Jan 30, 2022
Swiss watch brand HYT counts on liquid assets for refloat
Jan 30, 2022
The luxury Swiss watch brand HYT is looking to bounce back from bankruptcy with a new $75,000 timepiece that features a coloured liquid instead of an hour hand.
The small, independent brand, which launched in 2012, quickly developed a cult following among watch enthusiasts for its futuristic-looking fluid tube circumnavigating the dial.
However, it fell victim to the Covid-19 pandemic that derailed the Swiss watch industry in 2020, shutting down in March last year and laying off its 17 employees.
But the brand has been revived and hopes to make the most of the global rebound in demand for luxury goods as big spenders plunge back into the market.
"It's the right time," said new chief executive and creative director Davide Cerrato, the former artistic director of Rolex brand Tudor.
"Wealthy people who invest in the stock market have made an enormous amount of money over the last two years" -- and have a strong urge to spend it, he told AFP.
Furthermore, Swiss watch exports hit a record high in 2021, surpassing not only their pre-pandemic level but also the previous peak set in 2014.
A new company was set up in the western Swiss town of Neuchatel in June last year and Cerrato joined in July.
He first spotted the HYT brand at the Basel watch fair in 2012 and was impressed by their use of technology originally developed for the medical sector.
"Seeing this rather incredible possibility of symbiotically integrating fluid technology and beautiful mechanical watchmaking... is something that really fascinated me from the start," he recalled.
The original brand had also caught the eye of investors, including former Nestle chairman Peter Brabeck-Letmathe.
Though its first watches cost at least 50,000 Swiss francs ($54,000, 48,000 euros), the firm raised funds to develop models at more affordable prices.
But when the pandemic hit, the company saw its sales collapse by 40 percent in 2020, when it had been expecting a 25-percent increase.
Unable to raise the five-to-10 million francs needed to stay afloat, it filed for bankruptcy, its former boss told the Swiss newspaper Le Temps.
To relaunch it, Cerrato is moving the brand further upmarket, increasing the watchmaking complexity in order to seduce wealthy collectors looking for watches that will be seen on few wrists.
"Watch customers, collectors, connoisseurs are... looking for creativity, novelties, rarities," he said.
The brand is first launching the Hastroid model at 70,000 Swiss francs before taxes -- the "entry-level" price, according to Cerrato, followed by two more expensive timepieces that are even more technically complex.
"We reposition it on the fact that it is a unique object," said Cerrato.
"That's where independent brands come in and is what makes them successful."
But will the gamble pay off?
According to Jon Cox, an analyst at the financial services company Kepler Cheuvreux, the market for top-end watches is booming.
"Provided the product is right and there is a value proposition for consumers -- namely the price of the watch does not fall dramatically in the secondary market -- high-end brands will do well," he said.
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