“People spend that kind of money on a watch that, in time, becomes an heirloom piece and passed down,” he adds.
Michael Budge, general manager of Rodania Canada, agrees smartwatches will be popular among younger demographics looking to satisfy their craving for something cool, but adds that at an entry-level price point of $519 Cdn for the 42-mm model, it may be too expensive a purchase.
Given how the Swiss watch industry has tried to play down the smartwatch phenomena over the last few years, Budge says he was surprised to see so many wearables at Baselworld.
“I think companies are just trying to get every part of the market,” he adds. “Although many people may not like it, it’s our reality.”
On the home front, Budge says business is better in some parts of Canada than others. In places like Alberta, which has been hit hard by collapsing oil prices, luxury spending isn’t at the top of the list of priorities among consumers.
“It’s definitely a struggle,” Budge says. “Jewellers are not buying and if they are, it’s very little. It is certainly tough this year in provinces other than Quebec. A lot of jewellers are kind of stuck with last year’s inventory and they’re not going to buy more until they get rid of what they have.
I think it really depends on the economy of the location you’re talking about. Northern Quebec is doing really well, but there are a lot of contracts and a lot of money up there.”
Budge says Swiss brands offering mid- to lower-range price points—particularly under $1000—should feel less of an impact where the Swiss franc is concerned.
“If people have a little less money to spend, customers will look for brands they can afford,” he adds.
Chris Iliopoulos, owner of Sothil in Montreal, which distributes U-Boat and Welder, says exchange rates are impacting pricing models, leaving brands to determine how to either absorb the additional expense or lessen the impact at the retail level to remain competitive. Distribution companies like Sothil that purchase product in U.S. dollars are really feeling the impact of a weak Canadian dollar. He says one solution proposed by his suppliers is to pay for inventory in a currency that has a better exchange rate against the Canadian dollar.
“If I increase my prices by 25 per cent, people won’t buy my product because it’s too much of a jump,” he says.
The Canadian jewellery landscape may be in for a tough year, but with CJ Expos Toronto and Edmonton and Expo Prestige coming up in August, exhibitors will be putting their best foot forward with product to help woo consumers to stores.
