UAE will remain the driving force of our growth

The luxury goods industry is one of the most segmented markets in the world, where it is a never-ending battle to attract and maintain consumer attention, said the head of one of the world's top watch companies. In an interview with Emirates Business, Georges Kern, Chief Executive Officer of the International Watch Company (IWC), based in Switzerland's Schaffhausen, said one of the positive aspects of any global slowdown is that superficiality declines and true quality emerges. Kern said Dubai has the right fundamentals to keep attracting people from all backgrounds since it remains a hub for luxury brands, including watches. The UAE represents 30 per cent of IWC's trade volume in the Middle East, he said. Has consumer behaviour towards luxury brands – especially watches – changed in the UAE and the region as a result of the current global economic situation? Dubai is well prepared to withstand the current international crisis – perhaps better than most other places. Any country may have a decrease in the number of visitors or tourists for whatever reason, but if the fundamentals are right there are no worries in the long term. It is just a cloud that will pass and that is why we have no worries about our activities in the region. Our current outlet in The Dubai Mall is one of our fastest growing worldwide in terms of sales. How challenging was it to open a new store of this scale in The Dubai Mall in these times? One of the quotes I love is by Warren Buffet. It says: 'When the tide goes down, you see who swim naked'. The same logic applies to the UAE and many other economies. People and companies that did not do their homework well in the past will have a hard time and may disappear. Even in the luxury brands sector some companies have been affected. But IWC is gaining a solid market share – and we can confirm this from our retailers. We are more resilient than others. Are you here to maximise your market share in the luxury watch sector? We are not here to maximise our market share because we are a niche brand. Some luxury brands are about an assurance of a truthful product with quality. In times of a slowdown, there are opportunities where some competitors may disappear, such as those who might have promised something to end users, but did not deliver. How can a slowdown be a time of opportunities for luxury brands, especially for luxury watches? Take the automotive industry that is going through dramatic changes today. Manufacturers in developing economies are starting to use new technologies to compete with established manufacturers producing petrol vehicles. In the watch industry, luxury watches have been there for more than 200 years. It is about brand assurance for the consumer. Any economic slowdown is a process of filtration to find the right solutions. Things that have been hiding cannot be hidden anymore. People are intelligent enough to know what to believe. The bankers who got fat bonuses and used to come to boutiques and buy a watch for $40,000 (Dh146,800) are no longer there. Today, a consumer who wants to buy such a product is thinking for the long term. It is becoming more about people who want true values with assured quality and sustainability. Brands always need to position themselves technically – not to ride a wave, but to resist when it comes down. How do you evaluate the trade volume of luxury watches today, regionally and globally? Let us be honest. We cannot ignore the fact that trade volume has decreased in these troubled times worldwide. But we cannot say the current crisis has had a severe impact on the sector since it has been about product quality. The UAE will remain a driving force for the growth of our activities. However, the past two years have been crazy – the constant double-digit growth rates gave the impression that things were not really normal. Currently, we are in the process of going back to a normal – a steady pace of growth with consolidation, and maintaining a sustainable business. Let us calm down a little bit. How much does the UAE contribute to your overall business in the Middle East? The UAE represents the highest share of 30 per cent in a region that includes the GCC, Levant and Yemen. To be honest, the luxury watch sector will not grow on a global level. But if we break it down into regions, the Middle East will not decline but keep a normal, steady growth rate. The best brands will always withstand any kind of economic storm. Brands, especially in current times, do not only attract people with big pockets, but consumers who look for quality-oriented roots. The consumers' mind shift towards true values is becoming very important. PROFILE: Georges A Kern, CEO of IWC Schaffhausen Kern, 37, is the 10th leader in the long history of the International Watch Company. He was appointed CEO in 2002, after 10 years of being with the company. Kern began his career as a sales and marketing manager in the food industry. His first job in the watch industry was in 19