Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Well, let's talk about China's luxury spending slow down. That's
Speaker 2: getting worse. Swiss watchmakers are suffering from a sharp decline
Speaker 2: in demand aid the current pullback brightening CEO Georges Kern
Speaker 2: it's remaining upbeat and is confident that the luxury industry
Speaker 2: has hit bottom. And Georges joins us now to tell
Speaker 2: us more So, Georges, it was just back in September
Speaker 2: you were here on Bloomberg TV telling us that the
Speaker 2: luxury market has hit the bottom. Well, since then, we've
Speaker 2: found things could get a little bit worse. We've had
Speaker 2: Swiss watch exports falling a bit more, LVMH and May
Speaker 2: disclosing a sharp drop and watch sales and there financial results.
Speaker 2: So are we at the bottom now or could there
Speaker 2: be more to come?
Speaker 1: Well, it depends on the countries.
Speaker 3: China remains difficult, but USA has been picking up lately.
Speaker 3: What you see today in the watch market in particular
Speaker 3: is a kind of k development, so meaning a couple
Speaker 3: of brands doing extremely well in a way the winner
Speaker 3: takes it all, and then many brands going sharply down.
Speaker 3: So yes, you have to be part of the first
Speaker 3: group and continue to gain market share, and this is
Speaker 3: the case for Brightling.
Speaker 2: Well, let's take a look at some of those divergent
Speaker 2: markets that you mentioned. The US, as you say, has
Speaker 2: been performing fairly. Well, how do you expect the US
Speaker 2: to consume it to behave after next week, once the
Speaker 2: election's out of the way. And do you think there's
Speaker 2: going to be a difference depending on who wins, whether
Speaker 2: it's a Trump victory or a Harris victory.
Speaker 1: Well, that's very difficult to say.
Speaker 3: We as managers and as corporations, we have to adapt
Speaker 3: to any situation. Of course, Donald Trump certainly has or
Speaker 3: will be given impulses to the economy, but we don't know.
Speaker 3: We don't have a crystal ball in our hands, and
Speaker 3: we have to deal with the situation as it is.
Speaker 1: There are other.
Speaker 3: Countries growing, like India, you know, Malaysia, Indonesia. You cannot
Speaker 3: fight demography, So there are many many countries out there
Speaker 3: where there's growth potential. But bottom line, the US economy
Speaker 3: is extremely resilient. We have been talking about recession in
Speaker 3: the US since years and it never happened. And I
Speaker 3: don't believe that the election will influence this status quo.
Speaker 2: In terms of not fighting demography. Let's talk a little
Speaker 2: bit about China, because of course some of the troubles
Speaker 2: and consumer confidence they are well known. How are you
Speaker 2: approaching that market at the moment.
Speaker 3: Well, we continue our investments. We started really as writing
Speaker 3: only after COVID in a very i would say professional way.
Speaker 3: But China represents for us only six or seven percent
Speaker 3: of our turnover, so thank god, we are not dependent.
Speaker 1: A couple of years.
Speaker 3: Back, I was a little annoyed about the situation today.
Speaker 3: We are part of the branch which are very lucky.
Speaker 3: As you know, many watch manufacturers are dependent, really dependent
Speaker 3: on China, generating forty to fifty percent of their cells.
Speaker 3: So imagine you have a drop of thirty percent of
Speaker 3: forty percent in China. What influences might have on the
Speaker 3: top line of the whole company. So you have to
Speaker 3: be a plane with five engines and even if one
Speaker 3: engine has a problem, at least or four other.
Speaker 1: Engines should work.
Speaker 3: And this is basically our philosophy and strategy and management approach.
Speaker 2: Yeah, some of your competitors, of course, have struggled in
Speaker 2: that regard. We've seen some employees furloughed, do you expect
Speaker 2: to see some more of that going forward.
Speaker 3: I really believe and I hope it's not wishful thinking
Speaker 3: that we have reached the bottom. On a worldwide level,
Speaker 3: we've seen across the board of the last three four
Speaker 3: months an increase of sales. Of course, consumer sentiment is
Speaker 3: influenced by political situations and you've discussed about that, but
Speaker 3: interest rates have been decreased. There are some also economic
Speaker 3: impulses given by the Chinese government, so we see.
Speaker 1: A kind of recovery.
Speaker 3: I hope it will stabilize and we will see growth
Speaker 3: again in the next coming months. On a worldwide level, Again,
Speaker 3: the country I'm the most confident about, certainly the US,
Speaker 3: but also the UK is recovering.
Speaker 1: A little bit.
Speaker 3: And again you have amazing potentials in you what we
Speaker 3: would call new countries and regions. Also India with one
Speaker 3: point six billion population, which is a third economy worldwide,
Speaker 3: and which is also growing.
Speaker 2: In terms of some of the difficulties watchmakers are facing
Speaker 2: right now. Is that something you've had to do though,
Speaker 2: furlough employees or access government support programs or are you managing.
Speaker 3: No, No, we're managing, saying God, And I'm not a
Speaker 3: big fan of subsidies. We cannot only be sunshine managers
Speaker 3: in our business. The economic environment is what it is.
Speaker 3: And as we're in Buffett used to say, when the
Speaker 3: tide goes down, you see who was swimming naked. And
Speaker 3: hopefully many companies have a good basing suit on the world.
Speaker 3: Is stuff out there, But we're fighting and I'm confident,
Speaker 3: and as I said.
Speaker 1: Earlier, we're growing again. So yeah, let's take it from there.
Speaker 2: Just finally, I want to ask you about the Universal
Speaker 2: genev brand that you bought last year. Can you give
Speaker 2: us an update on that? So might we see some
Speaker 2: new watches? How would you position them in the market,
Speaker 2: And in terms of timing, is this really the right
Speaker 2: time to be doing something like this.
Speaker 3: No, absolutely, because interestingly enough, it's the super luxury is
Speaker 3: a luxury. It is a superluxury market which is the
Speaker 3: most resilient. It's the entrance price a point which is suffering.
Speaker 3: So Universalgenere will be positioned above, far above ten thousand
Speaker 3: US dollars and this is something which will add value
Speaker 3: also to brightening bright things. Average price is eight thousand,
Speaker 3: two hundred now, but universalgene will start at thirteen fourteen
Speaker 3: thousand US dollars, so I think it's a very good
Speaker 3: compliment to what we offer today with writing. It's a
Speaker 3: totally different brand. It will be managed in a different way.
Speaker 3: The retailers are waiting for it. We just launched yesterday
Speaker 3: all our social media and I invite everybody to have
Speaker 3: a look into this fantastic brand which will be relaunched
Speaker 3: by twenty twenty six.
Speaker 2: All Right, Georges Kern, the CEO of Bridling, thank you
Speaker 2: so much for joining us.