In a downturn, the luxury industry should be hit harder than the rest of the economy - it's just common sense. People are becoming a lot more prudent with their income, they cut back on their spending, and the first thing o go will be the non-critical, frivolous luxury purchases. And I don't believe the argument that the customers buying luxury products are less likely to feel the pain of the economic recession and keep on spending the way they used to. If anything, they probably have more money invested in the markets than the average Joe, and will on average have a higher decrease in wealth.
Alex, I am ready to make a friendly wager with you (say, $10?) that the Luxury Watch industry will not reach an increase of 6-7% for 2009. In fact, I'll eat my hat if there is an increase at all in total revenues.
The one thing that I am wondering if how much of an impact will the watch price increases over the last few years have on the watch sales? Will the watch manufacturers pay for they short-term pursuit of a quick profit? Hopefully there will need to be a readjustment of prices and they will come back to a more "normal" level