Swiss luxury watches maker Longines said affluent but price-conscious Asian shoppers were snapping up its old-style timepieces, helping it weather a sharp slowdown in China which is shaking much of the luxury industry.
"We are not suffering at all," Chief Executive Walter von Kaenel said in an interview with Reuters on September 27, sounding an optimistic note amid much recent industry gloom.
British fashion house Burberry's profit warning, which rattled the luxury sector earlier this month, was the clearest indication to date that all is not well in the industry which has weathered the financial crisis better than any other sector, thanks to unbridled demand from Asia.
Since the warning, shares in Burberry and its rivals LVMH, Richemont and Hermes have been under pressure, although they remain well ahead of their pre-financial crisis peaks, with the last three hitting all-time highs this year. Longines' parent Swatch Group, the world's largest watchmaker, had been among the first to warn of a slowdown in China's high-end segment, but according to von Kaenel, Longines - which has been present in China for many decades - was not affected.
"They (the Chinese) want classical watches, they want sizes adjusted to their wrist and at a reasonable prices," von Kaenel said.
Longines watches with the famous winged hourglass logo, the oldest registered trademark in the watch industry, typically sell for 1,000 to 4,000 Swiss francs ($1,060 to 4,250). Von Kaenel also said that his and Longines' approach of never experimenting or following fashion trends was in keeping with what Chinese customers had come to expect from the brand, which was celebrating its 180th anniversary this year.
"They don't like changing their models," he said. Neither does Longines, it seems. The group's Lindbergh Hour Angle watch - which was designed in 1931 based on the ideas of US aviator Charles Lindbergh, the first man to fly solo across the Atlantic - has yet to come to the end of its production run.
Von Kaenel said Asia accounts for more than half of the group's total sales, but the United States - where Longines has had a presence for more than 70 years - remains a crucial market. The brand is strongly associated with US sports. For many years the Longines name was on display on the analogue clocks topping scoreboards in stadiums thoughout the country such the old Yankee Stadium in New York. The watchmaker is a prominent sponsor of tennis and equestrian events, and is the official timekeeper of the Kentucky Derby. "Only when we stopped selling movements in the US and started selling watches did we become a truly global brand," von Kaenel said. "To stay No 1 in the US is still the name of the game," he added.
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