While limited-edition and diamond-encrusted watch sales remained steady—even increasing in some places—sales of “fashion”, more common brands suffered.  As with loose diamonds, it seems that bigger is better when it comes to selling in a tough economy.  It may seem counter-intuitive, but the more over-the-top a piece is, the more likely it is to sell, and quickly.  “The decline of bonus culture had a big effect on the watch market,” says Catherine MacDonald-Home, editor of Luxury Briefing.  “A lot of guys would buy a watch with their first bonus.”  So while watches in the $10,000 to $25,000 range dropped, those over $25,000 have actually seen an increase in sales.

Last year, a Middle-Eastern watch collector paid $3.3 million on Piaget’s Tourbillion watch, studded with 1,200 diamonds and shaped like a Mayan temple.  Only one was made.  The ultra-luxe brands like Cartier, Piaget, Rolex, and Patek Philippe continued to do well even in the darkest depths of the recession.  “Anything over $60,000 is holding up,” MacDonald-Home continued.  “It has to be something that’s a limited edition or of a very high quality.” 

Piaget, with an average watch price of $25,000, saw expanding markets as their lifeline.  To encourage this growth, they have placed 9 new stores in China and plan to build 5 more there.  They are also placing 3 new stores throughout the Middle East.  Audemars Piguet, with an average watch price of $35,000, saw growth only in one area during the last fiscal year: Latin America.  In honor of this, they created 2 new models for 2010, called “Pride of Mexico” and “Pride of Argentina”.  North American President and CEO of Audemars Piguet noted that, “The Latin American market is booming.  I showed up at a dinner in Caracas for 30 people.  Each had more than $150,000 on his wrist.” 

The way to sell timepieces in this economy is to create unusual pieces with either a new design or new technology.  While watch sales between $100 and $25,000 falter, it is the extremely decorative or unusual pieces with huge price tags that are moving.  Collectors are still collecting.  And with markets growing throughout Asia, the Middle East, and Latin America, the diamond jewelry industry as a whole can look forward to an all-around increase in sales over the next few years.

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