Watches gain sparkle with diamonds

To say that the Italianmodel and actressEva Riccobonolooked a million dol-lars when she appeared atthis month’s Venice FilmFestival would be a dramaticunderstatement – at currentexchange rates, a more accu-rate figure would be around$4.3m. The reason? She wasentwined in a unique set ofjewellery called Le Lierre(ivy) that comprises 14,000gemstones and costs €3m.

What might have sur-prised onlookers, however,was the fact that the glitter-ing assemblage of Tsa-vorites, yellow sapphires andrare diamonds was not theproduct of one of the long-established jewellery housessuch as Cartier, Boucheronor Van Cleef and Arpels butof Jaeger-LeCoultre which,after building-up 175 yearsworth of watchmakingexpertise, has used Le Lierreto make its mark in theworld of contemporary hautejoaillerie.

And, although the centre-piece of the set is a dramaticcuff bracelet concealing awatch, the people at Jaeger-LeCoultre are clearly excitedto have entered a new fieldof non-horological creativityby matching it with aremarkable sculpted neck-lace depicting interlaced ivyleaves, a pair of earringsbased on tendrils and a ringtopped with a rare, oval-shaped yellow diamond. Andno, they cannot be bought

separately: it is all or noth-ing, and you get a custom-made cabinet to keep it all inas part of the deal.

Gem-set watches havebeen included in the brand’scatalogue for decades, yet itwas not until last year’sVenice film festival that JLCdecided to shine the spot-light on its ability to createhigh-jewellery timepieces byunveiling a pair of watchesrespectively inspired by arose and a tulip flower – andthis month’s arrival of theone-off Le Lierre marks thefirst time for around 70years that the company hascreated an elaborate ring,necklace and pair of earringsto complement such awatch.

“Jewellery houses arebecoming more and moreactive in watchmaking, sowhy shouldn’t a watchbrand become active in jew-ellery?” reasons JeromeLambert, Jaeger-LeCoultre’schief executive.

”We regard pieces such asLe Lierre as being ambassa-dors for our company,

objects that are considerablymore visible than a watchand which act as a kind oftestimonial to our capacityand technical mastery.”

Mr Lambert is quick topoint out, however, thatalthough pieces similarlyelaborate to Le Lierre will becreated each year, high jew-ellery will not become a“brand extension”.

“A high jewellery watchdefinitely looks best when ithas the matching ‘extras’,but we want to keep itexceptional by producingone set per year, always on adifferent theme.”

As Mr Lambert observes,there are now plenty of jew-ellery houses cross-pollinat-ing with the watch world.Cartier has been doing so formore than a century and canbe described as either a jew-eller or a watchmaker withequal justification, whileVan Cleef and Arpels haslong been known as themaker of “jewels that tellthe time” – but the horologi-cal offerings of both havebecome more prominent of

late, with the former achiev-ing considerable successwith its Ballon Bleu collec-tion launched last year, andthe latter stepping-up itswatch range with intriguing,often complicated piecessuch as the “Fairee” forwomen and the men’s “Parisby Night”.

Harry Winston’s horologi-cal heritage does not go backso far – but the long-estab-lished company famous forcreating exquisite jewelleryfrom giant gems such as theLesotho diamond nowregards its watch businessas being almost as signifi-cant as the diamond side.

”Watches have nowbecome very important,”explains global marketingdirector Beatrice Dequer-vain. “We have 18 salonsaround the world offeringboth jewellery and watches,but beyond that there are150 wholesale partners sell-ing only watches, somethingthat gives the brand fargreater reach.”

Back in 2001, Harry Win-ston set out to establishitself as a maker of “serious”watches with the “Opus”project on which it workswith a different, independentwatchmaker each year toproduce a limited edition,high complication piece.Watch production is now atan all-time high of around5,000 pieces per year withdemand outstripping supply.

“People still think ofHarry Winston as the jewel-ler for big stones, but thetwo sides of the business arenow more or less equal part-ners and our Rare Diamondsand Rare Movements plat-forms have started to over-lap,” adds Mrs. Dequervain.

The boundarybetween finejewellery and hautehorlogerie isblurring, writesSimon de Burton

Inside this issueFocus The Indian marketfor gold is struggling, writesAmy YeePage 4

Interview Haig Simoniantalks to the chief executiveof Girard PerregauxPage 6

Interview Nick Foulkes onthe revival of the MinervafactoryPage 8

MORE ON FT.COM

Online exclusive Voguejewellery editor CarolWoolton talks to TheoFennell about his newventurewww.ft.com/fennell

Slideshow Simon deBurton picks his top 10 finejewellery watcheswww.ft.com/jewelwatches

Looking a million dollars and more: Eva Riccobono sparkles at the Venice Film Festival Rex Features Continued on Page 2

WATCHES& JEWELLERYFINANCIAL TIMES SPECIAL REPORT | Saturday September 13 2008

www.ft.com/watchessept2008

Audio slideshowScheherazade Daneshkhuwatches Chanel create anecklace for the ParisbiennaleFT.com/chanelnecklace

2 ★ FINANCIAL TIMES SATURDAY SEPTEMBER 13 2008

Watches and Jewellery | Boucheron

Removing the fashion from fine jewellery

“The 20th century wasnot such a comfort-able century forBoucheron – butthe 21st: that’s a fantastic oppor-tunity.”

It is a funny statement for thechief executive of a fine jewelleryhouse to make, given that the20th century saw the blossomingof the modern luxury industryand the fact that the biggestjewellery markets in the world –including the United States andthe United Kingdom – are facingthe prospect of recession, butthat is the opinion of Jean-Christophe Bédos, the chief exec-utive of Boucheron.

Mr Bédos goes even further,saying that missing the luxuryboom was in fact “an immensegift” for Boucheron.

Judging by the recent growthof the French fine jeweller, which

turned 150 this year, he may beright.

Although Gucci Group, Bouch-eron’s parent company, will notbreak out specific performance

figures of its various luxurybrands (which include Gucci,Bottega Veneta, AlexanderMcQueen, and Balenciaga), insid-ers report Boucheron is on track

to double its turnover everythree years, as it did from2004-2007, approximately twicethe average market growth.

Mr Bédos attributes the renais-

sance partly to the ethos of thebrand, consumer behaviour atthe beginning of the 21st centuryand Boucheron’s recent history,but mostly to the company’s

understanding of the evolvingrole of jewellery as a luxuryproduct.

Mr Bédos became chief execu-tive of Boucheron in May 2004,after four years of losses sincethe company was brought intothe Gucci Group by Tom Fordand Domenico de Sole in 2000.

They had bought the fine jew-eller and tried to turn it into afashionable brand.

The following July, Gucci’sowner, French conglomeratePinault -Printemps-Redoute ,appointed Robert Polet chiefexecutive of the group.

Mr Polet’s directive to MrBédos, as announced at an openpresentation to analysts inNovember 2004, was simple: “FixBoucheron.”

Mr Bédos’s response wasequally straightforward: forgetfashion.

“Fashion and jewellery workon very different dynamics,” hesays. “Fashion is all about re-inventing yourself two to fourtimes a year; jewellery is muchslower, and more personal. Themarket couldn’t absorb thatmuch novelty, and the result wastoo much stock and inventory” –at, it should be mentioned,extremely high prices.

Mr Bédos replaced the creativedirector, Solange Azagury-Partridge, who had been broughtin by Ford, with an anonymous“team” and reduced the numberof new high-jewellery collectionsto one or two a year.

The idea, he says, was to placethe emphasis on individuality,and allow customers to discoverpieces of jewellery that spoke tothem, as opposed to dictating tocustomers what they should like.

“In the last four or five years, Ihave noticed that consumersinterpret the value of an item interms not just of its price, but interms of an added element,whether it be spiritual, artistic orhistoric,” says Mr Bédos.

“I think it’s true in every area,not just jewellery. You see thesame thing in the art world, withpeople buying because of an emo-tional connection to a piece. Thedynamics are similar. Peoplewant to buy something for a rea-son; they want purchases to havemeaning. It’s why I believe thespecial order side of the businessis growing so fast.

“Twenty years ago, when Ibegan my career in jewellery, itwas much more about socialcompliance, and the search forthe status symbol recognised byall. Then consumers were gov-erned by tribal behaviour; todayit’s more about what somethingmeans to them.”

It is this sociological changethat Mr Bédos is attempting toleverage to Boucheron’s advan-tage, emphasising the brand’shistoric roots (it was founded in1858 by Frederic Boucheron), thegolden age of the 1920s and ’30s,and its aesthetic heritage in theoriental and organic traditions.

“This makes the brandextremely relevant today,because of its concern for nature,that you see in the designs, andregard for China and the coun-tries of the east, all of which isvery much at the forefront ofpeople’s minds,” he says.

It is also why, during the tech-nological revolution, the brandwent into an extended decline,culminating in the losses of theearly millennium, a trend thatfinally ended in 2006 when thejeweller returned to profit a yearbefore Mr Polet’s deadline.

Now Mr Bédos is openingstores at a rate of six or seven ayear (Boucheron will have 50stores by the end of 2008), andre-introducing Boucheron to theUS – the company pulled outduring the depression of 1929.

In line with Mr Bédos’s moreemotional approach to consum-ers, Boucheron will not enter themarket with the bells and whis-tles and giant real estate costs ofa flagship store, but rather bypartnering with a Cirque deSoleil-like adult circus known asSpiegelworld, which has createdan entire show based on theBoucheron archive. The showwill travel across the US,with Boucheron hosting privatesalons alongside the shows.

“You need to work out, andthen maintain, the very subtleration between desirabilityand availability, where the firstis greater than the second;you need a gap between demandand supply,” says Mr Bédos.“Our objective is to make Bouch-eron increasingly desirable asopposed to increasingly availa-ble.

“I believe in cycles, and Ibelieve we are only at the begin-ning of a cycle of expansion ofthe high jewellery market,” hesays. “It is a deep trend – onethat will last for the next 10years or more.”

INTERVIEW

Vanessa Friedmantalks to the headof Boucheron, thehistoric jeweller thatis making a comeback

‘Fashion is all aboutreinventing yourselftwo to four timesa year; jewellery ismuch slower, andmore personal’

Jean Christophe Bédos: “People want to buy something for a reason; they want purchases to have meaning.”

Boucheron opts for boldbut idiosyncratic designs

When the time came toinstruct the Boucherondesigners for the 150th anni-versary high jewellery line,chief executive Jean-Christo-phe Bedos says a consciousdecision was made “not tocommemorate the past”.

In jewellery terminology,that would have meant re-making famous pieces suchas Boucheron’s “foliage”necklace that won firstprize at 1878’s ParisUniversel exhibi-tion, or the tiaraworn by QueenElizabeth, thelate Queenmother.

Instead, MrBedos instructedthe designers tofocus on “the rea-son we were stillalive”. The result is12 precious gemstonesets that have beenintroduced in two parts– the first last January,the second this season –themed along emotional, as

opposed to narrative, lines.The collection is called“Audacious, Voluptuous,Magic, Curious, Gourmand,Dangerous and Mysterious”.This atypical approach hasserved the house well, asthe first half of the collec-tion has already been sold(each piece costing over€100,000).

The collection includesfive striking sets – thehouse always pro-duces necklacesand earrings tomatch, as that iswhat clientsdemand.

The new “Voluptu-ous” is a tasselled

swirl of 699 whitediamonds dripping

three 24-caratpink sapphires,all of which canbe detached andworn as pendants.“Magic” is a pea-

cock - feather - in -spired blue andgreen circlet whose

sleight of hand isperformed courtesy ofa diamond, emeraldand sapphire comma

that hides a 9.12 caratemerald. “Curious” is a

pink and yellow sapphirenecklace that has the face ofa fawn hidden in theabstract pattern. “Danger-ous” is a sunset of stonesembraced by a snake drip-

ping a 15.50 yellow dia-mond venom and

“Gourmand”has a water-fall of sap-phires andd i a m o n d ssurroundedby emerald

vines, with a15-carat brown dia-mond nestled in thecurrent.

Eye-popping as thenecklaces are, they arenot as surprising as the

high-jewellery watch collec-tion. The limited editionExtravagant Bestiary collec-tion is inspired by insect,bird, and reptile and is bothidiosyncratic and original.

The collection includes achameleon bracelet wherethe animal curves aroundthe wrist to nibble on a leafbefore popping up to reveal aquartz movement watch anda ruby frog on a lily padwith a diamond lotus flowerwhose petals hide the time.

This idiosyncracy ledBoucheron to designerHarumi Klossowskawho has

collaborated on two pieces: abrushed gold-and-gemstonearm bracelet (Vesper) andchain necklace (Kundalini),both featuring large curvingsnakes. The collaboration isthe fourth in the series, aftera Vertu phone, some Bouch-eron/Richard Mille time-pieces and a Maison duChocolat necklace.

“Working with externaldesigners stimulates our cre-ativity and helps make usrelevant,” says Mr Bedos.“We are not a museum, andthese are pieces that have apoint of view about jewellerytoday – even if they arerooted in something that is150 years old.”

REVIEW

Vanessa Friedmanevaluates thejeweller’s latestcollection

Contributors

Simon de BurtonFT Watches Contributor

Vanessa FriedmanFashion Editor

Scheherazade DaneshkhuParis Correspondent

Haig SimonianZurich Correspondent

Amy YeeDelhi Correspondent

Lucie MuirDeputy Fashion Editor

Nick Foulkes, Maria Doulton,Clair Adler, Veronica McNiffFT contributors

Tom GriggsCommissioning Editor

Martin BriceDesigner

Emma BowkettPicture Editor

For advertising details, contact:Andrias FriasAndrade on:+44 207 873 4356;fax: +44 020 7873 4336;

andrea.friasandrade@FT.comor your usual representative

Continued from Page 1

Watches that gain diamond sparkleFor brands owned by giantluxury goods groups such asRichemont, Swatch andLVMH, adding a jewelleryline to your watch collec-tion, or vice-versa, is madeconsiderably easier by call-ing on the expertise,resources and suppliers ofsister brands. Swatch-ownedOmega, which concentratedexclusively on watches forthe first 157 years of itsexistence, introduced a jew-ellery line three years ago,Breguet has recently

increased its jewellery offer-ing and Swatch Bijoux offersaffordable costume pieces.

Likewise, Dior has had itspath to horological successeased by being part ofLVMH. During the 1970s and80s, the celebrated fashionhouse enjoyed moderate suc-cess with a range of licensedwatches such as the Malice,Riva and Bagheera but it didnot take horology too seri-ously until the arrival of Vic-toire de Castellane in 1998.

Although her main briefwas to create designs for thebrand’s then-new fine jewel-

lery department, in 2003 shecame up with a winningwatch with the La D de Dior,a classical man’s watchdesigned for women togetherwith a range of matchingrings. The following yearfashion designer Hedi Sli-mane created the ChiffreRouge for men and in 2005John Galliano launched theChristal collection.

Although she refuses torelease volume figures, Lau-rence Nicolas, president ofDior Watches and managerof the brand’s fine jewellerydivision, says that all three

watch lines have provedhugely successful with theChiffre Rouge being particu-larly popular in Asia.

“The Chiffre Rouge dem-onstrated how helpful it is tobe able to call on otherbrands within the LVMHgroup,” says Ms Nicolas.

“We were able to go toZenith which provided uswith its prestigious ElPrimero movement for useon the flagship ChiffreRouge, and that made peoplerealise that this was a reallyserious watch that wasworth owning.”

Grenouille watchbracelet set

Curiosité

FINANCIAL TIMES SATURDAY SEPTEMBER 13 2008 ★ 3

Dusty workshop to salon

In a secret location down asidestreet in Paris’s LeMarais district this summer,seven jewellers handledthousands of diamonds as theyworked against the clock to cre-ate a showcase necklace forChanel.

With only a few weeks leftbefore the August deadline forthe holidays, the craftspeopleworked in concentrated silence,around a rectangular woodentable with leather saddlebagsunder their workstations to catchfalling jewels and precious metal.

The dusty room, up a creaky,sloping staircase, bears morethan a passing resemblance to anold-fashioned dentist’s studio,complete with pliers and drills.

Dearly in need of a lick ofpaint, the modest workshop wasin stark contrast to the dazzlingnecklace which was to emerge.

The white gold “haute-couture”necklace, weighing 70 carats andmade up of 2,164 diamonds,including an 8-carat centralstone, is one of the fashionhouse’s most prized pieces at this

month’s Biennale des Anti-quaires in the glass-domed splen-dour of Paris’ Grand Palais.

Chanel’s exhibition of 100pieces pays tribute to CocoChanel’s first collection of plati-num and diamond pieces in 1932,about which she famously said:“If I choose diamonds, it ’sbecause they represent the high-est value in the smallestvolume.”

Inside Chanel’s flagship bou-tique in Paris’ exclusive PlaceVendôme, modelled on the inte-rior of Coco Chanel’s art decoapartment, Benjamin Comar,director of fine jewellery,explains: “We have not copied orreplicated the 1932 collection butwe have taken our inspirationfrom it to produce modern andeasy-to-wear pieces, which areunique and exclusive.”

The haute-couture necklacewas conceived in March 2007 andtakes as its cue the importancethat Mademoiselle Chanel, as sheis known by employees, attachedto the neckline and her fondnessfor embroidery.

“The idea was to have a beauti-ful, very feminine design, sym-bolic of the sophisticatedwoman,” said Georges Amer,technical director of Chanel FineJewellery.

Chanel’s studio of designerscame back with sketches for an8-carat diamond set in the centreof a collar of white gold andbaguette diamonds, throughwhich runs a thread of diamonds

creating the impression ofembroidery.

The fashion house prides itselfon design-led jewellery – insteadof finding gems and then creat-ing a design around them, MrComar says that one of Chanel’scontributions to the jewelleryindustry has been to design firstand find the stones later.

After coming up with a design,the next stage was to make aprototype from non-precious met-als and gems, so that the designcould be tweaked.

Then work began on the realthing. White gold was used inpreference to platinum, as it is amuch lighter metal and morecomfortable to wear. Mr Amersays he does not know the originof the diamonds but that they

conform to the Kimberley regula-tions of conflict-free diamonds.

Each stone was selected andthe necklace’s unusual shapemeant that all 2,164 diamondshad to be specially cut to fit it.

The white-gold collar was cutafter every three diamonds andthen re-joined using an invisiblelink to make it supple and ensureit sits correctly on the wearer’sneck.

“The most challenging aspectof the process was to create aperfect aesthetic with the loopsand therefore a harmoniousrhythm in the whole necklace,”said Mr Amer.

“The subtle movement of theloops gives fluidity to this spec-tacular piece.”

Back at the workshop, theunpolished collar was mountedon a wooden bust and thebaguette diamonds set individu-ally.

The loops were crafted sepa-rately and the diamonds set,before the whole necklace cametogether as a stunning piece ofjewellery.

It has taken the seven crafts-people 10 months to complete –the equivalent of 500 hours ofwork.

At around €1.7m, the necklacewill be the most expensive ofChanel’s exhibited pieces. In linewith Coco Chanel’s stricture thatthe back of a garment is asimportant as the front, the backis exquisitely finished.

But Mr Amer insists that forChanel, the luxurious Biennale isnot about competing to show thebiggest stones or the flashiestpiece of jewellery, but to demon-strate the jeweller’s capacity forinnovation, skill and flair.

He is equally proud of theCamélia Poudré necklace,another showcase item, whichplays to the Biennale’s “gardens”theme by incorporating CocoChanel’s love of the camelliaflower. The camellia features reg-ularly in the fashion house’s jew-ellery, so the challenge was toproduce a fresh design, resultingin an asymmetric three-stringfountain of diamonds – 700 ofthem – cascading from twodiamond-encrusted camellias.

“Our most sophisticated andknowledgeable clients will bethere and we want to meet theirexpectations. We want to showthem that Chanel, with its yearsof fine jewellery skills anddesigns, can bring somethingnew to them and can create con-temporary pieces that are com-fortable, exclusive, unique andgorgeous,” he said.

CHANEL

ScheherazadeDaneshkhu visitsa dusty workshopin Paris to witnessthe creation of a pieceof fine jewellery

French actress, Anna Mouglalis, wears the new jewels ahead of the Biennale des Antiquaires MAXPPP

Watches & Jewellery | Haute Joaillerie

‘If I choose diamonds,it’s because theyrepresent the highestvalue in the smallestvolume’

Coco Chanel

Reputation providesvaluable opportunity

Ask most people where aneophyte should go to buy apiece of fabulous – and fabu-lously priced – high jewel-lery, and 90 per cent of thetime the answer will beBond Street. In New York,however, you may get a dif-ferent – and surprising –answer: the MetropolitanMuseum of Art.

The museum is virtuallyunique in selling costly, one-of-a-kind precious jewelsthrough its stores. Indeed,the Met’s only competitionseems to be the Asia Societyand Museum down the roadon Park Avenue. It special-ises in a dazzling array ofAsian and Asian-Americandesigner jewellery, mostlymade in India and Thailand.Prices can go as high as$16,500 for a necklace fromthe Lotus de Vivre Om ManePadme Hum collection.

However, it is the Met thathits the high point in its twodedicated boutiques wherevitrines sparkle with 18- and22-carat gold necklaces,rings, bracelets and pen-dants, even belts, set withrubies, diamonds, emeralds,sapphires, pearls and semi-precious stones.

Prices go as high as$35,000, and the most expen-sive single piece ever soldwas a Moghul necklace forapproximately $100,000.

Much of the Met’s jewel-lery is from the Indian Kasli-wal family’s Gem Palace jew-ellers, but it also works withGreek and Turkish sources,and everything is handmadein authentic period tech-niques, as at the Asia Soci-ety.

Both work on a consign-ment basis. In contrast, themost expensive items of jew-ellery at the Victoria &Albert museum in London isno more than £2,000. “Wehaven’t explored that veryhigh-end market because ourJewellery Galleries havebeen closed,” admits SarahSevier, head of buying andproduct development. “Butwith their re-opening, it maybe something for the future.”

Just how did a statelymuseum like the Met getinto the business of sellingprecious jewellery? Techni-cally, touting fine jewels isnot a new idea for the insti-tution; the first pieces wereoffered in 1877 when Tiffany& Company reproduced a setof Cypriot gold items for thegift shop. A long hiatus thenensued, however, only end-ing when the Met decided to

sell fine jewels in the accom-panying gift shop to the May2001 “Jewelled Arts of India”exhibition. Now, Moghuljewels display kundan set-tings where gems areenclosed in gold and backedby foil to enhance brillianceand colour. These, andGreek, Roman and Byzan-tine pieces created in con-junction with exhibitions aredeveloped by the museum.

A second, pocket-sizedboutique opened in April2007 to celebrate the openingof the Greek and Roman gal-leries. About 10-15 per cent

of the Met’s jewellery salesare from high-priced pieces.

“We are here for twothings: To educate the publicabout art, and to makemoney for the museum,”says Valerie Troyanksy, gen-eral manager for productdevelopment.

The Met is New York’snumber one tourist attrac-tion, with 60,000 visitors on aSunday alone. The smallerAsia Society gets only125,000 visitors a year, butstill sells jewels worth tens

of thousands of dollars fromestablished houses like Thai-based Lotus De Vivre, andlaunches new Asian andAsian American designers.Fine jewellery accounts for22 per cent of its shop sales.

“We carry one-of-a-kinditems, and we don’t look atprice points,” says shopmanager and buyer AnneGodshall, who was hired tore-image the Asia SocietyShop some seven years ago,and attributes their successwith fine jewellery to a cre-dential effect: “In our case,it’s having part of the his-tory of Asia.”

She continues: “I think themost expensive piece we’vesold to date was to anambassador’s wife, for about$13,000. We have a Who’sWho list of membership, andeveryone gets a 10 per centdiscount.”

At the Met, certain catego-ries of membership receive a20 per cent discount,although not on Gem Palacepieces.

Ms Troyansky believesthere is a perceived valuefrom buying from amuseum.

“The expectation is thatthe jewellery has been care-fully developed,” she says,noting that, when the Greekand Roman galleries reo-pened, a gold and emeraldGreek-inspired wreath neck-lace was sold to a dinner-jacketed invitee on the spot– for $49,000.

MUSEUM SALES

The Met is apopular place tobuy jewellery, saysVeronica McNiff

‘We are here fortwo things: toeducate the publicabout art, and tomake money forthe museum’

On show: fine jewels at the Met boutique

MORE ON FT.COMAn audio slideshow that follows thecreation of the “hautecouture”necklace from design to completionin time for the Biennale desAntiquaires in Pariswww.ft.com/chanelnecklace

4 ★ FINANCIAL TIMES SATURDAY SEPTEMBER 13 2008

Watches and Jewellery | Focus: India

Downturn bringstough times forIndian jewellers

Weddings in India arememorable for theriot of colour, frombright red saris toorange garlands. But gold is themost dazzling colour in the neck-laces and bangles draped uponthe bride and groom. Gold is sodeeply ingrained in Indian cul-ture that Hindu weddings areincomplete without it. MajorIndian festivals revolve aroundthe metal for its auspicious sym-bolism of wealth. India’s appetitefor gold is so keen that the coun-try is the world’s largestimporter, accounting for about aquarter of global sales.

But recently the unthinkablehas happened: gold has lost someits lustre in the face of recordprices and competition fromother luxury goods and lifestyleproducts such as mobile phonesand vacations. Demand for goldjewellery in India plummeted47 per cent to 118 tonnes in thesecond quarter of this year, saysthe World Gold Council, an advo-cacy group for the world’s largestgold-mining companies.

The changing landscape inIndia is forcing the industrygroup to become more innovativeabout keeping gold relevant toconsumers. Changes are also tak-ing place across India’s gem andjewellery industry. It is said that11 out of 12 diamonds sold in theworld are cut and polished inIndia. But the country’s gemindustry is feeling the effect of asharp slowdown of jewellerysales in the US, the world’s big-gest market for diamonds.

“The industry is going through

so much turmoil,” said AnilKumar, managing director of Vir-tus Global Partners, a financialadvisory firm specialising indeals between the US and India.“People [in the US] aren’t buyingjewellery because of the eco-nomic climate. Sales havedropped significantly.”

To boost sales of gold jewelleryin India, the World Gold Councillast year launched its mostaggressive marketing campaignto date, with a nationwide televi-sion advertising campaign featur-ing Indian celebrities clad in goldjewellery. It also sponsored a con-test to encourage designers tocome up with sleeker, more con-temporary jewellery in order toappeal to the younger generation.To modernise traditional jewel-

lery designs made of heavy, but-ter-yellow 22-carat gold, theWorld Gold Council is developing“youth brands” such as “Collec-tion g” – lightweight designsmade of 18-carat gold.

The World Gold Council is alsohelping retailers with marketingand promotion. In August, itpartnered with Joy Alukkas, aDubai and India-based retailer, ina marketing campaign aimed atIndians in the Gulf countries.

India began to focus on thebusiness of cutting and polishingrough diamonds in the 1960s,says Sanjay Kothari, chairman ofthe Gem and Jewellery ExportPromotion Council of India.

“No one had thought we wouldget diamonds started,” recalls MrKothari. “Slowly, slowly, Indiademocratised diamonds.”

FOCUS

The high price ofgold has seen adecline in demandfor the precious metal,writes Amy Yee

Hindu traditions: Buying gold on Pushya Nakshatra is considered very auspicious AFP

A shining star ofIndian designViren Bhagat has redefinedIndian craftmanship. He resetshistorical Indian gemstones inthe style of the Mughal Era –an epoch symbolised by theiconic building, the Taj Mahal.

So sought after are MrBhagat’s designs that, in 2007,a diamond and pearl pendantnecklace sold for $958,400,having been estimated at$600,000 to $800,000.

Mr Bhagat favours pearlsfrom Bahrain, prized for theirrarity, and diamonds hailingfrom the 17th and 18thcenturies. “The cut of olderstones is not so bling. Olderstones hold a softer, subtlercharm, like a quiet whisper thatsignifies old wealth,” he says.

A century ago, Mr Bhagat’sgreat grandfather started as agoldsmith in Lathi, a tiny villageon the western coast of India.Today Mr Bhagat, who has noformal art education despite afather who was a professor ofart, caters to the sophisticatedtastes of the global elite.

His clients range fromBollywood stars to wealthybankers and Russian oligarchs.

“Most Indian jewellers makebespoke jewellery for clients,but I refused to do that fromday one. I’ve built myreputation from making myown jewellery,” he explains.

However despite his success,Mr Bhagat’s small Mumbaistore is his only retail outlet.

“The pieces are selling beforethey are even made. Now thatIndia is booming, I simply can’tmake enough pieces to sellelsewhere,” he says.

However he does have plansfor stores in Delhi and London.“London is the centre of theuniverse for me. There are somany wealthy people therewith good taste,” he says.

Mr Bhagat is also indiscussions with USdepartment store chainBergdorf Goodman about alimited edition handfinishedjewellery collection.

“It would ease the pressureand enable us to expand. Ienvisage this as a lowerpricedcollection of everydayjewellery,” he says.

Despite this, Mr Bhagat isconfident that his mostprecious pieces will retain theirvalue.

Claire Adler

At the heart of India’shistoric jewellery trade

The faded grandeur of abygone era can be seenthroughout the old city ofJaipur – in the hilltopAmber Fort or the intricateyet crumbling façade of thePalace of Winds.

But in this northernIndian city in a formerprincely state, grandeur andopulence are still very muchalive within the Gem Palace,jeweller to Indian royalty inthe past and to a steady flowof high-profile global clientstoday.

Prince Charles, Mick Jag-ger and Jackie Onassis haveall been patrons of the GemPalace over the years.

Gem Palace was estab-lished in 1852 and todayoccupies an unassumingstorefront on a busy road inJaipur.

On the showroom floor,glass display cases are chockfull of gold bracelets that areas thick as serpents, flower-shaped jewelled broochesand shimmering strands ofprecious stones, to name justa few items.

Sanjay Kasliwal and histwo brothers are sixth-gener-ation owners in a familybusiness that made its namedesigning and making jew-elry for India’s maharajas.

The Kasliwals’ legacy asjewellers extends back morethan eight generations whenthey were court jewellers toMughal emperors.

This legacy helped GemPalace become a repositoryfor some of India’s finest andrarest jewellery.

The maharajas began sell-

ing off their heirlooms oncethey were required to paytaxes after India gained inde-pendence in 1947.

Gem Palace began acquir-ing jewellery and preciousobjects from India’s royaltyand today owns pricelessheirlooms made by the Kasli-wals generations before,such as a life-size 250-year-old gold enameled parrotinlaid with rubies and dia-monds.

Other prize items in GemPalace’s collection include a19th century gold and dia-mond chess set and a goldplate and diamond-studdedspoon made for the mahara-jas of Jaipur dating from the18th century.

But Gem Palace is morethan just a showroom forantique jewellery.

About 350 people areemployed at the Gem Palace,designing jewellery and cut-ting, polishing and settinggems in classic Indian andcontemporary styles.

Craftsmen sift throughpiles of gems in workshopsand can spend days on a sin-gle stone. Gems are sourcedfrom all over the world –rubies from Burma andaquamarines from Brazil.

Mounds of amethysts,emeralds, topaz, sapphires

and citrines litter workshopslike colourful marbles.

Over the past five decades,India has become a globalhub for cutting and polish-ing rough diamonds. Elevenout of 12 of diamonds soldglobally are cut and polishedin India.

But Gem Palace is uniquein India’s jewellery industrybecause it is involved in allstages – from mining todesign to manufacturing and

retail.Gem Palace has boutiques

in the Indian cities of Jaipur,Mumbai, Delhi, Agra andUdaipur, as well as shops inbranches of the Oberoi, theIndian luxury hotel. It alsosells pieces in Barneysdepartment stores in NewYork and Los Angeles.

This end-to-end expertisegives Gem Palace a “bigadvantage,’ says Mr Kasli-wal. “We can adapt to anydesign.”

About 60 per cent of GemPalace’s clients are interna-tional with the remainderhailing from India.

“But buying power inIndia is changing fast,”notes Mr Kasliwal.

India’s economy is grow-ing rapidly and unprece-dented wealth is growing inthe country.

“More and more Indianshave the capacity to buyimportant items,” he adds.

Jaipur, and especially theGem Palace, is famous formeenakari – decoratingmetal with enameling in amethod introduced by theMughals in the 16th century.

In meenakari, flowers,birds, fish and other designsare engraved on to metal tocreate grooves to hold col-our. Coloured enamel dust ispainstakingly poured intoeach groove, fired, then pol-ished.

The depth of the groovesdetermine the play of lightin intricate pieces such as a22 carat gold ring with redand green enamel in aMughal floral design or agold enamel bracelet in theshape of a crocodile and setwith diamonds. In additionto traditional meenakari,Gem Palace makes jewelleryin a range of styles, fromRussian, Victorian, Byzan-tium, Greek and Roman.

Gem Palace collaboratedwith the MetropolitanMuseum in New York to cre-ate a collection of Egyptian-inspired jewellery in gold,turquoise and lapis lazuli.

Some of Gem Palace’streasures have been dis-played in exhibits aroundthe world. More than 100pieces from the Kasliwals’private collection were dis-played at the Harry Oppen-heimer Diamond Museum inIsrael in 2006.

The exhibit included 18carat gold and silver ear-rings set with diamonds andemeralds in the shape ofsunflowers. Floral motifsdone in gold wire mesh arefound on the reverse of theearrings. And if that werenot opulent enough, a fringeof emerald drops danglefrom the sunflower’s petals.

“This is style that nevergoes out of fashion,” says MrKasliwal.

GEM PALACE

Amy Yee visitsa house whoseroots go back tothe 17th century

Handson: working with semiprecious stones Getty

The Kasliwals’legacy as jewellersextends back towhen they werecourt jewellers toMughal emperors

As the world’s largest proces-sor of diamonds, India is animportant link in the globalchain that connects mining inAfrica, trade in Antwerp andIsrael, and sales in the US.

India accounted for nearly 60per cent of the world’s cut andpolished diamonds in terms ofvalue in 2005 and exported $11bnworth of diamonds that year.However, less-valuable small-and medium-sized stones accountfor most of the diamonds proc-essed in the country, accordingto a KPMG report.

India is trying to move up theranks to cut and polish larger,more lucrative diamonds – workthat is still typically done inEurope and Israel. It is alsobecome a player in jewellerymanufacturing with a 14 per centshare of the global market in2005, according to KPMG.

India also claims a fast-growing domestic market. Jewel-lery sales in the country grewabout 7 per cent year-on-year toreach about $13bn in 2006.

Yet prospects for its jewelleryindustry have been dulled by theeconomic downturn in the USand an unfavourable dollar-rupeeexchange rate.

With the US accounting forhalf of global diamond sales,“replacing that market is noteasy”, says Mr Kothari.

Some Indian companies aretrying to diversify into distribu-tion and sales to bolster razor-thin margins earned from dia-mond processing.

To try to gain a firmer footholdin the critical US market, Indianretailer Gitanjali Gems boughtUS jewellery chain Samuels for$45m in 2006.

“There is brutal competition inIndia,” said Mr Kumar of Virtus,which advised Gitanjali on theacquisition.

“Retailers make about 7 percent margin,” he says. “Manufac-turers make about 2-4 per cent

margin. They are always underpressure.”

The outlook is likely to becomecloudier. US jewellery chainWhitehall filed for bankruptcythis summer, joining more thanhalf a dozen jewellery retailersthat have fallen casualty to the

global credit crisis and the USeconomic downturn.

Once a US retailer goes bank-rupt, it can wipe out business forits Indian jewellery suppliers.“Indian companies have been hitvery badly,” says Mr Kumar.

Mr Kothari of the Gem and

Jewellery Export PromotionCouncil cautions that the USdownturn is just part of thecycle.

But maintaining his upbeatattitude, Mr Kothari adds thatthe Indian jewellery industry is“trying to find ways to survive”.

‘People [in the US]aren’t buying jewellerybecause of theeconomic climate.Sales have droppedsignificantly’

Gem Palace in Jaipur

FINANCIAL TIMES SATURDAY SEPTEMBER 13 2008 ★ 5

Watches & Jewellery | West vs East

Rules still make life difficult

India’s gem-cutting heritage,its love of jewellery and rap-idly-growing wealth shouldmake it an ideal market forwestern jewellery companies.Last year, India led world growthin the number of rich individu-als, with a 23 per cent increase to123,000, driven partly by a rapidrise in its stock markets, accord-ing to a recent wealth report byMerrill Lynch and Capgemini.

Its middle class is also growingfast and is expected to fuel con-sumer spending. McKinseyGlobal Institute, the consultant,forecasts that India will becomethe world’s fifth-largest con-sumer market by 2025, leapingfrom 12th place now.

While companies are watchingIndia with interest, so far therehas been no stampede as inChina. Bulgari, the Italian jewel-ler, is present in six cities inChina but has only two stores inIndia. “India and China are notcomparable,” says Francesco Tra-pani, Bulgari’s chief executive.“China is a huge market, expand-ing rapidly. India is small andnot growing at the same pace.”

Cartier, part of the Swiss-basedRichemont group, is promotingits Inde Mystérieuse collection –drawing on its history of creatingjewels for Maharajas and theIndian elite. It has jewellery out-lets in 13 Chinese cities but farfewer in India.

Chanel, the Paris-based group,does not have shops in India andis content to target Indian cus-tomers when they travel.

“India is a great jewellery mar-ket and a very huge market,mostly of local purchase,” saysBenjamin Comar, internationalfine jewellery director at Chanel.“The key issue is the duties,which are very high – you mayhave to double your prices. Wewill go one day but we have noplans for the time being.”

Mr Trapani says: “We have tobe more expensive there to takeinto account the cost of duties.But we don’t incorporate fullythe duties because otherwise theproduct would cost so much

more [than in other countries].”Restrictions on foreign owner-

ship, bureaucracy and a lack ofgood infrastructure are also citedas obstacles.

However, change is in the air,as some of the restrictions arebeginning to be lifted. Dutieshave come down and areexpected to fall further. Restric-tions on foreign ownership arealso easing.

A big problem for Westernretailers, especially in the jewel-lery industry with its need forsecurity and image promotion, isthat India lacks the type of shop-ping districts – particularly lux-ury malls – in which upmarket

brands would feel comfortable.Bulgari says the lack of a suita-

ble retail environment led it toopen its two stores in five-starhotels: the Oberoi in New Delhiand the Taj Mahal Palace inMumbai. However, this is chang-ing too with the development of anumber of upmarket malls.

“Malls in India are playing animportant role. They are givingIndians a taste of how much funshopping can be. They are alsoexposing Indians to brandedretailing, and getting them usedto paying higher prices,” accord-ing to Cherie Saldanha, manag-ing director of India’s DiamondTrading Company, writing in The

Art of Jewellery, the Bangalore-based magazine.

One challenge that is likely toremain, however, is competitionfrom the domestic market. Indiahas a large number of luxuryjewellers, such as Ganjam, theBangalore-based group estab-lished in 1889 as jeweller to theMaharaja of Mysore, and Tan-ishq, India’s biggest multiple jew-ellery retailer. Quality is excel-lent and prices are much lowerthan western companies.

But Ms Saldanha notes a grow-ing demand for Western brands:“The Indian consumer is chang-ing . . . With luxury brands mak-ing a regular appearance in the

Indian market and being lappedup with passion, clearly luxuryas an attitude is here to stay.”

Philip Olden, the World GoldCouncil’s chief marketing officer,says the changing retail and reg-ulatory environment means thereare significant opportunities.

He says: “There is an emergingdemand for international qualityin jewellery as well as luxurygoods. Although the highly-afflu-ent Indians travel, they will wantthese brands on their doorstep.The market is becoming easier toenter and jewellery companiesneed to get in there soon becauseother luxury goods companiesare already doing so.”

WESTERN JEWELLERS

ScheherazadeDaneshkhu looks athow European brandsare faring in India

Azzy Fahmy’s designs for Julien Macdonald

Faking it no longer theugly sister of the real thing

When Christopher Baileyput huge, cut-glass necklacesover trench coats in hisautumn/winter runway showfor Burberry Prorsum, heconfirmed what fashioninsiders had long suspected:the oversized “It” bag nolonger tops the trend stakes.

Instead, another attention-grabbing accessory was hit-ting the headlines. Independ-ent labels as well as ready-to-wear brands includingMarni, Louis Vuitton andYves Saint Laurent, havejoined Bailey in making cos-tume jewellery a must-havefor any wardrobe.

“Costume jewellery isoffering customers newnessat the moment and what’smore, it’s accessible at anyprice point from independentdesigner labels to big-branddesigners,” says Holli Rog-ers, Head of Buying and Mer-chandising at Net-A-Por-ter.com, which carries jewel-lery by independent labelssuch as Erikson Beamon,Philippe Audibert and TomBinns, as well as Missoni,and Lanvin.

Designer-label costumejewellery with its affordable-price tags is an attractivealternative to the real thing– especially during the cred-it-crunch.

What is more, faux jewel-lery is now regarded andappreciated in its own rightand not simply as a fake ver-sion of the real thing, mak-ing it perfectly acceptable towear just about anywherefrom school run to red car-pet.

For example, AlexanderMcQueen’s Maharajah chan-delier earrings look as ifthey are worth a million dol-lars but come at an afforda-ble £510; Lanvin’s fabricwith jet black stone braceletretails for £395 at Browns onBond Street, and is beingsnapped up by a new genera-tion of buyers.

Thanks to such affordableprice points, buyers can con-

sider buying brands theywould not have been able toafford before.

At Harvey Nichols, cos-tume jewellery now accountsfor 50 per cent of accessoriessales, including bags. Whileat Liberty, year-on-year jew-ellery sales are up 15 percent.

“One of the great thingsabout costume is that youcan buy into a trend withoutcommitting to a full-onlook,” says Liberty’s head offashion buying, Olivia Rich-ardson.

“So, for those who want tobe up on this season’s punk-inspired trends, but don’thave the nerve to go thewhole hog, you can just adda fluorescent-pink necklaceor bracelet and there youhave it.”

Ms Richardson saysdesigners are trying to cre-ate unique costume pieces asdemand grows for limitededition collections.

“Jewellery designers, espe-cially the more independentones, are creating pieceswith real integrity,” shesays. “Take New York’sStephen Dweck for example:he featured a dead beetlefound in his garden and nowuses it as his signatureemblem on really exquisiteone-of-a-kind pieces such asthe turquoise floralembossed knuckledusterrings, which we sell for£495.”

Unique designs by Bang-kok-based jewellery designerMatina Amanita are anothergood example.

Her “Globe Trotter” collec-tion features gold-platedcocktail rings, which mimicthe top of the Chrysler build-ing and other famous archi-tectural landmarks she hasvisited. Made with imitationamethysts and peridot cubiczirconia each one is a workof art in itself.

Cameron Silver, owner ofLA-based vintage boutique,Decades, which specialisesin 20th century fashion andopened a London division inDover Street Market thisyear, takes the view thatmodern costume jewellery issoaring in popularitybecause of attention to detailand craftsmanship.

“Historically, costume jew-ellery has always been made

like fine jewellery. You justhave to look back to theearly days of Chanel or Diorto see that most of their cos-tume designers trained atCartier, or Lalique or Bouch-eron. As a result, costumejewellery was technicallyrefined and I think thatthat’s what designers arestarting to explore againtoday.”

Jewellery-making duoVicki Beamon and KarenErikson – Erikson Beamon –celebrate their 25th anniver-sary next year. Their trade-

mark beaded necklacesalong with chandelier ear-rings, bracelets and broochesare meticulously hand-crafted on site in their Lon-don boutique, using every-

thing from large ethnicbeads to tiny preciousstones.

“Our biggest collaborationis with fashion and interna-tional ready-to-wear design-ers,” says Ms Beamon, whohas created pieces for labelsincluding Mathew William-son, Richard Nichols andand from this season, Jaeger.

“Since we are so seasonaland work at setting trends,we consider ourselves moreas fashion designers thanjewellery designers,” saysMs Beamon.

“Karen can’t stand theterm ‘costume jewellery’ andshe is right, it just sounds sotheatrical.

“We really care about thelook and quality of our workand incorporate Swarovskycrystals and other preciousstones into various pieces.Just because it is ‘costume’it should look as beautiful asfine jewellery – somethingyou would want to handdown to your grandchil-dren.”

All of which comes asgood news to both collectorand costume jewellery dealeralike.

Gillian Horsup, a Deco spe-cialist who has been sellingcostume jewellery at variousantique fairs and marketsfor over 30 years, says she isalready seeing increasedtraffic at her sales unit inGrays Antique Market incentral London.

“Thanks to ready-to-wear’scurrent love affair with cos-tume jewellery, jewellery asa whole is seeing a surge ofinterest,” she says. “Brandedcostume jewellery is fastbecoming a modern collecta-ble.

“Chanel – old and new –for example, is in as big ademand as anything by Diorand Yves Saint Laurent.Basically, brands with a richtradition of making costumejewellery are reviving theircollections today. After all,when costume is done well,it will always be worthinvesting in.”

COSTUME JEWELLERY

Lucie Muir looksat the popularity ofan attractivealternative toprecious stones

Burberry gem cluster

‘Karen can’t standthe term ‘costumejewellery’ and sheis right, it justsounds sotheatrical.’

Looking East forworld fashion

There was an air of Middle East-ern chic at Julien Macdonald’sAutumn/Winter 2008 catwalkshow at London Fashion Week.

A bulging gold and hammeredsilver ring in the shape of anArab window contrasted with thesubtle cool grey of a sumptuoussilver-fox coat. Primitive Egyp-tian-style cuffs with an art decofeel, adorned with blazing gar-nets, winked beneath the sleeveof a pumpkin-orange military-style coat. On the next model, acascading necklace of silver ringsstamped with Nubian motifsshimmered down the catwalk fol-lowed by champagne diamonds,clusters of gold filigree-detailedbrooches punctuated by Victo-rian floral motifs and pendants ofmystical ancient symbols.

The creator of these jewels isAzza Fahmy who, 35 years ago,founded what is now Egypt’smost prominent luxury jeweller.The high-profile Macdonald fash-ion show was part of a carefullycalibrated plan to expand beyondits Middle Eastern base.

“We always had the vision tomake the brand international,”remarks Mrs Fahmy’s daughter,Fatma Ghaly.

The company is owned by Azzaand her two daughters, Fatmaand Amina, who have set theirsights on taking the brand to theUS. Amina is being primed totake over as chief designer whileMs Ghaly has been active inre-structuring the company.

“The brand had already come along way when I joined nineyears ago, but I saw the potentialfor creating a proper structurefor the business and giving thebrand a clear positioning,” saysMs Ghaly.

One of her boldest moves wasto bring the brand to the UK, andhence the logic behind the collab-oration with Julien Macdonald.“We are both interested in each

other’s markets and fortunatelywe clicked,” explains Ms Ghaly.

Business strategy and the cat-walk of London are a far cryfrom Cairo’s spice-scented Khanel-Khalili souk, where MrsFahmy started making jewellery.From her second home in Alex-andria, Mrs Fahmy, explains howher career was inspired by abook of jewellery designs ofMedieval Europe.

Mrs Fahmy stuck with her dayjob as an illustrator while learn-ing her trade. “I tied my hairback, put on my overalls andspent my days in a workshop fullof men learning the tricks ofjewellery making.”

Under the tutelage of the mas-ter goldsmiths of Khan el-Khalili,Mrs Fahmy filed, soldered andcleaned metal. “I was sitting withthem, but while they would bemaking typical gold pharaoniccartouches, I was working on mydesigns,” she says.

A British Council grantallowed her to study at City ofLondon Polytechnic where shelearnt theory and manufacturingtechniques and developed aninterest in the history of jewel-lery that infuses her work.

Mrs Fahmy broke through intothe male-dominated business,although it no doubt helped thather country, still under the influ-ence of President Nasser’snationalistic policies, barred for-eign brands from the country.

Azza Fahmy employs 180 work-ers in her Cairo factory anddesign studio and her designs aresold around the Middle East andin Selfridges in London.

However, Azza Fahmy’s brandof tempered Middle Eastern exot-icism has started to spreadbeyond the Arab world. It wasnoted in the Washington Postthat Karen Hughes, the USundersecretary of state, on her2005 Middle Eastern tour, worean Azza Fahmy pearl necklaceinscribed with the Arabic wordsfor love sincerity and friendship.

While her daughter Ms Ghaly,researches their venture into theUS, Mrs Fahmy is dreaming upthe next range of jewels, thistime inspired by the 500 differentwindows of the starkly beautiful9th-century Ahmad ibn Tulunmosque in Cairo.

Azza FahmyThe designer hopesto expand into theUS with help fromher daughters, writesMaria Doulton

ON FT.COMEric Musgrave profiles Lanvin,which is at the forefront of thecostume jewellery trendwww.ft.com/Lanvin

6 ★ FINANCIAL TIMES SATURDAY SEPTEMBER 13 2008

Quality components makeGP watches stand out

The place of Girard-Perre-gaux in the history of horol-ogy is secure. It was the firstcompany in the world tomanufacture wristwatchesin a full production series.

This fulfilled an orderreceived at a Berlin tradefair in 1879, at the behest ofKaiser Wilhelm I, for 2,000such timepieces for the useof deck officers in theGerman navy.

They were duly delivered

the following year, completewith a protective metal grilleover their dials, and extra-large winding crowns atthree o’clock.

The company’s name wasto come about through amarriage between twowatchmaking families in LaChaux-de-Fonds, in theSwiss canton of Neuchâtel,but the original businesswas founded by Jean-François Bautte (1772-1837),a gifted orphan in Geneva.

At 19 he was making hisown pocket watches, manyof them ultra-flat and beauti-fully engraved. His succes-sors sold the enterpriseto Constant Girard(1825-1903), who already hadhis own business in LaChaux-de-Fonds, anotherstill-famous centre of watch-making excellence in Swit-zerland. In 1854, Constantmarried Marie Perregaux.

To mark the 200th anni-versary of Bautte’s firstwatches in 1991, Girard-Perregaux produced a wrist-watch version of its mostfamous model, the Tourbil-lon with Three Gold Bridges.

The history of this intrigu-ing timepiece goes back to1865, when Constantdesigned the movement,which is still in production,in various versions, today.

His Tourbillon sous TroisPonts d’Or featured threeidentical rose-gold “bridges”that kept key components inplace: the barrel, the geartrain and the tourbillon (theinvention of Abraham-LouisBreguet in 1798), alignedalong the same axis. Exactlywhy Constant’s bridgesended in the shapes ofarrowheads has never beenexplained.

Some of these wonderfulwatches can be seen at thecompany’s museum, theVilla Marguerite, nearlyopposite its manufacture inLa Chaux-de-Fonds. Thismodel, in all its variation, isthe all-time favourite ofLuigi Macaluso, the control-ling shareholder today inGirard-Perregaux and itssister brand JeanRichard.

Italian-born Gino, as he isknown to all, designedwatches in his thirties, after

studying architecture, artand design. He was also aprofessional racing driver,and became European RallyChampion in 1972 beforeretiring three years later.

He took up watch distribu-tion in Italy and elsewherein Europe, handling brandssuch as Blancpain and Brei-tling. Gino was offered theGirard-Perregaux brand in1987. He took it on and laterjoined the board of itsowner, Sowind Group. In1992, he jumped at a chanceto buy the company.

Until then, the brandmade mainly quartz wrist-watches, having joined theso-called “revolution” in the1970s. In 1969 the firm haddeveloped the first mass-produced wristwatch with aquartz movement. But Ginoimmediately set out todevelop his own mechanicalmovements, with GP Manu-facture, which has been bril-liantly successful, and is onereason why his companymade an attractive invest-ment for PPR.

His car-racing careermeant that he knew Ferrariwell, and one year after heacquired his marque, in 1993,he signed a co-brandingagreement with theMaranello marque to launchthe Collection GP Pour

Ferrari, with the loved andenvied prancing horse logoemblazoned on each modeldial. Quite a coup, so howdid it come about?

Gino explains: “It all hap-pened by chance. I wasenjoying a friendly andinformal lunch one day withLuca Cordero di Mon-tezemolo and Piero Ferrariwhen the idea of doing some-thing together came up.”

The results are collectors’pieces. But the range hasnow ended – Panerai hastaken up the branding con-nection – although in worldsales rooms today, Girard-Perregaux timepieces havealways been sought afterand attract high prices.

One major reason for this,and PPR’s interest, is thatGirard-Perregaux buys infrom outside suppliers onlyescapements, jewels, main-springs, pinions, pins,screws and wheels.

It designs its own dials,hands, pushpieces (forchronographs), sapphirecrystals (dial “glasses”) andwinding crowns.

Such is the high specifica-tion for these movementcomponents, and the assem-bled watches, that Gino’scompany does not bother toapply for official, widelysought-after and respectedSwiss COSC accuracy testcertificates.

This sophisticated entre-preneur from Turin consid-ers their qualifying stand-ards too low.

HISTORY

Links with KaiserWilhelm I andFerrari mark outGirardPerregauxas a brand, saysMichael Balfour

GirardPerregaux: Tourbillion with three gold bridges

The Collection GPPour Ferrari hadthe envied prancinghorse logoemblazoned oneach model dial

Landmarkyear aftertheft andPPR deal

Two events have in thepast year distinguishedGirard-Perregaux asmuch as any in the morethan two centuries of its exist-ence since 1791.

In July 2007, robbers posing asdelivery men burst into the com-pany’s exquisite museum in LaChaux-de-Fonds, violently attack-ing staff and making off with theentire, priceless, collection. Then,earlier this year, the company –one of the smallest of Switzer-land’s top watchmakers, – sold aminority stake to PPR, the giantFrench retailing and luxurygroup best known for Gucci.

Neither occurrence appears tohave swayed Luigi (Gino)Macaluso, Girard-Perregaux’slongstanding owner, off course. Achampion rally driver in his 20s –“in that sort of business, youneed to quit when you’re on top”– his subsequent career has beendevoted to watches. He learnedthe trade at the Italian distribu-tor for Omega and AudemarsPiguet, rising to chief executiveby the age of 31. Then he decidedto go it alone, initially as Italiandistributor for Blancpain, thenBreitling and Hamilton.

In 1987 came the link to Girard-Perregaux, with the chance tobuy 20 per cent, along with Ital-ian distribution. Five years latercame ownership and a move toSwitzerland. Mr Macaluso’s twoeldest sons now also work for thecompany, and all commute regu-larly between headquarters andthe family’s roots in Turin.

“Rally driving is somethingyou do when you’re young”, saysMr Macaluso, a quiet, thoughtful,man. But his passion for cars hasremained. For years, Girard-Per-regaux clocks came as standard

in Ferraris. Today, the companysponsors the Monte Carlo rallyfor historical cars.

The sale three months ago of23 per cent of Sowind Group, thefamily’s holding company, toPPR caused a surprise. MrMacaluso, who through Sowindalso owns Jean Richard, a sisterbrand to Girard-Perregaux, hadalways stressed independence.

Was this the end of his dream?Coming just weeks after the saleof Hublot to LVMH, the deal trig-gered speculation about a consol-idation wave in the industry, asindependently-owned watchbrands sought to sell at the topof the market.

Mr Macaluso bats aside anyhint of opportunism. He says Gir-ard-Perregaux had reached a

stage where specialist outsideknow-how was required, andFrançois-Henri Pinault, thewatch-loving head of PPR, wasthe ideal partner.

“All along at Girard-Perregaux,I’ve stressed the long term. Overthe years, we’ve cautiously builtup production, while stayingfocused on quality. Few othercompanies of our size can claimto be true manufacturers, withalmost complete vertical integra-tion. We now have more than 100movements and are strong inmechanical and quartz time-pieces. It’s all done in house, andthere’s much more to come.”

Output should reach about15,500 pieces this year, excluding“a few thousand” at Jean Rich-ard. While that may be modestcompared with some luxurywatchmakers, forecast group

sales of SFr150m (including JeanRichard) reflect the premium Gir-ard-Perregaux commands. Entry-level models start at aboutSFr8,000 retail, with prices spiral-ling to SFr650,000 for the mostcomplicated models.

Mr Macaluso is more cautiouswith market speculation that thedeal with PPR was to financeexpansion. “We could have gotcash from various sources,including financial investors”, hesays. Some bigger watchmakerswere also interested, but theywanted full control. “I was notready.”

Going public was an option –and one Mr Macaluso favouredgiven his strong interest in mar-

kets. But, ultimately, it becameclear that outside shareholdersworked to a different rhythmthan a top watchmaker. He hintsat fundamental valuation issues,along with a conflict betweeninvestors’ short term focus onquarterly results and a watch-makers long-term perspective.

“A flotation would have beenvery interesting for me. But atthe top end of the watch busi-ness, you have to think eight to10 years ahead.” Meanwhile, MrMacaluso had developed a goodrelationship with Mr Pinault,chief executive of PPR. “Thechemistry was right. Don’t for-get, deals are often done betweentwo individuals.”

The French wanted to expandinto watchmaking: althoughGucci sells watches, it is posi-tioned well below Girard-Perre-gaux. PPR wanted to be moreactive at the top end, and MrPinault was ready to respect theMacalusos’ wish to retain con-trol.

“The agreement is very precisein terms of maintaining our inde-pendence”, says Mr Macaluso.

“Girard-Perregaux has been apioneer technologically and arespected manufacturer. Butthere are areas, like retailing,marketing and logistics, wherewe can learn. Just imagine whata company like PPR, whoseGucci subsidiary includes Yves

Saint Laurent and BottegaVeneta, can offer.”

He declines to specify wherethe relationship might go. But hehints that PPR’s involvementcould create opportunities forexpansion that would have beentoo ambitious for Girard-Perre-gaux alone.

“Our first priority remainsimproving quality. Then comesdeepening vertical integration.Only after that comes the possi-bility of other ventures – notnecessarily under the Girard-Perregaux name.”

Meanwhile, Mr Macalusoremains confident about the mar-ket, in spite of fears of a slow-down later this year, as economicuncertainties nibble at demandfor luxury goods. “Obviously, noone can pretend they are on anisland. But I remain very positivefor Girard-Perregaux. We’re in asuper-specialised niche.”

Sales in Europe have flaggedsomewhat this year, south-eastAsia has been a little weak, theUS has maintained last year’slevels and Japan has been upslightly, he reveals. But Hong-kong and mainland China havebeen “excellent: more than excel-lent”, eastern Europe “excellent”and the Middle East “very good,almost excellent”, he adds.

Not wishing to break the buoy-ant mood, I nevertheless feelobliged to return to that otherjarring occurrence: what of therobbery?

“It was a nightmare”, headmits. Fortunately, the night-mare only lasted 72 hours.Within minutes of the raid, Swissand French police erected road-blocks around the area. Thethree thieves ended up having tostash their haul by an oak tree.Within three days, a massivepolice operation, using snifferdogs, had tracked down thewatches and returned them totheir owner. Some, going backmore than a century, were dam-aged, but most have now beenrestored

The Girard-Perregaux museumremains closed, but should reo-pen by December in a new guise.Security will be improved. Butthe raid has also offered theopportunity to rethink theformer, static display. Therevised collection promises to bemore stimulating, with moreinter-relationship between items,brand and local watchmakinghistory, Mr Macaluso reveals.

Meanwhile the three perpetra-tors, east Europeans with poten-tially military backgrounds, facetrial in Switzerland. So far, nonehas cracked, convincing MrMacaluso that they were profes-sionals working to order. Theevents were unpleasant, butsomeone, somewhere, it seems,wants Girard-Perregaux watchesvery much indeed.

INTERVIEW

Haig Simonian talksto Luigi Macaluso,chief executive ofGirardPerregaux

‘Few other companiesof our size can claimto be truemanufacturers, withalmost completevertical integration’

Luigi Macaluso: Former rally champion favours steady growth in business

WATCHESWorldfinanceon thewristThe new ww.tc-Financial wrist-watch from Girard-Perregaux isfirst and foremost a “worldtimer”displaying the time in 24 differ-ent international cities, one ineach of the world’s time zones.

The ww.tc in the name – worldwide time control – echoes theworld wide web, but it is thefinancial part of the name thatpoints to the unique function ofthis model – it shows the dailyopening hours of four of theworld’s most important stockexchanges – London, Hong Kong,Tokyo and New York.

This function is provided bytwo mobile discs around the dial.A 24-hour inner ring is synchro-nised with the hour hand. A sec-ond ring, or bezel, is regulatedwith the winding crown atnine o’clock. This crown bearsthe names of the 24 cities, andthe periods during which theexchanges are open for trading.

When the red arrowheadpointer on the inner ring is oppo-site one of these periods, thatparticular market is open.

The concept of a worldtimerwristwatch originates with a pro-posal in 1876 by the Canadianengineer Sandford Fleming thatthe globe be divided into 24zones. Each would correspond to15° of longitude and to a specifictime in relation to GreenwichMean Time. By 1929 most coun-tries had embraced his system,although with variations insome.

In 1950, the independentGeneva watchmaker LouisCottier invented an ingeniouswatch system with two crowns,with a universal time displayoffering the time in several citiessimultaneously. In 2000, Girard-Perregaux brought out a sophisti-cated chronograph version, andcalled it ww.tc. It has been fol-lowed by ever more complicatedvariations.

The ww.tc-Financial uses thecompany’s GPO33CO automaticmovement housed in an easy-to-read 43mm titanium case, whichaffords both sturdiness and light-ness, and mounted on a sportyblack rubber strap.

The titanium-cased edition ispriced in the UK at £9,100. Otherscome in stainless steel (£7,600) orpink gold (£17,700).

Michael Balfour

Constant Girard (18251903)

FINANCIAL TIMES SATURDAY SEPTEMBER 13 2008 ★ 7

Keeping tabs on an energeticchild leads Hermès to watches

Guillaume de Seynes bringsout an age-dappled 1912 pho-tograph taken on a sum-mer’s day of his then nine-year-old grandmother, Jac-queline Hermès. The younggirl is wearing the very firstHermès wristwatch. It is, infact, a pocket watch fastenedto her arm by way of pigskin strap and case.

“We came to watchmakingvia the straps,” says Mr DeSeynes, sixth-generationfamily member and vicepresident of Hermès andpresident of La Montre Her-mès. “She was very ener-getic, so her father devised away to stop her pocketwatch falling out of herpocket.”

Since this innocent start,La Montre Hermès, foundedin Bienne, Switzerland in1978 has produced 2.6m time-pieces including the top sell-ing Cape Cod (from £975).The watches reflect Hermès’historical links to harness-making and leather goods.Up until now, the focus hasbeen on the design ratherthan the technical aspects ofthe watches. The majority ofthe timepieces are fittedwith movements supplied byone of the largest movementmakers, ETA, part of theSwatch Group.

But changes are afoot asHermès stakes out for itselfa greater claim in the higherpriced, luxury mechanicalwatch market where clientsexpect in-house rather thanoff-the-shelf movements andcomplications that gobeyond telling the time.

The only surprise is howlong it has taken Hermès tomove into this arena. Theiconic Kelly bag thatrequires 18 hours of labourstarts at £3,160, whereas theKelly watch (from £850) witha quartz movement costs buta fraction. With unknownnames coming up with high-end horological complica-tions faster than you can say“jumping hours”, and luxury

conglomerates structuringtheir product offer to includehaute horlogerie along withhaute couture, Hermès hastaken its own good time inentering this arena.

“We are looking at timewith serenity,” remarks MrDe Seynes. “This companyhas a very special relation-ship with time: our productsare long-lasting and we have

been family owned for gener-ations. We aim to developanother territory of watch-making, ours is not a techni-cal quest, but another mes-sage about time.”

The care taken over eachhand-stitched, waxed linencotton seam, gold buckle andleather-encased padlock on asoft-as-a-puppy’s ear hand-

bag suggests Hermès will beat ease in the world of highhorology. “We don’t dothings differently from oth-ers, we do them how theyhave to be done,” is how MrDe Seynes explains Hermès’fastidious approach.

“Our idea is not just toupgrade our watches, but tobring more craftsmanshipinto our company and to bemore involved in the produc-tion,” he says. “Our long-term strategy is to be a realwatchmaker. This allows usto maintain the creativitythat we are known for and toraise the quality of ourwatches.”

This year sees the ClipperH1 (from £4,900) powered bythe first movement producedexclusively for Hermès and avital step in gaining horolog-ical gravitas. Also new thisyear is the whimsical CapeCod Grandes Heures (from£5,900) that makes the pass-ing of hours a more personalindulgence. A speciallydeveloped movement allowsthe gaps between 1pm and3pm – lunchtime in Paris –and 6pm and 8 pm appear to

stretch on for longer, allow-ing these intervals to befully savoured.

These two watches are thefruit of an on-going strategythat began in 2000, whenHermès acquired 25 per centof Vaucher ManufactureFleurier, a Swiss group thatmakes high-quality, techni-cally complex mechanicalmovements. Vaucher is partof the same group thatincludes Parmigiani Fleu-rier, a name known to horol-ophiles and admired for itspurist approach to watch-making as well as antiquerestoration work.

Hermès history of watch-making is unique. WhenEmile Hermès took over thedirectorship of the house in1878, Hermès was a promi-nent supplier of high-qualityhorse harnesses.

After the first world war,the automobile replacedhorse-drawn carriages andthe company’s original busi-ness disappeared. Emile Her-mès set his mind to findingnew ways to use his leatherworkers’ skills in the fast-changing world of transport.He decided to focus on theneeds of the traveller, fromluggage to scarves and time-keeping.

In 1928, the first watch tobear the name Hermès onthe dial, was sold from theFaubourg Saint-Honoré bou-tique. The “Ermeto” pro-duced in conjunction withSwiss watch house Movadowas a handbag watchencased in an elegant rigidleather pouch that slid opento reveal a miniature travelclock.

In 1945, Umberto II of Italyordered a belt-buckle watchfor skiing on a box calf beltand by this time Hermès wasoffering a range of wristwatches developed withmajor Swiss houses such asJaeger-LeCoultre, UniversalGenève, Mido, Cyma, Aude-mars Piguet, Ulysse Nardinand Movado.

The original idea forEmile’s daughter’s watchwas refined to create the“montage polonais” thatallowed motorists to weartheir pocket watch on theirwrist. Made of soft pig skinwith bridle stitching, it isbeautiful yet simple, a stylethat was to permeate thelook of the house.

HERMES

Maria Doultontalks to the Frenchfashion houseabout making moreupmarket watches

Jacqueline Hermès in 1912 Famille Hermès

‘Our longtermstrategy is to bea real watchmakerto maintain thecreativity we areknown for’

Infectious enthusiasm can really help sales

William Asprey is the chairmanof William & Son, a Mayfair-based luxury goods emporium hefounded in 1999.

He is the seventh generation ofhis family to work in the luxurybusiness.

When did you start collectingwatches?Growing up, I was always theone of three sons most interestedin the family business, and Ispent lots of time in the shop[Asprey & Garrard] and in theworkrooms learning aboutwatches and studying the watch-makers and fiddling around withwatches: taking them apart andputting them together.

The first watch I ever boughtfor myself was a steel and goldAsprey watch that I must havegot about 20 years ago, when Ifirst started at the firm.

Did being part of the Aspreyfamily influence your watch collecting in any way?My father was a great watch col-lector and, in a way, I wasbrought up with that; he gave memy first real watch, a Rolex Sub-mariner, when I was at school.It’s a great all-around watch, andI still have it.

Then, when I was older andhad started my own collection, Ibought myself a Ulysse NardinGMT perpetual calendar 1stseries, which is an extremelyclever watch as well as a verypretty one, and I bought one formy father too.

Do you give other peoplewatches as gifts?Only my wife; I’ve given hernumerous watches, including anAudemars Piguet, and a stainlesssteel Patek Philippe 24.

She’s interested in watchesbecause of me, but it’s less aboutthe mechanism than how theylook.

My son is only eight, so hehasn’t got into watches yet.

How many watches do you havenow?Probably about 50. There’s norhyme or reason to when or whyI buy them; I just buy what I like.It’s very subjective, which is thegreat thing about being a collec-tor. I don’t think you should col-lect with financial gain in mind –if, after a while, you can upgradeby selling a piece and then buy-

ing another, well, that’s a bonus,but it’s not something I do. Forme, it’s about personal enjoy-ment, the same reason I collectwine and silver.

When it comes to watches, I’minterested in the materials used,and how they are made. Plus, Ithink a watch is one of the onlypieces of jewellery a man canwear, and if you have a few of

them, then you have the optionof changing.

Do you change your watch a lot?I usually switch my watch once aweek, although if I’m going onvacation I might only take one ortwo with me. And I have somewatches that are dress watches,which you wouldn’t wear duringthe day. But generally, other

than those, I change my watchdepending on how I feel.

There’s no guiding theme tomy collection other than my ownpersonal taste, so I have somevery big watches, like a GrahamChronofighter in 18-carat gold,which has a huge chronographmechanism that goes up yourwrist and is a very different,statement piece, and some much

smaller ones, like an F.P. Journeand a steel Patek Philippe Aqua-naught, and some that aresporty, like an Audemars Piguetpressed carbon Alinghi theymade when they sponsored theAmericas Cup, and so on.

Do you organise them?Once I buy a watch I take it outof the manufacturer’s box, which

is often very large, and put it ona watch roll, and then put it inthe safe, but that’s it.

I think if you’re too organisedabout it, then you don’t giveyourself an occasion to gothrough them all, and then therewill be old friends you never see.

Where do you buy yourwatches?Generally, I buy them fromfriends, or at the fairs; I have meta lot of watchmakers throughwork. Occasionally, I’ll buy someat auction; we get all the cata-logues, as well as watch maga-zines like QP and 24 Heures.And I like a website calledthepurist.com a lot; it’s a verygood place to learn about all thenew developments and smallmanufacturers coming up.

I also try to go to workshops asmuch as I can, and speak to themanufacturers. It’s both interest-ing, and you get a real sense of

their passion and their history –you learn, for example, that F.P.Journe has some watches thatare actually long-case clockswhose mechanism he hasreduced to watch size, and thatBreuget-made watches andcarriage clocks for Napoleon andMarie Antoinette and the Duke ofWellington.

What’s the last watch youbought?I’m actually still waiting for it: aDe Bethune DBS, a very moderndesign. They only make 200watches a year, and I met themat the Geneva Fair; we’re goingto be their London stockists.

Do you let your personal taste inwatches influence what you sellin the store?Well, it’s easier to sell somethingwhen you like it. Enthusiasm canget infectious.

WILLIAM ASPREY

Vanessa Friedmantalks to the chairmanof William & Sonabout his passion forthe watches he hasbought over the years

‘If you’re tooorganised about [yourwatch collection], youdon’t give yourself anoccasion to gothrough them all, andthen there will be oldfriends you never see’

William Asprey: “There’s no rhyme or reason to when or why I buy them; I just buy what I like. It’s very subjective, which is the great thing about being a collector” Daniel Lynch

Watches & Jewellery | The Collector

8 ★ FINANCIAL TIMES SATURDAY SEPTEMBER 13 2008

Watches & Jewellery | Watchmakers

Timeless accuracyand artisan style

If the Montblanc story is not onthe syllabus of every businessschool intending to turn out lux-ury-industry ready graduatesthen it should be. What used tobe one pen-making companyamong many has grown into aglobally known luxury brand –its pens are no longer pens, butprestige writing instruments, andthey are just one product sectorin an offer that includes smallleather goods, luggage, jewellery,eyewear, fragrance and watches.

Montblanc has been sellingwatches since the 1990s, but nextmonth it will hold the gala open-ing of a very specialised manu-facturing centre; the old Minervafactory in the quiet Swiss townof Villeret. Minerva was boughtby Montblanc’s parent companyRichemont in 2006 and will add atop tier of extremely low volume,traditional, exigent Swiss hautehorlogerie to Montblanc’s rangeof timepieces.

Currently, Swiss watchmakinghas hit a production bottleneck,so any additional manufacturingcapacity is eagerly seized upon.However, it is difficult to seeMinerva as a solution to thisproblem.

The firm currently employs 37people and, even after the refur-bishment, there will only beroom for a total of 50; moreoverthe business is set up in such away that 300 is being spoken of

as the maximum annual produc-tion.

Such a figure is tiny, a fractionof a percent of Montblanc’sannual production of around100,000 watches and more or lessinvisible among the hundreds ofthousands of high-qualitymechanical watches made acrossRichemont’s brands whichinclude Cartier, A Lange &Soehne, Vacheron Constantin,Piaget and Baume & Mercier.

The current vogue for verti-cally integrated manufactures,finds a pretty extreme expression

at Minerva, where almost all thecomponents are fashioned in-house and assembled by watch-makers who build the wholewatch.

Typically, when a new move-ment is devised, a brand willinvest around SFr4m in develop-ment, tooling and then manufac-turing the movement in apprecia-ble quantities for a number ofyears to amortise the cost.

At Minerva, there is no tooling– everything is done by hand,which means that, while produc-tion is small, it is also flexible.The plan is that each year Min-erva will make a strictly limitednumber of pieces in the followingnumbers: one in platinum, eightin white gold and 58 in pink gold

(a sort of numerical acrostic thatgives you 1858, the date of Min-erva’s foundation). While thedials of these watches (at themoment there is a single push-piece chronograph and a plainthree handed, hours minutes andseconds timepiece) are signedMontblanc, the movements, visi-ble through a crystal caseback,are signed by Minerva

The man who has been guidingMontblanc on its journey intohaute horlogerie is Henry JohnBelmont. He ran Jaeger-LeCoul-tre before it was bought by Rich-emont, but his role is now fur-ther reaching, identifying oppor-tunities such as this one.

He says: “When we acquiredMinerva it was sold to us by anItalian who had in mind to createthis fine watchmaking brand butdid not have the distribution. Ithas always been very small man-ufacture in Villeret, which onlyever had around 50 employees.”

And the traditional methods ofmanufacture create a very tradi-tional product that Mr Belmontlikens to the movements of 100years ago. As well as the highstandard of finishing with intri-cate decoration of the movementand painstaking polishing of thebevelled edges, Minerva move-ments are distinguished by thelarger-than-average balancewheel: the regulating organ thatis the heart of the watch.

“There is a very big balancewheel – 59mg, compared to oth-ers which are often 5-7mg.” Abigger balance makes for a moreaccurate watch, which in turnmeans that Minerva watches areable to offer a greater degree ofaccuracy at a lower frequency.

“Minerva is heading in thedirection of chronometrie prod-ucts,” explains Mr Belmont. “Inother words, accuracy in the longterm. If you have a balancewheel moving at 28,500vph(vibrations per hour) it will bevery accurate but, after threeyears, four years, the accuracywill suffer. We are working at18,000vph: it is accurate and itwill keep its accuracy for muchlonger, like the old pocketwatches that you could leave for

years.” Obviously, the lower thefrequency at which the balancewheel oscillates, the less wearthe movement experiences.

For Mr Belmont who is now inhis late 60s, the Minerva projecthas reminded him of an earlierphase in his career, almost 30years ago.

“It was like going back to whenI took on Jaeger-LeCoultre, itwas in the same situation: noth-ing had been done for 50 yearsand we had people inside who

were true artisans.” It is this con-tact with the skilled craftsmenwho bring these watches to lifethat he enjoys, especially as he isthe fourth generation of his fam-ily involved in the watch trade.

“My great grandfather workedat IWC. During the crisis of 1910,my grandfather went to createhis own brand, Titus, inBesançon. My father also createdhis own brand, Yema, which fora time was the biggest watchbrand in France. We were pro-

ducing 2m watches a year. How-ever, I can tell you that it is moreof a pleasure to do 250 watchesthan 2m because, with thosenumbers, you no longer have anycontact with the individuals whobuy watches or the people whomake them.”

Today Mr Belmont is not justfamiliar with every one of thecraftspeople who works here, heis on first name terms with everyone of the oversized balancewheels they fit into the watches.

HISTORIC MOVEMENTS

Nick Foulkes looksat Montblanc’s revivalof the traditionalMinerva factory

Villeret factory: traditional methods of manufacture create a very traditional product

Ancient jeweller putsits mind to horology

Here’s a trivia questionwhich few people outside thejewellery industry willanswer correctly: what is thename of the world’s oldestdiamond company? The cor-rect response is Backes andStrauss, a 219-year-old firmthat recently decided tomake its mark on the watchscene by producing a rangeof bejewelled watches so daz-zling that they could bringtears to the eyes of even themost bling-loving rapper at30 paces.

The man behind the ven-ture is 53-year-old VartkessKnadjian who was born inAddis Ababa, the son of theofficial watchmaker to theImperial Court of EmperorHaile Selassie. Educated inthe UK, he went on to joinBackes and Strauss in 1976.

Just six years later he wasput in charge of the Antwerpoperation and turned thecompany from a small buy-ing office into a major traderof diamonds on the interna-tional market.

Knadjian became manag-ing director in 2001 and led amanagement buyout twoyears later. Since then, hehas transformed the com-pany into a creator of luxuri-ous products inspired by thehistory of Backes andStrauss, which was estab-lished in 1789 by immigrantGeorg Carl Backes, who setup as a diamond cutter, pol-isher and goldsmith in theGerman town of Hanau nearFrankfurt.

Exactly 25 years later,Backes sent his son, JohannFranz, to establish a branchin Hatton Garden, London,

where an office boy calledMax Strauss was dulyemployed. The precociousStrauss soon rose throughthe ranks to become man-ager and, by 1873, the com-pany was trading as Backesand Strauss and manufactur-ing a range of jewellery.

It registered its ostrichtrademark at Goldsmith’sHall five years later andbuilt up its longstandingbusiness by selling animpressive range of productsfrom three Europeanbranches while continuingto supply other jewellerswith beautifully cut, high-quality diamonds.

Among its most loyal cus-tomers has been the watchbrand Franck Muller, forwhich Backes and Strausscreated a special 73-face Cur-vex diamond to complementthe tonneau-shaped FranckMuller Curvex wristwatch.

It was the Muller connec-tion that last year ledBackes and Strauss tolaunch its first range ofdiamond-set wristwatchesnamed after famous land-marks in London, where thecompany still has offices anda showroom today. The col-lection, which has move-ments and cases producedby Franck Muller, comprisesentry-level products startingat £5,000 and rising to the40mm Royal Berkeley withfull diamond pavé at£764,000.

Despite the downturn,Backes and Strauss has thisyear increased its outletsaround the world by 10 to 35and, by year-end, expects to

have sold 1,000 watches, 350up on last year.

“We have been delightedwith the sales figures, butsince we have only been atretail since July 2007, it isdifficult to know what tocompare them with,” saysMr Knadjian. “I expectthings will slow down, butthe fact is that we havealready sold two examples ofour most expensive watchand have two more on orderfrom customers in the Farand Middle East.

“There are clearly twodivisions in horology: thepurist makers who createever-greater complicationsand the makers – such as us– of exceptional high-jewel-lery pieces. We have notgone into business to com-pete in the first category. Asfar as making the internalsand cases of a watch are con-cerned, we want that to bedone by the absolute expertswhich is why we work withFranck Muller.

“What we do is add some-thing very special by usingour decades of knowledge todress the watch in ideal cutdiamonds, which are of per-fect symmetry and form.This is not simply a matterof setting a standard watchcase – our cases are specifi-cally designed to carry ourdiamonds and it is this thatmakes our products standout.

“To understand why Ithink the market for suchextravagant watches willremain strong, we need tounderstand the originalEuropean phenomenon ofluxury, which was that thewealthy, the aristocratic andthe truly discerning haveonly ever wanted the bestproducts made by the bestcraftsmen, almost regardlessof cost. We cater for suchpeople, and we believe thereis still a great deal of creativ-ity to be realised.”

At this year’s World Pre-mier of Haute Horlogerie inGeneva – organised byFranck Muller as a sideshowto the official Salon In