There have been few notable casualties of the past year’s slowdown in the global watch industry, but historic brands Girard-Perregaux and Ulysse Nardin may become the poster children of the dip after choosing to take Swiss government assistance to pay furloughed workers over the summer, and going public with its decision.
Sowind Group, owner of GP and UN, told Bloomberg earlier this month that it had put around 50 from 320 of its employees on short-time work shifts.
Canton-level institutions, such as the Jura Office for Economy and Employment will pay an employer 80% of any lost earnings for furloughed employees, who might have their working weeks halved.
Patrick Pruniaux, CEO of Sowind Group, has overseen a rollercoaster since buying out the watch brands. Two years’ ago there were waiting lists for Girard-Perregaux’s Laureato.
Today there are 905 Laureato watches listed on Chrono24, with previously hot models like the green-dialed 42mm in steel (retail price $14,300) being offered for $8,400.
A white dialed version of the same watch with box and papers is just under $7,000.
The current downturn is seeing demand concentrated into only the biggest, most bankable brands, leaving challengers like Girard-Perregaux and Ulysse Nardin working harder than ever to stand still.
Cutting supply to ensure there is not a glut of unsold watches that could leak onto the grey market is critical to prevent a short term challenge turning into a long term crisis. As is getting supply into the right markets, which right now means concentrating on the United States and Japan.
Mr Pruniaux does not appear to be panicking in an interview with Business of Fashion last week.
“The watch market is not collapsing, it is normalising,” he says.
“We’re now going to go through a couple of quarters that will be more challenging, but medium-term, long-term, no issue. Consumers still spend a very significant amount of money and have a lot of passion for luxury watches,” he adds.
Mr Pruniaux insists the business is debt-free, profitable and not looking for further investment at this time. He also believes Ulysse Nardin and Girard-Perregaux are gaining “significant” share in a turbulent market.