philippe have him is the individual attention he turnedA their workshops into market- receives. That relationship is impor- ing assets. tant for watch brands as they seek to “As luxury brands build a presence retain young clients graduating to in leading cities, this helps them bur- their next level of watch buying. nish their image,” says Matt Jacob- “You only think of service when the son, head of market development at time comes or when you have a social networking site Facebook and a mechanical problem, but it is good to keen collector of Rolex and Patek know it is there for you when it does Philippe timepieces. arise,” adds Mr Barry. “It takes a bit Mr Jacobson cites the Apple Store of the bad side of the hobby and model: consumers have no reason to makes it more user-friendly.” buy products at an Apple Store other In the US alone, between 9,000 and than the reassurance that doing so 10,000 Patek Philippe watches are provides, he says, and it is very differ- serviced each year. The company’s ent for the retailer from sending prod- retailers are given tours of the facil- ucts off in a box. “I would rather hand ity, where nearly 9,000 sq ft is dedi- over a watch to somebody than send cated to the workshop. VIP customer it to them,” he says. and other PR events include the work- The logic for watchmakers of the shop as a tour highlight. “workshop-as-customer-experience” is The reception area is designed to simple. Typically, aftersales service educate: interactive walls showcase involves sending timepieces to the brand’s history while a camera Geneva, often for many months. The system provides a live stream feed process can range from simple proce- into the workshop. dures, such as a check-up or aesthetic But this commitment to the future service to a complete overhaul, which is also a money-losing proposition. allows for a full inspection of the “There is no return on investment,” timepiece’s most technical and precise Mr Pettinelli says. “The return is good feature: its mechanism. will and satisfying the customer. Until recently, a Patek Philippe “We look to break even every year watch sent from the US to Geneva for on servicing; we usually are in the servicing was expected to be gone for red.” But he adds: “If we don’t service three months. customers at this level with expecta- Servicing a luxury watch is expen- tions as high as they are, we won’t sive, but that does not seem to put sell that extra watch.” customers off. “People rarely com- John Reardon, senior vice-president plain about our pricing. What they of the watches department at the complain about is that they want Christie’s auction house in New York, their watch back,” says Larry Pet- who previously worked at Patek tinelli, Patek Philippe’s US president. Philippe USA, confirms the value for To tackle the problem, Henri Stern companies of investing in aftersales. Watch Agency, Patek Philippe’s US Eyes down: Chopard’s aftersales service centre at Coral Gables, Miami, was set up following a customer survey that produced only ‘average’ results A highlight of Christie’s New York subsidiary, signed a 15-year lease last Important Watches sale last December year on a 33,000 sq ft office at Rock- was an 18ct gold Patek Philippe Perpet- efeller Plaza in New York, more than an 11,000 sq ft customer service centre The move was part of a five-year become a selling point for the brand. ual Calendar Chronograph. The time- doubling its US workshop space in the in the Miami suburb of Coral Gables. project that followed a customer sur- Mr Scheufele says the company has piece, made in 1960 and cared for by process. The workshop enables more time- vey in which aftersales service cut the average global turnround time Patek since day one, sold for $725,000. “The more we can repair in the local pieces to be serviced in the growing received less than enthusiastic by 11 days to 12. “There is nothing Much of the value Patek Philippe market, the better off our clients and American markets, including special approval. “We were average but not more important than someone talking watches retain at auction is down retailers, who won’t have to explain pieces that in the past had to be sent excellent,” he says. “It wasn’t easy; it about the great experience he or she to the brand’s commitment to servic- why a simple repair takes three to Switzerland. was as much a logistical overhaul as had,” he says. ing every watch made since the com- months, will be,” says Mr Pettinelli. Karl-Friedrich Scheufele, Chopard’s ‘If we don’t service it was a change of culture.” Chris Barry, a collector based in the pany was founded in 1839, Mr Reardon The workshop is the largest outside co-president, says the centre comple- customers at this level, we Retaining customers is paramount, US, bought his second Chopard watch says. “The pay-off is protecting the Geneva, with room for 40 watchmak- ments an existing Manhattan town- particularly in the US, where Chop- partly because he was impressed by brand’s heritage and preserving treas- ers (the company has 19 in the US). house facility and makes it possible to won’t sell that extra watch’ ard’s business has increased steadily the company’s aftersales service. “I ured timepieces for generations to Similarly, Chopard last year opened double the rate of domestic repairs. over the past decade. Aftersales has didn’t feel like I was just another come.” Prototypes prove their value as pieces of watchmaking history Design Models that were used in the development of chronometers are a surprise hit among collectors and enthusiasts, writes Arthur Touchot

Master watchmakers work in miniature. But when developing complicated models, often the best way for designers to test con- cepts is to build maquettes – 10/1-scale models. While they were never intended to appeal to collec- tors, some watchmakers have found ways to make the value of these snapshots of engineering history last long after finished products have gone on the market. Claudio Cavaliere, head of product management at Audemars Piguet, says the watchmaker’s design team relies on maquettes because they are cheap and quick to build, and make it easier “to solve the first main con- struction issues”. “The maquette helps us confirm the principle of a function but also makes it easy to adapt,” he says. Watch fairs are one way declined such offers. “A In progress: François Despite interest in in which watchmakers are maquette is part of the Quentin’s maquette caused a maquettes, few are on dis- extending the useful lives of development process and it stir at watch fairs play in horology museums. maquettes. When Audemars needs to remain in house,” Sylvie Dricourt, adminis- Piguet developed its direct he says. trator of the Patek Philippe impulse escapement, which But his workshop’s Museum in Geneva, says offered protection against maquettes are not stored just a handful are kept in its shocks, the brand presented away and forgotten. “We collection, in part because its maquette “to explain the may also use the maquette of “the secrecy modern novel function”, says Mr. as a training tool,” he says. watchmakers keep over Cavaliere. One brand has decided to their designs.” François Quentin, an give its maquettes away. One reason museums independent French watch- Greubel Forsey this year may not want maquettes, maker, used a similar offered 150 replicas of its says Mr Cavaliere, is that approach to establish his Double Tourbillon 30° most “look ugly – they are brand, 4N, when he pre- maquette. not very nice to present”. sented his first concept, the Stephen Forsey, one of The solution, he says, 4N-MVT01, at the Basel- the watchmaker’s founders, would be to rebuild them world fair in 2011. built the original in 2002 with other materials, but Audemars Piguet Renaud using a Meccano set, while that would defeat the pur- & Papi, a movement maker looking for a way to design pose of saving an original that builds maquettes dur- a more accurate tourbillon. piece of engineering. ing development, created an “We had few resources, so Maquettes often reveal example for Mr Quentin’s this model was hugely help- problems with the concepts stand. The scale makes it ful,” says his co-founder, being tested, but even these easy to assemble, Mr Quen- Robert Greubel. Two years are kept. Just because they tin says, “and allows an later, they finalised a 1/1 don’t work now does not educational viewing” of the scale version, which they mean they will never work, mechanism. included in the brand’s first says Mr Cavaliere. He was surprised by the watches. In some cases, he says, interest of visitors. “Many The watchmaker says it they are never mentioned admired the Plexiglas would not sell replica again. “But other times, we model and emphasised [it] maquettes because it ‘The maquette go back to them, years would make a nice clock,” believes the pieces are helps us confirm later, because we have says Mr Quentin. He is now priceless. “The Meccano found a way to use them.” tempted to commercialise a maquette is something very the principle of a Several iterations of the maquette based on the 4N- strong symbolically,” says same concept can be MVT01’s movement. Mr Greubel. “It represents function and makes repeated “up to 10 times”, Mr Cavaliere, however, the first time [an] idea has it easy to adapt’ according to Mr Cavaliere, says Audemars Piguet has been materially completed.” “or until it is fit to be made on a 1/1 scale.” FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 17 Watches & Jewellery Jeweller to the stars throws the most glittering parties in town

Independent brands Fawaz Gruosi, the man behind de Grisogono, has broken with tradition in design and marketing, writes Camilla Apcar

n a world where luxury brands beautiful ring – it doesn’t has boutiques in are acquired and owned by a mean expensive or not.” Miami and New York, handful of conglomerates, a brand De Grisogono is recovering two of 17 worldwide. that remains independent is from a fall in sales in 2009 of These are mostly scat- intriguing. about 40 per cent, before which it tered across capital cities IFawaz Gruosi, chief executive of de was reporting growth of about 25 per but can also be found in Grisogono, co-founded the private cent a year. It will take another cou- destinations such as company in 1993. Now 62, he has ple of years for the pre-crisis equal Courchevel and maintained ultimate creative and balance between horological and jew- Saint Barthélemy commercial direction since taking sole ellery products to be restored. Watch that cater to a well- control in 1995. sales in the same year accounted for travelled, affluent clientele. There are De Grisogono is known for its 30 per cent of sales, and jewellery 70 plans to eventually double the Clockwise from far left: vibrant showcase of gemstone- per cent. Mr Gruosi would not be number of boutiques, including two Paris Hilton and friend covered jewellery and watches. Mr drawn on figures but predicts best additional US locations. attend the de Grisogono Gruosi explains: “My vision has sales from 2007 will be matched by In China, de Grisogono has party at the 2013 Cannes always been to shock the market and 2016. encountered a problem familiar Film Festival; earrings, shock the clients, in keeping and one under 50 years Recovery will be helped by a large to brands of its size: it is ring and brooch; Fawaz showing the talent of the company old because they injection of capital from new share- unknown in the country. Estab- Gruosi Getty and the immense variety we have.” wouldn’t have money”. He found such holders. In 2012, 75 per cent of de lishing a presence here and in He describes a 1996 collection using events boring. Grisogono was reportedly acquired by India are challenges for the black diamonds as one of the brand’s At de Grisogono, parties are more Victoria Holding, which consists of six future. At present, Mr Gruosi sees greatest successes, and working with vibrant affairs. Guests tend to be international investors, including greater benefit in reinforcing exist- a material deemed by critics to be younger and take to the dance floor. Mr Gruosi. ing retail strengths. Next year the ugly and worthless as a “miracle”. Being the host with the most is valua- Forbes magazine reported in Janu- brand may launch its first range The break with traditional materials ble currency. The first de Grisogono ary that an Angolan state-owned com- of handbags since 2008, but “if I was an invaluable lesson in market- gatherings were costly but today Mr pany appeared to have a stake in Vic- don’t come up with something ing that he says he still follows. Gruosi reports demand from celebri- toria Holding – a claim apparently really unusual then it will not The chief executive regards de Gri- ties to attend the company’s annual denied in the report by the chairman come out,” he adds. sogono’s small, entirely handmade A foray into watches in 2000 was party at the Cannes Film Festival. of de Grisogono. Mr Gruosi does not His focus remains original- production – a single collection initially a strategic solution to The same fun-loving attitude is seem concerned over such publicity. ity. “Creativity is the number- accompanied by 400 unique pieces increase traffic to boutiques. Now, reflected in de Grisogono’s whimsical But he was not forthcoming to ques- one goal I have in the future,” each year – as haute couture. He is they are among de Grisogono’s best- lines of jewel-encrusted fruits and tions on the subject, saying: “As with says Mr Gruosi. proud of what the company (with just sellers. animals (monkeys of black diamond most private companies, de Gri- “I always had a niche, but over 150 employees, mostly based in Mr Gruosi regards the brand’s and gold, emerald frogs, ruby-covered sogono’s shareholder structure is a the niche is even bigger Geneva) has achieved in 21 years. craftsmanship and quality of stone as cherries) that retail for about £20,000. confidential topic.” today.” “Other brands don’t have the cour- a blend of his former employers, Mr Gruosi is not worried that his A major advantage of not being He adds: “Human beings in age to go that far because it’s too Harry Winston and Bulgari. Early in designs may be seen as frivolous; tied to a corporate behemoth is that general only buy what they costly, too time-consuming and too his career, he was frequently required these pieces are sold alongside others ideas can be sketched and designs see in magazines, newspapers expensive for what it is. But that’s to socialise with clients in his role as priced at £500,000 or £2m. enter production within only a few or shops. But [my market] is what these clients are looking for: sales manager. “I’ve never understood why people weeks. Sales are strongest in Europe, also those people who are fed something different, unusual, unique He recalls formal dinners with soft take jewellery seriously. I do jewellery although business is also “huge” in up with having the same and so beautiful”. music, cocktails and “definitely no thinking of a woman wearing a the US, he says, where the company things everybody else has.” Certification industry provides reassurance on coloured gems

are of a lesser value than seller, be it an independent around for decades, but Gemmology their untreated counter- brand or auction house. these treatments and fakes parts, the absence of a cer- Despite certification often became harder to detect Slips of paper from tificate can weigh nega- being slow and bureau- with the naked eye, so proc- leading labs can send tively on price by as much cratic, it is widely accepted esses to confirm the authen- as 30 to 40 per cent,” says as an integral part of a sale. ticity of a stone became prices soaring, writes Kenneth Scarratt, southeast Gary Schuler, head of the more commonplace.” Elizabeth Paton Asia managing director of jewellery department at Pierre Rainero, director the Gemological Institute of Sotheby’s auction house, for image, heritage and America – one of the lead- says: “It’s part of a package style at Cartier, calls the Whether it is a question of ing providers of certificates. we offer clients that they certificate “fundamental”. bidding on emerald earrings “People want to be abso- see as non-negotiable. Many But he adds that, as well as at a New York auction, buy- lutely sure of what they are are buying pieces as invest- being the scientific basis for ing a ruby ring from a lux- buying,” he adds. “Today, ments and are aware that the price of a treated or ury flagship in London, or you simply cannot sell col- treatments potentially untreated coloured stone, sourcing loose gems from a oured gems without one. In dilute the quality of a stone grading of characteristics is dealer in Hong Kong, an fact, many buyers require or distort its value.” important because aesthetic independently verified pre- multiple reports for a single He believes the coloured appeal is as important to a cious stone certificate is stone, all from separate, stone certificate trend client as monetary value. now an essential compo- independent laboratories.” began about 30 years ago, “The notions of beauty nent of a sale within the The value and character- when the coloured stones and charm are linked to the fine jewellery industry. istics of gems are deter- market collapsed. Custom- hues, cut and shape of a Global appetite for col- mined in labs through vis- ers lost trust in what they stone,” he says. oured gems has soared in ual analysis, microscopic were buying amid a rapid However, there are some recent years and with it the evaluation, chemical testing increase in use of sophisti- in the industry such as Mr demands of discriminating and refractive indices. cated treating techniques, Reza who, while asserting consumers, who want more Afterwards, a report, including the enhancement the importance of independ- knowledge about the cut, often containing security of emeralds by Colombian ent analysis of inventories, colour, weight and carats of features such as a hologram drug barons, using a poten- ponder its increasing reli- their purchases. to prevent it being forged or tially corrosive resin filler. ance on the reports. The fact that sources of duplicated, is returned Provenance became para- “My fear is that some peo- coloured gems are dwin- alongside the stone to its mount, particularly when ple, by acquiring this piece dling fast, coupled with a public concern grew about of paper, stop really appre- growing preference for nat- blood or conflict diamonds. ciating the stone,” he says. ural rather than irradi- “Today, colour and geog- “In some ways, it’s becom- ated, treated or syn- raphy significantly affect ing a branding conceit, thetic stones, prices,” says Olivier Reza of almost a way of artificially means the iden- fine jeweller Alexandre creating price premiums.” tification – Reza. “There is a big differ- And the irony, he says, is and authenti- ence in the price of an that coloured gems – even cation – serv- emerald from say, Kashmir those with certificates – ices of gemm- or Colombia, for example. still sell for considerably ological experts “Provenance gives a huge less than their colourless are sought after. premium to stones, even if counterparts. And the presence of the stones look virtually “Truly exquisite emer- the slip of paper that identical.” alds, sapphires and rubies they are able to provide Mr Schuler believes this are far more difficult to – or lack of it – can have a Coloured also applies to the public’s come by than white dia- big impact on a transaction. gems: in approach to treatments, monds. They are the rarest “Now that the market has demand saying: “Heating and filling stones in world and should decided that treated stones of coloured gems has been be priced as such.’

Valuation game The industry’s go-to players

Valuation certificates confirming the across the globe. Its reputation is specialising in country of origin reports quality, rarity and authenticity of a gem foremost in diamond grading, and its for coloured stones. It now has a are becoming an essential component labs have pioneered synthetic detection second lab in Hong Kong. of any sale, no matter who is buying. software to be used by diamond trading A report from one of the three core bourses. It is also a leading school for SSEF (Swiss Gemmological Institute) companies confirming clarity, colour, cut independent gemmology degrees. The services offered by SSEF are or weight can elevate the value of the lauded by industry insiders for being examined precious stone. There are also Gubelin Gem Lab rooted in academic research. The Swiss many smaller firms in the marketplace, Established in 1924, this Switzerland- laboratory is known to focus on including American Gemological based laboratory was developed identifying the characteristics of loose Laboratories and GemResearch Swisslab. internally by jewellery house the Gubelin precious stones, but only to provide Company after it recognised the need characteristics analysis rather than Gemological Institute of America for a broad and well-founded knowledge commercial evaluation. It also combats An independent, US-based non-profit of the gemstones it was mounting. the latest innovations being used to organisation that is the world’s largest Today, it is the leading European create hard-to-spot synthetics and authority on gemmology. It has experts destination for the entire industry, fakes. EP 18 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 19 Watches & Jewellery

Pomellato, which is among Europe’s top jewellery brands by sales after leaders such as Cartier, Chopard, Bul- Buyout boosts gari and Tiffany. But it is the young- est by as much as a century. And since its founding in 1967 it has built a following as a high-end jeweller that dares to be different. “Coming up with a synthetic stone cult brand for is pretty daring. No brand that is over 100 years old could do that,” says Andrea Morante, Pomellato’s chief executive. He points out that Rouge Passion is now one of Pomellato’s top independent five-selling lines. It emerged as a major jewellery brand in Milan in the 1980s. As Gior- gio Armani was breaking the fashion mould by designing relaxed trouser women suits for newly liberated women in the workplace, Mr Rabolini drew from that trend by creating coloured, stack- able everyday pieces of jewellery for those women to wear. “Pino Rabolini made a simple obser- vation. He said jewellery cannot be something that you buy on a special occasion, or that you wear on a spe- cial occasion, it has to be some- thing for everyday,” says Mr Morante. The brand taps rising demand for statement jewellery. And the premise behind Pomel- lato’s founding remains an allur- ing proposition as women become a greater consumer force. Today, as much as three- quarters of Pomellato’s sales are to women. Nearly half its sales are made to women who are shopping for them- selves, with the remainder by women “with a man as a cosigna- tory” as Mr Morante puts it. It is an usually high proportion for the fine Pomellato Kering deal means new boutiques jewellery industry where men shop- ping for women tend to make up the in prime locations, writes Rachel Sanderson biggest category of customers. Three quarters of Pomellato’s turno- ver comes from repeat customers. Its big trend in recent years in “It is all about opportunities that ported its plans to venture into new Clockwise from left: Pomellato Nudo and M’ama, non M’ama rings fine jewellery has been con- as an independent brand owned by a areas. Along with Rouge Passion, lapis necklace, diamond rings, are especially favourite buys. solidation, as conglomerates family with limited capital resources Pomellato recently launched three bracelet, earrings and stacking Mr Morante say this plays to have bought up independent are just more difficult,” he says. perfumes and most notably a range of rings Pomellato’s strengths. brands. While Kering has never disclosed watches in collaboration with inde- “More women are inde- APomellato, the Milanese jeweller the size of the deal, analysts at Kepler Mr Morante says. pendent Swiss watches group Parmi- pendent and more behind the cult Nudo and M’ama non Cheuvreux estimate Pomellato had an Thus, Pomellato’s management has giani Fleurier. women are buying M’ama stacking rings, was bought last enterprise value of €270m–€300m remained unchanged including Mr Mr Morante points out that Pomel- on their own, and April by Kering, the French luxury ($372m–$413m) at the time of the Morante, a seasoned luxury goods lato brings an accessibility in fast- women are becom- goods group behind Italian brands transaction. Pomellato posted reve- executive who was previously at growing branded jewellery to the Ker- ing more relevant in Gucci and Bottega Veneta, after Ker- nues of €146m in 2012. Gucci as well being as an experienced ing brand stable in watches and jewel- the choice men are ing fought off competition from Prada, Mr Morante, in an interview at luxury goods banker at Credit Suisse. lery, where it already has stately making about buying the Italian fashion house, and the Ital- Pomellato offices in Milan, says Ker- But the brand has been able to lean brands Boucheron – the first jeweller jewellery. ian state investment fund. ing came top of the list of buyers for on Kering’s expertise in property to to have a shop on Place Vendôme – Now it is part of Such deals are good for conglomer- Pomellato’s founder, Pino Rabolini, gain access to prime new locations in and Girard Perregaux. Kering, Pomellato’s ates looking to bolster their high lux- because the conglomerate founded in Europe and Asia. It is also able to tap Pomellato is known for its inde- sales figures are ury offerings, but what is in them for 1963 by French entrepreneur Francois into an extensive marketing and pendent approach. Last year it undisclosed but Mr the independents? Andrea Morante, Pinault understood that little needed media buying team. launched the Rouge Passion ring. The Morante says: “That Pomellato’s chief executive, says the to be changed. “If you are on your own you can do design echoed the Italian jeweller’s we have historically answer is simple. “Mr Rabolini wanted to make sure something but not all. But if you are rings for everyday wear made of rose been particularly What Pomellato needed was more that the company would be handed part of a bigger group you have better gold and precious stones. But it was attentive to funding firepower to better exploit its over in the best way with an element market knowledge and better capital,” surprisingly different in composition: women’s taste is potential in far-flung markets outside of strong continuity that was easy for Mr Morante says. its stones were synthetic. proving very posi- Europe. Kering to understand and respect,” Kering’s financial backing has sup- The step was a typical departure by tive.” Demand for ancient art revives as age of bling starts to wane

an enamelled element hold name in the jewellery Enamel that is always, in her sector, having in 2009 case, made by Fred launched its first collection Craftsmanship is Rich, an enameller since the Russian revolu- taking precedence based in Sussex in the tion. Enamel would be an south of England – that obvious craft to make more over brand names, fetch £70,000 and of, but the company was says Stephanie Gray upwards. taken over by Gemfields, Katharina Flohr, crea- purveyors of coloured gem- tive and managing direc- stones, in 2012, and has What happens in one sector tor at Fabergé, the luxury more immediate opportuni- often affects another. When brand established in Tsar- ties to pursue. the big Swiss watch names ist Russia, whose name is Besides, she says, some of set about the revival of the associated with the enam- the colours in old enam- nearly lost art of enamel- elled egg, also believes the elled pieces would be diffi- ling, it was a reasonable bet age of bling is on the wane, cult to replicate, purely on that the jewellery industry partly because of difficult safety grounds. Crushed would follow suit. economic times when osten- glass from which enamel But why, in a world of tation may not seem appro- was made in Russia was computer-generated design, priate. Brilliance: often recycled church win- would anyone bother with She makes much of the Fabergé’s dows with a high lead con- an ancient, time-consuming “luminescence, magic and Ouef Sophie tent that played a big part and high-risk craft that alchemy” of vitreous Rouge in the colours. involves multiple colours enamel but cautions that its She is an admirer of all melting at different tem- production is a very com- Limoges craftsmen, Frey peratures, and where a plicated process. “It’s not Wille, an Austrian company lapse of concentration can the first choice in terms that specialises in bangles lead to a very expensive of manufacturing or and bracelets, and Victor mistake? price. Mayer, the German group David Mills, head of mar- “It’s laborious and that held the original Fab- keting at London’s Gold- time-consuming ergé licence. smiths’ Company, says and can involve But Theo Fennell swears tastes are changing. “There seven or eight fir- by British craftspeople. “We is a renewed interest in ings. At the last have the best in the world. craftsmanship and skills- instance, the whole We should be much prouder based luxury goods over thing might bubble and make more of them.” bling and brand names,” he up and you have to Elizabeth Gage, a Belgra- says. start from scratch.” via jeweller, has used enam- “My instinct is that this is She says Fabergé is elling in her pieces for 45 in response to the overexpo- becoming more of a house- years. sure of luxury brands, in She sees increased inter- part because of the huge est as part of a trend demand from China and toward the bold use of col- other emerging markets. Passion and patience our, as clients want some- Luxury consumers across What it takes to make it work thing that makes them the globe are becoming stand out from the crowd. more and more savvy.” Jewellery designers usually Techniques include: “When I started using Craftsmanship is becom- gain experience of ● Champlevé, a French enamel it was colourful and ing the hallmark of growing enamelling, the fusion of word for “raised field” in inexpensive. As my budget consumer sophistication, glass to metal under high which the artist removes did not allow rubies, sap- says Theo Fennell, the Lon- heat conditions, while at the silver by cutting, phires or emeralds, it was a don jewellery designer. college. But the need to hammering or stamping to great way to add vivid col- “Emerging markets want earn a living usually means create a depression to our,” she says. unusual, original grand the high-risk, painstaking, receive the melted glass. She used enamelling in expensive decorative art is ● Basse­taille, where designs...pieces you can- the rings she created for sidelined. the recesses are engraved not get elsewhere and that Those who develop a with patterns or carved with Cartier in 1968 and contin- are the very best. This sort passion for the skill, often a low relief which can be ues to use it in many of her of piece is only going to come back to it in their seen as varying densities of pieces. Phil Barnes, who come out of a workshop and 40s, says Pat Johnson, colour through the enamel. has a workshop in the vil- studio environment, some- chair of the British Society ● Plique­à­jour, the lage of Yoxford, Suffolk, where craftsmen with of Enamellers. “Once they technique used by French produces all her designs. arcane skills can prosper.” have the job, the husband, enamelists Lalique and Christoph Wellendorff, Barbara Tipple, the May- the children, the house, Feuillâtre in the 1900s, in managing director and co- fair-based designer, says they have the financial which the enamel is fired owner of the German jewel- Chinese clients who once backing to do it.” into an open framework, lery company that bears his dressed themselves “from One might also add resembling stained glass. surname, says it has estab- head to toe in Chanel have patience to that list. It is a ● Grisaille or painted lished an in-house academy started to realise that it is difficult process when enamel, in which ground to ensure skills such as not a stylish look”. multiple colours are metallic oxides are painted enamelling are preserved. Ms Tipple has noticed involved and they melt at on to a white enamel base “Handwork, quality, ori- increasing demand for different temperatures of up with fine brushes and fired, gin and details have become bespoke designs from the to 900 degrees. layer upon layer. SG more important than empty US and China – often with marketing,” he says. 20 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches & Jewellery Precious Metals ‘Our artisans are world-class, but poor at marketing’

Italy Matteo Marzotto, the new chair of Fiera di Vicenza, reveals his plans to revitalise his country’s gold industry. By Rachel Sanderson

he quiet Milan street that is leading gold and jewellery fairs. Craftsmanship: Italy and textile to buyers from the of the better advertised products are round Valentino, eventually selling it home to Matteo Marzotto, the The timing of his arrival is no coin- specialises in small and global accessories business. offered for sale by fashion companies to Permira, the private equity group, Italian luxury and fashion cidence. Jewellery, whether fine expensive items; Alongside, Mr Marzotto has such as Chanel, or the jewellery of at what was at the time the highest tycoon, gives no indication of pieces in gold and silver or bijouterie right, Matteo Marzotto brought in Not Just a Label, Louis Vuitton or those owned by Ker- premium paid for a fashion group. the visual feast awaiting the – the word for more accessibly priced Getty the global online sales platform ing”. The Marzotto family’s sale of Valen- Tvisitor inside. jewellery made of stones, resin or that represents 13,000 young Therefore, Mr Marzotto wants to use tino came under the spotlight of the Outside it may be grey, but within plastic – has become the hot topic of designers from 106 countries. the platform of Fiera di Vicenza to Italian tax authorities, which have the walls of the apartment the mood luxury goods companies seeking to The event taps into Italy’s promote what he describes as “the targeted several Italian fashion com- recalls the romanticism of a Marra- expand their brands into total lifestyle growing influence as the manu- well done in Italy”. panies that have traditionally kept kesh souk. Swags of purple velvet emporiums for global consumers. facturing hub of the global fash- “We need to build a network to pro- their holding companies outside of drape the ceilings and walls, the sofas “When I imagine a world-class ion world. An estimated 70 mote ourselves internationally, Italy. The authorities claimed 13 peo- are burnt brocade red. Offsetting it brand, I cannot see its development per cent of French luxury because we are a small country and ple including Mr Marzotto evaded all, vast paintings of modern art and without jewellery in there some- goods are now made we need to face globalisation taxes. He has denied the charges. impressionism cover the walls. where,” Mr Marzotto says. in Italy, according together,” he says. He went on to the French house “I love colour, I need drama. Mini- “Sometimes, we have precious to Altagamma, the He also sees his role promoting the Vionnet, which he sold in 2012 to malism makes me feel ill,” says the stones on shoes and bags, or they fashion associa- Italian jewellery industry through Kazakh businesswoman Goga 47-year old entrepreneur who gained have their own bijouterie line. These tion. Fiera Vicenza as a calling, describing Askenazi. Mr Marzotto has never international renown with his turn- things are super pretty – they may Mr Marzotto himself as a “civil servant” for Italy. revealed the price of the deal, but round of luxury brands Valentino and not cost €1m but €1,000 – and that is points out that He was previously a tourism ambas- describes it as “super successful”. Vionnet. why the fashion brands cannot but while Italy’s sador for Italy for two years. “I realise from experience how Today, though, Mr Marzotto’s pas- have jewellery and gold in their pipe- jewellery arti- “As an entrepreneur, I’ve always much intangible things weigh on the sion for colour and drama have line today,” he says. sans make been involved in textiles and fashion. valuation of a brand. brought a new challenge. After years Mr Marzotto’s idea at Fiera di things that And as a civil servant I realised I was “When we see newspaper stories in the luxury fashion business, Mr Vicenza is to bridge this gap between are very attracted by promoting good Italian saying that Loro Piana has been sold Marzotto is turning his eye to a new the jewellery world and the fashion small and products and good Italian craftsman- to LVMH for 23 times ebitda [earnings front for the world’s of luxury goods: industry by bringing together Italian very expen- ship,” he says. before interest, tax, depreciation and high end jewellery and luxury acces- artisans and the fashion world. sive and very He was president of haute couture amortisation], it looks outrageous,” he sories. In May, VincenzaOro, the gold fair, special and house Valentino when the fiery, high- says. The entrepreneur, who is the is adding to its remit a new event involve a lot of spending designer, Valentino Gara- “But that is the magic of luxury sixth generation of an Italian called Origin. The plan is to create a design, they are vani, after whom it was named, was goods. These are the intangibles that textile dynasty, is the new executive hub for the best artisans and crafts- poor at marketing at the helm. make this business bloody difficult, chairman of Fiera di Vicenza, men in Italy to promote their products them,” he says. Mr Marzotto nonetheless was but also exciting and fascinating,” he which stages one of the world’s worked in leather, stone, technology By contrast, “most among those who managed to turn adds with another of his wide smiles. Gold rediscovers its sparkle as investors reach out for safety

Metals Turmoil in Ukraine has played a big part in a sharp turnround, writes Simoney Kyriakou

There is nothing like geopo- litical uncertainty to send investors scuttling for shel- ter. This is likely to be one reason why gold, which had a torrid 2013, looks to be reclaiming its attraction for investors as the Ukraine crisis continues. The day after the dis- puted referendum in favour of breaking away from Ukraine, the New York Mer- Capital, says: “Equity mar- Called to the bar: China has Mr Brooks adds: “Inves- cantile Exchange reported a kets were roaring, the Fed overtaken India as gold’s tors are also allocating to session trade in gold had just announced taper- biggest consumer silver as it has traditionally futures of $1,392.20, the ing, and people who didn’t outperformed gold when highest since 9 September have a philosophy of keep- both are rising.” 2013. It since fell to ing gold in their portfolios Since December, silver $1,346.40. as a hedge, as a diversifier, has climbed 10 per cent and The indicators are that started selling.” platinum and palladium investors are returning to Marcus Grubb, managing have risen 8 per cent, the yellow metal – a far cry director of investment strat- partly because labour from 2013, when it was fol- egy for the World Gold strikes last year in South lowing a downward price Council, says that the mass Africa pushed prices up, trend from its $1,910 high in sell-off created huge supply, says Nick Moore, commod- August 2011 to $1,202 in pushing prices down. “They ity strategist for fund man- December. are still 25 per cent down on ager BlackRock. Platinum and silver, last year and analysts were What if market risks which had been up at £1,879 too bearish,” he says. diminish or central banks and $43.57 in August 2011, After the sell-off, bars face inflationary head- likewise fell to $1,371.10 and were shipped to Asia, par- winds? $19.37 respectively by ticularly Beijing, as China Mr Grubb says he cannot December 31 2013. overtook India as the big- see inflation reaching such This trend was the cumu- gest consumer of gold. danger levels. The Federal lative result of mass selling. The World Gold Council Reserve could also issue Deborah Fuhr, partner for recorded a 38 per cent rise another £10bn tapering pro- independent consultancy in China’s bar intake last gramme. ETFGI, explains this as year, while demand for jew- Michael Hartnett, chief “uncertainty over the US ellery was up 29 per cent. global equity strategist for Federal Reserve’s tapering Thailand’s desire for bar Bank of America Merrill programme, while many and coin reached 79 per Lynch, also warns: “If the investment banking strate- cent and even the devel- Fed can raise rates, gold gists had forecast continu- oped markets such as UK will be unlikely to glitter.” ing weakness in the gold and US reported an upsurge Macro events should not price”. in jewellery demand, at 10 negate long-term invest- Exchange traded funds per cent and 13 per cent ment decisions, says Roland played a leading role in the respectively. Khounlivong, head of deal- sell-off. Some 29m ounces, Overall, purchases of gold ing at British online trader which ETFGI has priced at in 2013 reached $170.4bn, GoldMoney. $40,091m, were sold by ETF with jewellery at its highest “The fact that gold and investors, especially in April since the onset of the finan- silver prices are discounted and June 2013, although cial crisis in 2008. ‘Geopolitical and suggests it is opportune to Nicholas Brooks, head of Since the end of 2013, the economic risks buy and hold. Geopolitical research at ETF Securities, gold price is up 14 per cent and economic risks con- calls this “extreme” and and, given the Ukrainian continue and tinue and investors are unlikely to be repeated. situation, this positive price looking for protection. Money was diverted into momentum remains in investors are “Gold’s use as an invest- equities as markets rallied. place. looking for ment predates stock mar- Markus Bachmann, co- Mr Grubb says: “Gold is kets. It has been, and can founder of South-Africa reasserting its historic sta- protection’ continue to be, a good based asset manager Craton tus as a hedge asset.” hedge.” FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 21 Watches & Jewellery Fine gems

Riotous: pieces from the G London collection (left to right) include earrings set with rubies Exclusive, and diamonds; emerald and diamond ring; diamond and titanium cuff; conch pearl and diamond tassel pendant and diamond irreverent and and pink diamond ring ‘completely winging it’

Interview London dealer and designer Glenn Spiro talks to Helen Barrett about his approach

hey may not know his side, stacked jewellery trays lie Spiro’s collection will be on sale in set with rubies and diamonds, take small business, so when those stones name, but jewellery across three large open vaults, Harrods, the London department modernist lines. Others such as a The CV sold, [producers] dug a bit deeper collectors have almost threatening to tumble and spill their store. The G London collection will tassel pendant set with natural pink Glenn Spiro and they produced a bit more – and certainly coveted his work. contents across the carpet. be found in the fine jewellery room, conch pearl and a 11.16 carat cognac now there are very average stones. The world’s most “It’s very private,” he says. and Mr Spiro will meet international diamond might appeal to more ●Cartier English artworks 1977-83 “There is too much,” he adds. Trecognisable brands call in Glenn “There’s no website, no advertising, clients in a private Harrods salon, bohemian tastes. “High-end jewellery has become a Spiro when they need one-off couture no one knows where we are or who away from the shop floor. Trends, he says, hold no interest ●Robert Glenn Chairman 1983-91 mass business.” items – which they then present to we are.” He professes bafflement that Helen David, fashion director of and neither does he create jewellery It is clear why clients visit: he is clients under their own names. clients arrive at all: “People somehow fine jewellery at Harrods, says with a particular client in mind. ●Christie’s Senior international lively and good company. When I The master jeweller and former find their way. I don’t know how customers are increasingly seeking “There is no uniform, it’s just cool, director and jewellery specialist, admire his work, he insists I try on Christie’s expert is a designer – they turn up, but they do.” one-off pieces – and she believes Mr out-there,” he says. “I don’t know 1992-2000 piece after piece, piling them high on about 200 pieces a year leave his Clients, he explains, typically Spiro’s “bold, show-stopping high how I’m going to feel. Anyway, how the desk, from a titanium and ●G London Founder and chairman, Geneva workshop – and one of a spend more than $500,000 a year on jewellery . . . resonates strongly”. do I know who’s coming? I have diamond cuff set centrally with a 2000 handful of dealers worldwide who fine jewellery. So how would a Mr Spiro says the reason for the no idea, so I just make what I like.” 40.15-carat, certified D, internally trade in the rarest and most precious potential client with a big budget move is that he has accumulated a Some clients, he says, are sent flawless type 11a diamond the size of gems, flying them around the globe find him? “Very complicated. They lot of stock: “Why am I doing it? It’s away. “I know a customer, who a small mirror, to a twistable white until they find the right buyer. have to do a bit of work – not that ridiculous that it’s all stuck in a safe wants to buy something for a lot of gold and diamond pavé ring that “We work with maybe half a dozen I’m a big shot.” – that’s why.” But he eventually money. And I know exactly where it opens, flower-fashion, to reveal super-brands,” says the 51-year-old This exclusive approach is similar adds that he would like new clients: is, and I can sell it, but I won’t do it. a 1.01 carat pink diamond. Londoner, though he does not to JAR (Joel Arthur Rosenthal), the “Ten new customers, or 20 – I’ll be She’s very upset with me, because I Will the Harrods move disclose which ones. “And we buy Paris-based jeweller who works in a over the moon with 20.” don’t like the stone she wants to buy detract from the mystique, coloured gems and diamonds – from hidden atelier off the Place Vendôme. With the same irreverence, he and I’m not going to buy it. I don’t the effort that it takes for $10,000 to $10m. Then we design a JAR, too, is known for extraordinary claims to have no business case for like the diamond – it’s horrible, it’s a customers to find him? few pieces for our private collection.” gems and reticence. the Harrods move: “I’ve done zero modern stone that I don’t really like.” And does he risk becoming This is a quiet and insular world, Mr Spiro likes the comparison: “It’s research, I’m completely winging it. What is it? “It’s a princess cut. associated with the mass away from the dazzle of Bond Street that type of business, a very private But I’d be surprised if there are They have no charm, they are business that troubles him? boutiques. Mr Spiro’s private clients, house for a private few customers – more than 2,000 people in the world manufactured by a computer.” He hopes not: “I’m not of which he says there are about 50, that’s who we take care of.” spending more than half a million But finding the calibre of stones looking for change. But I typically visit his salon in a smart His somewhat irreverent approach dollars a year on jewellery.” that meet his standards, from need business, so this is my but anonymous Georgian townhouse – a disregard for the conventional The G London collection is priced auctions, other dealers and private route to maybe finding a few in London’s Mayfair. They make wisdom on building a business, such accordingly, with pieces starting at collections is, he says, increasingly more people to buy more their way via a Parisian-style open as attention to marketing and $100,000 and ranging to about $25m. difficult. “There are more wealthy things.” lift, past a battery of assistants and branding – seems to have served him The designs are riotous and people in the world [than previously] a vast waiting chamber to his office. well. He has operated from his exuberant, but it is hard to point to and they’ve bought most [high- Here they sit opposite Mr Spiro at Mayfair office for 11 years. a signature style. Some pieces, such calibre stones] – annoyingly. a generous desk, surrounded by But it appears to be at odds with as a pair of chandelier earrings made “You always had to fight to get clutter, mirrors and light. To one his latest move. From April 10, Mr in 18-carat pink and white gold and the best stones, and it was always a ‘Within six seconds, we can tell you if it’s a natural diamond’

something like the art mar- Synthetic stones ket. Within about six sec- onds we can tell you New technology is whether [a stone is] a natu- tackling the threat ral diamond.” The technological devel- from fakes, writes opment reinforces the idea Camilla Apcar that synthetic jewellery is not the real thing, as described by Mr Lussier. When it comes to synthetic The allure and superiority – or fake – diamonds, rigor- of natural diamonds is at ous caution is the indus- the core of De Beers’ brand try’s modus operandi. offering, and explains the It has good reason. In premium price that equip- May 2012 an unsuspecting ment such as the AMS diamond merchant bought helps to protect. a parcel of what was According to Mr Lussier, believed to be 605 natural At work: but screening techniques are changing cubic zirconia, moissanite diamonds ranging from 0.30 and other imitations have to 0.70 carats. not had any real impact on When the buyer sent a monds or through the activ- technician to place individ- the market “because those sample to be certified at the ity of unscrupulous traders ual stones in a machine. who want to buy a diamond International Gemological at import. Yet it is difficult The AMS screens about 360 are buying for a whole dif- Institute, tests revealed a to pinpoint where risk lies. stones an hour using a fibre ferent reason. number of undisclosed syn- “Our understanding is optic probe to verify “It’s about the emotion, thetics. On examination of that synthetic diamond pro- authenticity or refer stones the preciousness, the value, the package, 461 diamonds duction is very small, for further testing. the rarity,” he says. were verified as synthetic. accounting for less than For some years, De Beers Natural examples may Diamonds certified in 500,000 carats per year. This has supplied its clients and command the highest val- laboratories are usually a is less than 0.5 per cent of major laboratories with ues but, elsewhere in the quarter carat or larger and, rough diamonds mined per manually operated detec- industry, fully disclosed cul- because of routine testing, year – around 128m carats, tion equipment for larger tured pearls and coloured relatively few synthetic according to Kimberley stones. It has gained valua- synthetic gemstones have stones of this size are Process statistics,” says De ble insights through Ele- found legitimate places in known to have reached con- Beers, the diamond com- ment Six, a synthetic indus- the market. sumers without being iden- pany. trial diamond supplier that Mario Ortelli, an analyst tified as such. However, in The proportion may be is part of De Beers Group. at Bernstein Research, spec- the case of smaller “melee” small, but De Beers is plac- The AMS will be made ulates that imitation dia- stones – weighing 0.18 car- ing itself at the forefront of available from next month. monds could follow a simi- ats or less – it often costs detection technology, with lar trend. Changing con- more than a stone is worth the Automated Melee sumer attitudes would to have it graded. Screening device (AMS). require time and invest- It is these smaller stones The AMS is designed to ‘In many ways, ment, he says: “Marketing that represent a risk. Syn- provide a natural guarantee we’re in a hell of a spend is very important in thetic production methods for melee stones from 0.01 the perception.” have become more cost to 0.20 carats. It was devel- lot better position If a synthetic producer effective in the past couple oped following requests were to create a convincing of years, particularly using from De Beers’ rough- than something like proposition, De Beers and the technique of chemical diamond clients for auto- the art market’ other jewellers would have vapour deposition. Imita- mated detection equipment to take a strong stance tions passed off as natural that could be used in vol- against that message, Mr stones remain potentially ume on small stones. De Beers’ priority is to sat- Ortelli suggests. market-destabilising threats “We don’t view [synthet- isfy its own customers, but “The real threat is more to supply chain integrity as ics] in any way as a threat,” it is also looking to set up a for De Beers than for the well as consumer confi- says Stephen Lussier, an screening service in major jeweller,” he adds. Should dence. executive director of De diamond-cutting centres consumers embrace syn- “The issue about undis- Beers. He adds that the where the need arises. thetic diamond jewellery – closed synthetics is almost group aims to offer “the Taché, a dealer with superficially indistinguisha- exclusively in very small ultimate confidence” to cli- direct access to its rough ble, but cheaper than natu- stones like 10- or 12-pointers ents and their customers diamond suppliers that is ral diamonds – jewellery or under a quarter of a through its detection tech- part of the De Beers Group, brands could respond by carat,” says Russell Shor, nologies. “It’s just prepar- says it does not find syn- creating higher margins. an analyst at GIA, who pre- ing to make sure that there thetics problematic. How- Mr Lussier recognises dicts an increase in undis- are no issues in the future ever, it has leased the AMS interest in synthetic stones closed activity as produc- rather than reacting to any- to give its clients confi- in markets such as India, tion becomes faster and thing particular of impor- dence and reassurance, but is unconcerned. He says cheaper. tance today.” according to Maurice De Beers is unlikely to Synthetics may enter the The AMS machine will Zajfen, the company’s finan- launch a synthetic diamond supply chain undisclosed allow thousands of melee cial manager. arm. “We think the issue through cottage-industry stones to be poured into an Mr Lussier says: “In isn’t one of production – the manufacturers mixing a few automated feeding system. many ways we’re in a hell issue is, who’s going to fakes among natural dia- Existing methods require a of a lot better position than want it?” he says. 22 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014 Watches & Jewellery

London’s East End offers Bella figura Italian glamour at the V&A antidote to Bond Street

Independent makers Overseas visitors are heading for Hackney and Shoreditch – once they locate them on the map, writes Elisa Anniss

he other day I had a couple street beside London Fields in E8. he took out a 10-year lease and fixed of impeccably dressed ladies Business is brisk at the weekend, but the rent for five years. He has from an Italian fashion mag- how much do his customers spend? recently moved his workshop from ‘Tazine come in looking for He says that when it comes to Hatton Garden, London’s jewellery hipsters,” says William Cheshire, a impulse purchases, the price range quarter, to below the Hackney store. designer based in Hackney, east Lon- narrows to between £90 and £160. Cus- “Around me, on Broadway Market, don – not the most obvious shopping tomers tend to return a couple of shops are closing and new ones open- destination for overseas tourists. times to see the more expensive ing almost fortnightly,” he says. As well as being a mecca for hip- pieces or wait for a special occasion. “Landlords have been persuaded to sters, over the past five years the area raise the rents on retail and domestic around Hackney and Shoreditch has [properties]. Some retailers have become a popular place for independ- shorter terms, so they can find the ent jewellers to set up shops and ‘On Broadway Market, rent going up 40 per cent in some workshops. shops close and new ones cases overnight.” This part of London is not about to The story is similar in Shoreditch, take on Bond Street, but visitors con- open almost fortnightly’ where Thor & Wistle can be found. It tinue to arrive in search of unusual opened in 2012 on Club Row. Kamilla and handmade pieces. Thorsen and Rachel Entwistle, who They might even walk away, were London’s tourists usually stay in founded the store, do not own the the jewellery to be branded. the West End, but the presence of building but have secured a long lease At Thor & Wistle in Shoreditch – a fashionable hotels such as the Town and a “fairly competitive rent”. store with a vintage ambience where Hall in nearby Bethnal Green and the Other local independents have been fashion and jewellery coincide – there Ace in Shoreditch indicates that tour- less lucky. According to Ms Thorsen: are gold-plated entry-level pieces from ism is on the rise in these areas. “The rates in the area are climbing new British designers such as Domin- “These tourist visitors give us great fast and many independents in certain ique Lucas and Rachel Entwistle. feedback – they seem genuinely streets, such as Cheshire Street off Work made on the premises delighted to have found a real, indi- Brick Lane, have had to shut down or includes a £250 alchemist’s pendant vidual London shop with a bespoke, move due to inflation.” that comes hand engraved, cast in luxury feel in a more edgy, bohemian The pair say tourist numbers in sterling silver and then oxidised. area,” says Mr Cheshire. general are on the rise and they have Branch on the Park, in Hackney, When he opened his shop noticed an increase in UK visitors. sells commissioned “During the week the crowd is local, rings and other one- comprising well-educated, design off creations and environmentally conscious designed by Julia people,” Ms Thorsen says. Cook, a goldsmith Nevertheless, they rely on who trained at Central wholesaling their respective Saint Martins. brands – Rachel Entwistle Jewel- Meanwhile, Mr Cheshire lery and Dynasty – to other Photofest – a furniture designer- retailers to boost overall turned-jeweller who learnt his revenues. Elizabeth Taylor spent nine Glamour of Italian Fashion designs marked an end exhibition, says the trade under Islington-based “I have lived in the months in Rome filming 1945-2014, an exhibition at to the wartime austerity. company’s history is Stephen Einhorn and then area for 20 years and I Cleopatra in 1962. According the Victoria and Albert Among the jewels on reflected in the exhibition. designed and made jewellery would never have opened a jewel- to Richard Burton, her co- Museum in London from show will be an emerald “It parallels the postwar under his own name for Silas, lery shop until about four years ago, star and later her husband, April 5. and diamond “tremblant” period at Bulgari, when the the Anglo-Japanese fashion when I felt that at last the time was she learnt just one Italian The exhibition will trace brooch, worn as a hair third generation of the family label – says sales of more expen- right,” says Ms Cook of Branch on the word during her time in the the extraordinary glamour ornament in this promotional took over the company. In sive pieces are rising. Examples Park. city: Bulgari. and craftsmanship of Italian picture of Ms Taylor to this we see echoes of the include his £3,600 Venus Fly Trap Her customers are mostly London- Extravagant fine jewellery, fashion in the second half publicise her 1963 film, stylistic heroism and ring in 18-carat yellow gold with a ers on the hunt for investment pieces. once owned by the British- of the 20th century. It The V.I.P.s. refinement of fashion tsavorite garnet. Eastern promise: But she notes that Japanese tourists born actress and now in the includes work by the creative Julie Ann Morrison, designers of the times.” Mr Cheshire’s jewellery shop rings by Branch often wander into the shop, with a company’s own collection, postwar entrepreneurs managing director of Bulgari opened last year in Hackney’s Broad- on the Park in guidebook to independent London will be on display at the and artisans whose luxurious UK, which is sponsoring the Helen Barrett way Market, a traditional market Hackney retailers clutched to their breast. FINANCIAL TIMES THURSDAY MARCH 27 2014 ★ 23 Watches & Jewellery Hidden treasures await the visitor to Ironopolis

Galleries One of the UK’s most important jewellery collections will go on display to the public for the first time this year, writes Kate Youde

iddlesbrough, in the ally expanding; the latest acquisition northeast of England, is the German designer Mi-Ah Rödi- was in the 19th century ger’s headpiece, Crown Jewel. Other known as Ironopolis – a featured artists include the Dutch jew- global centre for the iron ellers Felieke van der Leest and Ted Mand steel industry. Now, it is concen- Noten, and Italy’s Giovanni Corvaja, trating on more artistic uses of metal whose gold bracelet, pictured below, as it seeks to build a worldwide repu- is its most valuable piece. tation as a centre for contemporary “It’s interesting that some of the jewellery. makers we have in the collection, peo- Middlesbrough Institute of Modern ple might not know their names but Art (Mima), which opened in 2007, is they are artists that have made some home to a nationally important jewel- very important and significant pieces lery collection, until now mostly hid- that people would know,” says Ms den away in storage. But this year the Brindley. “So for instance, David institute will launch a £430,000 project Watkins designed the 2012 Olympic to create its first permanent exhibi- medal. Lin Cheung designed the Para- tion space for public access to the lympic medal, and Wendy Ramshaw collection. created the Millennium Medal for the Mima hopes the move will put Mid- Queen. Madeleine Albright [the dlesbrough on the map as the UK cen- former US secretary of state] collects tre for contemporary jewellery and a Gijs Bakker. hub for international research. “Some of these people might not be “There are not many jewellery col- household names, but when people lections of this nature in this coun- see the objects, things may start to gel try,” says Kate Brindley, director of in that they recognise a familiar style Mima. “The [London-based] V&A and or image.” the Crafts Council have them but, Joanna Hardy, author of Collect other than that, in the regions we’re Contemporary Jewelry and a specialist very significant.” on the BBC’s Antiques Roadshow, says Last year Mima received a £299,000 that, unlike contemporary art, the grant from Arts Council England over jewellery market is “still quite an two years to increase exhibition space undiscovered territory”. “And yet, in and enhance understanding of con- my experience when I’ve exposed temporary jewellery. It also attracted potential buyers to it, they get incred- funding of £118,500 from Teesside Uni- ibly excited and think, ‘Wow, this is versity, which will take over govern- fantastic – where can I buy it?’” ance of the gallery from Middles- Ms Hardy says people are looking to brough Council this summer. own something original and well Work is under way to convert an made, but that contemporary jewel- existing storeroom into a 120 sq m lery is “very difficult to find” despite permanent gallery with display areas there being talented makers. for up to 100 pieces of jewellery. There “People are seeing it as the way will be storage for the rest of the forward although it is, I think, still collection, which spans the 1970s to relatively in its infancy,” she adds, the present day and features top Euro- “but places like this [Mima] having pean makers, with staff on hand to contemporary jewellery on permanent open drawers so visitors can look at display [will be] hugely beneficial to items not on show. The new space is the contemporary jewellery world, scheduled for completion in July and that’s very exciting.” before the launch in October. Dauvit Alexander, a director of the Pieces from Mima’s collection, Association for Contemporary Jewel- which covers jewellery, ceramics and lery and a jeweller himself, says the art, are currently displayed on rota- project is a welcome development for tion or available to view by appoint- “quite bereft” that the collection is Teesside University is funding a versity. It is intended that the collec- Northern exposure: kept mainly in the industry. ment. Ms Brindley says that, while it not always available. jeweller in residence role. Gemma tion will become a teaching resource. storage, the Middlesbrough Institute of “Anything that raises the profile was not planned that Dutch architect “We were able to do it with the Draper and Janet Hinchliffe McCutch- This year, Mima will put out a call for Modern Art’s collection contains work and makes people realise that jewel- Erick van Egeraat’s building would jewellery because it’s quite a discrete eon, the current post-holders, split papers for its first international con- by European designers, including Karl lery doesn’t have to come from [high house a permanent gallery, the organ- collection,” she says. “It’s only just their time between developing the gal- ference on contemporary jewellery, to Fritsch, Giovanni Corvaja and Felieke street chain] Mappin & Webb . . . that isation has decided a permanent pres- over 200 items so it meant we felt we lery’s new permanent display, and be held with the university in 2015. van der Leest (above, left to right) jewellery goes beyond the engagement ence is important because people feel could do justice to it in that space.” working on new courses for the uni- The gallery’s collection is continu- ring, is wonderful,” he says. Lapis lazuli is a building block in Afghanistan’s reconstruction

ernment levies on the min- Ethical producers ing of gemstones are high. Ms Swire has acted as a Jewellery from consultant to the World women artisans is Bank in an attempt to rewrite the gemstone roy- to be sold online, alty policy as an adviser to writes Syl Tang the Afghanistan Ministry of Mines. The Afghan government This spring a company is considering reducing roy- called Aayenda has toured alties to about 10 per cent, a trade fairs in the US and figure that Ms Swire says the UK with an unusual would be necessary for jewellery range: pieces by Afghan miners and gem Afghan artisans, funded by dealers to be competitive in the US Department of the global market. Defense. But can the project, and Their efforts fall under a its mission to create jewel- US government agency lery companies, be effective called the Task Force for in stemming violence. Business and Stability “Is it proven? Probably Operations. The organisa- not,” says Third Wave’s tion was formed in 2006 Mr Peritz. “Afghanistan has originally for operations in all kind of problems. Flying Iraq and with the aim of people to Jaipur to train kick-starting small and them, then flying them medium-sized businesses in back home, just seems like conflict zones. it costs a lot of money. But “The idea is simple,” says it’s difficult to see whether Aki Peritz, senior national spurring the economy in security policy adviser at small areas has a causal Third Wave, a Washington Artisan: an Afghan jeweller at work relation to decreasing vio- DC-based think-tank. lence. “Small businesses create an “If you look at what employed middle class. The Swire sought funding from They will allow the entre- we’ve done in Iraq and employed are happy, ergo Task Force. preneurs, including the 36 Afghanistan, we just throw they don’t join terrorist “I went looking for any- already trained, to manage money at things.” factions and shoot at Amer- one who would fund it,” she the process of their compa- But policy discussions are icans.” says. “The American mili- nies’ supply chains. The irrelevant to the Afghan Task Force is now work- tary was working closely jewellers will be able to use women in the scheme, ing in Afghanistan, where it with Usaid [the US interna- tablet apps, for example, to according to Future Bril- aims to revitalise tradi- tional development agency], receive, enter and manage liance. “We know it will tional industries. According providing security and orders for 2,000 lapis lazuli take time, but it’s a wonder- to the US Special Inspector some funding in Panjshir drop earrings, including ful start,” says Roya Hayat, General for Afghanistan valley, where emeralds are such supply chain steps as gender manager at the Reconstruction, as of sum- found. Task Force stepped projecting the amount of charity. mer 2013 the US had allo- up.” “The majority of the cated about $96.57bn on In the summer of 2013, US women we trained now relief and reconstruction in federal funds helped send 36 have independent busi- the country since 2002. Afghan artisans to Jaipur ‘This brings nesses, such as Khala Zada. Task Force joined forces in India to be trained in employment into She was doing a business with Sophia Swire, a British gemmology and jewellery and was struggling on how businesswoman, social design, then set them up in the home. A large to deal with clients. She entrepreneur and sister of their own businesses on never kept records of expen- Hugo Swire, UK Foreign their return. number of women ditures – she didn’t know Office minister. In 2012 she “This brings employment are war widows’ how to keep invoices. Now set up Future Brilliance, into the home. Something she has doubled her sales in the charity behind the Aay- that doesn’t first require lit- the last six months.” enda jewellery line. eracy empowers the ‘bottom materials required and cost- Task Force expects to end The charity says 100 per million’,” says Ms Swire. “It ing out the purchasing its work in Afghanistan in cent of net profits from the empowers women, in partic- process. the near future, which jewellery line are returned ular, because a large The devices are linked to means funding for Aayenda to Future Brilliance to be number are war widows.” Shopify – a worldwide dig- will finish at the end of this spent on tools and other In partnership with the ital retail website – and year. equipment, and the running Afghan government, Future other online stores. Future Ms Swire is determined to costs of the workshop, as Brilliance is working on a Brilliance is also working find funding elsewhere. well as growing the arti- digital literacy scheme. towards the collection being “I’ve been on this mission sans’ digital sales platform. It has distributed 70 solar- sold in stores. for six years,” she says. “If With the intention of charging WiFi and SIM- But before these goals can we have to turn to social training Afghans not just in enabled, network-agnostic be reached, other hurdles impact investment, that’s jewellery-making but also tablets customised in the must be overcome. an option. This is the new in entrepreneurship, Ms Dari language. Historically, Afghan gov- way things are being done.” 24 ★ FINANCIAL TIMES THURSDAY MARCH 27 2014