Omega President Stephen Urquhart said the US is one of the Swiss watch brand’s most promising markets this year amid a lull in spending by the Chinese, the biggest buyers of luxury timepieces.
Omega’s next big store openings will be in New York, San Francisco and in China, Urquhart said in an interview Friday. The U.S. and greater China are the largest markets for Omega, one of 18 brands made by Swatch Group AG, the biggest maker of Swiss watches.
“The Omega brand is undersold in the U.S.,” Urquhart said at Baselworld, the world’s biggest watch and jewelry show. “China is an emerged market, an established market, which is entering a phase of consolidation.”
Omega expects a “good performance” in the U.S. this year after boosting investment there in the past five years, the executive said. That may help offset a slump in demand in Hong Kong, the main market for rich Chinese consumers to buy timepieces and the destination for almost a fifth of Swiss watch exports.
The industry’s shipments to the city fell 22 percent in February, the steepest drop in two years amid a slowing Chinese economy and government policies to limit extravagance and improper gift-giving. Still, Urquhart said Omega has “very strong” growth potential in China.
Omega sold 18 percent of the Swiss watches priced at 8,000 francs ($8,100) or more in 2013, and was only surpassed by Rolex, whose market share was 20 percent, Rene Weber, an analyst at Bank Vontobel AG, has estimated. The brand probably had sales of about 2.26 billion francs ($2.3 billion) that year, he said. Omega declined to disclose its revenue. Thirty-two of the brand’s 350 stores are in the U.S.
Omega won’t add any intelligent functions to its watches this year, but is looking at ways to integrate applications in the future.
“One logical thing to do would be something like Montblanc’s e-Strap for a special watch, not for the whole collection,” Urquhart said. “Smart applications involving the Olympics could also be an option, like for example payment functions.”
For now, Omega is working on gradually adding anti-magnetic technology into its entire collection, saying that magnetic fields can make a watch run inaccurately. A survey conducted in Japan three years ago showed that 58 percent of all watches coming back to the Omega service center needed demagnetizing, Urquhart said.
By 2020, every Omega mechanical watch — at least 500,000 timepieces — will have a special certification showing they’re resistant to fields up to 15,000 gauss, a measure of magnetism.
Household magnets are usually only several hundreds of gauss. Most people won’t ever encounter magnetic fields as strong as 15,000 gauss, according to A Blog to Watch, a review site that says exceptions might be people who operate MRI scanners or work at CERN, the Geneva-based particle accelerator.
“I’d say for anyone living in a suburban environment today, with computers around them, driving cars and cooking, about 50 percent of every mechanical watch is affected by magnetism,” Urquhart said.