LVMH luxury watch brands forecast booming 2012

Members of French luxury group LVMH’  watch division were in bullish mood at this year’s Baselworld watch and jewelry exhibition, predicting strong sales growth in 2012.

Hublot, which sells watches with an average sales price of 22,000 Swiss francs ($24,000), and Zenith, whose products have

Zenith, El Primero 1969 Chronomaster – presented at Baselworld 2012

an average retail price of CHF8,000 to CHF10,000, both enjoyed record sales year in 2011. Hublot Chairman Jean-Claude Biver said: “2012 will be another record year.”

Sales were up by around 30% to more than CHF300 million during 2011, Biver told Dow Jones Newswires on the sidelines of the Baselworld show. The Swiss Exhibitors Committee said it expected exports to continue to grow in 2012, from the CHF19.3 billion achieved in 2011, but expected the rate of increase to ease from the 19% last year.

“This year Hublot might have weak double-digit growth, somewhere in the low teens,” Biver added. This outpaces his view for the whole industry of a 6% to 8% increase. The chairman sees signs of a slowdown in demand in China, which has been the main driver behind the rise in watch exports since 2009. “But the slowdown in China may last only three months and start up again. We only make 3% of our sales in China, so we are not anxious,” Biver said.

Jean-Frederic Dufour, Chief Executive of Zenith said 2011 was a record year for his division in terms of turnover, production and operating income. “So far January and February are in line with our budget, even slightly ahead. We have a double-digit budget for this year, and we are confident we are going to achieve it,” he said. “By 2015 we will be totally independent,” (production wise) he added. Both brands said they also rapidly expanding their boutique network in order to increase sales.

Hublot will add around 18 boutiques to the 42 it has around the world, while Zenith will more than doubles its stores to 17 from seven. “We are developing at a crazy speed. We are doing in two years what others have done in 10 years, with new machines, new processes, new shops, new distribution and new collections,” said Zenith’s Dufour. “The big challenge at the end, is the world has to be steady. That’s it. With that, demand will continue to rise.”