Luxury watchmakers are going back to basics with classic designs, as industry players at the world's biggest watch fair in Switzerland warned Wednesday that the "years of extravagance" were over.
While the industry is reporting a glimmer of recovery, watchmakers gathering in the Swiss city of Basel also noted that recovery was fragile and that the mood among consumers was far from the heady pre-crisis years.
"After several months of economic upturn, there are some positive signs," said Jacques Duchene, head of the organising committee for the Baselworld fair which officially kicks off on Thursday.
Companies such as Hublot and the giant Swatch have declared that the sales have been "exceptional" so far this year.
Hublot chief Jean-Claude Biver said that January was "the best in history, just like February would be and probably March."
However, Duchene also warned: "We should not be overly confident, because the global economic situation is still highly precarious."
Key export producers Switzerland, France, Germany and Italy all reported a slump last year.
Swiss watch exports, often taken as a barometer for the global sector, plunged by over a fifth - 22.3 percent - in 2009. But in January, they posted a small growth of 2.7 percent.
Watchmakers nonetheless warned that the impact of the crisis still resonates.
Duchene observed that it had made consumers more careful about what they were buying.
It had sparked a "return to genuine values, as well as traditional and solid principles," he said.
"Today, consumers certainly take more responsible and considered decisions that established and even highly reputable companies must respond to.
"Many of you have already mentioned this in writing or in conversation - the years of extravagance are over," added the industry veteran.
In the Swiss watchmaking industry, the biggest in the world, demand for watches in the low export price bracket of below 3,000 Swiss francs (2,551 dollars, 2,068 euros) rose by nearly a fifth in January.
Francois Thiebaud, who heads the committee of Swiss exhibitors, remarked on a "return to real value" and "more classic" designs.
Consumers were also looking at high end jewellery as an investment.
"It's better to invest in 'haute' jewellery than in the stock market. It's viewed as a more sure investment," he added.
Mauro Egermini, director-general of Les Ateliers Horlogers Dior, part of the French fashion group, acknowledged that clients were on the lookout for good investments.
"They are trying to put their money in good value" rather than riskier assets, he told AFP, pointing out that this provided good opportunities for luxury watchmaking and jewellery.
The president of parent Dior Horlogerie, Laurence Nicolas, also told AFP that "bling-bling is no longer very trendy."
While Dior is still making watches with diamonds and precious stones, the look appears more understated this year. Nicolas described it as "dazzling but still elegant."
Alfred Schneider, of the German watchmaking and jewellery federation, felt the outlook for 2010 was "more muted."
"There is a slight recovery in foreign demand... we hope that these first signs would be strengthened," he said.
Beyond the issue of more restrained consumers, the industry, and jewellers in particular, is also feeling the squeeze from higher raw material prices.
Gaetano Cavalieri, representing Italian jewellers, highlighted gold prices, which soared in the crisis as investors sought to park their money in safer investments.
"Keeping costs down was particularly difficult when the price of gold was rising so sharply."
"Many of the luxury product categories managed to reduce costs by cutting prices but this was difficult for us due to skyrocketing prices of gold," he said.