Despite Economic Woes, Luxe Timepieces Keep Ticking

With financial markets reeling, gold and diamond prices soaring and currency markets riding a dizzying seesaw, it would seem the time has come to turn bearish on luxury.

Most key players continue to accelerate shop openings in emerging markets where luxury is flourishing thanks to newly aspirational consumers.

Bulgari opened five stores in Mainland China last year. This spring the Roman jeweler plans to open in Macao, which is quickly becoming a hot spot for jewelry and watches thanks to the boom in casinos there, and twin stores in Hong Kong. Van Cleef & Arpels will double the size of its stores in Beijing and Shanghai and the firm recently opened in Macao and Kuala Lumpur, Malaysia. Piaget just opened a fourth boutique in Taiwan, as well as a fourth in Hong Kong.

"Mainland Chinese now account for more than 25 percent of our worldwide sales," said Leopold-Metzger.

Severin Wunderman, owner of Corum, said, "India, Singapore, Hong Kong, Thailand and Malaysia are all booming in Southeast Asia, except Japan, where we are totally flat. Our total production is [already] sold out for Basel this year."

Thierry Nataf, ceo, president and creative director of Zenith, said "Asia is booming," adding the firm just opened in Shanghai. He said China was Zenith's top growth market, with Taiwan, Singapore, Malaysia, Thailand and Vietnam showing great promise.

"In the next five years, I believe we will continue to see [double-digit] growth in this area of the world," he said.

Trapani agreed. "The region is enjoying very strong growth, counterbalancing the softness in Western countries."

Even in the U.S., at least for now, few warning bells are ringing that luxury watch sales will cool.

"Business is still holding up very well for us," said Andrew J. Block, executive vice president of Tourneau.

While the sinking value of the dollar against the euro and the Swiss franc has caused prices to skyrocket, Block said the above-$5,000 category has shown "tremendous strength."

"We do see an influx of European and South American customers due to the weak dollar," Block said. "It's critical for brands to continue to support the growth of the U.S. market and not turn to other parts of the world because of the weak dollar."
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