ZURICH (Reuters) - Top end Swiss watch maker Ulysse Nardin said the global economic crisis was ratcheting up demand for its ultra-exclusive timepieces as buyers were looking for more conservative values in times of uncertainty.
“Consumers are going back to the traditional but that also means to traditional brands, brands that have been around for many years,” Chief Executive Patrik Hoffmann told the Reuters Retail and Consumer Summit on Thursday.
Classic Swiss luxury watch brands like Rolex or Swatch Group-owned UHR.VX Omega and Breguet have so far come relatively unscathed through the recent economic downturn while other Swiss exporters have suffered under the strong Swiss franc and slowing demand from the eurozone.
Ulysse Nardin, which was founded in the western Swiss town of Le Locle in 1846, initially specialized in marine chronometers, even supplying the U.S. Naval Observatory for a time. That naval history is today on display in the company’s blue color and trademark anchor logo on its high end watches, usually trading in the four-to-five-digit Swiss franc range.
“I think the times when new manufacturers came out just like that, and everybody bought their watches even though they didn’t know the names, is over,” Hoffmann said.
Moreover, it is no longer possible to slap any price tag on watches as consumers have become far more price sensitive, he said.
The economic gloom also means that buyers no longer look for flashy and cheap showmanship, as displayed in many companies’ trend to ever more complications. Complications are features in a timepiece that go beyond the basic functions of displaying hours, minutes, seconds and date.
Hoffmann said the company was so far not experiencing any signs of a slowdown in Europe and that business in its North American and Asian markets was also good.
Ulysse Nardin, which produced 25,500 watches in 2011, expects this number to rise to 28,000 pieces this year, he said.
Hoffmann also said that the company has overcome the supply shortage of movements - following Swatch Group’s decision to gradually wind down deliveries to its customers - by ramping up its inhouse production. Its biggest problem now was to get hold of enough dials, cases, crowns and hands. “This is where our shortage is coming from,” he said.
Nevertheless, Ulysse Nardin will not look to Japan to overcome the problem like its Swiss rival TAG Heuer, which is using movements made by Seiko (8050.T). “This is really not an option,” said Hoffmann.
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Reporting by Andrew Thompson; Editing by Tim Dobbyn