This subsidiary of LVMH wants to make inroads into the market of mobile phones above 3000 euros

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In June, Tag Heuer presented in Harrod’s (London) a mobile phone inlaid with 1,232 diamonds for a total of 7.4 carats.  “It costs 30,000 euros” mentions Steve Amstutz, general manager of the mobile phone division of the Swiss watchmaker Tag Heuer, owned by the French group LVMH.

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Tag Heuer decided to perform some brand stretching couple of years ago. First, the company moved to the sunglasses & eyeglasses arena. Then, in November 2008, Tag Heuer revealed the Meridiist, a luxury mobile phone made of noble materials such as stainless steel or sapphire glass. Contrary to Prada, Armani or D&G which are only branding LG, Samsung or Motorola telephones, Tag Heuer followed the Nokia way of creating a brand new phone with a specific technology inside. Nokia has been a pioneer by launching Vertu in 2004 and now this upmarket is estimated at 100,000 units per year says Amstutz.

A challenging positioning

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Nokia successfully anchored Vertu as a luxury brand by using precious metals such as gold or titanium. Some Vertu telephones are inlaid with diamonds and some more exclusive pieces were crafted in partnership with the French jeweller Boucheron. And Vertu was the very first to propose a 24-hour concierge accessible by a dedicated key. Nothing similar for the Meridiist: it does not support 3G networks and it was not designed for data transfer. According to Modelabs, the French manufacturer of Meridiist, this telephone is remarkable due to its outstanding autonomy (1 month in hibernate mode) and its second

screen.

In spite of such lacks, it costs 3,400 euros for the basic version and 450 euros for the earphone. But beyond the price, the future will tell if a high-end watchmaker is legitimate enough to expand in very different markets such as mobile phones.

Yvon Le Gall

Luxury-world 

http://www.tagheuer.com

Escada goes bankrupt

On August 13^th, the German company Escada AG filed for bankruptcy in Munich local court. This was the conclusion of months of financial negotiations as the company market contracted and the debt exploded. Bloomberg said “Escada wanted 80 percent of bondholders to exchange old debt for new notes and only received backing from about half of investors. That derailed a plan to obtain a bank loan and raise new capital, forcing the company into insolvency.”

Escada bankrupt
The company said a number of restructuring measures had been contingent on the bond swap success, but it did not get enough support from the shareholders. For example, a plan to raise EUR 30 million through the company’s biggest investors was contingent on the bond exchange going trough, as was a credit extension of more than EUR 13 million.

Escada bankrupt
Out of fashion, out of business

Escada’s fall started after 1992, when the owner and chief designer Margaretha Ley died. Since, many executives and shareholders followed one another without finding the solution to boost the company.

Escada bankrupt
Instead of building a global brand such as Gucci, Burberry or Prada, the executive staff restricted the company on the sole segment of women ready-to-wear. While the competitors generated a very profitable business in leather goods, shoes, accessories and perfumes, Escada was struggling with the constraints of stock management in ready-to-wear.

In terms of image, the company did not regenerate and was perceived as quaint. When a young generation of designers arrived in the 90’s (Tom Ford, Christopher Bailey, Stella McCartney) with new style proposals, Escada kept on doing the same clothes without any possible brand identification. Even the double-E logo looks like a counterfeited logo of Chanel or Gucci. Not mentioning the brand identity in the shops with a very middle range look when competitors massively invested in renovating their own shops and creating impressive flagships all around the world. In a world of brand recognition, image deficit is a killer.

Last but not least, the group multiplied the shop openings without measuring the size and profitability. And if the executive staff invested in Russia, emerging markets such as China remain unexplored.

Escada bankrupt
An international company

Escada was founded in 1976 by a Munich couple Wolfgang and Margaretha Ley.
Escada bankrupt
The German company, specialized in women's apparel, met success by selling colorful, highly decorated sportswear.
scada bankrupt
Margaretha Ley, who was a former model of Parisian designer Jacques Fath, remained chief designer of Escada until her death in 1992.
scada bankrupt
In May 2009, the company sold its mid-market subsidiary Primera which included the brands Laurel, Cavita, Apriori and Biba. Primera weighted 36% of the group activity and employed 1,800 persons out of 4,027.
Escada bankrupt
Today, Escada operates 182 of its own shops and 225 franchise shops in more than 60 countries, employing about 2,200 people – 600 of whom are in Germany.
scada bankrupt
In the fiscal year 2008, the company posted EUR 528 million in sales but a net loss of EUR 70 million. In the first half of the fiscal year ending in April, it lost EUR 90 million.
Escada bankrupt
Escada operates 182 of its own shops and 225 franchise shops in more than 60 countries, employing about 2,200 people – 600 of whom are in Germany.
scada bankrupt
The company biggest investors include Russian millionaire Rustam Aksenenko (20.9% of the stock) and German billionaires Wolfgang and Michael Hertz (12.5% of the stock).

Yvon Le Gall

Luxury-world

http://www.escada.com/

History

ebay counterfeit 

2008 was an “Annus Horribilis” for eBay which was condemned by a French court and obliged to pay 38.6 millions euros to LVMH, the famous luxury French group. LVMH charged eBay for its lack of control on fake articles sold on the internet site. The Paris Commerce Court estimated that eBay did not take the appropriate actions to fight against counterfeit. For instance, eBay was blamed for having refused to close any seller account once the seller was convicted of forgery. eBay also rejected Louis Vuitton’s request to immediately remove any advertisement containing illicit articles identified by the luxury brand.

Financial measurement of counterfeit

  ebay counterfeit

This 38.6 M€ fine may look huge but it is the result of a calculation done by the expert Maurice Nussenbaum and detailed in the French economic magazine “Challenge” on 1/07/08. For each of the most impacted brands, Louis Vuitton and Christian Dior, he calculated:

1. The amount of commissions received by eBay regarding the sale of fake articles from 2001 until 2006,
2. The image prejudice ,
3. The moral prejudice.

ebay counterfeit 

Commissions received by eBay

The expert calculated that:

-         From April to June 2006, 149 739 ads related to the brand Louis Vuitton were processed on the web site,

-         96 681 sales were done at the average price of 96.5 €,

-         90% of the sold items were reported as fake by LVMH but they generated commissions for eBay,

-         The court estimated that eBay received 1.6 M€ per year which sums up to 7.9 M€ for the qualified period 2001 – 2006.

The same logic applied to the brand Christian Dior:

-         From April to June 2006, 316 904 ads related to the brand Christian Dior (CD) were processed on the web site,

-         107 825 sales were done at the unit price between 15 € and 44 €, quite all of them were reported as fake.

-         This would represent 4.1 M€ of commissions, received between 2001 and 2006.

Image prejudice

M. Nussenbaum evaluated the image prejudice at 10 M€ for each brand.

Moral prejudice

This was evaluated at 2 M€ for Louis Vuitton and the same for Christian Dior.

These numbers were all fully validated by the Paris Commerce Court.

Source: 2008 - Challenges

The impossible chase

  ebay counterfeit

“The difficulty on eBay is that you can not see a handbag, open it and verify if everything is correct” says Wolfgang Weber, in charge of the fight against cybercrime at eBay, for Europe. So, eBay can rely on three sources of information to identify fake articles:

-         A dedicated software used to scan the eBay database and identify the questionable advertisements,

-         The remarks coming from the customers,

-         The observations reported by the luxury brands.

In order to protect its reputation, eBay imposes sanctions on the users selling counterfeit articles: 30,000 accounts were closed in 2008. eBay also collaborates with justice by reporting cases and providing the personal data of the sellers to the authorities. The company announces to have reported more than 500 cases in 2008, leading to more than 300 arrests for a total value of 29 M€ of counterfeit articles.

In total, eBay reports more that 2,000 people collaborating to the fight against forgery. But most of them work on tracking forbidden articles (such as weapons, pornographic material,…) and counterfeit is only “a tiny part” of their activity admits Wolfgang Weber. Basically, eBay reports to have invested “more than 30 M€ each year” in the fight against counterfeit, compared to a total revenue of 8.5 B$ in 2008.

But despite of this strategy the trials multiplied: eBay won against Tiffany in the US (NYC, 2008) and against L’Oréal (Paris, 2009) in Europe, but the company lost against Hermès (Troyes, 2008) in France, LVHM and Christian Dior (Paris, 2008).

  ebay counterfeit

Source: 2009 - Agence France-Presse

  ebay counterfeit

The battle has just started

 ebay counterfeit

With the keen interest generated by the luxury industry last years, it is more than likely that counterfeit will spread and increase. eBay can not investigate each advertisement related to a luxury brand but the vast majority of forgery is focused on brands with a very strong image. And they are not so many. So, focus on the ten top copied brands could have a very strong effect in this battle.

Moreover, eBay was extremely smart in creating Paypal as an independent company. Could it make sense to create another subsidiary dedicated to the fight against counterfeit? Not only this company could have a better understanding of the luxury brands business but it can also propose services to other web companies such as Price Minister.

  ebay counterfeit

Last but not least, ethic and equity are today values beloved by the customers and the media. In such a case, why not saying that counterfeit is cause of children and women slavery in many countries? Why not explaining that the money generated by an “innocent” fake watch is often invested in the drug dealing? And then, drug money is invested in weapons dealing and ultimately in terrorism. The man in the street, in western countries, is surely more concerned today by the impact of drugs and violence in the society rather than the prejudice suffered by multimillionaires owning the luxury brands.

http://www.ebay.com

  ebay counterfeit

After eight successful days, BASELWORLD 2009 closed its doors today, once again reaffirming its position as the leading international watch and jewellery trade show. On a site covering approximately 160,000 m², 1,952 exhibitors from 45 countries showcased their latest products and innovations. Exhibitors and visitors alike spoke enthusiastically about their experience at the show and the business they did. Thanks to this sense of positi­vity, both exhibitors and visitors forecast new prospects for the industry as a whole.

Watch and jewellery manufacturers and representatives from related industries have been showcasing their exclusive new products and premium collections at BASELWORLD over the past eight days. With its unrivalled vibrancy, BASELWORLD proved once more its immense importance to all exhibitors as the absolute highlight of the watch and jewellery industry’s calendar.

Satisfied exhibitors

This year, BASELWORLD once again reaffirmed itself as the leading global business platform for the watch and jewellery industry. And with results to match. For François Thiébaud, President of the Swiss Exhibitors’ Comittee, BASELWORLD 2009 was a great success. In his own words: “We were able to showcase our new products to buyers from all over the world and we’re extremely satisfied with how the show went. It was extremely well organised and it worked its magic for us once again”. Rolf Schnyder, President of Ulysse Nardin, was also very pleased: “The results for 2009 have been far better than we had expected. Once again, BASELWORLD has been the best place for us to meet specialist dealers and showcase our latest collections.”

A strong media and trade presence

For Luc Perramond, CEO of Hermès, BASELWORLD was without a doubt much more successful than many had been anticipating in the run-up to the show: “The mood was fantastic. There was a strong media and trade presence which has given our new range excellent coverage.” Jean-Christophe Babin, President of TAG Heuer, stresses this point as follows: “Over the course of one week, we have the attention of the world’s press in Basel – and these media representa­tives were there yet again in 2009. Therefore, BASELWORLD has once again offered us a fantastic platform where the entire watch industry can get together.”

BASELWORLD as a barometer for the rest of the year

For Rodolphe Schulthess, Sales Manager of Breguet, being able to stage a successful trade show is also very gratifying: “BASELWORLD is immensely important to Breguet.” Karl-Friedrich Scheufele, Vice President of Chopard confirms this: “BASELWORLD is the highlight of the year and it’s also the barometer for the rest of the year. We do a large proportion of our business in Basel and get together with our clients and the press from all over the world.” This was once again the case for Chopard: “Even if there was a noticeable air of caution amongst a few of our clients.”

Expectations clearly surpassed

The jewellery sector was also very satisfied as the show drew to a close. “BASELWORLD has been a success. All major jewellers came to our stand, almost without exception”, says Christoph Wellendorff, Managing Director of Wellendorff. Lisa Foo, Marketing Manager of Pasquale Bruni, backs this up: “BASELWORLD is extremely impor­tant to us because it’s the one and only trade show we go to. Our expectations, which were initially a little conservative, were clearly surpassed.” Expectations were also exceeded in the gemstone and diamond sector. Markus P. Wild, Managing Director of Paul Wild, said that there was a large amount of visitor interest. According to Chaim Pluczenik, CEO of The Pluczenik Diamond Company: “It just illustra­tes that even in these difficult times, BASELWORLD attracts all of the decision-makers for the entire industry.”

Stengthening its position as a global leader

BASELWORLD strengthened its position as a global leader with a total of 93,900 visitors coming to the show from around the world. Buyers also drew an equally positive conclusion from BASELWORLD 2009: “There is no other comparable event in the jewellery industry’s calendar which has the potential and scope of BASELWORLD”, according to Scott Martin, buyer for Saks Fifth Avenue in New York. “For all of us, BASELWORLD is the launch pad for the rest of the year.” For Michael Tay, Executive Director of The Hour Glass in Singapore, one thing is certain: “This year, BASELWORLD was once again the epicenter of the watch industry. As usual, I was able to gain a fantastic overview of current issues and trends in the industry.”

Buyers focus on BASELWORLD

Arif Ben Khadra, owner of Levant in Dubai, simply describes BASEL­WORLD as the most important watch and jewellery show there is: “Its importance has been borne out by the sheer number of exhibitors, purchasers and media representatives who once again have come to Basel this year. Anyone who is anyone in the industry has a stand in Basel.” Rajesh Gandhi, owner of Choron Diamond in Russia, espe­cially appreciates the “unique and pleasant atmosphere which the organisers have managed to bring to the show once again this year. With its huge number of exhibitors from 45 countries, this watch and jewellery show exceeded my highest expectations.” For Mehud Choksi, Managing Director of the Gitanjali Group in India: “BASEL­WORLD is the world’s biggest and most important trade show. In good times as in bad, my colleagues and I can take or leave other trade shows, but that’s not the case with BASELWORLD.”

BASELWORLD is a must

The show’s good atmosphere and the satisfaction of the buyers also comes across in the survey conducted on behalf of BASELWORLD. Like last year, of those questioned, three quarters rated BASEL­WORLD 2009 as either good or excellent. As many as 78% of visitors in 2009 stated: “BASELWORLD is a must”. What has been on offer at the show, in all of the exhibition halls, has been judged to be of an extremely positive quality.

Increased internationality and strong customer loyalty

68.1% of those who visited BASELWORLD were from overseas (compared with 63.6% in 2008). 71% of those visitors questioned confirmed that they also intend to visit BASELWORLD next year; thus emphasising the strong ties the show has. When asked, those questioned said that the main goal of their visit to the watch and jewellery show was to gain an overview of the market. This was followed by networking, customer care, meeting new clients and information gathering about market innovations. Orders were slightly down on the previous year due to the global economic crisis.

The large number of media representatives underscores the importance of the world show

With 2,973 accredited journalists covering the trade show, the impor­tance of BASELWORLD to the entire luxury goods industry has also been underlined. All major trade publications, hundreds of lifestyle magazines, daily newspapers, the online media and numerous TV stations from all over the world, have given coverage to BASEL­WORLD and to the collections and innovations which have been on display over the course of the last eight days.

New momentum boosts business

Sylvie Ritter, Show Director of BASELWORLD, draws an extremely positive conclusion: “BASELWORLD 2009 has shown that the watch and jewellery industry is facing up to this difficult economic situation in an extremely constructive way. BASELWORLD 2009 has successfully given the watch and jewellery industry new momentum and as a result business has been boosted.”

BASELWORLD 2010: March 18 – 25, 2010

BASELWORLD 2010 – the World Watch and Jewellery Show – will be held in Basel, Switzerland, from March 18 - 25, 2010.

 
Introduction

Cet article reprend des tableaux de chiffres extraits du dossier de presse du comité FRANCECLAT*, paru en février 2009. Chaque tableau fait l'objet d'une courte analyse qui permet de mettre en évidence certaines tendances des ventes de montres en France.

L'étude originale du comité FRANCECLAT couvre la bijouterie en or, la bijouterie en argent ainsi que l'horlogerie. Par contre, le périmètre de cet article est volontairement limité au marché des montres, en France.

*FRANCECLAT est le Comité Professionnel de développement de l'horlogerie, de la joaillerie, de l'orfèvrerie et des Arts de la Table.

Le marché français des montres en 2008

Ce marché a représenté 1.2 milliard d'euros en 2008.

Evolution annuelle des ventes en valeur

Le tableau suivant montre l'évolution annuelle des ventes en valeur, de 2000 à 2008: 



 Il est intéressant de remarquer que la période où les ventes annuelles ont eu une croissance négative correspond pour la France à deux évènements majeurs qui ont pu avoir un impact traumatisant sur les achats non nécessaires:
- La double crise au Moyen-Orient: le 11 septembre et intervention en Afghanistan (2001) puis la seconde guerre en Irak (2003),
- Le passage à l'Euro (2002).

Evolution des ventes en unités, en valeur et en prix moyen

Les tableaux suivants détaillent l'évolution des ventes de montres, en France, de 1997 à 2008: 

La valeur totale des ventes a augmenté de 60% en 10 ans, de 1997 à 2008, passant de 780 m€ à 1.242 m€.
Dans le même temps, les ventes en unités n'ont progressé que de 5%, passant de 12.6 millions à 13.3 millions.
Le prix moyen est donc passé de 62 € à 94 € soit une augmentation de 51%.


Evolution des ventes de montres en valeur par tranche de prix

Le prix moyen ayant augmenté de 51% en 10 ans, il est intéressant d'identifier les gammes de prix qui ont eu la plus forte croissance.

Le tableau suivant détaille l'évolution des ventes de montres en valeur par tranche de prix:



Au vu de ces chiffres, deux observations s'imposent:
- Remarquable croissance du marché des montres de plus de 3000 euros: les 6 dernières années, ce marché a connu une croissance moyenne de 10% contre une croissance moyenne de 1% pour les montres de moins de 50 euros et 0% pour les montres de 50 à 99 euros.
- Reprise des ventes depuis 2004: après avoir connu une décroissance en 2003 et 2004,  les ventes d'horlogerie retrouvent une progression à partir de  2005 avec un pic de croissance en 2008 (+10% en moyenne toutes catégories confondues).

Structure des ventes de montres en unité et en valeur, par tranche de prix

Le tableau suivant détaille l'évolution des ventes de montres en unités et en valeur par tranche de prix:



Une observation ressort de ce tableau: le segment des montres de grand luxe (prix > 3000 €) représente moins de 0,5% en unités mais plus de 20% en valeur. Si on y ajoute le segment des montres de luxe (prix > 1000 €) c'est 1% des ventes en unités qui représentent 35% des ventes en valeur. Sur ce marché de l'horlogerie, les segments supérieurs sont donc particulièrement dynamiques.

Conclusion

Le marché de l'horlogerie est particulièrement dynamique avec un prix moyen qui a augmenté de 51% en 10 ans.

Dans ce marché, le segment des montres de plus de 3000 € est particulièrement intéréssant puisqu'il a connu une croissance annuelle de 10% en moyenne durant les 6 dernières années soit la plus forte croissance tout segments confondus. Ce segment est particulièrement rentables puisque représentent 0.5% des ventes en unités mais 20% des ventes en valeurs.