As the world’s biggest watch a jewelry fair opens its doors to 100,000 visitors in the Swiss town of Basel on Thursday, chiefs from some of the most exclusive luxury brands told CNBC they were optimistic about 2012.
Phillipe Lopez | AFP | Getty Images
Two women look at a jewelry display in a luxury shopping mall in Shanghai. Following in the footsteps of Japan, China has become the world's second-largest consumer of high-end fashion, accessories and luxury goods.
Jean Claude Biver, chairman of Swiss watchmaker Hublot, owned by French luxury giant LMVH , says: "When you are coming off a record year, you are always optimistic. The Swiss watch industry may not repeat the 20 percent growth it saw last year, but we are still hoping for a growth of 5-7 or 8 percent in 2012 — and that would mean yet another record year."
Swiss watchmakers have dodged a triple whammy of a record high Swiss franc , the disaster in Japan and the Arab spring with ease, delivering an impressive 19 percent growth of Swiss watch exports to 19.3 billion francs ($21.1 billion). That was helped by buoyant demand particularly from China, but also a rebound in luxury appetite from the U.S. and Japan.
Ahead of the official opening of "Baselworld", Francois Thiebaud, head of the Swiss exhibitors' committee, said that "if exports reach between 20 and 25 billion francs in 2012, we would be satisfied."
Increasingly, the fate of Swiss watchmakers depends on Asia though. In 2011, exports to Asia accounted for more than half of annual sales. Exports to China saw the fastest growth rate at 50 percent last year.
And for now, Swiss watchmakers see no signs of a slowdown in Chinese demand in 2012, according to Thiebaud. Hublot’s Biver adds: "China can still grow a lot, and I am not just talking about Beijing and Shanghai but all of China.“
For American diamond giant Harry Winston , which says it is not focused on mass retail sales, China is highly promising as well.
“We are excited about growth in China in 2012, and actually we see the Chinese market as the most sophisticated market in the world," CEO Frederic de Narp said.
Other watchmakers warn of overestimating Chinese growth however. Thierry Stern, President of the high-end Geneva-based manufacturer Patek Philippe tells CNBC: "I have learned not to put all eggs in one basket. Yes, China is growing and it is an important market, but we are relying on growth from all over the world, not just China."
So is it all blue skies for the watch and jewelry industry?
Asked by CNBC about the biggest headwinds for 2012, Harry Winston’s CEO Frederic de Narp was rather relaxed. He indicated that the company would be insulated from a potential slowdown in China, and said: "For the broader industry, maybe a deceleration of Chinese growth is a key risk, but we are just embarking in China, there are no comparisons."
Thierry Stern from Patek Philippe points out that the Swiss franc continues to be a headache, but stresses that "Swiss watchmakers are all in the same boat" while Hublot’s Jean Claude Biver says he is confident the Swiss National Bank will continue to act on to help exporters.
Further headwinds, he adds, could be a war with Iran, a spike in the price of gold or a French Socialist government which does not cooperate with Germany to solve the euro zone debt crisis.
