The decision to change the format of Hong Kong-based Watches & Wonders from an annual to biennial show is one of those surprise bits of news that shouldn’t really come as a shock to anyone.
Given the last couple of years trading in Asia it is perhaps more surprising that the show hasn’t been cancelled altogether.
But this is a halfway house solution that gives Richemont time to reflect on exactly where 2016 will take the luxury watch industry before making any major decisions.
It’s impossible to gauge visitor numbers at Watches & Wonders’ Geneva-based sibling, SIHH – no detailed figures are released annually except the general 15,000 visitors figure – but it was noticeably quieter last month than in 2015. Collections from the exhibiting brands were smaller and more considered than in previous years; only Montblanc, Cartier and perhaps IWC were prepared to paddle against the tide and release extensive new ranges.
While the excesses of SIHH are legendary – restaurant-standard food, free-flowing champagne, travel and accommodation come compliments of Richemont – so Watches & Wonders will no doubt also be expensive to stage, but given the deep, deep pockets of Richemont, I just don’t see the changes at Watches & Wonders being down to return on investment. If there was a happy end in sight for the troubled Chinese market, Richemont would ride out the storm in search of smoother waters.
I think it has far more to do with strategy in an uncertain market.
The move to staging the show once every two years must surely be taken as a symptom of a contracting market for luxury watches in Asia, as witnessed by falling sales in China and Hong Kong, which have fallen by 7.6% and 23% in the last two years respectively.
Taking away Watches & Wonders’ annual status once again gives centre stage to SIHH at a time when Europe is exhibiting a level of sales consistency nowhere else in the world can match. Whether it’s France, Germany, the UK, Italy or Spain the numbers are up year-on-year. Europe isn’t as immediately exposed to the ebb and flow of market conditions as perhaps the Middle East or China, markets which rely too heavily on oil and manufacturing.
If the world’s finances continue to spiral into another global crisis then, of course, Europe will be hit, but for the time being it would appear to be a safe haven for luxury watch sales.
Richemont has suggested that it will use Watches & Wonders’ off-year to stage events in other regions. It will be interesting to see where this travelling luxury roadshow lands first. My money would be on the US and then Japan.