Appreciating watch trends

Diamonds might be a girl's best friend, but in a man's world, it's all about the watch.

No luxury watch company has positioned itself more intensely as the testosterone-heavy, male watch brand than Richemont's IWC, with its action-packed names like Pilot's Watches, Aquatimer and Ingenieur, Portuguese or Da Vinci.

The Swiss company, headquartered 40 minutes outside of Zurich, sells 70% of its watches to men, at between $4000 (R29 123) and $380000 (R2 767 000) apiece.

IWC CEO Georges Kern recognises that more than anything, luxury is about selling a dream. "We're storytellers. We have inspiring names and mythical products."

To continue selling a successful dream, the executive team at the 142-year-old company derives its inspiration around colour, materials and trends from other industries, as well as from other watch and fashion companies, to create new modes of style.

The group dabbled with the notion of broadening its focus during 2003 to 2005 - the years when luxury goods companies were booming. It was a time when many companies expanded too fast and too heavily, ending up offering too many products and confusing customers about their brand.

IWC has stuck to its core strategy. "For us the danger was not in the bad times or the bad economy, the danger was in the good times, when we were facing low-hanging fruits.

"Opportunities arose, such as diversifying the portfolio into other segments. It meant easy money, easy products but we decided not to follow this path.

"It would have diluted and harmed the brand," says Kern.

Experts expect the industry's heavyweights, LVMH, Riche-mont and Gucci Group to hold up better than smaller players like Hèrmes, Bulgari and Chanel, though the big stalwarts have been hit hard.

LVMH watch sales dropped by 22% in the third quarter of last year, Richemont watch sales fell by 18% in the five months until August last year and in the first six months of last year, Swatch Group's gross watch and jewellery sales were down by 16.4%. Swiss watch exports as a whole fell by 22.3% last year.

A forecast from consulting firm Bain & Co, released at the end of last year, expects the luxury goods industry to recover in either 2011 or 2012.

The Oscars of the industry, the annual Baselworld luxury watch fair held in Switzerland last month, also showed signs of recovery, although reports indicate that consumers have become more careful and considered with their purchases.

"The brands that are losing ground now are those with a loose image," says Kern, who believes brands that are successful are those with history, tradition, values, content and reassure consumers in terms of quality, with classic designs.

"No one wants to take risks. There are no spontaneous purchases any more. The thinking and decision-making process before you buy something takes much longer and is more in-depth than before. The consumer is checking out who you are, especially in our industry, at this price point," says Kern.

A significant part of IWC's success is its zealous vigilance over the brand, which includes a weighty book released last month to celebrate the watch company's history. Some refer to it as a watch catalogue.