Pummeled by a worldwide decline in sales of at least 30 per cent, the family-owned firm has started to offer its customers products that are both cheaper and more traditional in design, said Philippe Charriol, its founder 
and president.

Charriol’s signature products include watches and bracelets made partly of metal cable. The company’s strongest markets in the current downturn have been China, the Philippines and Qatar, but its US and Japanese sales are ailing.

So, as part of its response to the slowdown, Geneva-based Charriol is tweaking its product line.

“You develop more conservative products at a more affordable price, because as a general trend, everyone’s stepped down one or two steps” in terms of what they’re willing to pay, the firm’s president told Khaleej Times.

Charriol, dressed in a pink shirt and white linen suit, spoke on the sidelines of Leaders in Luxury Middle East, a four-day conference that opened on Monday at the Park Hyatt Dubai.              

He likens the current situation for many of his customers to that of a man having to choose between buying one suit in all-purpose gray and another in light green.

“A gray suit you can wear every day,” he said. “A light green suit…”

As a result, his firm is now offering items that are designed more simply and made of what Charriol calls “classic” materials.

“When your turnover goes down by 30 per cent or more, you’re affected in everything you can do.…  That being said, the two parts of the world for Charriol that are steady are Southeast Asia and the Middle East, but with a rather weak Saudi Arabia.”   

The Middle East, for example, consumes more Charriol perfumes and fragrances per capita than any other region. There seems to be “no limit” to fragrance sales in this part of the world, Charriol said. “The culture of perfume is very old here.”

In another effort, Charriol’s daughter Coralie Charriol Paul is pushing to sell more goods over the Internet. She believes that countries in the Gulf – with their young, well-traveled and brand-savvy populations – are ripe to adapt to buying more luxury items online.

Coralie described the power of the Internet to stimulate luxury sales as “like word of mouth but on a completely different scale.” She notes that many Americans and Japanese routinely buy expensive and handbags online.

“It is our future, it really is,” said Coralie, the firm’s creative director for leather goods and jewellery.

Charriol’s performance mirrors broader trends in the luxury goods business. Global sales of luxury products this year are projected to fall to $227 billion, down 8 per cent from 2008, said T.B. McClelland, Jr., president and chief executive officer of an industry trade group called the Luxury Marketing Council (Middle East).

Sales in the US are expected to plunge by 16 per cent. Japanese sales are seen sliding by 10 per cent, while European sales are expected to decline by 8 per cent, McClelland told the conference, citing an industry forecast prepared by Boston-based consulting firm Bain 
and Company.

Asia, however, bucks the trend. Bain predicts a 10 per cent increase in 2009 sales in that region, with China sales alone surging by 12 per cent, McClelland quoted Bain as saying. He didn’t provide corresponding data for the Middle East.

Bain foresees worldwide sales edging upward by a meager 1 percent next year, but a real recovery probably won’t take hold until at least 2011, he said, referring to Bain’s outlook.

In the UAE, buying power for luxury goods has shifted over the past six months — along with the general economic momentum — from Dubai to Abu Dhabi. “Dubai was very much affected by the overall crisis,” Charriol said. “Dubai was basically a real estate business for everybody. That business has more or less gone… and so consequently, (luxury goods) sales have dropped quite badly.“ He declined to give specific figures.

Meanwhile, the father-daughter team are pressing ahead in their battle for sales against much bigger rivals.

“You’re permanently looking for the miracle product,” Charriol said. “So until you find it, you have to continue creating, developing and selling — and hope that this is the one.”

·         bruce@khaleejtimes.com