Patek Philippe sees slightly higher sales

       Patek Philippe,one of the last major independent Swiss watchmakers, expects sales to rise in 2009 as the super-rich shrug off the worst economic crisis in decades and splash out on top-end watches.
       The group, whose watches have fetched record-breaking prices at auctions, said unit sales had fallen around 10% by the end of July, but turnover had risen overall as the value of the watches it was producing was higher.
       "The models costing between $10,000 and $20,000 have been hit hardest, while the high-end complicated models are holding up. People want to buy real,lasting value," chairman Philippe Stern told Reuters."Overall,2009 should be slightly higher than 2008."
       Switzerland's watch industry is grappling with its sharpest decline in demand in some 20 years as consumers tighten the purse-strings due to worries about job losses and a severe drop in the value of investment portfolios.
       But there are growing signs that the worst may be over for the sector and Kepler Capital Markets analyst Jon Cox expects July Swiss watch exports, due today, to be down 15-20%, recovering from the 32% drop seen in June.
       Last week, Swatch Group, the world's largest watchmaker, gave an upbeat out-look for the rest of the year as retailers start to order stocks again, boosting shares across the sector.
       "Patek Philippe is another watchmaker which is indicating things are improving.This is positive for the watch industry and it looks like things are rebounding.The United States is still very weak, but things in Asia are very encouraging,"Cox said.
       Many retailers stopped ordering new products to run down stock built up during the boom years, while some struggled to get the necessary credit to buy goods after markets tightened.
       Patek Philippe, which created its first wristwatch in 1868, said the appetite for its watches had held up well in Europe,excluding Spain, and also in Asia, excluding Japan, but demand was down some 50% in America.
       Around 45% of the classical watchmakers sales come from Europe,20%from America, while Asia could contribute up to 35% of sales this year as the appetite for its timepieces there increases.
       "Quality is very important. People know real value and want concrete quality. The retailer doesn't want to sell something that will be brought back in a week or so," vice-chairman Thierry Stern said in the interview.
       "People are ready to invest in something that is holding in terms of reliability as well as in terms of value," he said.
       Prices for the group's watches start at $10,000 and can sell for over $1 million.
       The Stern family, which bought Patek Philippe in 1932, has been running the company for three generations and Philippe Stern, who turns 71 later this year,will hand the reins over to his 39-yearold son Thierry by the end of the year.
       Patek Philippe, which competes with brands such as Richemont's Vacheron Constantin and Swatch Group's Breguet,has not cut any jobs or introduced shorttime work, but it has cut production by 4,000 pieces this year.
       The group normally produces around 40,000 timepieces each year at its workshops in Plan-les-Ouates, outside Geneva, and its most complicated watches, such as its minute repeaters,are checked by the chairman before reaching the customer.