Clock ticking, but not for Swatch

30
JUN
2010

Author: Maggie Slowik - Categories: Procurement Intelligence

In the current economic climate, positive news for luxury goods companies is gold-dust – and thanks to market intelligence it looks as though one Swiss watch-maker is bucking the downward trend.

Unsurprisingly, at a time when austerity is very much the watchword of the moment, the luxury goods industry has been struggling to bounce back from a slump that has been deeper and more prolonged than some of the world's most iconic corporate names had dared to imagine.

A huge drop in demand has led to widespread redundancies and fears over the long-term health of a number of leading firms both in Europe and across the Atlantic.

And although there have been some more positive noises emanating from the industry in recent months – a study by consulting firm Bain & Company claimed that the luxury goods market would once more enter positive territory this year, with sales expected to increase by 4% to €158 billion – after a 2009 that saw sales dive by a staggering 8%, some companies are clearly going to find the going tough for the foreseeable future.

The report suggested that the growth is being driven, not in the US or Europe, but in Asia, where the Chinese market is predicted to expand at a rate of 15% this year.

However, thanks to its intelligence-led approach, it's a company based in Switzerland that appears in the rudest health to capitalise on any new opportunities – in Europe and further afield.

In 2009 sales of Swatch's jewellery and watches were slightly up on 2008. Nothing remarkable in that you might think, until you consider that 2008 was a boom time for luxury goods producers, and 2009 was one of the toughest on record. So how did Swatch manage it?

Well, according to the company's chief executive, Nick Hayek, the answer was very simple – "unparalleled" market intelligence.

"No one else has the same breadth," he said earlier this year. "We are active in components and movements - which we also sell to other watchmakers, giving us insight into their plans. Then we have our own brands, in every price segment. We have some wholesale, and we have hundreds of our own retail stores, as well as stakes in other retailers. We knew what we were talking about."

Clearly Hayek is not a man short of confidence, but the assuredness in his company's long-term health appears to be well-founded and steeped in an approach that's clearly paying dividends.

And with time potentially running out for some of its less-savvy competitors, Swatch has once again proved the benefits that intelligence can bring.