By Katie Reid
PARIS (Reuters) - Hublot sees flat to slightly negative sales in 2009, but some cautioned the Swiss watchmaker's outlook may be too upbeat as independent peer Chopard said it would be happy if sales fell only 10 percent.
Hublot is hoping its strategy of deliberately undersupplying retailers will help it weather the current downturn after a record year for the industry in 2008, its chief executive told the Reuters Global Luxury Summit by phone on Tuesday.
"We only supply 60 percent of demand. We always said never deliver what people need. Only give them half, then you keep them hungry," Jean-Claude Biver said, adding he aimed to beat its 2007 sales of 160 million Swiss francs ($146.5 million) by 30 percent.
Swiss watchmakers are bracing themselves for the worst decline in exports in at least two decades as customers worry about the economy and their jobs. Swiss watch exports slumped 24 percent in the first four months of this year.
"The worst months are coming," Jean-Marc Jacot, the chief executive of high-end Swiss watchmaker Parmigiani told the summit, adding it would take two to three years to return to the same level as 2008.
The company, whose watches have an average retail price of 50,000 Swiss francs and which competes with Lange & Soehne and Patek Philippe, has seen sales fall almost a fifth since January and aims to break even at the net level in 2009.
"Hublot does seem somewhat optimistic but it depends on the number of stores they're opening this year. They're probably betting these shops will help offset the slowdown they're facing in their existing distribution channels," one analyst said.
Hublot, which sits alongside watch brands Tag Heuer and Zenith at French group LVMH (LVMH.PA: Quote, Profile, Research, Stock Buzz), will open 12 stores in 2009, in cities such as Prague, Budapest and Paris, and set up 10 shops in China through partners, Biver said.
Chopard Chairman Karl Scheufele told the summit it would be "well off" if sales fell a tenth this year after falling 15 to 20 percent so far in 2009 in both watches and jewelry.
"This is a more realistic assumption of what has gone on in the first months of the year," said Kepler Capital Markets analyst Jon Cox. "It is going to be a tough year.
"Luxury goods will come back but we are likely to get a trend toward understated jewelry as no one wants to be showing off," Cox said, adding he expects a 20 percent decline in Swiss watch exports in 2009.
Burberry (BRBY.L: Quote, Profile, Research, Stock Buzz) told the Reuters summit on Monday it had seen shoppers favouring timeless pieces such as its classic trenchcoat, while Richemont (CFR.VX: Quote, Profile, Research, Stock Buzz) has also seen the rich shying away from flamboyant watches as they seek to downplay their wealth.
GLIMMERS OF HOPE
Scheufele said he expected to see a recovery in the fourth quarter and that sales picked up in May as demand for watches and jewelry in the high-end range proved more resilient.
"We can see there is still money around and sometimes people still spend this money," Scheufele said. Chopard watches can cost up to 120,000 euros ($166,500). Continued...
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