One sign of better times, executives say, is that global pipelines, which were swollen with inventory two years ago, particularly in Hong Kong, are returning to normal. Some Hong Kong buyers, who had skipped SIHH for the past two years because of their high inventories, were back this year, ready to buy.
Retailers say that Richemont’s efforts, announced last year, to do a better job matching supply and demand are real and are paying off. Richemont characterized the third-quarter sales of its Specialty Watchmakers division as “subdued.” In fact, that was a good thing, “reflecting,” as Richemont stated it, “the continued monitoring of sell-in versus sell-out in the wholesale channel.” Failing to match supply and demand hurt Richemont in 2016, when it had to buy back €249 million worth of excess watch inventory. It learned a hard lesson. “Richemont [management] is controlling supply so that the brands don’t shoot themselves in the foot,” a U.S.-based Richemont brand executive says.
Brands reportedly are doing a better job of monitoring the shipments. At IWC, the process starts the day a new watch is launched at SIHH, says IWC’s Grainger. IWC uses data from a variety of internal sources to make better decisions much sooner about which watches to produce, in what quantities, and for which markets.
Another sign of the times: retailers and collectors said that, in general, the new watch crop was more “commercial,” i.e., designed and priced to appeal to a wide audience. Retailers applauded the trend; collectors not so much.