Watchmakers at Baselworld this week will unveil an array of styles, from classic to high-tech, as they battle sharp currency fluctuations in the quest for market share.

■ SURVIVALSTRATEGIES

■ JEAN-CLAUDE BIVER’S PLAN FOR LVMH WATCHES

■ FOOD, FERRIES,FURNITURE, FUN

TIME HONORED

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CHANEL J12 SKELETON FLYING TOURBILLON LOUIS VUITTON TAMBOUR EVOLUTION GMT

ULYSSE NARDIN HANNIBAL MINUTE REPEATER CHOPARD MILLE MIGLIA GTS POWER CONTROL 01

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ART CLASSArt has always been big in Basel, given the city’s strategic location on the River Rhine bordering France and Germany and the plutocratic patrons who made billions in chemicals and pharmaceu-ticals. The yearly Art Basel fair draws thousands, but the recent closure of the public Kunstmuseum for a lavish reno-vation and extension will put even more focus on the beautiful Fondation Beyeler, a private collection in a leafy suburb.

Links between the two have just grown closer than ever: among the highlights of the Beyeler’s stunning new Paul Gauguin show is the French artist’s “Nafea Faa Ipoipo” (which means “When will you marry?” in Tahitian), a typically colorful South Seas masterpiece formerly on long-term loan to the Kunstmuseum.

But after the show closes, the work will vanish from Basel’s walls, ostensibly because its private owners are unhappy about the Kunstmuseum’s lengthy face-lift. It was widely reported in the art world that the masterpiece was in fact sold for a staggering $300 million to ultraacquisitive Qatar as another trophy asset.

Fondation Beyeler101 Baselstrasse4125 Riehen / BaselTel.: +41-61-645-9700Web: fondationbeyeler.chRunning through June 28Hours: 10 a.m. to 6 p.m. daily, Wednesdays until 8 p.m.

IT’S ALWAYS CHRISTMASAlmost as much an institution as the galleries, Johann Wanner has for three decades — and all year-round — been selling traditional handmade Christmas ornaments from his landmark shop in the heart of the old town. Originally into an-tiques, Wanner discovered glassblowing and Christmas decorations while on vis-its to remaining craftsmen in traditional manufacturing areas of eastern Germany, northern Poland and Bohemia. His dark, maroon and gold store is a treasure trove.

Wanner’s services include consul-tations on decorating Christmas trees, and for taking a break, he even owns a “Christmas Parlour” around the cor-ner for coffee, tea and snacks or small-scale entertaining.

Johann Wanner14 Spalenberg, 4051 BaselTel.: +41-61-261-4826Web: johannwanner.ch Hours: Monday, 12:30 to 6:30 p.m.; Tuesday to Friday, 10 a.m. to 6:30 p.m., Saturday until 5 p.m.

EAT BY THE WATERThe Papiermühle is more of a café than a restaurant, set near the Rhine for relax-ation after visiting the nearby Museum of Contemporary Art and the Paper Museum — from which it derives its name. Lunches are light, with daily specialties and a changing limited monthly menu based on fresh seasonal ingredients.

There are cakes and sandwiches in the afternoons and big brunches on Sundays. Dinner is served on Fridays only, with other nights often reserved for private or corporate entertaining.

Chef Appukuddy Sivalingam and his team even run to traditional Tamil meat and fi sh curries and vegetarian dishes from his native Sri Lanka on special occasions.

Restaurant Papiermühle35 St. Alban-Tal, 4052 BaselTel.: +41-61-272-4848Web: papiermuehle.ch

NO FRILLSFurniture is not a Basel specialty, but Minimal is an exception. As his store’s name suggests, Stephan Wenger has made “less is more” his mantra. Simple but elegant craftsmanship is the overriding theme, with pieces — often designed by Wenger himself —

stretching from cool functionality to ta-bles made of old wood still sometimes bearing the traces of former owners. Much of the material is sourced from small, Swiss craft workshops.

Minimal Design9 Rosshofgasse, 4051 BaselTel.: +41-61-262-0140Web: minimal-design.ch

DON’T FORGET THE FERRYMANNo trip to Basel would be complete with-out a ride across the Rhine on one of the city’s four traditional ferries — Wilde Maa, Leu, Vogel Gryff or Ueli. All four of the small, partly covered vessels, which cross the broad river at different points, work without motors, using the power of the strong river current and tethered cables as their main propulsion.

They’re not just a tourist attraction — although they do keep longer hours in the summer — but are popular among locals, too. The ferries are supported by a nonprofi t association and each has its own dedicated ferryman. And it’s a bar-gain, too: a one-way trip across the river costs less than $2 per person.

Further information on locations, operating times and fares is on the Web site — though in German only.Web: faehri.ch

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Bausele is bringing the Australian outback to Baselworld.

The Sydney-based company is the first Australian watch brand to take its products to the fair, booking a 151-square-foot stand (#F36) in Hall 2.2 to show seven new collections and 28 styles, boasting Swiss, as well as Australian, components.

Prices start at $550 for The Vintage, a 36-mm watch with Ronda 507 movement, with the midrange Yachting II, a new 43-mm version of Bausele’s best-selling Yachting style, with IsaSwiss 8270 movement, costing $950 to $1,100.

The most expensive time-piece is the new $3,480 Terra Australis, a 46-mm watch fea-turing the Soprod A10 caliber movement. It’s housed in a case made from Bauselite, Bausele’s proprietary lightweight ce-ramic material that was de-veloped in partnership with Flinders University’s Centre for NanoScale Science and Technology, in South Australia.

The Bausele name is an ac-ronym for “Beyond AUStralian ELEments,” and every timepiece has a unique hollow crown fi lled with raw Australian elements — either beach sand, red earth from the Red Centre or crushed coal. Kangaroo leather, which is used for many of the watchbands, will be showcased on custom-made Ross Didier chairs at Bausele’s Oz-themed Baselworld booth, which will also serve St Hugo wines and play Australian music.

The company was founded in 2011 by Swiss na-tive Christophe Hoppe, former chief financial offi-cer for TechnoMarine and the Swatch Group’s Universo, who moved to Sydney in 2010 with his Australian dancer wife.

The watches cur-rently sell through the bausele.com Web site and select boutiques in Australia and Indonesia, but Hoppe said he hopes to grow his current volume of 2 million Australian dollars ($1.5 million at current exchange) tenfold within the next fi ve years.

“The idea is to create an Australian luxury brand — right now, it’s watches, but I want to do sunglasses and accessories,” said Hoppe. “I’m an ex-cfo, I’m an ex-PWC consultant, I’m an ex-boring guy, and being able to express my creativity is pretty cool. The fact that Australia gave me that op-portunity is amazing.”

— PATTY HUNTINGTON

Scene

From furniture to food to ferries — a few things to check out in Basel. By Haig SimonianPaul Gauguin’s

“Nafea Faa Ipoipo” at Fondation Beyeler.

Johann Wanner’s Christmas shop.

Bausele Australia’s Yachting II style.

Bausele Australia Docks in Basel

The Papiermühle restaurant.

A look from Minimal Design.

Ferry across the Rhine.

22.2 BILLION SWISS FRANCS ($22.53 BILLION)

SALES BY SWISS WATCHMAKERS IN 2014:

1.5 MILLION SQUARE FEET

TRADE FAIR FACILITY:

STATS & FACTSARE SWITZERLAND’S TWO BIGGEST WATCH AND JEWELRY TRADE SHOWS.

BASELWORLD(AND JANUARY’S SIHH IN GENEVA)

BASEL POPULATION:

170,000

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ESCALE WORLDTIME. EXPLORE A WORLD OF COLOR.

The master watchmakers of ‘La Fabrique du Temps Louis Vuitton’ have captured the 24 time zones on a hand-painted dial whose color palette draws inspiration from legendary cities around the world. The hours move around the dial while at the center, the yellow arrow remains motionless.

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JEAN-CLAUDE BIVER is a man on the move.

As head of the watch division at LVMH Moët Hennessy Louis Vuitton, the 66-year-old execu-tive is on the road more often than not, drumming up business for the luxury conglomerate’s three Swiss watch brands: Tag Heuer, Hublot and Zenith.

On a Tuesday in February, he was in Paris to pore over contracts with two potential megapartners in Tag Heuer’s fi rst smartwatch venture. Two days later, he appeared in New York, posing alongside basket-ball star Dwyane Wade and Israeli model Bar Refaeli at the fashion week event introducing her as the new face of Hublot.

Having eased out of day-to-day operations at Hublot in 2011, leaving his longtime lieuten-ant Ricardo Guadalupe to take over as chief executive offi cer, the man considered an icon in watch industry circles appeared ready to de-vote more time to his other great passion: Making cheese in the Swiss Alps.

Instead, he not only took charge of timepieces at LVMH last year, but also in December added the role of ceo of Tag Heuer — offi -cially on an interim basis, though Biver sees himself holding the position at least two years.

“I can do 10, I don’t care,” he says. “But I would like to be able to leave in two years’ time, not because I want to, but because that’s part of my mission: Training people, pre-paring a succession.”

A larger-than-life fi gure with indefatiga-ble enthusiasm, Biver is reputed for his golden touch, turning around the fortunes of Blancpain and Omega before taking over as ceo of Hublot in 2004.

The brand has seen rapid growth, thanks to the launch of watches like the Big Bang and the signing of brand am-bassadors including Usain Bolt, Pelé and Kobe Bryant. Biver has also inked a slew of timekeeping partnerships with organizers of events in-cluding the FIFA World Cup.

His motto? “Be fi rst, be dif-ferent, be unique.”

Now he has turned his la-serlike focus to Tag Heuer. The first order of business was streamlining produc-tion, which prompted the fi rm to fi re 46 employees in September and put another 49 on temporary unemployment until year-end.

This resulted in heavy one-time costs that hit revenues at LVMH’s watches and jewelry

division, which also includes Bulgari, Chaumet, Fred and De Beers. The department’s sales in organic terms rose 3 percent in the fourth quar-ter, with LVMH noting that throughout 2014, “watches were penalized by the cau-tious behavior of multibrand retailers in an uncertain eco-nomic environment.”

Among Biver’s initiatives:■ Spearheading a drive to refocus Tag’s offer with in-troductions in the $1,000 to $3,000 segment;■ Reviving the old “Don’t Crack Under Pressure” adver-tising slogan;■ Redirecting research-and-development efforts from high-performance chrono-graphs toward the planned smartwatch, which he hopes to unveil next year.

A handful of competitors, including Swatch Group,

will arrive at the Baselworld watch

and jewelry fair this year with a connected watch in their coffers. Biver is deter-mined to make

Tag’s offering dif-ferent and unique,

with innovative ap-plications and micro-processors.

“We are different from Swatch Group in that we don’t have the knowledge, the capacity nor the pro-

duction expertise in Switzerland for the watch we want to make,” he said, noting that he uses the Swatch Access connected

watch as a ski pass.“We fi gured that

if we want a smart-watch that is not in-spired by the Swatch Access, we needed to sign partnerships

with very, very big play-ers,” he added.

If the contracts are inked this spring, Biver expects to develop a smart-watch that, like Tag Heuer, is anchored in the sports universe. But whereas Tag has deep-rooted links to motor racing, the smart-watch could also appeal to fans of soccer or basketball with dedicated functions, he explained.

“So with a bit of luck, in addi-tion to having a watch produced with two giants, we will also have innova-tions that the others don’t have,” he said.

Such zeal might seem sur-prising from a man who has previously

been skeptical of the appeal of smartwatches, and initially dis-missed the Apple watch as “not sexy at all.” Biver has since re-vised his opinion of the eagerly awaited offering from the tech giant, expected to hit stores April 10 for pre-orders.

“The Apple watch is quite exceptionally coherent with the Apple brand. If they had taken the same approach that I would have mistakenly followed — a slightly sexier watchmaking approach — I think it would have been not right. So I had to recognize that they’re right, in terms of their logic, and I was sorry I spoke too soon,” he said.

Biver is reasonably optimis-tic heading into Basel. Though he agrees with the Federation of the Swiss Watch Industry’s forecast that Swiss watch ex-ports will remain stable this year, he hopes to snatch busi-ness from his competitors.

“We have entered a phase where the market’s growth will

perhaps be less strong, and if you want to increase your rev-enues in a market that is not expanding, you need to win market share,” he noted.

Biver hopes to achieve this through his time-tested meth-od of focusing on a small num-ber of models — a technique he likens to that of Australian hunters killing lizards with poisoned blow darts.

“The arrow has to be ex-tremely small but very sharp,” he explained. “That gives a strong penetration.”

Accordingly, he scrapped the launch of Tag’s much-hyped new chronograph movement, the CH80, to focus on produc-tion of its existing model, the CH1887. Tag Heuer is also phas-ing out high-concept watches such as the Mikrogirder chrono-graph, unveiled with great fan-fare in 2012.

Its Basel novelties will span from two vintage-in-spired Carrera chronographs to the futuristic Monaco V4

Phantom, an all-black carbon-fi ber watch.

Meanwhile, Zenith is refocusing its offer on the Chronomaster 1969 chronograph, which comes equipped with its award-winning El Primero movement. In June, it unveiled a lim-ited edition of the time-piece in partnership with the Rolling Stones.

Biver is also shaking up Tag’s roster of ambas-sadors. He revealed that it will part ways with Leonardo DiCaprio, who has been with the brand since 2009, and Cameron Diaz, who joined its roster in 2012.

In January, Cara Delevingne was named as the new face of Tag Heuer. The announce-ment was made at an event during Men’s Fashion Week in Paris

that was originally due to fea-ture Biver and the British model locked in a cage with an adult lion, his tamer and a lion cub — until the executive kicked up a stink.

“I said: ‘I’m 66 years old, I don’t want to die because of some stupid lion,’” Biver recalled.

“They found an elegant way to back out of it. They used the excuse that the lion did not want to come out of its cage,” he added with a chuckle.

With her fondness for wearing onesies and pulling silly faces, Delevingne might not seem like a poster girl for Formula One-inspired watch-es, but Biver is keen to expand Tag’s traditional demographic of 25-to-45-year-olds.

“The 15-to-30 set is exactly the target audience I’m seek-ing for Tag. Why? Because they are my future custom-ers, and someone like Cara Delevingne, who is very active on social media — that’s the communication tool of tomor-row’s generation,” he said.

Tag Heuer will also an-nounce soon that it has re-cruited DJ David Guetta as brand ambassador.

The brand will hold its tra-ditional party at the Basel fair, but Biver is also exploring more novel ways of reaching out to distributors. Last month, 600 sales associates were invited to 15 hotels across the United States for a cocktail reception at which the executive addressed them via an 18-minute movie projected on giant screens.

“I want to communicate that Tag Heuer is avant-garde,” he explained.

Notwithstanding the tech trappings, Biver is anything but a Big Brother fi gure. He has pledged to have breakfast with all of Tag Heuer’s 800 staff members in the next few months. At the two sessions held so far, he mingled with around 40 employees for two hours, sharing his cheese and answering questions.

“The business world suf-fers from a lack of proximity. Bosses are often ex cathedra — they are either on the top fl oor of the building or somewhere else entirely. I want everyone to be in communication with me. At the end of the breakfast, everyone gets my home phone number, work phone number and e-mail,” he said. “When you do that as a boss, you cre-ate a team, you create a soul, you create solidarity.”

After decades in the busi-ness, Biver would be justifi ed in considering he’s seen it all and done it all. So how does he keep his fervor intact?

“You know, Paul McCartney isn’t blasé,” he replied. “He was in The Beatles, he reached the pinnacle of success, yet he’s still singing. He just recorded a song with Rihanna and Kanye West. Why? Because you can’t retire a passion.”

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Zenith Academy Christophe

Colomb Hurricane Grand Voyage

Hublot Big Bang Unico Full Magic

Gold watch

The LVMH watch division chief is just getting started — again. By Joelle Diderich

Biver Winds Up

Jean-Claude Biver

The Tag Heuer Carrera Caliber 6 chronograph and a Tag Heuer ad featuring Cara Delevingne.

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GRABBING MARKET SHARE will be the key battle of Baselworld this year.

The Federation of the Swiss Watch Industry predicts Swiss watch ex-ports will remain stable in 2015 after eking out 1.9 percent growth last year. Therefore, brands must win a bigger slice of the pie in order to post growth.

To do this, they will have to van-quish hurdles including sharp curren-cy fluctuations, a recent slowdown in U.S. sales growth, political turmoil in Ukraine and Hong Kong, and the poten-tial impact of lower oil prices on Middle Eastern demand.

Leading watchmakers including Swatch Group and Patek Philippe have adjusted prices ahead of the show in reaction to the decision by the Swiss National Bank in January to de-peg the Swiss franc from the euro, causing the cur-rency to appreciate sharply not only against the euro, but also against the dollar and the yen.

Others, like Ulysse Nardin, have shortened their staff ’s working hours as volatile de-mand for luxury time-pieces forces them to scale back production.

Tough market conditions notwithstanding, executives — mindful of gaining a mental edge on their competitors — pro-jected confidence heading into the show, which runs today through March 26.

“The current economic situation is challeng-ing for every player in the luxury business,” Fawaz Gruosi, founder and creative director of Swiss jewelry and watch brand de Grisogono, ac-knowledged. “Forecasts are difficult to make, and markets are fluctuating and very unstable.”

He added, “Luckily, our segment is less impacted, as hard luxury products seem to hold on well.”

Swiss watch exports rose 3.7 percent in January after two months of losses, though analysts said this partly reflected a surge in or-ders from retailers be-fore major watch players push through price hikes in select markets, in par-ticular the euro zone. Figures for February are due to be published today.

“I think the mood is still fairly positive. In some markets there is clearly so much disrup-tion that it hurts sales, but we see, for example, already in February, that it is pretty much rebounding, if we look at the global level,” said Peter Stas, cofounder and chief ex-ecutive officer of Frédérique Constant.

Benefiting from its positioning in the accessible luxury segment, the brand outperformed the market last year, posting sales growth of 16 percent. In the wake of the Swiss bank’s decision, it raised prices in the euro zone by 8 percent and lowered them by 5 percent in Switzerland and between 3 and 7 per-cent in Asia.

“I see less competition and I see con-tinuous development in growth for our company,” Stas predicted.

Frédérique Constant also appears well-poised to ward off the threat of the Apple Watch, set to go on sale in April. The Geneva-based firm and its sister brand Alpina will arrive in Basel with more than 10 models of their horologi-cal smartwatches for women and men.

Described as “the bridge between Silicon Valley and Switzerland,” they feature traditional watch faces rather than digital screens, and are the fruit of a venture with California-based Fullpower Technologies, which aims to bring its MotionX activity tracking tech-nology to the Swiss watch industry.

The fair’s organizers predict busi-ness as usual. The number of exhibi-tors is set to remain stable at 1,500, with

150,000 visitors and 4,000 journalists expected to attend.

“[Exhibitors] have high expectations in terms

of buyers coming and the media impact of Baselworld all around the world. They are convinced that it will give a positive impact to the world market in watches and jewelry,”

said Baselworld director Sylvie Ritter.Swatch Group ceo Nick

Hayek Jr. stoked market buzz by announcing that the world’s big-gest watchmaker plans to bring a smartwatch with functions

including communication, mobile payments at stores

and applications that work with Windows and Android.

The group, whose brands range from high-end Blancpain time-pieces to plastic Swatch watches, has raised pric-

es for some of its brands between 5 and 7 percent in

select markets to compensate for the unfavorable currency situation, which Hayek likened to a “tsunami.”

Patek Philippe said even before the SNB’s surprise move,

that currency fluctuations cre-ated sharp distortions in

the prices of its watches in different markets. In early January, a compli-cated watch such as its Ref. 5960 annual cal-endar chronograph in platinum cost 33 percent more in Hong Kong than

it did in Switzerland.“The significant price

differences in the magni-tude of plus-20 to plus-25 per-cent in Asia and the U.S. com-pared to Switzerland and the euro zone, attributable mostly to foreign exchange trends,

destabilizes local markets by enticing customers to buy their watches abroad and could lead to the development of a gray market,” it said in a statement.

Patek Philippe therefore cut prices by 5 percent in Switzerland, 3 percent in Asia and 7 percent in North and South America, as well as Hong Kong. It simul-taneously hiked prices by 7 percent in Europe and 5 percent in Japan, beginning Feb. 10 and effective until the end of June.

“Within this new and difficult con-text, it is my objective to make sure that our customers in the individual markets can expect fair prices, excluding VAT

and other taxes, and that our dealers can operate within a sound financial framework,” explained Thierry Stern, ceo of Patek Philippe.

Aldo Magada, ceo of Zenith, agreed it was vital to reassure retailers and con-sumers in order to restore a measure of serenity to the market.

“I can’t do much about the economic environment, so my strategy is simple:

It is to ensure that Zenith products are quite homogenous in terms of price,” he said. “I have to avoid creating imbal-ances that could trigger an avalanche on one side or the other.”

Magada noted that even if the euro stabilizes at around 1.08 Swiss francs, versus the low of 0.97 francs hit in January and the previously main-tained cap of 1.20 francs, it is also losing ground against the dollar, which has re-percussions for territories as far afield as Dubai, Hong Kong and China.

Magada is among a slew of executives in new roles at Basel. Among the other ceo’s appointed in the last 12 months are Jean-Frédéric Dufour at Rolex; Jean-Claude Biver at Tag Heuer; Antonio Calce at Sowind Group, parent to Girard-Perregaux and JeanRichard; Stéphane Linder at Gucci Watches and Jewelry, and Laurent Dordet at La Montre Hermès.

Efraim Grinberg, chairman and ceo of Movado Group Inc., noted that it re-cently hired former Apple executive Jo An Lawson as general manager of wear-able devices. “But we are moving in that area cautiously, because we want to make sure that we can introduce beau-tiful products,” he said.

The group also has a new president, Ricardo Quintero, in charge of acceler-ating its global expansion.

“I think there are always opportuni-ties. You have an improving economy in the U.S., and I understand that there are challenges in other parts of the world,” Grinberg noted, “but you also have de-clining oil prices, which ultimately ben-efits consumers all over the world.”

Movado Group, which produces watches under brand names including Movado, Ebel, Coach, Tommy Hilfiger, Hugo Boss and Scuderia Ferrari, raised its prices on March 1 for the first time in six years. But Grinberg expects markets to have partially digested the Swiss franc shock by the time the fair kicks off.

“Currencies will begin to settle to their natural balance, and I think that will create a better air of calmness in the industry,” he said.

Mario Ortelli, senior analyst at Bernstein Research, said Swiss play-

ers could hedge themselves against the strength of the Swiss franc by buying companies that record their sales in other currencies, especially euros.

“Keeping cash in Swiss francs now-adays is a cost, because you have a negative rate on your bank account,” he said. His top picks for acquisitions were Audemars Piguet, Chopard and Patek Philippe.

“We believe that Richemont will focus its attention on high-end brands, and Swatch Group on midtier brands. In the case of Swatch, any acquisition they make could potentially run into an-titrust issues because of their dominant market position in movement produc-tion,” he added.

The central bank decision has fueled fears that the export-dependent Swiss economy will slide into recession. The KOF Swiss Economic Institute, a leading economic think thank, expects Swiss gross domestic product to fall by 0.5 percent in 2015 and remain stagnant next year.

“Investments in equipment will become increasingly restrained as the exchange rate adjustment has made Switzerland even less attractive as a manufacturing lo-cation, having already been hampered by doubts over progress in the bilateral ap-proach,” it said in a recent report.

Nonetheless, several major players are sticking with plans to ramp up their output from Switzerland.

Movado Group is launching Hugo Boss Swiss Made timepieces, though the sud-den currency swing means they will be priced around 8 percent higher than ini-tially planned at 399 euros to 699 euros, or around $450 to $800 at current exchange.

Fossil Group is moving ahead with long-term plans to increase its capaci-ties to assemble mechanical movements and manufacture cases in Switzerland as the firm expands its selection of Swiss-made products for brands such as Emporio Armani, Burberry and Fossil.

“Our diversified manufacturing base and global distribution puts us in a strong position to limit impact from currency fluctuations,” said Martin Frey, managing director of Fossil Group Europe. “We react more to market-driv-en changes than currency-driven chang-es. Investing in vertical manufacturing in Switzerland continues to be a big op-portunity for us and our strategy will not change based on recent policy changes.”

The group expects to produce close to 200,000 movements in 2015, up from 110,000 in 2014. Its Basel launches will include limited-edition Diesel timepieces featuring Swiss movements, and it is work-

Juggling currency swings and adjusting prices are key to surviving in a diffi cult market. By Joelle Diderich

Movado Bold

Louis Vuitton Escale Time Zone

Frédérique Constant Swiss Horological

Smartwatch

Tudor North Flag

Follow the Money

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7WWD THURSDAY, MARCH 19, 2015

ALBERT BENSOUSSAN’S arrival at Kering signaled that, while it is a relatively modest player in hard luxury, the French group is serious about growing the category.

The former LVMH executive took over as chief executive offi cer of Kering’s newly created luxury watches and jewelry division in May 2014, just as growth in the segment was slowing because of a sharp reduction in demand from Asia and a drop in spending by Russian tourists.

Sales of hard luxury grew just 1 percent at constant exchange rates in 2014, according to an estimate by Bain & Co.

Bensoussan is in charge of seven brands, ranging from Place Vendôme jeweler Boucheron to more recent acquisitions such as Sowind Group, Qeelin and Pomellato. Ulysse Nardin joined the fold on Nov. 1, while Gucci Watches and Jewelry is operated separately under the responsibility of Gucci ceo Marco Bizzarri.

In his fi rst year on the job, Bensoussan installed new management at several brands. Antonio Calce took over as ceo of Sowind Group, parent of Swiss luxury watch brands Girard-Perregaux and JeanRichard, succeeding Michele Sofi sti. And Christophe Artaux was named ceo of Qeelin, the Chinese jewelry brand, after its cofounder, Guillaume Brochard, left to pursue other interests.

Kering group revenues rose 4 percent in 2014 to 10.04 billion euros, or $13.34 billion at average exchange. The luxury division generated sales of 6.76 billion euros, or $8.98 billion, with watches representing 4 percent of the total and jewelry 6 percent.

Though it does not break out detailed fi gures, the group said watches and jewelry — excluding Gucci — posted a mixed performance last year, with a drop in revenues at Sowind Group due to a shake-up of its distribution network in Asia for Girard-Perregaux and volatile tourist fl ows in Europe and the Middle East.

In an interview, Bensoussan discussed the challenging economy, cleaning house and fostering organic growth. — J.D.

WWD: What was your assessment of the watch-and-jewelry division at Kering when you took over, and what were the initial measures you took?Albert Bensoussan: Kering remains a medium-sized group in terms of watches and jewelry in light of the heavy sector consolidation that has taken place over the last 15 years. At the same time, inside this newly created division, there are seven brands with a distinct and separate identity that don’t cannibalize each other. They mostly have distinct business models and organizations, which facilitates the task of analysis and collaboration with each brand. This also makes it easier to develop different visions for strategic development of brands that range from those that one could qualify as being at the start-up stage, like Qeelin, to others that already boast a long history and many achievements, as is the case for Ulysse Nardin and Girard-Perregaux in watches, and Boucheron and Pomellato in jewelry.

At Kering, we favor the organic development and the independence of each brand. The principle of ‘One brand, one ceo’ made sense to us, [so] we streamlined the organization. An important part of my role is to be a sparring partner to the brands, an ambassador for their messages and needs at the group level, but also a challenger.

WWD: How did Kering’s watch and jewelry division perform in 2014 and what is the outlook for 2015? A.B.: In 2014, watches and jewelry faced volatile market conditions. Performances of our brands were positive in jewelry, in

particular at Boucheron, which delivered a more-than-satisfactory year. In watches, Sowind remained under pressure in a market climate still marked by caution of wholesalers. Regarding 2015, at this point there is still market volatility [in the watch industry] and distributors remain cautious.

WWD: Can you provide details about Ulysse Nardin’s decision to shorten working hours for its staff in response to slowing demand?A.B.: This concerns only a limited [number] of the staff. Historically, Ulysse Nardin has been a very autonomous brand. The management is used to taking temporary measures to preserve the brand’s future when the market environment toughens. Several other brands in the industrial hub of La Chaux-de-Fonds announced similar measures in November and December. The measures implemented at Ulysse Nardin are not surprising, but rather reflect a commitment to sound management.

WWD: Kering chairman and ceo François-Henri Pinault recently referred to possible synergies between Girard-Perregaux and Ulysse Nardin. Can you provide specifics? A.B.: We are very attached to preserving the identity and independence of each brand. It is not a question of being territorial or refusing to share resources. Each brand has techniques, know-how and product lines that are specific to them, but sometimes also similar manufacturing facilities. The brands have no plan to manufacture for each other or exchange parts. However, we do exchange information regarding know-how, industrial processes and resources such as suppliers.

We also stick to a simple principle of having a specifi c distribution network for each brand. With few exceptions, they don’t share sales teams. When we do share resources, it tends to be on the fi nancial, accounting, administrative and logistics side.

WWD: There are reports that the marketing team at JeanRichard has been dismissed. What is the future of the brand?A.B.: There has been a big repositioning at JeanRichard that is now nearing completion. We’ve revised the internal

organization to reflect the fact that Girard-Perregaux accounts for the bulk

of revenues at Sowind Group, so it’s natural for the focus to be on [that brand]. JeanRichard is what we would consider a start-up brand within the division, and, as such, we want to adapt its modus operandi and costs to its business model.

WWD: What are your strategic priorities for 2015?A.B.: Our mission is to focus on the organic growth of our brands and to help them increase their global

presence, develop new collections and hone their product pipeline.

It’s a long-term process that does not require any changes or turnaround

in the identity of each house, but rather an emphasis on quality of execution.

ing on a ladies’ mechanical move-ment to be marketed next year.

Meanwhile, Tudor — the sis-ter brand of Rolex — will unveil its first manufactured movement as it enters the next phase of the brand’s global relaunch, initiated in 2007. The Tudor MT5621 cali-ber will initially equip its North Flag model, which boasts a power reserve of around 70 hours.

“Manufacturing an in-house movement allows for more indus-trial independence,” said Philippe Peverelli, director of Tudor Montres. “The introduction of this new cali-ber is the first step of a major indus-trial strategy aimed at equipping more and more Tudor watches with Tudor’s own movements.”

Indeed, innovation will be key to capturing increasingly dis-cerning consumers, especially in

China, the number-three market for Swiss watch exports in 2014. Exports to China fell 3.1 percent last year and were down more than 15 percent from 2012 levels, according to the Federation of the Swiss Watch Industry.

The drop in demand has been largely blamed on a government an-ticorruption campaign, but Franklin Yao, managing partner and cofound-er of Shanghai-based consultancy SmithStreet, believes the shifts in the Chinese market run deeper.

“I wish that I could say that 2014 will be like a bad dream that you wake up from and in 2015, ev-erything will go back to the way that it was, but that’s not going to be the case,” he said.

Yao sees two main factors at play: Very wealthy consumers in China are starting to spend in a more rational way, while a credit crunch is limiting access to capi-tal for rich entrepreneurs.

On the upside, a generation of upper middle-class consumers is emerging and they are spending more than they were before.

“They might be two or three years out from being completely immersed in spending on luxury as part of their lifestyle,” he pre-dicted. Capturing these consumers will require a more sophisticated approach to retail and marketing.

“I think the fundamental issue for brands in China is that they have been really set up to serve the VIP customer, and they haven’t been set up to serve this emerging customer. Maybe in

some ways, they don’t really un-derstand these [emerging] custom-ers, or don’t know how to influ-ence and touch them, teach them or introduce themselves to them in the right way. I think that is the challenge and the opportunity that everybody is going through right now in China,” Yao said.

In a recent report, Bernstein Research forecast that the rise of these sophisticated consumers and an improvement in the po-litical situation in Hong Kong will contribute toward ending the de-stocking cycle in Mainland China in the second half of the year.

With the effect of the clamp-down on Chinese gifting finally stripped from comparable data, Bernstein forecasts the global luxu-ry watch market could post growth of 3 percent in 2015, though it sees

a two-speed recovery, with mid-priced watches recovering more quickly than those at the high end.

“We argue that the rising tide of demand will not float all boats, and the most ‘desirable’ brands with evergreen products or com-pelling new launches will emerge as clear winners,” it said.

“In a market where over-ex-posed brands are in decline, and where customer sophistication is rising internationally, the need to innovate is higher than ever,” Bernstein added.

Louis Vuitton, which launched its first watch in 2002, is banking on creative design as its advantage in a competitive playing field. It’s launching a more accessible ver-sion of its Escale Worldtime men’s watch, unveiled last year, featur-ing a simplified movement and a printed dial, in lieu of the original hand-painted version.

The timepiece will retail for 5,200 euros ($5,900), compared with $67,600 for the high-end version.

“We think it’s a strong idea. I also think it’s different from ev-erything already out on the mar-ket,” said Hamdi Chatti, vice pres-ident of fine jewelry and watches at Louis Vuitton.

“I think a lot of customers will continue to buy beautiful watches, but they will gravitate either toward very classic timepieces or some-thing very original and new. We don’t have 150 years of watchmaking history, though we do have a 160-year brand history. Therefore, our credo is to innovate,” he concluded.

Kering’s Watch Strategy

’’

Baselworld runs today through March 26 at the Messe fairgrounds.

Girard-Perregaux Vintage 1945 Lady

PHOT

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’’Forecasts are difficult to make,

and markets are fluctuating and very unstable.

— FAWAZ GRUOSI, DE GRISOGONO

Albert Bensoussan

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