WWDBASEL

PHOTO BY FREDERIC BOYADJIAN STYLED BY LAURENT FOLCHER

MYSTERY DATE

WHETHER CHIC, SPORTY, SPARKLING OR SUBTLE, TIMEPIECES AWAIT THEIR SUITORS AT THE BASELWORLD WATCH AND

JEWELRY FAIR, WHICH BEGINS TODAY IN BASEL, SWITZERLAND.

PLUS■ CHINA CRACKDOWN

WEIGHS ON WATCHMAKERS

■ KEY LAUNCHES AND THE SHOW AT A GLANCE

■ ERA OF THE SMARTWATCH

The Tahitian pearl is the world’s most alluring gem. Harvested in the azure waters of South Seas archipelagos, the name alone connotes beauty, tranquility and romance. The name most indelibly associated with Tahitian pearls is the American jeweler, Assael. From the moment Salvador Assael introduced the natural color Tahitian pearl to Harry Winston in 1976, the world fell in love with this magnifi cent gem.

Tahitian pearls remain at the core of Assael’s jewelry designs today. From the iconic Classic collection, to the modern designs of Angela Cummings for Assael collection, to the company’s brand new, everyday Tahitian collec-tion known as A-Line, Assael uses only the most lustrous and seductive Tahitian pearls.

Debuting at Basel, the A-Line collection offers Tahitian pearls at their most casual. Long strands interspersed with precious and semi-precious colored stones, including sapphires, rubies, emeralds, amethysts, moonstones and garnets offer a modern way to wear pearls.

The collection’s fl ower group pairs semi-precious pavé stones with Tahitians to create bursts of energy and color. “Nothing is as glamorous as a woman wearing pearls,” says Lawrence Lewis, CEO of Assael. “But they needn’t be saved only for special occasions or evenings out. Our new A-Line collection has been designed to make women feel comfortable wearing them every day.”

The Classic and Angela Cummings collections continue to refl ect the art of haute joaillerie design, with intricate settings, one-of-a-kind stones and perfectly matched natural color pearls. The entirety of Assael’s collections may be found in fi ne retailers through-out the world.

From the A-Line by Assael, this 18K gold bracelet contains 5 Natural Color 10 mm Tahitian Pearls and 12 Moonstones weighing 17 cts.

Nothing is as glamorous as a woman wearing pearls,

but they needn’t be saved only for special occasions

or evenings out.

Nothing is as glamorous

only for special occasions asionsnings out

Angela Cummings for Assael “Wave” earrings featuring a pair of 12 mm Tahitian Cultured Pearls surrounded by 62 diamonds 2.88 cts. set in Platinum.

An exquisite Necklace of Natural Color Tahitian Cultured Pearls measuring 16 – 15 mm and a Platinum ball clasp set with 6 cts. of diamonds.

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EMPORIO ARMANI SWISS MADEEmporio Armani is taking its watches upscale with the launch of Emporio Armani Swiss Made. The 51-piece range, which goes on limited release today, will be officially unveiled in Basel and start shipping globally in July.

Giorgio Armani said the timepieces, inspired by the Thirties and Forties, were “not overly precious” and designed for everyday use.

“Designer watches are usually just beautiful objects. I strive instead for something more,” the designer said. “I have created a new watch collection for Emporio Armani that while being elegant, streamlined and subtle, is also wonderfully functional.

“I wanted to create the most precise watches — when it comes to technology and manufacturing — and to match this precision with the most precise design, which is where my expertise comes in,” he added.

Kosta Kartsotis, chief executive officer of Fossil Group Inc., the licensee for Emporio Armani watches, said Armani brought his exacting eye to the design process.

“Throughout his career, he has melded old-world craftsmanship with modern technology to create indelible images in the fashion and design industries. The creative process for this collection was fascinating,” Kartsotis said.

Prices range from around $700 to $1,500.The launch is part of a broader move by Fossil

to bring Swiss technology to its fashion brands, specifically by increasing its production capacities for watch movements and cases in Switzerland, with an eye to catering to Asian demand in particular, said Luis Samaniego, senior vice president of luxury brands at Fossil.

CHANEL J12-365Chanel hopes the new version of its cult J12 watch is the kind women won’t want to take off.

It has dubbed the timepiece J12-365 to reflect its appeal as a

more feminine spin on the sporty black and white timepieces launched

in 2000, which have been credited with popularizing the use of ceramic in watch manufacturing.

Nicolas Beau, international director of watches at Chanel, said the case has been made slimmer and slightly smaller, with a diameter — coincidentally — of 36.5 mm., compared with 38 mm. to 42 mm. for the previous versions.

“Originally, the J12 was a unisex and rather sporty watch,” he noted. “We wanted to create a totally feminine version.”

The watch has been stripped of its rotating bezel, giving the dial a fresh feel, accentuated by guilloché finishing and a running seconds subdial at six o’clock. Diamond settings are now placed inside the case, instead of on the bezel.

“Opening up the dial makes the watch feel quite big. It is 36.5-mm. wide, but the visual perception is almost identical to a 38 mm.,” Beau said. “That remains an important element of the J12, which has always had a strong presence, both visually and on the wrist. Only now, you have the comfort of a small watch.”

The watches come in black or white ceramic with accents of stainless steel or beige gold, a new alloy exclusive to Chanel.

Priced 4,500 euros to 15,000 euros, or $6,270 to $20,890, they will go on sale in June.

WWD.COMWWD THURSDAY, MARCH 27, 201416

SOURCE: BASELWORLD 2013

1,460 exhibitors from 40 countries.

3,610 journalists from 70 countries.

122,000 visitors

from 100 countries.

141,000 square meters, or 1.5

million square feet, of exhibition area.

DATES: March 27 to April 3, Messe Basel exhibition center, Basel, Switzerland

BASELWORLD VILLAGE, 14 BINNINGERSTRASSE: With its restaurants and bars,

Baselworld Village is an evening meeting place for show visitors in the heart of the city.

Open March 27 to April 2, 6 p.m. to 2 a.m.

CONTACT: Baselworld.com

LUXURY BRANDS WILL INTRODUCE THEIR LATEST KEY MODELS AT BASELWORLD. HERE ARE THREE. BY JOELLE DIDERICH

WWD

BASEL2014

Fun at the Fair

DIOR VIII MONTAIGNETwo years after the launch of the Dior VIII, Christian Dior is introducing a variant, the Dior VIII Montaigne, which reflects founder Christian Dior’s fondness for gray by reinterpreting the watch in steel.

The new timepieces take the pillar line in a more feminine direction, with slenderized horns, a slimmed down case and a softer

version of the bracelet featuring pyramid-shaped links. Whereas the Dior VIII came in two sizes — 33 mm. and 38 mm. — the Dior VIII Montaigne is available in 25 mm., 32 mm. and 36 mm.

Laurence Nicolas, president of Christian Dior watches and fine

jewelry, noted it was a departure from the sporty black ceramic

models that made up the core of the Dior VIII collection.

“Steel is essentially a way for us to talk about the Dior gray,” she said. “No doubt, it will also allow us to attract customers

looking for something more understated, particularly with the

25-mm. watch. It has a very timeless feel, a refined but discreet elegance,

especially with the alligator strap, which is also a novelty for us this year.”

The collection consists of 20 references ranging from stainless steel quartz watches

to a limited-edition Grand Bal automatic timepiece featuring a pink gold oscillating

weight on the dial decorated with mother-of-pearl marquetry and set with diamonds.

With prices ranging from 2,800 euros to 58,000 euros, or $3,900 to $80,770 at current exchange, the line will go on sale worldwide in July.

The ad campaign, shot by Patrick Demarchelier, will break on June 20.

BASELWORLD AT A GLANCE

BY THE NUMBERS

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18 WWD THURSDAY, MARCH 27, 2014

A MULTITUDE OF TIMEPIECES IS SET TO SPARKLE AT THE FAIR.

WATCH ME RUNEBEL ONDE CHRONOGRAPH

LOUIS VUITTON TAMBOUR EVOLUTION SPIN TIME GMT DE GRISOGONO ALLEGRA S05

OMEGA SPEEDMASTER MARK II

BLANCPAIN VILLERET

SHINOLA RUNWELL

SPORT

CALVIN KLEIN PURE

BREMONT BOEING

MODEL 1

CITIZEN L LADIES’ WATCH

TUDOR HERITAGE BLACK BAY

BELL & ROSS BR 03-94

CARBON ORANGE

88 RUE DU RHONE RIO SWAROVSKI CRYSTALLINE BANGLE CHRONOGRAPH

PATEK PHILIPPE NAUTILUS TRAVEL TIME CHRONOGRAPH

HARRY WINSTON PREMIER CHRONOGRAPH

WWD.COM19WWD thursday, march 27, 2014

A multitude of timepieces is set to spArkle At the fAir.

WATCH ME RUNwwd

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breguet clAssique tourbillon ultrA-thin AutomAtic

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swAroVski crystAlline bAngle chronogrAph

ferrAgAmo buckle VersAce V-signAture guess

burberry britAin

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JAquet droz

grAnde seconde sw côtes de genèVe

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w27c018(19)a;12.indd 19 3/25/14 1:55 PM03252014135712

WWD.COM20 WWD THURSDAY, MARCH 27, 2014

By JOELLE DIDERICH

GREATER CHINA is down but not out.That’s the message from luxury watch

brands heading into the Baselworld fair, the watch industry’s most important an-nual gathering, which is set to run in Basel, Switzerland, today through April 3.

All eyes are on Hong Kong and China, the number-one and number-three mar-kets for Swiss timepieces, respectively, where demand for watches fell sharply last year owing to an economic slow-down and a government crackdown on official gift-giving.

As a result, Swiss watch exports rose just 1.9 percent in 2013 after a 10.9 per-cent increase in 2012, according to the Federation of the Swiss Watch Industry.

Most analysts expect the sector will see a slight rebound this year. Swiss pri-vate bank Vontobel forecasts Swiss watch exports will rise 6 percent in 2014 to a record 23.1 billion Swiss francs, or $26.5 billion at current exchange, with growth in all major markets.

“The main reason for the growth ac-celeration compared to 2013 is a nor-malization in Greater China, where we expect low-single-digit growth,” Vontobel Equity Research said in a recent report.

And the World Watch Report, released by Geneva-based Digital Luxury Group on the eve of the fair, shows Chinese con-sumers have not lost their appetite for luxury watches. Total Internet searches for haute horlogerie timepieces were up 59 percent in China last year, with Omega, Cartier and Rolex the most sought-after brands.

“The euphoria of the last two or three years [among exhibitors] is gone,” said Baselworld director Sylvie Ritter. “But everyone is very confident, and all those I have met expect it to be a good edition of Baselworld, and they don’t think we’re going to see a sharp slowdown.”

New arrivals at the fair include dia-mond specialist Graff, which is tak-ing over the space previously occupied by Harry Winston, now housed with the other Swatch Group brands on the ground floor of the main hall. Meanwhile, Fossil Group Inc. will be present with an expanded portfolio including Emporio Armani Swiss Made, Burberry, Skagen and Fossil, which celebrates its 30th an-niversary this year.

Nick Hayek, chief executive officer of Swatch Group, the world’s largest watch-maker, forecasts the Swiss watch indus-try will grow 5 to 10 percent in 2014. But he warned that volatile currencies could severely dent revenues in Swiss francs.

“If you are talking in terms of growth in local currencies, then I see things going really well. If I look at our ex-change rates, every day they are tum-bling — the world looks slightly differ-ent,” he said at the group’s annual media conference last week in Plan-les-Ouates on the outskirts of Geneva.

Swatch Group is banking on its mid-priced brands, including Tissot and Longines, to deliver continued growth as China’s middle class expands. François Thiébaud, president of Tissot, said the brand posted double-digit growth in 2013, selling more than 4 million watches.

“On the one hand, we are less af-fected by the anticorruption campaign than higher-end watch brands,” he said. “On the other, we are benefiting from the growth in the number of peo-ple whose purchasing power is rising and who suddenly want a Swiss watch, because they believe Swiss watches have something extra.”

Among Tissot’s introductions this year is the T-Touch Expert Solar, which it is billing as the first touch-screen watch powered by solar energy.

Thiébaud emphasized that China was not the only focus of the brand, which has a network of around 14,000 points of sale worldwide. Although Tissot plans

to continue streamlining its distribution this year, it will open a store in Zurich in April and another on New York’s Fifth Avenue in August.

Jean-Claude Biver, president of the watches division at LVMH Moët Hennessy Louis Vuitton, said he sees overall Swiss watch exports rising by 4 to 5 percent this year.

“I am relatively optimistic, and I am not the only one,” said the executive, who oversees the Tag Heuer, Hublot and Zenith brands. “The situation in China has changed, it’s true, but not permanently.”

In its latest “Income and Expenditure: China” report, Euromonitor International predicts massive increases in the num-ber of people earning higher salaries. Between 2014 and 2030, it forecasts the population with income of $20,001 to $30,000 will rise by 647 percent, and the proportion of those earning $30,001 to $40,000 will increase by 795 percent.

“That is a huge potential,” observed Biver, adding that even though Swiss watch exports to Mainland China fell 12.5 percent in 2013, there was a marked increase in watch purchases by Chinese travelers to South Korea, Switzerland and France, for example. “In the me-dium term, China will remain an El Dorado. Perhaps [growth] will not be as flamboyant as it was initially, because you can’t post 50 percent growth every year, but you should certainly not under-estimate [the country’s potential]. The death knell has not sounded for China — very far from it.”

Within the LVMH brand stable, Biver expects Hublot and Zenith to outperform

the rest of the sector. “These two brands have yet to reach their cruising speed,” he asserted.

Hublot hopes to capitalize on the fever surrounding the upcoming FIFA World Cup in Brazil — for which it is the official watch and timekeeper — with the limited-edition Big Bang Unico Bi-Retrograde Chrono, aka the Soccer Bang, which has a display built around the tim-ing of one half of a soccer match.

Meanwhile, Jean-Frédéric Dufour, ceo of Zenith, forecast the maker of El Primero and Pilot watches would post

growth of 9 to 10 percent this year, after an increase of 7 to 8 percent in 2013. Greater China (Hong Kong, Taiwan and Mainland China) accounts for 35 per-cent of volume.

“Today, we have an average sellout that’s higher in China and Hong Kong than in the U.S., for example,” he noted. “It means people are still keen to con-sume watches, but we see a turn with po-litical changes that the Chinese are buy-ing fewer gold watches and more steel watches than they used to. In volume, we’re selling more, but the average sell-ing price is decreasing a little bit.”

Accordingly, the brand has revised the entry price for its timepieces to 3,300 euros, or about $4,600 at current exchange, slightly below the 2013 level of 3,500 euros, or $4,900. Dufour predicted the drop in de-mand for higher-priced timepieces would lead consumers to reject models that lack a strong selling point.

“The watches that are suffering are more the watches that were just made with the intention of selling them ex-

pensive. You know, like the umpteenth perpetual calendar or tourbillon that ev-eryone carries — this is becoming more difficult to sell,” he noted.

Zenith’s key launch this year is the Synopsis, an addition to its El Primero family featuring an open-ing on the dial that reveals the watch mechanism. Prices range from $6,000 for a steel version to $15,300 for a rose gold model, both of which come with a brown alligator strap.

At Hermès, sales of watches were down 3.2 percent in reported terms in 2013. At constant exchange rates, the seg-ment reported a 1 percent sales increase.

Luc Perramond, ceo of La Montre Hermès, expects the division to post sales growth in 2014: “Hopefully the situ-ation in China will stabilize even if, due to the price difference between China and the rest of the world, a growing per-centage of our Chinese customers buy

abroad. The key question is whether the drop in sales we are register-

ing in China is being compen-sated overseas.”

Vontobel noted in its re-port that besides Customs duties of 11 percent and val-ue-added tax of 17.5 percent, China imposes a 20 percent luxury tax on watches worth

more than 10,000 yuan ($1,625 at current exchange).Looking to the rest of the world,

Perramond said he was positive on prospects for Japan, Hong Kong, Taiwan and Europe, but the outlook for the U.S. was still uncertain.

“Even if there are encouraging mac-roeconomic signals in North America, it is not being reflected fully in the sell-out. When you look at the numbers from

Saks Fifth Avenue, Neiman Marcus and the like, you can see there is a certain gloominess,” he said.

Hermès is putting the accent on wom-en’s watches this year with the return of the Nantucket in a new silver alloy that is resistant to oxidation.

“Another advantage of silver is that it is a less expensive metal than gold,

even if it’s still precious. That al-lows us to offer pieces priced below 3,000 euros [$4,100], in other words, to reinforce our offer in more accessible price

segments, which is very important, given the economic context and our

strategy,” he said.On the acquisitions front, makers

of watch components remain a target after the Swiss Federal Competition Commission, or Comco, last year ap-proved a deal allowing Swatch Group to gradually reduce deliveries of mechani-cal movements to rival brands.

“The trend toward consolidation is likely to continue, although the pace will depend on the decisions made by

the owners,” Vontobel reported. “There are still some family-owned

watch component companies, for in-stance, among the hand and dial manu-facturers. But some independent sub-contractor groups also own some watch component producers,” it noted.

Among recent deals, Swatch Group in November took control of Rivoli Investments LLC, a Dubai-based opera-tor of more than 360 retail businesses in the Middle East, mainly in the watch segment. Germany’s CGI Management Consulting last month acquired Swiss-German watch brand Hanhart.

Biver said that Tag Heuer, one of the brands that stood to be hit hard by the Comco ruling, had invested so much in guaranteeing alternative supplies that by 2019, it would no longer be reliant on Swatch Group.

For the time being, LVMH has scaled down its acquisitions plan, Biver added. “There was a time when we were hunting for acquisitions,” he said. “Today, that is no longer the case.”

The main watch hall at Baselworld.

Watchmakers Set Strategies for Basel

Tissot’s T-Touch Expert Solar, the Arceau Temari by Hermès and Zenith’s El Primero Synopsis are among the new offerings at the fair.

WWD

BASEL2014

WWD.COM21WWD thursday, march 27, 2014

THE SMARTWATCH is finally here — and Swiss watchmakers aren’t sure how they feel about it.

Wearables were the hottest trend at the annual Consumer Electronics Show in Las Vegas in January, with industry observers comparing their potential to the introduction of Apple’s iPhone in 2007.

The buzziest new devices are activity trackers and watches that wirelessly connect with smart-phones. Among the first out of the gate was Pebble Technology, which raised more than $10 million on Kickstarter for a $150 watch compatible with Android and Apple’s iOS.

The last year has seen launches by Samsung, which unveiled its Galaxy Gear in September (the sec-ond generation of which will be known simply as the Gear 2); Qualcomm; Archos; Kreyos; ConnecteDevice; I’m Watch, and MyKronoz, among others.

Last week, Google announced the Android Wear platform for wearables and will team with Fossil, Motorola and LG, among others, on smart-watches that are expected to be introduced by the end of the year.

Speculation is rife that Apple could launch its eagerly awaited smartwatch, preemptively dubbed iWatch, this year.

Analysts forecast the market for wearable tech-nology will explode in the next few years, with BI Intelligence predicting 91.6 million smartwatch units will be sold globally in 2018. With an aver-age selling price of about $100, that translates to a $9.2 billion market by 2018, it noted.

“Many look at the smartwatch as the next tablet, a device that will define its own category and alter the pace of the entire mobile industry,” BI Intelligence analyst Tony Danova wrote in a report published last fall.

“An Internet connection on a wristwatch may seem an optional or even strange frill (calculator watches once seemed cutting-edge, after all). But over time a connection will seem like a no-brainer feature. For example, a multi-time-zone travel watch is a much simpler proposition with an Internet connection,” he added.

Nick Hayek, chief executive officer of Swatch Group, begs to differ — for now.

Swatch was one of the first to in-troduce a connected watch with the Paparazzi, launched in 2004 in collabo-ration with MSN Direct, a division of Microsoft. The watch promised wearers personalized information including news, weather and sports via MSN Direct but failed to catch on, due in part to technical issues.

The experience appears to have left a bitter taste for Hayek, who vowed last week he would enter no further collaborations with American firms and said he was skeptical about the current crop of smartwatches on offer.

“The problem is, it’s trackable from NSA, every data, you can know where you are. The second thing is, after one hour of using it, you have to charge it for a week, and the third one is, it’s doing the same thing as the phone. You need Android software, so you don’t seem a smart guy or a smart lady when you wear it,” he said.

“But the Swatch Group has all the technologies and we have the products and we have two brands, Tissot and Swatch, that are privileged to be big players in this market. We have everything, but we don’t try again to be the first one to go out there, because we have [al-ready] been it,” he said.

François Thiébaud, president of Tissot, said the brand known for its touchscreen T-Touch watch-es was in fact working on a “Wi-Fi watch,” but it would steer clear of the fitness category, believed to be at the core of the future Apple smartwatch.

“We already have prototypes, but we don’t want to go in the same direction as what is cur-rently on the market, and especially not watch-es that provide personal information like your heart rate or anything like that, because when you enter the health arena, there are risks at-tached,” he said.

“If one day someone manages to prove that his heart rate was being displayed as normal when in reality the watch was wrong — well, I would rath-er someone else deal with that problem, because the lawsuit could be very expensive,” he added.

Purveyors of haute horlogerie timepieces are publicly stoic about the smartwatch revolution. Several luxury brand executives noted hopefully

that wearing wrist devices could get younger con-sumers interested in wristwatches again.

Thierry Stern, ceo of Patek Philippe, said he was aware of market developments but believed the smartwatch was “a completely different world” to traditional watchmaking.

“I do not believe it can compete with mechani-cal watches in our haute horlogerie segment in terms of emotional value, the shared passion we have making our watches and the passion that our clients have, the aesthetic value and longevity of the object and its long-term value,” he said.

“Another important aspect is the fact that a quality mechanical watch can always be repaired and will keep working as long as watchmakers exist. For us, service is a key value and we are in a position to repair any watch that we produced since 1839. This is really different to the electron-ic world,” he noted.

If smartwatches are not on the same playing field, traditional watch brands will nonetheless have to get used to sharing space with the new category.

ConnecteDevice of Hong Kong will be present at Baselworld this year with its new Cogito brand, albeit in the smaller hall 4, and MyKronoz has signed up for 2015.

Boris Brault, founder and ceo of MyKronoz, said the Geneva-based firm launched its first two models, ZeWatch and ZeBracelet, in June 2013 and hopes to come to the Baselworld fair next year with a dozen models, including the ZeNano, which allows users to dial a phone number.

“We felt that the Swiss watch industry was clearly not venturing into connected

watches,” he said. “We thought, why not try to become the Swatch of

the smartwatch sector?”His aim is to create smart-

watches that are first and fore-most fashion accessories, though the devices, which are compat-ible with Android 2.3 and above and iOS 4.0 and above, also have compelling technical features, being among the first to feature an integrated microphone and loudspeaker.

At $69, the brand’s entry price point is similar to Swatch. It delivered 100,000 units last year and aims to hit

500,000 in 2014.Some retailers

have also started marketing the gad-

gets alongside their more conven-tional watch offer.

A case in point is Le Bon Marché in Paris, which unveiled a new watch department last June fea-turing powerhouses like Rolex, Breitling and Piaget alongside La Galerie Imaginaire Horlogère, a space for alternative brands like Slyde, Kubik and ZeNano. There, tech geeks rub shoulders with

watch aficionados.“I think this is something that

can really galvanize the mar-ket and that will force traditional

watch brands to change their po-sitioning — and that’s a good thing,”

said Marie Lassagne, watch, fine and fashion jewelry buyer at the Left Bank

department store.“They could aim for a younger target. There

are potential customers who are under 35 and want to spend less than 5,000 euros [$6,900]. And they could put across messages other than sports like motor racing and sailing — those traditional themes that are common in watchmaking. You could bring in more contemporary designs, fun dials, real creativity in design and not only in the watch complications,” she said.

However, shifting traditional mind-sets in Switzerland promises to be a tough sell.

As Jean-Claude Biver, president of the watches division at LVMH Moët Hennessy Louis Vuitton, noted, a smartwatch has yet to trump a luxury timepiece as a status symbol.

“The smartwatch is an information device that tells you that you’ve got mail or a message, whereas a high-quality Swiss mechanical watch is a communication device that communicates to others who you are,” he said.

“It communicates your status, your elegance, your idiosyncrasy, your exclusivity, your taste, your discre-tion — you see? The watch communicates, whereas the smartwatch informs. It’s totally different.” — J.D.

Smartwatches Rankle Traditionalists

The ZeNano from MyKronoz.

Samsung’s Gear 2.

w27c021a;6.indd 2 3/26/14 3:49 PM03262014155020

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