CORUM Opens its First Boutique in Switzerland

Officials perform ribbon-cutting ceremony at new Corum boutique in Geneva. (from left) Pierre-François Unger, Geneva government official, Loïck Peyron, sailor and Corum ambassador, Antonio Calce, Corum CEO, and Alain Guttly, boutique general director.

Swiss watch brand Corum opened its first boutique in its home country of Switzerland, in the watch capital of Geneva on Thursday. It’s the second branded store in the company’s 55-year history.

The new boutique is located in the Place Kléberg, along the shores of Lake Geneva, in an historical building inspired by classic Geneva-style architecture with four large bay windows displaying the company’s watches. The door handles are engraved with the brand emblem, the Corum key.

Inside, ebony wood furniture and flooring contrast with walls feature technical drawings of the brand’s movements and timepieces, evoking its watchmaking talent and its horological culture. The simple and refined interior design is enhanced by plasma screens showing films of the brand’s history with hints of its future. Bathed in natural daylight, the 753-square-foot area invites customers to stroll around and explore.

Interior of new Corum boutique in Geneva.

“Opening our first boutique in Switzerland bears witness to the level of maturity that the Corum brand has achieved,” said Antonio Calce, CEO of Corum. “On the one hand, it reflects our global distribution policy aimed at consolidating our selective distribution network while moving it up-market; and on the other, it testifies to the brand’s determination to invest in the long term.”

Corum, based in La Chaux-de-Fonds, opened its first boutique in Hong Kong in December, 2009. Its third store is planned to open in Shanghai in October. The company said more stores will follow.

Kering Acquires Ulysse Nardin, Pays 13 Times Earnings For High Watch Brand

Ulysse Nardin Marine Diver

Kering makes another jewelry and watch acquisition. This time the French multinational company said Wednesday it will acquire a 100 percent stake in the Swiss luxury watch brand Ulysse Nardin. The watchmaker will join Kering’s recently formed “Luxury – Watches and Jewellery” division headed by Albert Bensoussan. Kering added that the Ulysse Nardin management team, led by Chai Schnyder, president of the Board of Directors, and CEO Patrik P. Hoffmann, will remain in place.

Kering (formerly known as PPR) hasn’t been shy about upping its stakes in the “hard luxuries” category (jewelry and watches). François-Henri Pinault, Kering’s chairman and CEO, said that in a statement that Ulysse Nardin, as one of the last remaining independent haute horlogerie brands, will reinforce its growing jewelry watch division, which consists of Boucheron, Dodo, Girard-Perregaux, JeanRichard, Pomellato and Qeelin. Three brands (Italian jewelers Pomellato and Dodo; and Hong Kong jeweler Qeelin) were acquired by Kering within the past two years. Those acquisitions along with Ulysse Nardin are evidence of the company’s pursuit of luxury jewelry and watch companies. Kering also owns brands in the high fashion, lifestyle and sports merchandising categories.

In addition, both companies say the acquisition will allow Ulysse Nardin to expand more rapidly in Asia. Expansion in Asia is something else Kering has been open about in recent years. 

“Ulysse Nardin benefits from a rich heritage, high profitability and solid growth prospects,” Pinault said. “Independent high-end watchmaking manufactures are rare. This is an opportunity that we had to seize, particularly because this structural acquisition will enable us to take advantage of numerous synergies with our existing brands. We have great ambitions for this company and we will help it continue its international expansion whilst staying faithful to its roots and its identity.” 

The company declined to give an acquisition price but during a conference call Wednesday, Jean-Marc Duplaix, Kering CFO and Jean-Francois Palus, Kering managing director, said the company paid 13 times Ulysse Nardin’s 2013 earnings before interest, taxes, depreciation and amortization. Palus said it is a “fair (price) for a brand with such a rich heritage high visibility and growth prospects.”

As a private company, Ulysse Nardin doesn’t disclose much of its finances or manufacturing volume and Kering wouldn’t release those details. An analyst at the conference call asked if media estimates of annual sales of 250 million Swiss francs and annual turnover of 27,000 pieces per year were accurate. Duplaix responded by saying the “assumption you mentioned is quite sensible and so is the volume of watches the brand is selling per year.” He added that Ulysse Nardin “will become the backbone of our watch business.”

Ulysse Nardin, based in Le Locle, Switzerland, specializes in creating ultra-complicated timepieces, many of them considered groundbreaking achievements, using cutting-edge technologies and state-of-the-art materials. For example, it was one of the first companies to use silicon in its timepiece movements and is one of the few Swiss watchmakers to have its own production capacity for critical watch components, particularly regulating systems.

The independent company was founded in 1846 by Ulysse Nardin with its roots in the nautical world for navigational purposes. It was taken over and re-launched in 1983 by Rolf W. Schnyder who transformed it into a highly profitable business. After his unexpected and sudden death in 2011, Chai Schnyder, Rolf Schnyder's wife, and Hoffmann took over the lead of the company. 

The company still benefits from a very strong brand identity based on its historical expertise in marine chronometers.

“Joining Kering is an opportunity for Ulysse Nardin,” Chai Schnyder said. “It will allow the brand to carry on with its international expansion and continue to innovate, while assuring the long-term future of its knowledge and expertise and communiqué.”

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33 Detained in Spectacular $50M Diamond Heist

The van believed to have been in the Belgian airport diamond heist was found burned. Photo credit: NBC News

Authorities in Belgium and Switzerland said Wednesday that they have detained 33 people in three countries suspected of being involved in a spectacular $50 million diamond heist at Brussels airport in February, the Associated Press reports.

A French citizen believed to be one of the actual robbers was detained in his home country. Belgian authorities have requested his extradition. Eight others in Geneva were also detained on Tuesday, according to the report. This was followed Wednesday morning by 40 raids by Belgian police that netted the remaining 24 suspects. A Brussels police spokesman is quoted as saying they are certain they recovered some of the stolen diamonds in Switzerland.

Swiss authorities have issued a statement saying that they recovered diamonds that are believed to have stolen in the heist.

The February 18 robbery was so spectacular and efficient that it was compared in the press to Hollywood movie heists such as Ocean’s Eleven and James Bond films. On February 18, the robbers posing as police drove in a van through a hole in the fence (they created) of Brussels airport to the plane carrying the diamonds, pulled out machine guns, took the rough and cut diamonds, and drove away in less than five minutes. The only known clue was the charred remains of a van believed to be in the heist.

Police reportedly said that there will be announcement later Wednesday on how many will actually be charged and their identifications.

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UBM to Launch Jewelry Fair in Germany during Baselworld 2014

Does Baselworld have competition? Hong Kong-based tradeshow and publishing company, UBM Asia, has been coy about this but its new jewelry show in Europe will butt heads with Baselworld in 2014.

This new tradeshow called, “Jewellery & Gem Fair – Europe,” will be held April 1 – 4, 2014, in Freiburg, Germany. The dates and location line up nicely with Baselworld 2014, which will be held March 27 – April 3, 2014. Freiburg is less than an hour away from Basel, Switzerland. In fact, it’s so close that when I attended Baselworld two years ago, I stayed in Freiburg

This announcement of a new tradeshow comes after the world’s largest watch and jewelry tradeshow finished a $454.5-million upgrade to the Messe Basel complex that came with several upset vendors. In fact, the 1,460 companies who exhibited at the recently concluded Baselworld 2013 was 355 fewer than those who exhibited the prior year.

The biggest player to exit Baselworld this year was David Yurman, after what was described as “‘exasperating’ back-and-forth with the powers that be at Baselworld.” People from several companies expressed their dissatisfaction to me with their booth placement, the substantial increase in the cost of participating this year, and the pressure to construct newer, larger and more expensive booths for the show. One company, which was one of the few companies to both remain in the same space and not expand their booth, told me they still had to pay 30 percent more than the prior year.

UBM Asia is refusing to acknowledge that they are creating a competing show, calling this new fair “a comprehensive sourcing fair offering a wide range of jewelry products.” It is being positioned “as a high-efficiency, high-level face-to-face jewelry business platform to create real business value for international suppliers and buyers.”

UBM says that more than 260 exhibitors from 25 countries and regions have reserved exhibition space a year ahead of its launch. “This figure represents more than 50 percent of the expected number of exhibitors and represents 60 percent of the total exhibition space which indicates the market’s enthusiasm for this new fair in Europe,” UBM said.

Exhibitors that have signed up are from Australia, Austria, Belgium, Brazil, China, Colombia, France, Germany, Hong Kong region, India, Israel, Italy, Japan, Korea, Poland, Russia, Spain, Sri Lanka, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom, the United States and Zambia.

The fair is open to the jewelry trade, business professionals and members of the media. Free admission to save €30 will be granted to preregistered visitors and online preregistration opens in June 2013. 

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Baselworld 2012: End of an Era; Baselworld 2013: A new era begins

Inside Hall 1, the Hall of Dreams, where all the major watch brands at Baselworld 2012 are located. There will be changes among the exhibitors.

A fractured arm kept me from attending Baselworld this year. Fortunately, I know some of the best writers and experts in the jewelry and watch industry. One of those folks is William George Shuster who has kindly agreed to take time from his busy schedule to write a few stories from the tradeshow. Below is his third report.

By William George Shuster
Special Correspondent

Baselworld 2012, the 40th annual edition of the world’s largest and most important watch and jewelry show, may be its most successful yet.

But it also marks the end of an era for the trade fair. Indeed, there was a sense of finality about Baselworld 2012 that had nothing to do with business.

The reason: An enormous and costly restructuring of trade fair buildings and a redesign and revamping of Exhibition Square, the outdoor center of the fair, so total that international visitors and exhibitors from next year onward will not recognize the long-time fair site.

Indeed, Sylvie Ritter, the show director, called Baselworld 2012, a “milestone in the history of our trade show” and “a decisive turning point” before the “start of a new era” in 2013.

This newest modernization in a long history of renovations and expansions of the Basel fairgrounds is scheduled to finished and ready for the 41st edition of Baselworld in April 2013.

Trade show facilities that have housed the annual Baselworld and earlier Swiss watch and jewelry fair for much of the 20th and early 21st centuries are being torn down and replaced with massive new, three-story structures, costing millions of dollars. Show officials promise this enormous undertaking, the most extensive modernization and expansion of the show facilities in its history, will benefit both visitors and exhibitors immensely.

“With investments of around 430 million Swiss francs ($460 million), we will be able to provide our exhibitors, our trade visitors and our journalists with a fantastic trade show infrastructure,” said René Kamm, CEO MCH Group.

The 95-year-old Hall 1, site of  major watch brand exhibitors and the fair ground’s oldest building, will be rebuilt, with its front dismantled, and extended into the exhibition square by a three strew building. Hall 3, across the street (site for gemstone and equipment exhibitors) is being torn down and replaced also with a new three story complex, with a multifunctional event hall (capable of holding up to 2,500 people) on the ground floor. Linking these two buildings will be linked by a two-story complex (starting the second floor level of Hall One, roofing over exhibition square. The exhibition square (pictured left) itself will become a large atrium, open to the public and the trams which will continue to regularly ride through it.

The new complex will have a total of 141,000 square meters and will “ensure a greater level of convenience for our visitors,” says a show report. The final outcome is going to do justice to the expectations of our exhibitors,” says Jacquares Diichene, trade show chairman.

Also changing will be the locations of many exhibitors, especially those watch vendors on the first floor in Hall 1. And members of the Hong Kong exhibitors pavilion, the show’s second largest, will be moving from Hall 6 to Hall 4.

William George Shuster is a multi-award winning writer—including three Jesse H. Neal Award, business journalism's highest honor. He has 40 years experience as a journalist, author and editor. He is considered one of the world’s top watch industry journalists, covering the world of timepieces for the past 30 years.

Inside Montblanc Montre Headquarters

While going through my blog I realized that there was a story from November that I failed to post. Below is the story of my trip in the fall to the headquarters of Montblanc Montre SA. It's still timely, especially as the Salon International de la Haute Horlogerie (SIHH) tradeshow for luxury timepieces approaches. Enjoy

Montblanc Montre Headquarters

LE LOCLE, Switzerland — It doesn’t take long to realize this city on the border of France is an industry town. And the industry in this town is watches. In fact, it is here that the Swiss watch industry is said to have been founded.

For all the romance that goes into the marketing and advertising of watch brands the reality is a little different. Many of these culturally and historically significant companies are housed in non-descript identical glass and steel structures located in what can only be described as an office park. The only distinguishing feature on the buildings is their logos on the front. They could very well contain insurance companies, pharmaceutical firms or just about any kind of unexciting endeavor.

A display of the individual components of an automatic movement that was conceived, developed and manufactured in house for Nicolas Rieussec timepieces. Its manual counterpart is the MB R100.  Photo credit: Anthony DeMarco

 
Pass the office park and onto the edge of a residential community you come upon an attractive Art Nouveau villa. This is the headquarters of Montblanc Montre SA.

Inside this one-time residential building is where nearly all of the Montblanc watches are made (with the exception of Montblanc Villeret watches). This includes the Star Collection, Sport Collection, Lady Profile Collection, Summit Collection and TimeWalker Collection. Its newer lines are the Nicolas Rieussec Collection, named after the person who invented the chronograph, and the Montblanc Collection Princesse Grace de Monaco, in honor of Grace Kelly, the famous actress and Princess of Monaco. In recent years it began building its movements in house, such as MB R200 for the Nicolas Rieussec.

Montblanc Montre recently began designing and building its own in house movements.Designing the piece is the first step in the process.  Photo credit: Anthony DeMarco

Comparing this building with the institutional-like facilities on the outskirts of town, it’s difficult to believe that Montblanc is the newcomer in the Swiss watchmaking industry. Known for its luxury writing instruments, the venerable Hamburg, Germany-based company entered the world of Swiss watchmaking in 1997, when it purchased the villa. Unlike some of its competitors, Montblanc uses this attractive, old-world building in its marketing.

Thierry Junod, general manager of Montblanc Watch Production, had to deal with all of the barbs from his established competitors. “Where do you put the ink?” is one of the most common ones.

Even with modern technology, skilled watchmakers are vital to making superior timepieces. Photo credit: Anthony DeMarco

 
“We have a lot to do and lot to prove,” Junod said.

The brand already has proven a lot and now stands as a permanent fixture in the world of Swiss watchmaking, particularly with the chronograph models that is its specialty. Inside the one-time residential building, there’s a lot activity as approximately 135 employees churn out watches throughout the year, combining traditional Swiss watchmaking techniques with the high-tech machinery that is now commonplace in the industry.
 

Automation with the human touch. Photo credit: Anthony DeMarco

In addition to upholding tradition, this newcomer has also shown innovative tendencies, particularly with its testing facilities. An area in the building is dedicated to testing the integrity and endurance of watches through five sets of tests for a total of 500 hours. The program is designed to simulate the first five years in a watch’s life. Approximately 2 percent of the watches produced are tested for winding performance, accuracy, function of the movement, general performance and water tightness. Videos of the some of the testing are below following the story.

An example of a typical workstation. Photo credit: Anthony DeMarco

Junod said he has a lot of plans for the future. Those plans someday may have to include moving Montblanc Montre to one of those nondescript buildings in the office park.

That would be a shame.

Montblanc will be releasing a number of timepieces at SIHH (January 21 - 25 in Geneva). I will be attending and will provide an overview of the new products. 






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Swatch Group Reports Record Sales For 2013 But Warns of Overvaluation of Swiss Franc

Swatch Group Ltd., the largest Swiss watch business, on Monday said year-over-year gross sales for 2013 increased 8.3 percent to 8.82 billion Swiss francs ($9.7 billion), far outpacing the 1.8 percent growth for the rest of the Swiss watch industry at the end of November. 

“This clearly indicates the gain in market share,” the company, which consists of 20 watch brands encompassing all market segments as well as luxury jeweler Harry Winston, said in a statement. “In production, specific capacities have been expanded and put into operation. Additional increases in capacity are either in the planning phase or already under construction.”

The company—which designs, manufactures, distributes and sells finished watches, watch movements, watch components, electronic systems and jewelry—said that excluding production, revenue increased more than 10 percent.

It also forecasts a “positive outlook” for 2014, which has already begun with a “strong start by all brands.” 

However, the company warns that that despite its robust growth and forecast, the ongoing over-valuation of the Swiss Franc, particularly against the US dollar and Japanese yen, is having a negative impact on its sales. For example, in the second half of the year, the company said the negative effect of currency exchange rates cost it more than 100 million Swiss francs ($110 million). Its electronics operation reported a decrease of 3.9 percent due to price pressures placed by the overvaluation of the Swiss currency.

Despite this negative currency situation, it expects good results for 2013 at operating profit and net income level. The Swatch Group’s key figures will be published at the latest on 20 February 2014. Publication of the annual report at a media and analysts’ conference on 20 March 2014 is planned.

The company, in its statement, didn’t address a December 30 fire that destroyed its ETA movement operation. These watch movements are among the most common in the industry. They are used to power watches from Swatch Group brands such as Blancpain and Longines and for many other watches used by their competitors. It previously had said it will slow the production of watches by many brands.

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