Swiss Luxury Brands Bucked Western Economic Trends, Posted Record Profits in 2011

Despite international austerity and the depressing economic outlook of many countries, luxury retailers had a banner year in 2011, posting significant gains where other retailers are still seeing losses. The Swiss watch industry, the heart of haute horology, has been at the forefront of the recent boon and has been a huge factor in driving industry growth over the last few years; in fact, 2011 was a record-breaking year for many Swiss watch and jewelry brands. The Swatch Group, LVMH, and Richemont have all seen sales growth of 15 percent of more, crediting their fine jewelry and watch brands for generating much of that burgeoning bottom line. Much of this success can be attributed to opening markets on continents other than North America and Europe, as well as enhanced marketing practices.

The Swatch Group, home to such esteemed brands as Breguet, Blancpain, Tissot, Omega and Tourbillon, had a record year in 2011, posting a sales increase of 21.7 percent and an operating profit of 12.4 percent over the pervious year. Even while European economic turmoil and exchange rates had negative effects on the ultimate bottom line, the watches and jewelry sector still showed a gain of approximately $1.5 billion. According to the Federation of the Swiss Watch Industry, “The group’s leading brands recorded very impressive rates of growth not only in the enlarged China, but also in all other regions and in all price segments. Despite the unfavourable economic situation, the Swatch Group maintained its consistent policy of renouncing short-term price increases, preferring to focus on gains in market share.” Stepping up marketing efforts within the watches and jewelry sector, instead of raising prices, the Swatch Group saw its operating profit grow by 8.4 percent.

LVMH Moët Hennessy Louis Vuitton SA reported sales growth of 16 percent last year, with an operating profit increase of 22 percent and a net profit of $4.12 billion. The watches and jewelry group within LVMH recorded astounding increases of 98 percent in sales and 107 percent in operating profits. (Equating to +23 percent and 41 percent based on comparable structures.) Dedicated consumers in the Western Hemisphere responded well to marketing and innovative additions, while growth in Asian markets added to the LVMH global marketplace. Tag Heuer successfully launched the Mikrograph and Mikrotimer; Hublot introduced a popular new Masterpieces collection; Zenith and Bulgari brought back some well-loved classics.

Tag Heuer Mikrograoh (right) and Mikrotimer (left)
Tag Heuer Mikrograoh (right) and Mikrotimer (left)
Hublot Masterpiece #1 (on left) and #2 (on right)
Hublot Masterpiece #1 (on left) and #2 (on right)

Richemont, the Swiss luxury holding company that boasts subsidiaries such as Baume et Mercier, Cartier, Piaget and Montblanc, increased its sales by 33 percent and gross profit by 38 percent – a gain of approximately $1.6 billion. Operating profit grew by nearly double that amount – 63 percent. The highest sales growth occurred in the Asia-Pacific region, at 48 percent (or, by $3.67 billion) and sales in Japan were up by 18 percent. “We will continue to invest in their organic growth through higher levels of capital spending in manufacturing capacity and in the further development of the group’s own retail network,” said Richemont CEO, Johann Rupert. “Particularly in growth markets.” To that end, the company grew its freestanding boutique stores to a total of 876 last year – primarily in growing Asian markets.

Cartier in Tokyo

While the Asian continent currently represents the largest growth market for the industry, Australia, South America and Africa have also been the focus of luxury brand marketing efforts. Tag Heuer, an LVMH brand that began opening North American retail boutiques only last year, has established stores in Australia, South Africa as well as across the Middle East and India. They have a retail location in Argentina and a customer service location in Chile also, catering to a small but dedicated (and growing) clientele in those regions.

Map of Tag Heuer Brand Boutiques Worldwide
Map of Tag Heuer Brand Boutiques Worldwide

It would certainly seem that a truly global reach is the safest buffer against increasingly unpredictable western markets. But it probably doesn’t hurt to be well known and widely respected for beautiful and high quality products either.

Adidas Originals Debuts Watch Collection in Bob Marley’s Honor

To honor the memory of Bob Marley, one of their biggest endorsers, Adidas Originals launched the Rasta Collection, a fresh line of summer-ready luxury watches.

The collection incorporates the spring of red, yellow and green and recognizes Bob Marley and his contribution to his people and the brand.

Rasta Melbournes and Stockholm
(L-R) Melbourne, Stainless Steel Melbourne, Stockholm

 

In celebration of what would have been Nesta Robert Marley’s 60th birthday, Adidas Originals honored the quintessential voice of his nation, their most exuberant endorser. Bob Marley–who had well-known hits such as “No Woman, No Cry,”  “One Love,” and “Jammin’,”–was a political activist, Jamaica’s cultural attaché and big endorser of Adidas. Two of his vintage classic songs were re-released and a big listening party was thrown in his honor at the Adidas Originals Store in Los Angeles.

Seven years later, Adidas Originals continues to honor the legend through the Rasta Collection, reminding us of Marley’s bright personality and indelible style. Through six watches made of nylon, resin, aluminum, and stainless steel, the collection pays homage to Marley who wore Adidas all the time and was even featured in a commercial for Adidas during the 1998 World Cup, kicking around a soccer ball and proudly displaying the Adidas insignia. The Rasta series adds soccer inspiration, Rastafarian style and substance to Adidas Originals’ already full blown line of Rasta clothing and shoes, allowing enthusiasts to accessorize their stripes. The price points top off at $150, something that even Marley would be proud of.

Three Rasta Cambridge Models
The three different Rasta Cambridge selections

The most expensive watch in the collection, the stainless steel Rasta Cambridge, features a 44mm face, black matte dial, and chronograph sub-dials in red, green and yellow. A more rugged 44mm selection is the Rasta Stockholm, which features a black resin case and bezel, subdued red, yellow and green chronograph sub-dials against a textured matte dial and a wide Rasta-striped black nylon strap.

For those who wish to don white this spring, there’s an all-white, soccer-inspired Cambridge that that features three chronograph sub-dials against a matte green and yellow backdrop, a red aluminum top ring with a white aluminum case, complete with a white polycarbonate strap.

With four of the six watches featuring chronographs and the whole line accommodating a date marker, the Rasta Collection combines Rastafarian style with functionality and pays homage to Bob Marley, the man who created a whole artistic and spiritual movement with his guitar, his voice, and his humble swagger.

Gucci Goes To The Grammys

The 54th Grammy Awards ceremony held Sunday, February 2 at the Staples Center in Los Angeles to once again honor outstanding achievements by music industry professionals. Performances, parties, publicity and promotions will undoubtedly abound in the California performing arts mecca this weekend. In its second year partnering up with the National Academy of Recording Arts and Sciences (aka The Recording Academy) even the Gucci fashion house has contributed to the hype with a third addition to its I-Gucci GRAMMY® collection.

Designed by Gucci Creative Director, Frida Giannini, the watch is a variation on the I-Gucci XXL Sport. Proceeds will go toward the preservation and restoration program of music milestones at The Grammy Museum, established in 2008, an interactive and education museum dedicated to the history of the Grammy Awards and its winners.

Gucci Timepieces and Jewelry signed a three-year collaboration agreement with The Recording Academy in September 2010 and have produced three signature timepieces since: the I-Gucci GRAMMY in yellow gold PVD, the I-Gucci Latin Grammy in pink gold PVD and the latest, the I-Gucci Grammy Museum.

It is easy to see why this collaboration works. Giannini herself colluded with Jay-Z last year before the Grammys to host a star-studded brunch celebrating both the music and the Gucci collection associated with the ceremonies. “As a designer,” she said. “I always say I find an incredible inspiration from musicians who are in the music industry. Fashion and music, they have always been together because I think we are looking to musicians and musicians are looking to fashion.”

Gucci, a well-established fashion icon with a history of unifying the complimentary natures of haute couture and everyday street fashion – especially for industry superstars such as Rihanna, Mary J. Blige and Lenny Kravitz –  is perfectly positioned to embody this inevitable dovetailing of high fashion and popular culture. As Madonna sang at the SuperBowl earlier this month, “Music makes the people come together.”

Selling for $1,395 online, it’s unlikely that this watch will end up on the arm of your typical ‘99 percent’ street fashionista, but it is symbolic of a partnership that will endure for as long as fashion and talented musicians are a celebrated part of popular culture.

With a large 49mm face, the dial is black and yellow and the rubber strap is covered in soft patent calf leather imprinted with the Grammy gramophone. It has a digital, dual time-zone display, including date and alarm. It comes with dual chronograph movement and all the bells and whistles – even a sailing option for timing regattas. No diamonds or gems for this simple piece, however; it could easily be worn with a fur coat, a leather jacket, a tailored suit or a pair a thrashed jeans.

The I-Gucci Grammy Museum Watch