* Growth seen slowing in 2012 from record levels in 2011
* Brands keep stock level, production growth under control
* Asian demand still in focus
By Victoria Bryan and Nathalie Olof-Ors
GENEVA, Jan 18 Swiss watchmakers expect
slower growth this year after a record 2011 as strong demand
from Asia is unlikely to make up for weakness in America and
Europe, executives at the Geneva watch fair warned this week.
Demand might not have softened yet for some but many watch
brands predict that worries about euro zone debt and
unemployment in America will weigh on discretionary spending.
"Brands are worried about Europe," Jean-Daniel Pasche, head
of the Swiss Watch Federation, told Reuters. "It's not like
buying milk. If things are bad, people stop buying watches."
Pasche confirmed expectations expressed by Hublot
and Swatch Group earlier this month that the Swiss
watch industry's growth would slow down in 2012 after a 22
percent rise last year to record levels.
Swatch Group, the world's biggest watchmaker whose brands
include Omega, Longines and Breguet, predicts 5-10 percent
growth this year..
Emmanuel Vuille, chief executive of niche watchmaker Greubel
Forsey, said it was difficult to see how the industry could
remain untouched by what was happening in the world.
"We hope that growth will continue, but we are very
cautious. There are a lot of watches in the shops that aren't on
Already, jewellers Tiffany & Co, Zale Corp
and Signet have published disappointing sales figures for the
holiday season in Europe and America..
Meanwhile, British brand Burberry on Tuesday
reported a sharp slowdown in U.S. sales and gave a weak outlook,
, contrasting with Swiss luxury group Richemont
which said sales in the quarter to Dec. held up well.
Also weighing on the industry are potential production
bottlenecks stemming from Swatch Group's decision to cut
supplies to rival watchmakers starting this year.
While brands from 257 year-old Vacheron Constantin to 21st
century newcomers Greubel Forsey said they were investing in
production, they said they were also mindful of the previous
crisis of 2008/2009 when they were left with unsold stock.
"We tend to produce less than the demand," the CEO of
independent watchmaker Parmigiani said. "We like to remain
conservative because we don't want to end up in the same
situation as 2008/2009."
Overall a tone of cautious optimism prevailed at
the fair, the first major gathering of the luxury goods industry
"We've had a 20 percent increase in enquiries from customers
at the fair compared to last year," said Jean-Marc Pontroue, the
incoming CEO of Roger Dubuis. "But we are in a world that is
Bernard Fornas, chief executive of Richemont's
biggest brand Cartier which had the largest stand at the fair,
said the industry was in a "period of volatility."
But Girard-Perregaux, controlled by Gucci owner PPR
, struck an unusually bullish tone for 2012.
"It's just been two days, but so far the fair meets our
expectations. I think the trend will be the same as last year,"
said Girard-Perregaux CEO Stefano Macaluso.
The luxury industry proved more resilient to economic
turmoil than other consumer goods markets last year as strong
numbers from leading groups such as LVMH, Richemont and Burberry
Much of the growth came from China, where brands have been
racing to open shops in the past three years. But there is
growing concern demand from China could cool.
Richard Mille, one of the industry's most expensive brands
with models starting at 60,000 euros, said it did not believe
China could be described as a bubble.
"There could be an (downward) adjustment, yes, but I don't
see a bubble bursting," said Richard Mille, founder and chief
executive of the brand.