FT SPECIAL REPORT Watches Jewellery Baselworld Imitation game Market movers Tough economic times The spectacular stories Asian diaspora’s lavish put pressure on the fair behind costume jewels gold-buying is changing FULL COVERAGE Pages 2-4 MY FAVOURITE PIECES Page 18 BREAKING THE CHAINS Page 14 Thursday March 17 2016 www.ft.com/reports | @ftreports Hong Kong tumbles as Chinese travel beyond pace in five years and well below long- Mostunderpressureareoperationsin But the watch run averages. Demand for luxury Hong Kong, long a hub for sales across watches in energy-exporting economies Asia. Hong Kong is feeling the effects of market may have has been hit by the precipitous fall in oil overstocking, which have yet to be prices. workedthrough(seepage9),aswellasa reached its bottom, “It looks like the outlook may even stronger US dollar, to which the Hong have worsened since the end of 2015,” Kong dollar is pegged. Swiss watch says Ralph Atkins says Julie Saussier, consumer industries exports to Hong Kong in January were analyst at Credit Suisse. “Hong Kong is 33 per cent lower than a year earlier, still faring badly, and in Europe you according to the Federation of the Swiss atchmakers gather for have had the effects of November’s ter- WatchIndustry. the Baselworld fair rorismattacksinParis.” A turnround in Hong Kong may be against a gloomy eco- What matters crucially will be some way off. Thomas Chauvet, luxury nomic backdrop. The demand from Chinese consumers. The goods analyst at Citigroup, reports a W luxury timepieces industry has been hit by the crackdown “profound change” in Chinese percep- industry is weathering not just sluggish on“gifting”aspartofthecountry’santi- tions of Hong Kong. “It does not seem to world growth and a Chinese economic corruption drive. From peak to trough, be an attractive tourist and shopping slowdown. It also faces particular diffi- watch sales in mainland China fell by destinationanymore,”hesays. culties in Hong Kong, the industry’s about30percent,accordingtoindustry “Chinese people’s natural inclination most important marketplace, and a estimates. for travel, rising purchasing power and strong Swiss franc — which has sharply The good news is that the one-off greater ability to travel individually and sent up the cost of producing luxury effect of the clampdown has fed The one-off further out internationally are likely to watchesinSwitzerland. through. Year-on-year growth in Swiss continue to encourage them to discover With sales dependent on economic exports to mainland China turned posi- effect of otherpartsofAsiaaswellasEurope.” Hatton Garden The untold story behind the heist optimism, there is nervousness about tive at the end of last year. Even if China’s Reflecting the shifts in demand, the therestof2016.TheParis-basedOrgan- China’s economy expands at a slower Geneva-based Salon International de la It was the biggest burglary in British history: jewels. Now, as the criminals behind the heist start isation for Economic Cooperation and rate, luxury watches still have cachet clampdown Haute Horlogerie announced in Febru- over one weekend last April, eight men broke their jail terms, the full story of how Hatton Garden, Development expects the world econ- with the country’s consumers. The has fed arythatitsHongKong-basedWatches& into a safety deposit building in London’s and its traders like Karl Karter (above), recovered omy to grow by just 3 per cent — the problem is that Chinese spending pat- Wonders exhibition would in future be diamond district and took £14m in gold and from the chaos of the robbery can be told. Page 17 same as in 2015, which was the slowest ternsareshifting. through Continuedonpage2 2 ★ FINANCIALTIMES Thursday 17 March 2016 Inside | Watches & Jewellery Baselworld Runaway prices Precious tales The heist Your complete guide An era of inflation-busting price rises in the Diamond demand is The untold story behind the to the bellwether fair: watch industry is coming to an end as dying even as we £14m Hatton Garden overviews, interviews oversupply and economic crisis weigh on become gluttons for gold: diamond robbery and and a visual guide to global sales commodities diverge what the theft means the highlights of this Page 9 Page 13 for the London year’s Hall of neighbourhood’s future Dreams Page 17 Pages 2-4 Count us in South Asia We take a data-driven look at the luxury Indian families in the UK world: how smart are brands when it comes spend hundreds of millions of Real fakes 3D printing to their websites? And how are emerging pounds on jewellery every year — Art collector Patrizia Sandretto Re Watchmakers and jewellers markets faring? but the traders who cater to them are Rebaudengo picks her favourite items have always been early adopters of new Page 11 struggling to adapt from her historical collection of costume capabilities — we look at how they have Page 14 jewellery seized on the 21st century’s first Page 18 technological revolution Page 6 Patently Just as smartwatch Top 10 sales have taken off, From the brilliant cut to Museum pieces legal battles over the computer-aided design, via Jewellery, long excluded from galleries, is Digital diamonds tech behind them have electroplating, cultured finding its place in serious exhibitions — Stolen jewels are rarely recovered. That is begun pearls and clip-on earrings, and is reaping financial and cultural why a new diamond database that records Page 12 10 key developments in benefits from this new prominence every detail of a stone is causing excitement jewellery Page 19 Page 7 Page 16 Baselworld ‘is a family gathering’ Day in the life Kate Youde hears from five of the show’s habitués, including a watchmaker, a buyer and a blogger RolfStuder gemstones—somenewshapes,new Jointchief colours—togetinspiration. executive Wehave100meetingswithour officer,Swiss customersandover50appointments watchmakerOris withallthebesteditors. Baselworldforus Youneedtobestrongbecauseevery isafamily nightthereissomeparty,somedinner, gathering.It’slike butitispartofthegame. whenyouhavea bigpartyatyourownhome:you’reabit LizaUrla nervoushowpeoplereceivewhatyou Jewelleryblogger offerthemandyou’relookingforward forGemologue toseeingyourfriendsorthepeopleyou I’llbegoingfor haveinvited. twodays.For It’sgoingtobemy11thshow.I’veseen bloggers, everythingfromspontaneousbirthday Baselworldis partiestodoctor’svisitsandit’svery excitingbutalsoa hardtopredictwhat’sgoingtohappen littlebitboring next. becauseofthelocation. Baselitselfisnotabigplace,the RoanneOrlebar weatherisnotparticularlygreat[and] Finewatchbuyer, thelightinginsidethetradeshow . is Harrods notfantastic,soit’sdifficultformeifI Weseeabout30 wanttocreatecontent. brandsoverfour I’mgoingtobepublishingon days.Thereare Snapchat,Instagram,Twitter,Facebook business andthewebsite,withcontentcreatedon conversations thespotandafterIhavevisitedthefair. thatdohappen butweprefertohavethoseinadvance Dominik sothatthemeetingswehavearevery Nyffenegger muchlookingatthenoveltyinthe Directorof productandtheexcitementthebrand marketingagency hastooffer. USPPartner Yougowithsomeideasastowhatthe Overall,therewill brandsmightbelaunchingandsome beateamof brandsmeetthoseexpectations,some around200 farexceedthemandsome,maybe,you peopleprovided werehopingforalittlebitmore. byus:140hostsandhostessesfor Baselworlditselfastheofficialpartner MarcoBicego andaround50to60peopleforthe Jewellery brandsandjewellerycompanies.Most designer ofthemworkasinformationproviders Atthebeginning forvisitors. oftheshow,when Wehavehostsandhostessesoff-site, Ihavemoretime whichmeanstheyaretakingcareof formyself,Iwalk welcomedeskandreception[facilities] aroundandsee attheairportandtrainstations. what’sgoingon.I Iwillgointo[theshow]tocheckon visittheHallofElements,whereIhavea ourhosts,hostessesandmodels . so lotofsuppliersandlookatthe theyreallydoaperfectjob. Hong Kong tumbles as Chinese travel beyond Continuedfrompage1 Swatch complains that the apprecia- held biennially, with its organisers tion of the franc has caused “significant examining other destinations which shiftsinsalesinthemarkets,aswellasa couldalternatewithHongKong. marked distortion of the international Weaker sales in Hong Kong have been product pricing structure”. Swatch’s offset by improvements elsewhere. sales fell 3 per cent last year to While US watch sales disappointed last SFr8.45bn(£6.1bn)atcurrentexchange yearonthebackofthestrongerdollar— rates. Despite headwinds, Swatch said it and probably the rise of smartwatches had actually increased the number of —JapanandSouthKoreahavebenefited employeesinSwitzerland. fromChinesetouristflows. Meanwhile, Richemont, whose “There is a ‘bottoming out’ in global brands include Cartier and Montblanc, luxury watches but a lot of the business has warned its 9,000 employees in Swit- is wholesale, which tends to lag behind zerlandthatitislookingtocutupto350 the pick-up in the cycle,” says Scilla watchmaking jobs locally over the next Huang Sun, a sector specialist at GAM 12months. InvestmentManagementinZürich. The positive interpretation of job cuts In Switzerland, the effects of the atRichemontisthattheyshowagreater tougher conditions have been exacer- nimbleness. “They are being more bated by the strength of the Swiss cur- proactive and flexible with costs, and it rency since January 15, 2015, when the doesn’t mean that prospects for the country’scentral bank gave up trying to industry have changed,”says Ms Sauss- capitsvalueagainsttheeuro. ieratCreditSuisse. Thursday 17 March 2016 ★ FINANCIALTIMES 3 Watches & Jewellery | Baselworld Baselworld