“The future is ours”

Chief Executive Wilhelm Schmid sees bright days ahead for A. Lange & Söhne. Demand already exceeds production, with numerous markets and the women’s watch segment still largely unexplored. All of which gives Glashütte’s own plenty to celebrate in this 20th anniversary year. Schmid took time out from Watches&Wonders to say more.

Autumn got off to a busy start for A. Lange & Söhne. Fresh from the opening of two own-name boutiques, one in Moscow followed just days later by another in New York, its twelfth and thirteenth respectively, the Saxon brand was Asia-bound as one of the exhibitors at Watches&Wonders in Hong Kong, the fine Favorite Swiss Rolex Replica Watches fair that ran 30th September to 2nd October. A hectic schedule in sharp contrast with the stately pace of a brand known for its steadfast pursuit of higher mechanical realms and an almost obsessive devotion to finishing, brought together by irreproachable German classicism.

“It’s that final stretch, those last few percent extra which are the hardest to attain, and this is precisely what we have come here to Hong Kong to show,” commented Wilhelm Schmid, who was appointed Chief Executive in 2011. “I’m well aware that a lot of people are unfamiliar with A. Lange & Söhne, including admirers of mechanical watchmaking. Not that I take offence. It’s to be expected. Our role at the Manufacture is to ensure that anyone who shows an interest, anyone who does their research will be sure to find us.”

Playing catch-up

How many people indeed remember that A. Lange & Söhne was already an internationally renowned brand back in the 1930s. Nationalised by the East German government following the Second World War, it rose from its ashes in the 1990s, and this year celebrates the twentieth anniversary of what was effectively a rebirth. Commemorating the event, the watchmaker came to Watches&Wonders, after Dresden, to present a set of two Lange 1 20th Anniversary watches, the exact same model which in 1994 marked A. Lange & Söhne’s return centre-stage. This inaugural collection left its mark on the horological community at the time of its launch, with its unconventional off-centre dial and oversized date. Both features have since become hallmarks of the brand.

“Of course we had to give this Replica Omega Watches a leading role in marking this anniversary year,” continued Wilhelm Schmid. “It is exactly the same watch today as for the past twenty years. What greater proof that A. Lange & Söhne manufactures truly enduring, ageless watches. Fashion isn’t something we deal in at Glashütte.” Further confirmation came in the form of the two other timepieces which the brand chose to showcase in Hong Kong, namely a RICHARD LANGE Tourbillon Pour le Mérite in white gold with fusee-and-chain transmission, stop-seconds mechanism and a pivoting dial segment inside the hour circle, and a Langematik Perpetual, the Manufacture’s first automatic wristwatch with Perpetual Calendar and oversized date, proposed in white gold with a black dial. Says Wilhelm Schmid: “These are icons in our collections and it is thanks to them that A. Lange & Söhne is now positioned exactly where it was more than fifty years ago. A progression of which we are particularly proud.”

A new favourite among collectors

A. Lange & Söhne has only itself to thank for this newly conquered success. For collectors, such an approach to watchmaking is impossible to resist. These are the self-same collectors who bid for 2015 Cheap  Replica Watches UK at auction, where in spite of its relatively short (re-)existence the Saxon brand is beginning to claim top billing. As always, limited editions, one-offs and models finished to an exceptionally high standard garner the most success among bidders. A white gold Tourbillon Pour le Mérite manufactured in 1997 is a fine illustration. It sold earlier this year at Christie’s for over CHF 400,000 or 432% its original retail value. Similarly, a Lange 1, also manufactured in 1997, last year flew off the block for 753% its original price.

Despite this, the Saxon firm is unlikely to let this surge in popularity go to its head. “We see it as a simple equation. For a rigorously identical standard of quality, the more we produce complicated watches, which are highly time-consuming in terms of production and assembly, the less we are able to make entry-level timepieces. What I mean by this is that there are only so many hours in a day, and that quantities are a totally secondary consideration for A. Lange & Söhne.” As a consequence, the Manufacture is unable to meet demand by a long chalk. “The number of people who are interested in fine watchmaking is growing faster than our production capacity,” Schmid concludes. “Furthermore, our watches are currently sold in just 63 countries, which leaves a lot of virgin territory. Plus the fact we are virtually absent from the women’s watch segment, which accounts for barely 5% of our sales. In a word, we’re in a very comfortable situation. The future is ours!”

Trees still grow up to the sky

The most effective forecast – at least for those of us who like to take a weekend break – isn’t, so it seems, statistics, curves and counter-curves but the farmer’s far more empirical method to look up at the sky, and let experience and knowledge do the rest. Move from precisions to predictions, and we find ourselves in even more dire straits: macroeconomic surveys have neither day nor night, sun nor clouds; nothing but endless disturbance.

Let’s try and make our deductions based on more reliable, factual data; the kind a barometer would indicate as “fair”: Cheap Replica Rolex  Watches continues to pulverise volumes and values, as the latest statistics show. We can therefore forget about Cassandra and Nostradamus, and take a closer look at our branch, to then give some indications for the year-end and, more importantly, for 2015.

In 2014, sales in volume and value terms exceeded, by a short head, those for 2013. This implies new record levels of 28.5 million watches and CHF 21 billion. And there is more: whereas sales have risen in the low-end segment (under CHF 1,500) as well as in the high-end segment, and have also increased in the fine watch segment, the mid-range bracket (CHF 1,500-3,000) is struggling.

It’s an interesting coincidence that increases in “poor” watches, for sake of a better name, and in “rich”  Fake Breitling  Watches correspond to statistical changes observed in the corresponding social classes. This seems to justify the belief that there are more and more poor, that the lower middle class has taken a tumble, and that the rich are as wealthy as ever.

What, then, can we expect for 2015? I don’t see any reversal in trend but rather confirmation of “consolidation” in the sector. But with a physiological variable: 2015 should prove to be a better year for the price range above CHF 6,000, with an increase of 2% to 3% on the year now ending.

But I’m no analyst and, like any good farmer, prefer to sniff the air, so let’s wait for the numbers that will confirm this point of view.

I’d like to end with this remark: export figures for volume and value represent sales to distributors, not the end customer. Hence why, in my opinion, we need to be looking at inventory in circulation at December 31st (or February 2015 and Chinese New Year).

I have faith in painless arrangements; we can eradicate discounts, sub-distributors and parallel markets, all the source of harmful confusion, not with an earthquake but through ongoing vigilance. There will be no turbulence, possibly just a few showers.

Conclusion: in an old French song, a butler tries to convince his employer that “Tout va très bien, Madame la marquise.” Madame la Marquise has nothing to worry about. Not everyone can say the same. Large groups and major brands still appear to be better equipped than smaller ones. Ethically and/or politically, it’s not the same fight for everyone. The age-old rule prevails: “Money makes war and winners.”

My very best wishes to you all.

P.S. An interesting piece of information about fine watches, i.e. those priced above CHF 6,000: mechanical  Rolex Replica Watches UK take the lion’s share while quartz remains the exception that confirms the rule, and continues to prosper almost exclusively in women’s jewellery watches.

Mexico closer to God

With new president Enrique Peña Nieto, Mexico has renewed faith thanks to an ambitious programme of reforms intended to establish the country as a foremost economic power. For the time being though, results – like watch sales – are playing hard to get.

“Poor Mexico, so far from God, so close to the United States.” This famous phrase, uttered almost a century ago by Porfirio Díaz, the country’s dictator president for close to 40 years, captures the complex history of this Rolex Replica Watches UK LatAm country which has it all, both good and bad. On paper, Mexico has everything it could possibly need: energy resources, an impressive demographic dividend and an enviable geographic position, all essential factors for solid economic growth. Yet recent years suggest that the Latin-American dragon has lost its roar. And, by extension, the luxury market is holding its breath.

The road to reform

Does the solution lie in the reforms implemented by the current President of the Republic, Enrique Peña Nieto? Never before has a politician broken so many taboos in order to enact the Mexico he wants to see. The day after his swearing-in, two years ago, he convened all the country’s political forces to sign the Pacto por México. Since then, the country has embarked on reforms in every key sector: education, telecommunications (dominated by Telmex, property of billionaire Carlos Slim, which has a monopoly control of the market), politics (coalition governments were not allowed), public finances and energy (the market has been opened up and should attract a wave of foreign private investment). In the meantime though, the Mexican economy doesn’t appear to be changing as quickly as hoped, and the luxury market is feeling the consequences.

Avenida Presidente Masaryk, in the affluent centre of Mexico City, is the perfect metaphor for luxury in the country: the city’s ritziest thoroughfare is under construction. Workmen and machines have taken over the sidewalk outside Cartier, Omega, Jaeger-LeCoultre, Bulgari and Louis Vuitton, not to mention the capital’s finest restaurants where the menu now includes dust, pneumatic drills and road blocks. The entire avenue has descended into “mayhem”, say the regulars who are deserting their Favourite  Replica Cartier  Store Retailers are unanimous in demanding the end of work and a return to business as usual, although none of them deny that something had to be done about the potholes and cracked pavements. “The new tax laws have put a brake on the economy as customers have less to spend,” say luxury insiders. “However, with current investments, Mexico could well become a driving force for the global economy, which would have an impact on consumption. We still have six to twelve tough months to go.”

Crisis, what crisis?

Peña Nieto’s government is urging the country to be patient, in exchange for a promised 3.7% rise in GDP by the end of the year, versus 1.1% in 2013. Not far from Avenida Masaryk, Cédric Doffey, originally from Neuchâtel in Switzerland, is a distributor for brands including Corum, Girard-Perregaux, JeanRichard and Romain Jérôme. He doesn’t quite share this enthusiasm: “Like everywhere else in the world, we have observed a slowdown in sales,” he explains. “Certain indicators even suggest that Mexico will soon enter recession. But compared with other Latin American countries, Mexico is still a major importer of Swiss watches.” Just minutes from Cédric Doffey’s store, Carlos Alonso, director of Salón Internacional de Alta Relojería (SIAR – International Fine Watch Fair), confirms these impressions: “End 2013 and early 2014, here in Mexico we experienced the worst crisis the watch sector had seen in the past fifteen years. Except no-one dares pronounce the word crisis.” Figures published by the Federation of the Fake Swiss Watches  Industry show that Swiss watch sales in Mexico dropped by 7% between January and August 2014.

The need to adapt, radical but necessary measures, and a lot of work: Mexico is putting its house in order. The country nonetheless faces some considerable challenges, not least to reduce its poverty rate, which has barely shifted in the past decade, and eradicate corruption. For Peña Nieto, the “reformer president”, what matters most is to take action, in every domain. The fruits of this labour will come later. By which time Mexico might be closer to God and equal with the United States. It might also be home to an influx of luxury watches, produced as special editions to celebrate this “new” market.

A mixed bag for 2014 results

Even as Swiss watchmaking stands poised for another record year in 2014, with exports reaching CHF 22 billion, the mood is no longer quite so buoyant. Growth for the year is expected to be in the region of 3% versus 2% in 2013.

For Swiss watch manufacturers, 2014 has been a case of “loves me, loves me not”. Some are unshakeably confident, such as Nick Hayek who remains adamant “there is no crisis for Swiss watchmaking.” Or Richard Mille who seems almost embarrassed by his brand’s remarkable performance this year. Others, meanwhile, are more downcast: Greubel Forsey recently made known that it was cutting a dozen jobs out of the 115 at its Manufacture. Nor is it alone: TAG Heuer has made 46 staff redundant and introduced short-time working at its plant in Chevenez, as has Cartier at its site in Villars-sur-Glâne.

A less certain, less prosperous world

Performances by the major listed companies set the tone. For the third quarter this year, LVMH reported a 2% rise in revenue for its Rolex Replica Watches For Men and Jewellery division (Zenith, TAG Heuer, Hublot, etc.). Meanwhile, Kering (Girard-Perregaux, Ulysse Nardin, etc.) has posted a 3.5% increase for the same period. Richemont (Cartier, Jaeger-LeCoultre, Montblanc, etc.) boasts a 2% increase for its first half-year from April to September. As for Hermès, the group gained almost 9% over the first three-quarters of the year, although its watch division has seen sales drop by the same amount over these nine months, and plummet by as much as 14.4% between July and September. For Swiss watchmaking, the heady years of double-digit growth are a thing of the past.

This slowdown, already observed in 2013, is echoed in share prices. Over one year to end November, Best Breitling Replica Watches shares dropped 20% while Richemont lost 1.4% At +3.3% and +2.2% respectively, LVMH and Kering just kept their head above water. Only Hermès did better, gaining 6.7%. The reasons for this cooling-off are well-known, from anti-corruption measures in China to demonstrations in Hong Kong; from crisis in Ukraine to the threat of recession in Russia. The Middle East, meanwhile, is sitting on a powder keg and Europe is in stagnation. All of which adds up to a less certain, less prosperous world with inevitable repercussions for the luxury industry, even if the most affluent populations continue to see their wealth grow. A report presented in October by Bain & Co makes itself clear. For 2014, the consultancy forecasts growth in personal luxury goods of just 2% to EUR 223 billion (CHF 268.25 billion). This includes EUR 35 billion (CHF 42.1 billion) sales of Fine Watches, the same as in 2013.

Wrap up for winter

Figures from the Federation of the Cheap Rolex  Replica  Swiss Watches  Industry, albeit less defeatist, still point in the same direction. After the 1.9% increase in exports to CHF 21.8 billion (EUR 18.1 billion) recorded last year, the industry witnessed a rise of 3.1% to CHF 18.4 billion (EUR 15.3 billion) over the first ten months of 2014. Extrapolating these figures for the full twelve months of the year gives exports in the region of CHF 22.5 billion (EUR 18.7 billion). A new record, although prospects of a winter chill will put celebrations on hold.