2 ★ FT Special^ Report 9 November/10 November 2019Watches&Jewellery
Contributors
Sam Jones
Switzerland correspondentRichard Milne
Nordic correspondentIan Smith
Deputy markets news editorNicholas Foulkes
Contributing editor, How to Spend ItSimon de Burton
Contributing editor, How to Spend ItValerie Hopkins
South-east Europe correspondentGrace Cook, Jonathan Margolis,
Robin Swithinbank, Rachael Taylor,
Kate Youde
Freelance journalistsMaxine Kelly
Commissioning editorSteven Bird
DesignerFran Andreae, Hannah Bishop, Emma
Hammar
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the articles.the ateliers of Geneva’s Rue du Rhône or
Zürich’sBahnhofstrasse.
This single shopping complex, featur-
ing boutiques from IWC, Rolex, Jaeger-
LeCoultre and Vacheron Constantin,
among others, is indicative of the city as
a whole. Audemars Piguet as sevenh
outlets in the archipelago, and fourin
nearby Macau.This compares with its
sevenshopsacross orthAmerica.N
So it has been withconsternation that
Switzerland’s watchmakers have seen
Hong Kong descend into political chaos
in recent months,as protesters push
back against what they view as Beijing’s
tighteninggripontheterritory.
The IFC mall has become a regular
venue forflash mobs of both pro-
democracy and pro-Beijing protesters.
Hong Kong’s airport — home to another
cluster of watch outlets, including
Blancpain, Omega and Longines — has
beenseverelydisrupted.
Until the protests began, Hong Kong
was the world centre for Swiss watch
sales. In 2018, it powered more than
SFr3bn ($3.04bn) of the SFr21bn in glo-
bal sales, and was behind much of the
industry’sgrowththatyear.
“Asia is the first market for our indus-
try,” says Jean-Daniel Pasche, president
of the Federation of the Swiss Watch
Industry. “More than 50 per cent of our
exports are destined [to go] there. The
events in Hong Kong duly affect our
business.”
So far, Mr Pasche notes, the numbers
as a whole for the region have held up
reasonably well. While SeptemberContinuedfrompage 1exports to Asia rose11.3 per cent
year-on-year to SFr943m, the figure for
HongKongfell4.6percent.O therAsian
countries, among them China, Japan
and Singapore, appear to havetaken up
some of the slack, with imports rising in
allthreemarkets.
Many Chinese consumers buy their
watches overseas. While trouble in
Hong Kong has ledshoppers to abandon
that market, South Korea and Japan
remain attractive places to shop —as is
increasinglytheChinesemainland.Other observers are less sanguine,
however. High inventories in Hong
Kong mean the effect of political turbu-
lence has not yet been fully reflected in
export numbers from Switzerland — in
other words exports have yet to trans-late into sales and are less likely to do so
if disruption continues. Mr Weber
believes the Hong Kong marketcould
contractbyasmuchas40percent.
In the event of such a drop, the global
outlook ould be affected significantly.w
Earlier forecasts anticipated 4 per cent
growth for Swiss watch exports overall
this year — Mr Weber says the true fig-
ure could now drop to between 1 per
centandzero.
In 2014, the city endured similar
unrest. “The last crisis saw declines of
roughly 30 per cent and that did not last
aslongasthisone,”MrWebersays,add-
ingretailsalesfigures onotbodewell.d
Provisional data released this month
by Hong Kong’s statistics department
for September show that the value of
jewellery, watches and clocks, and valu-
able gifts sales plummeted 40.8 per cent
year on year, following a47 per cent
dropinAugust.
Luxurywatchbrandswillbewatching
the data closely over the next couple of
months as the severity of the situation
comesintoview.Red flags
signal
pressure on
global growth
IWC has taken steps to control its branding and pricing —IWCM
ichael Tay has sent word
that he is running late. It
is a Sunday in Singapore,
and fortunately his home
on the city state’s
upmarket Orchard Road is not far from
the Fullerton Hotel where we are due
to meet for coffee.
He arrives only a few moments
behind schedule, full of apologies,
looking sharp in the luxury watch
industry leader’s near-standard
uniform of a crisp blue suit, white shirt
and neatly knotted silk blue tie — and
he appears enviably unaffected by the
morning humidity.
“I’m so sorry,” hesays earnestly with
a beaming smile. “I’ve been up since
six, I’d showered, and then I was faffing
around thinking we were meeting at
9:30. But then I got a notification on
my iPhone.”
At 43, Mr Tay is still young for a man
running one of the world’s most
powerful multi-brand watch retailers.
The Hour Glass, which was founded in
Singapore by his parents in 1979. It
recorded revenues of S$720.9m
(£409.4m) in its most recent annual
report, up almost S$30m on 2017.
Mr Tay joined the company in 1999,
rising to the position of group
managing director in 2015. He now
oversees 40 stores in 11 cities in seven
countries across south-east Asia and
Australia.
He is wearing a suit on a Sundaybecause Patek Philippe is in town for
its Watch Art Grand Exhibition. He has
400 customers coming infor the event
and, one suspects, tobuy some of the
1,500-plus special pieces the Geneva-
based brand has created for the
occasion.
Mr Tay says he has 18 days of
dinners, breakfasts, cocktails and
receptions ahead of him, a glad-
handing marathon. He is excited about
it — andwith good reason.
The Singapore watch market is
thriving. Figures from the Federation
of the Swiss Watch Industry show that
Singapore imported SFr1.1bn (£878m)
worth of Swiss watches last year, and
that it is already up about 13 per cent
so far this year, he notes. That puts it
sixth on the world list, just behind the
UK. “We’re the only city state on that
list,” he says. “With a population of
5.5m people. We eclipse all other cities
in the world for the number of watch
collectors per capita.”
Singaporean customers are the
beating heart of his business, he says.
Scars from 1997’s Asian financial crisis,
as well as China’s tendency to cancel
visas without warning, means his
group’s focus issquarely on prioritising
local clients.
“We were quite hurt by the crisis,” he
explains. “A lot of business back then
came from Japanese tourists and from
the region.
“When the tourists don’t come in,who have you got to rely on?”
L’Atelier and Malmaison, two of his
flagship luxury watch retail concepts,
are Mr Tay’s attempts to nurture what
he calls “watch culture” among
Singaporeans.
Malmaison, a two-storey, 8,000 sq ft
one-off, is as much a watch enthusiast’s
theme park as a watch shop. As well as
Rolex and Patek Philippe outiques, itb
has a blue velvet-lined room decorated
with Napoleonic swords, a dark-wood
panelled library, an area selling
Rubinacci ties and Pierre Corthay
shoes (Mr Tay is Singapore’s only
Rubinacci retailer). It also features a
taxidermy corner that looks like a
Lewis Carroll-inspired live-action
movie set.
“I have a mantra I repeat continually
to my team: ‘profit is the percussionary
effect of the pursuit of passion’,” he
says.
“What’s important for us is that
we’re not focused on financial
outcomes. Financial outcomes are the
ripple effect of everything we do.”Mr Tay is convinced that multi-
brand retail concept stores such as
Malmaison will outlast the global
monobrand networks in which major
marques have invested so heavily. He
is critical of their replicant approach,
with outlets looking the same
everywhere you go. “Luxury needs to
be rare and tailored, like a boutique
hotel,” he says.
He is equally critical of ecommerce:
“People flock to ecommerce for one
simple reason: because their retail
experience doesn’t match up to
expectations.”
Much of Mr Tay’s theory stems from
his experiences and influences. Before
joining the family business (“It’s like
conscription: you always know that one
day you’ll end up there.”), hedreamt of
a career in the performing arts.
He was gifted enough to win places at
the Bretton Hall and at Trinity Laban
performing arts colleges after doing his
A-levels at the Leys School in
Cambridge, England. He eventually
settled at Oxford Brookes university,where he read business and
international management. Mr Tay
gave up performing more than two
decades ago and, he says, such passions
are now realised in the visual arts.
After a period spent investing in
female postwar abstract
expressionists such as Helen
Frankenthaler and Elaine de Kooning,
he has switched his attention to the
work of “post-PC painters” — with PC
standing for personal computer — such
as Michael Williams, and emerging
talent such as Avery Singer and Bunny
Rogers.
“I always like to transplant myself
100 years down the line and ask which
artists and artisans will stand the test
of time,” he says. “It’s a real risk,
because you don’t know.”
He talks lyrically and with fervour on
the subject, before realising that time
has run away with him and that once
again he is in danger of being late —
only this time for his Patek
customers. In this business, that really
wouldn’t do.Singapore’s
watch culture
offers rich
pickings
ProfileMichael TayThe 43-year-old runs one of the world’s most powerful multi-brand watch retailers.Robin Swithinbankasks what makes him tick
I have a mantra I repeat
continually: ‘profit is the
percussionary effect of thepursuit of passion’
Michael Tay with his art collection at home in Singapore —Munshi Ahmed for the FTIn terms of sales, the Hong
Kong market has the
potential to contract asmuch as 40 per cent
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