The Swiss have long had a reputation for being discreet when it comes to business. (Think banks). And their watch industry is no different.
But growing pressure for environmental and ethical accountability — from activists, investors and consumers — has convinced a few brands that it is time to reveal where they obtain some of their raw materials.
They are fighting the industry’s deep-rooted tradition of discretion, a practice born of watchmakers’ fear that identifying suppliers will reveal details of their expertise and give rivals an advantage.
Many, however, are secretive for a very different reason: They are reluctant to admit their “Swiss Made” watches contain numerous components manufactured in China. These aren’t legal concerns: Swiss law dictates that at least 60 percent of the manufacturing costs of a product must be incurred in the country for it to qualify for the label.
the pandemic and digital growth, a new generation of chief executives, public pressure — to rethink long-established notions about the way they do business, including the value of collaborating with other watchmakers.
where brands get their gold and how they produce their timepieces, more available. Some watchmakers are even going out of their way to share it.
During the virtual Watches and Wonders fair in Geneva that began April 7, for example, Panerai introduced the Submersible eLAB-ID, a 44-millimeter wristwatch built almost entirely from reused raw materials, including recycled Super-LumiNova on its hands, recycled silicon in its movement escapement and a recycled titanium alloy known as EcoTitanium on its case, sandwich dial and bridges.
In a news release, the brand named the nine companies that worked on the timepiece, which will remain a one-of-a-kind concept watch until 2022, when Panerai plans to release a limited edition of 30 pieces, each tentatively priced at around 60,000 euros ($70,530). “We would love to be copied and improved upon,” Jean-Marc Pontroué, Panerai’s chief executive, said during a video interview last month.
a reputation for transparency and activism in a sector not known for either quality.
Kering has gone this way, at least in part, because it has an eye on what its buyers — and potential future buyers — want.
“All over the world,” Marie-Claire Daveu, Kering’s chief sustainability officer, said on a video call last month, “you have millennials and Gen Z [customers] asking more questions and wanting more answers with more details.”
Claudio D’Amore, a watch designer based in Lausanne, is one of the few Swiss watch executives to welcome such scrutiny. In 2016, he created a crowdfunded brand called the Goldgena Project, later renamed Code41, whose radical approach to transparency was a response to the industry’s long-simmering debate over the Swiss Made label.
table that lists all the components and processes that went into its latest crowdfunded timepiece, the NB24 Chronograph, along with their prices and origins. For instance, the watch’s Swiss-made movement cost the company $1,056 (including taxes), while the titanium case, dial and packaging — manufactured in China — cost $167, $56 and $22. In total, the watch cost $1,474 to produce.
Below the table, the brand explained that it arrived at a retail price of $3,500 by adding what it called a “minimal markup” for profitability.
sustainability report — what’s new is how easy it will be to access online, a spokeswoman said.
Chopard is another high-profile watchmaker striving to make its business more transparent. In late February, the Geneva-based brand updated its website with more information about its raw materials, including gold from the Barequeros, a community of artisanal miners in the Chocó region on Colombia’s Pacific coast. It also posted its Code of Conduct for Partners for the first time.
And yet Juliane Kippenberg, a Berlin-based expert on mineral supply chains at Human Rights Watch, says these measures still fall short of what other sectors, such as the garment industry, are doing to implement transparency, particularly on the complex topic of gold sourcing.
“Big companies like Adidas and H&M release Excel spreadsheets where they list the names of the garment factories where their products are being made,” Ms. Kippenberg said. “But in this sector, there’s far more reluctance to do that.” (Of course, those companies aren’t immune to controversy, either; H&M for example, is embroiled in one over its cotton sourcing.)
That hesitancy may be because many watchmakers are still wary of transparency’s threatening implications for their intellectual property.
“Part of our know-how is the know and the how — why would you share it?” said Wilhelm Schmid, chief executive of A. Lange & Söhne, a prestige watchmaker based in the German city of Glashütte.
Swiss voters rejected the Responsible Business Initiative, a proposal by a civil society coalition that would have required Swiss companies to conduct due diligence on human rights and environmental risks throughout their supply chains, and publicize their reports. But a counterproposal from the Swiss Parliament that would require companies to ensure the traceability of their supply chains, and make their reports publicly available for 10 years, is expected to become law in 2022.
That means even the notoriously tight-lipped Rolex, the world’s biggest brand by sales — a Morgan Stanley report on Swiss watches published last month found that the company now has an estimated market share of 26.8 percent — will need to make its business more transparent.
“They can’t claim they’re a private company because no one’s asking for their trade secrets,” said Milton Pedraza, chief executive of the New York City-based Luxury Institute. “They will have to answer. There’s no place to hide.”
Every year Lane Schiffman — who lives in Greensboro, N.C., and who co-owns a handful of high-end watch and jewelry stores, including Shreve & Co. — usually spends a couple weeks in Switzerland at the trade shows that have been anchors of the watch industry for decades.
But for Watches and Wonders Geneva, the virtual trade fair that hosts 38 brands and starts on April 7, he will be sitting in a friend’s house, watching each company unveil its newest timepieces on a computer screen.
Mr. Schiffman said he will miss having new watches in his hands and socializing with colleagues in person. He is realistic, however, about the current limitations on physical gatherings. “It’s not something we can do, so Plan B is the next best thing, and Plan B is to do things virtually,” he said.
Certainly the online presentations this year have filled a pandemic-inspired need, but what happens to watch fairs when restrictions on large gatherings and travel are lifted?
Frédéric Arnault, chief executive of TAG Heuer. “It helps us all create this mystique around not just this or that brand, but all watch brands.”
But virtual fairs have their supporters, too. “There is something about just being able to, I hate to say it, sit in your underwear and not leave your home and watch the show,” said Adam Craniotes, an editor at large at the watch magazine Revolution and co-founder of the RedBar Group, a collectors’ organization.
Watch fairs, like so many businesses, were forced to recalibrate by the pandemic. And in this case, experts say, that restructuring was overdue.
“Probably this year of Covid was useful for them to try to disrupt something that was difficult to disrupt without such an event,” said Claudia D’Arpizio, partner and head of luxury goods for the management consultants Bain & Company. “Everyone was questioning the value of these fairs.”
an addition promised, but not fulfilled, in 2019. (Some Baselworld mainstays, like Patek Philippe and Rolex, are scheduled at Watches and Wonders.)
Many brands also have pivoted to and invested in video equipment to be used at the fairs and beyond. Chopard, for example, installed a film studio in its Geneva headquarters that it intends to introduce during the fair this week.
Some videos are brilliant, some are just boring.
In addition to its presentation of new watches, Montblanc’s watch division will include a live conversation with Reinhold Messner, the mountaineer and a brand ambassador, talking about an expedition that helped inspire elements of a limited edition timepiece.
aBlogtoWatch. “It’s because these brands have put absolutely no effort into anything beyond, ‘Hey, we heard Zoom meetings are a thing.’”
As another option, next month Mr. Adams will be introducing his own online fair, called New Watch Week. He aims to create more engaging videos than those in typical brand launches. The fair will include content at intervals throughout the year, instead of just during its first week.
His target audience, he said, is consumers, who will be able to watch for free, no invitations needed.
That type of programming is likely to continue after the pandemic has gone. Physical fairs, he said, may well resume then, too.
“The luxury industry requires real relationships, social opportunities, travel and celebration, and consumers that want to express themselves and have the money to do so,” Mr. Adams said.
“If you don’t have those things happening, you don’t really have a functioning watch industry.”
Rich people who shopped too much used to be called collectors. Now they — and those belonging merely to the aspirational class — are all investors.
It’s not just that they’ve spent the last year splurging on stakes in untested, newly formed public companies that have yet to produce products, much less profits.It’s that during the pandemic, seemingly every luxury acquisition has become a so-called alternative asset class.
Rather than elbowing past each other for reservations at the latest restaurants from Marcus Samuelsson and Jean-Georges Vongerichten, or getting into bidding wars for apartments at 740 Park Avenue, they are one-upping each other in online auctions for jewelry, watches, furniture, sports cards, vintage cars, limited-edition Nikes and crypto art.
growing wealth inequality.
sold on the secondary market in 2020 for $30,000 are now going for upward of $50,000 on some resale sites. The Nautilus 5980, a rose gold chronograph sports watch from Patek Philippe that has a retail price of $85,000, can seldom be found on 47th Street for much less than $200,000.
One reason for surging prices, according to Benjamin Clymer, the editor of the watch site Hodinkee, is that “Switzerland shut down, so demand was there while the supply was dramatically reduced.”
had sold shortly before the pandemic through the auction site Bring a Trailer (or BaT, as it’s known) for $560,000 but Mr. Clymer figured it might be a buyer’s market. Perhaps he could get it for less.
He found a beauty from a dealership that hadn’t listed the price on its website. It was in mint condition. Mr. Clymer asked for a quote and nearly fainted upon hearing the answer: $1.2 million.
“I said, ‘You’re crazy.’ Less than a month later it was sold.”
By Thanksgiving, auction houses were sending out news releases almost daily touting their record-breaking sales.
sold in October 2020 for $23,750 through the Chicago auction house Wright. A Mesa coffee table by T.H. Robsjohn Gibbings, a British architect whose name is barely known outside of the furniture world, brought in $237,500 in December; the overall result of the sale was $2.5 million, roughly double what the house did at the same sale a year before.
In February, a digital artwork of Donald Trump facedown in the grass, covered in words like “loser,” sold for $6.6 million, a record for a nonfungible token, or NFT, so called because there’s no physical piece for the buyer to take possession of.
Fittingly, the image was paid for in Ethereum, a form of cryptocurrency that, among millennials, is almost as well known as bitcoin. Two weeks later, Christie’s sold another NFT by Beeple, this time for $69 million.
sold through PWCC Marketplace for $5.2 million. In March, Goldin Auctions, a sports collectible site, held its annual winter auction. “We grossed $45 million,” said Ken Goldin, the founder and C.E.O. “Last year, it was $4.7 million.”
One of Mr. Goldin’s repeat customers is Clement Kwan, the former president of Yoox Net-a-Porter and a founder of Beboe, an upscale line of cannabis vaporizers and edible pastilles that The New York Times has called “the Hermès of Marijuana.”
along with her sisters Dakota and Dresden Peters, owns what some believe is the most valuable sneaker collection in the world — had her biggest sale in five years of being in business: a pair of autographed 1985 Air Jordans that fetched $275,000.
In 2019, the sisters sold 572 pairs of sneakers, at prices that began at $500, Ariana Peters said in an interview. In 2020, they sold 879.
Ms. Peters actually sounded somewhat surprised talking about all this, perhaps because she and her sisters only got into the business because their father, a retired real estate developer named Douglas Roy Peters, bought so many pairs of sneakers they were running out of places to put them.
sold one for $408,000.
Mr. Abouzeid doesn’t have that kind of money, but in a June 2020 “I.P.O.” from Valley Road, he purchased 125 “shares” of one at a price of $25 each.
vintage whiskey. But Johnson & Johnson and Jack Daniel’s don’t interest him.
His Merrill Lynch account contains shares of companies like Sarepta Therapeutics, a maker of precision genetic medicines that treat rare neuromuscular and central nervous system diseases. His fridge is filled with rare, vintage Kacho Fugetsu.
“When my parents saw them in my apartment, they got really worried,” he said. “They said, ‘Is there something we need to talk about?’ But I don’t even open them.”
Earlier this month, when rising interest rates sent high-flying tech stocks into a tailspin, Kacho Fugetsu provided what Mr. Moses called “the perfect hedge.”
Of course, he’s aware that the ascent of his whiskey collection also could come to an end, but that at least has an upside. “Then I’ll finally have an excuse to drink it,” he said.
Sometimes it’s the unexpected turns in life that set us on the right path.
For the Detroit-born Elizabeth Doerr, those have included winning a scholarship for graduate studies in Germany, where she would meet her future husband, raise a family and be introduced to the world of high-end mechanical watches.
Now, as co-founder and editor in chief of the seven-year-old website QuillandPad.com, she focuses on independent and high-end makers, working in a suite on the top floor of her home in Karlsruhe, Germany, with a view over the rooftops and rock music playing in the background.
Ms. Doerr, 54, recently talked about covering the industry and what the near-future may bring. Her comments, made by email and phone, have been edited and condensed. — SUSANNE FOWLER
What drew you to watches?
It was not a conscious decision. My interest developed through my job with a German publisher who was launching a magazine in 1991 about watches, called ArmbandUhren. The more I learned, the more I became hooked. There was a real sense of community that I loved, too.
Kathleen McGivney, chief executive of RedBar Group, the world’s largest organized collector group. And Livia Russo, the less-extroverted partner of the star auctioneer Aurel Bacs, who together run the watch auction section of Phillips.
Now for the crystal ball. Predictions?
I think the major groups will continue to deepen a commitment to e-tailing, which they have been very slow to adopt, and have suffered for, during the pandemic. The independent brands have done much better largely because their online boutiques were already in place.
Last year, the auction houses did great business as people “shopped” online. I suspect that the continuing interest in vintage and pre-owned, combined with the need to safely shop online, will continue.
I won’t be surprised if some brands hold back very complicated or very expensive pieces in 2021 until buyers are again able to touch and feel them first. And I think that sporty casual will continue to be a big theme in high-end watchmaking.
Like most online entities, we have experienced an uptick in traffic. But I see that we really need the touchy-feely side of meetings to understand watches. At least I do. So I hope the fairs aren’t dead. A watchmaker’s enthusiasm for a project or a technical element can really ignite a fire in me. Inspiration is contagious.