China: a word repeated like a mantra by luxury players who see Chinese consumers’ voracious appetite for luxury goods as the way out of the Covid-19 crisis. Statistics certainly bear them out, not least the 20% rise in Swiss watch exports to China in 2020, in the midst of the coronavirus pandemic, compared with 2019. Shipments for the first five months of this year gained 56%, again taking 2019 as the basis for comparison. However, this urge to “go East” shouldn’t detract attention from Swiss watchmakers’ second largest market, the United States, where increases in value terms are comparable to those observed in China. Between January and May 2021, Swiss watch exports to the US amounted to CHF 1.14 billion versus CHF 1.25 billion for China. That’s a 20% rise on 2019.
Between January and May 2021, the United States, Canada and Mexico accounted for less than 15% of total Swiss watch exports.
That the US economy is recovering strongly is welcome news and confirms the thoughts of François-Henry Bennahmias, Audemars Piguet CEO, who believes the country still has huge unexplored potential. “For a brand to be global and lasting, it must have at least 20% [of business] in each of the main markets of China, Europe and the Americas,” he recently declared. According to Bennahmias, the brand practices what it preaches as it sells around 8,000 watches a year in the Americas out of total annual production of 40,000 units. In contrast, the Swiss watch industry as a whole is a long way from reaching this quota. Between January and May 2021, the United States, Canada and Mexico – the three Americas countries in the Top 30 Swiss watch markets – accounted for less than 15% of total shipments.
For Watches of Switzerland Group, one of the world’s largest watch retailers, it’s a no-brainer. Solidly implanted in the United Kingdom, the group set about building a strong presence in the US and is now reaping the rewards. For the fiscal year ended May 2, Watches of Switzerland Group reported an 11.7% rise in sales to £905.1 million. While sales on its UK home turf were stable at £606.5 million (+3.6%), US sales for the year soared by 38.5% to £298.6 million. The group clearly sees business “across the pond” as the biggest driver for growth, alongside e-commerce which accounts for 14% of revenue.
It’s easy to see why Vacheron Constantin chose New York as the location for its new flagship, between Madison and Park Avenue in Manhattan. “The new Vacheron Constantin Flagship in North America celebrates the relationship between our Maison and America that has existed since 1831,” declared chief executive officer, Louis Ferla. “Engaging with the creative spirit of America and its many diverse cultures, Vacheron Constantin is ready to make 28 E 57th Street its new North American home.” With ties to the United States that stretch back almost two centuries, Vacheron Constantin has every reason to build on this presence to intensify efforts on the US market. For a brand that can call China its second home, again for historic reasons, the opening of this new flagship comes at just the right time. The significance of the one-off American 1921 Pièce Unique, an identical recreation of this iconic timepiece using tools and techniques from a century ago, won’t be lost on the brand’s US clientele. At end 2018, Richard Mille opened its biggest store in the world just a couple of blocks from the new Vacheron Constantin showroom. New York, New York, it’s a wonderful town!