In 2008 while the lucrative holiday period drew near, luxury watch production had slowed, brought to heel by the global financial crisis. Since mid-2008, exports declined and unemployment rose, with notices of staff reductions being announced by large multinationals each month.

In Neuchatel where a large number of luxury brands are located, the manufacturer Ulysee Nardin had to fire 12% of its 25o man work force and produced at a slower rate.

But since September, according to the management, the ateliers are running at 100% with orders rising and the company has ended its practice of partial unemployment.

Ulysse Nardin has inaugurated a new boutique in Beijing and the Neuchatel-based luxury watch maker seems braced for renewed good times. The director of the company, Rolf Schnyder, recently stated recently that the company would end the year in the black, albeit with less profit than last year. 2008 had started off very well for the Ulysse Nardin but finished off badly. 2009 started off badly and has apparently finished well.

The Director’s prognostic is that the recession has ended and that growth has returned, with November sales 30% higher than those for November 2008.

Nonetheless, Mr. Schnyder believes that the United States will take much more time to recover, and their market is important for the luxury watch maker; that said, the importance of the US market has declined from 30% historically to currently 18%.

An unstated reason for the return to health is that the company is operating with a smaller workforce, which, for the moment, the company does not seem in a rush to rehire.

Additionally, with the rise in orders, their production capacities cannot keep up. The various subcontractors upon which the luxury brands depend – for watch casings, dials and other parts– let go substantial numbers of staff over the past year and do not have the resources to produce at the old capacity levels. They probably are also wary about too rapidly hiring back staff.

Also, despite the return of strong sales, the distribution of sales has nonetheless changed, with a marked decline in sales of super expensive pieces and a concomitant rise in sales of moderately priced pieces.

The phenomenon is identical in China and in the United States. Ulysse Nardin’s director believes that the worst is also passed in the United States and the economy is recovering, though it will be a longer road to elsewhere. Besides the US and China, Russia is also an important market for the luxury brands, as well as the middle east, though with the financial crisis in Dubai, sales have dropped by 70%. A large part of the luxury watch maker’s sales figures this year in Spain, Italy, Turkey or Florida has come from Russian tourists.

The Leisure Revolution is brewing in Switzerland. A popular initiative has been launched to raise the minimum vacation allotment in Switzerland from 4 weeks to 6 weeks. The required 125,000 signatures have been obtained and the Travail Suisse union is expected to formally register the initiative at the end of June.

Companies are already growling over it, calculating that it represents an insidious salary increase of about 4%, without taking into account the accompanying expenses of implementing the change and insuring continuity and production with a greater turnover of employee presence.

HR Managers have responded that if the measure passes, the result will be a strong brake on salary increases.

The Unions are unfazed by these arguments. They are aware that small companies — PMEs — will have difficulties adapting. But they argue that employees are squeezed more and more and have received little in return.

Except for top managerial salaries, wages have stagnated in Switzerland for more than ten years.

The manager of the Travail Suisse campaign for 6 weeks annual vacation argues that nearly half of employees are overworked and that the cost of work stress in Switzerland is nearly CHF 8 billion per year.

Will voters pass the initiative ? In 1985, voters rejected a proposal to increase the minimum annual leave by one week to five weeks/year. Commentators interpreted that conservative result as proof of the strong commitment to work in Switzerland.

But perhaps times have changed since then and the increased competition and globalization of the workplace in Switzerland, as well as different demographics, may lead to a different result this time around.

The International Salon of Luxury Watchmakers (SIHH) opens today amid uncertainty and lowered expectations. The Salon is a barometer for the important Swiss luxury industries, an indicator of the effect the global downturn will have on high rollers and big spenders.

Analysts are expecting fewer visitors this year and commentators have noted that there are fewer invitations to suppliers being offered, fewer gala evenings and private parties planned.

Thus, before the doors even open and the numbers are in, investments for celebrations and largesse made by the exhibiting brands are said to be somewhat less than in the previous years.

Recruiters and HR analysts are saying that Executive management at the luxury brands will be looking to trim costs, which will certainly translate to fewer jobs and feer job opportunities.

Global exports of the Swiss luxury watch industry decreased slightly in 2008 over 2007. In November 2008 the sector exported for a total of $1.5 billion of product, representing a decline of roughly 15% over the same period in 2007.

The global recession and the grim predictions for 2009 are said to be causing purchasing hesitation even among the wealthy.

Because the wealthy tend to like bargains even more than the rest of us, the threat of a deflationary economy may cause rich buyers to forgo purchases under the impression that prices will decline.

The luxury watch industry refers to watches that cost from several thousand to over a million dollars. Marketing analysts believe that the lower segment of the market – from $5000 – $30,000 will be hit the most (among the clientele — the professionals in the banking and financial sector who have lost their jobs and are reducing their lifestyles in consequence) , but that the more expensive segments of the markets – items over $50,000 will be much less affected.

But the industry is anxiously waiting to see the results of the event. The president of Cartier recently commented that there could be a 20% reduction in attendance this year over last year’s fair. Spokesmen from other brands have been more optimistic.

There remains the added variable of the change in date for the SIHH. This year the Salon is being held in January to decouple it from Basel World. Previously, like Basel World, the SIHH was in March. Buyers previously able to travel once and attend both events now have to make the choice to come especially for this one event. The year 2009 was probably not the best moment for the SIHH’s organizers to declare themselves a manifestly standalone event.

At the SIHH, which is a smaller and more upscale event than Basel World, visitors find new models from the Richemont Group’s brands – including Jaeger-LeCoultre, Cartier, Vacheron Constantin, Parmagiani, Panerai, and Roger Dubuis.