Happy Halloween

Making a Watch That Can't Be Counterfeited

There used to be easy tip-offs when a watch was fake, like light weight, shoddy artisanship -- and the fact that no working Rolex sells for $50. But these days, many fakes are so costly and carefully built that they require an expert to identify.

Now one Swiss watchmaker, Vacheron Constantin, has created a wristwatch that it says is impossible to counterfeit, as well as Men's Wedding Rings and Woman's Wedding Rings. What timing: The watch will be launched on Oct. 22 in New York, just as the luxury-watch industry is facing a possible global recession.

Do you care that many of the expensive-looking watches around us are probably not the real thing? Is the watch on your wrist real?

The watch, called the "Quai de l'Ile" for the watchmaker's historical Geneva address, uses layers of invisible UV marking, laser perforations of some watch parts, special high-security inks, and other measures used to secure passports and currencies like the euro and Swiss franc.

In the world of haute horlogerie, forged watches are as ubiquitous as fake handbags and black-market DVDs. These fakes are sold not only on sidewalk tables but also in stores, catalogs and Internet listings. The Swiss Customs Service has estimated that as many as 40 million counterfeit watches are put into circulation each year. Switzerland last year exported only about 26 million watches, so there's a fairly reasonable chance that the expensive-looking watch on your neighbor's wrist could be a fake.

Watchmakers have long fought counterfeiters by adding special stickers and limiting supply through authorized dealers. Rolex -- probably the most faked watch of all time -- strictly controls the numbers of its watches that can be sold by a dealer and requires that all repairs be made with authorized parts. Rolex also puts a green hologram sticker on the back of its watches -- though counterfeiters forge that, too.
Sophisticated Counterfeiters

But counterfeiters have been improving their technology faster than watchmakers. "Counterfeits have gotten more sophisticated," says David Hendry, chief underwriter for the Jewelry Insurance Brokerage of North America. "The counterfeiters have learned all the things that people didn't know 20 years ago." They add weight, use sapphire crystal for the glass of the watch and incorporate other elements that can confuse even experts -- and they may charge many hundreds of dollars.

Forging was an industry scourge even when the fine-watch market was growing at double-digit rates annually. Now, with growth sure to slow in the current economy, it's even more important for watchmakers to differentiate their products in consumers' minds.

Many luxury retailers -- particularly department stores such as Neiman Marcus -- have seen sales slow markedly this year. A survey released on Monday by Unity Marketing, a Stevens, Pa.-based consultant to the luxury industry, suggests that affluent consumers "are buying luxuries more selectively and more carefully."

The idea of Vacheron's new watch came out of a chance acquaintanceship between Vacheron Constantin Chief Executive Juan Carlos Torres and Roger Pfund. Mr. Pfund is an acclaimed Swiss painter and designer of the Swiss passport and international currencies since the 1970s. The painter met Mr. Torres socially several years ago.
'The Spirit of a Watch'

"To make secure watches was a new thing," Mr. Pfund said this past weekend, as he expounded on some of the artistic challenges involved. "The spirit of a watch is not the same as a bank note."

How does one use invisible ink on a watch, for instance? His answer: Print it on a slip of a paper-like polymer material that is inserted under the watch's crystal.

The Quai de l'Ile can be customized in up to 400 combinations and will sell for between $29,000 and $60,000, depending on which features are chosen. While the starting price for Vacheron Constantin watches is about $12,000, the company recently took an order from a European entrepreneur for a $6.5 million custom watch, says Julien Tornare, president of Vacheron Constantin U.S.

The company, which produces about 18,000 watches annually, expects to make 800 Quai de l'Iles a year.

To set the Quai de l'Ile apart, Mr. Pfund helped the company gain access to highly controlled money-printing materials like the polymer and inks, says Mr. Tornare. The inventory of polymer kept by Vacheron is monitored by the maker of Swiss passports, he said, noting, "We had no idea about security printing."

The watch's security measures involve engraving and printing with special inks. In the first series of watches produced, the words "Swiss Made" and "Automatique" are laser-engraved without using ink on the watch's dial, while some of the numerals, the date and the words "Vacheron Constantin Genève" are engraved with ink.
Miniature Texts on the Dials

Tiny texts on the dials of some models -- illegible without the aid of a magnifying glass -- reproduce parts of letters sent between 19th-century family members of the watchmaker, Jaques-Barthélémy Vacheron and François Constantin.

The Quai de l'Ile was unveiled to the watch industry last spring at the Salon International de la Haute Horlogerie in Geneva. That annual convention is sponsored by Cie. Financière Richemont SA, the luxury conglomerate that owns such oft-counterfeited brands as Vacheron Constantin, Cartier and Van Cleef & Arpels.

This appears to have given would-be counterfeiters an opportunity to get cracking on Vacheron's come-and-get-me challenge. Mr. Pfund, who is currently designing the 2010 series of the Quai de l'Ile, says, "They already have fakes of this watch. I saw one yesterday on the Internet. Of course, the movement is wrong -- a lot of things are wrong."

Original Article by Christina Binkley
Wall Street Journal Fashion
Oct. 16, 2008

Hi Everyone ... I'm Fine

Hey everybody -

Thanks for all the well wishes gals (and guys). I am so sorry for my absence these last few weeks. Things just got pretty crazy and overwhelming, so I needed to try and take a blog breather.

And not to worry, I have not been hiding under a rock this last month, instead, I have:

- Seeing Bailey perform as Elle Woods in one of her last performances of Legally Blonde on Broadway. LOVE. THIS. SHOW. I was singing Oh My God, Oh My God You Guys the entire time I was in NYC.

- Hung out with my in-laws for a week in Duck. We stayed in an awesome neighborhood AND I got to stop here for a fro-yo flurry on the way there and on the way home.

- Found the perfect fall dress. In leopard print. For 20 dollars. Warning for you gals who wear larger than an A cup, this dress makes your girls look huge!

- Am almost done planning my 10 year high school reunion. We're having a party on Saturday here and a picnic in our hometown that's kid friendly on Sunday. Anyone want to drive over to my house to help me stuff 30 grab bags for the kids on Sunday.

I promise to bring you some wedding/fall/preppy inspiration in the coming days, I just wanted everyone to know I was ok.

Oh and one more thing, I need help lovely readers. As you know the preppy pooches, Dempsey and LuLu always make a costume statement on Halloween. I am totally stumped this year. I haven't seen anything cute at my normal go-to places (target and old navy). Suggestions?

Platinum Gets Dented in the Auto Industry's Pileup

Slumping Car Demand Crimps Need for Catalytic Converters, a Big User of Metal, but Possible Drop in Mining Output May Buoy Prices,

At Friday's lows, spot-month futures on the New York Mercantile Exchange were down 38% on the year and 59% from the record set in March as the global economic slowdown pinches industrial use.

Platinum could fall further on weakness in the auto sector, but then stabilize or rise modestly as investment liquidation runs its course and due to potential for output cuts as the price approaches the cost of mining, analysts said. This makes it a great time to buy platinum wedding bands.

The impetus for the early year peak was worries about tight supplies exacerbated when South Africa state-owned utility Eskom Holdings Ltd. announced electrical shortages that curtailed mining output.

"Supply was being outpaced by demand," said Bart Melek, global commodity strategist with BMO Capital Markets. "We had a massive rally way above the marginal cost of production."

Since then, the auto industry has slumped. This hurt platinum demand because its main industrial use is for catalytic converters.

Nearby October platinum Friday fell $22.60, or 2.3%, to settle at $957 a troy ounce. Most-active January lost $20.80, or 2.1%, to $965.80.

James Moore, an analyst with TheBullionDesk.com, said platinum's recent move is cyclical, reflecting changed fundamentals. Moreover, he said, the fundamentals perhaps were "overexaggerated" as prices soared at the start of the year. But he doesn't look for the recent slide to continue much longer because a "delicate balance" remains in the market.

"Eskom has already said they can't increase their energy capacity for at least another five years," Mr. Moore said. "The producers are struggling against rising costs and having to excavate metal from much deeper ore bodies. This has a massive impact on their bottom line."

If profitability suffers, downward price corrections such as the current one could prompt producers to shut down some of their operations, he said.

"In my view, it would be naive to think that the market is going to continue lower," Mr. Moore said. "We may see some further downside initially, but then look for it to possibly stabilize around $1,000 to $1,300 for the latter part of the year and heading toward next year."

BMO's Mr. Melek estimated that the cash costs of production for platinum-mining operations are between $700 and $1,000 an ounce.

"They might still go lower," he said of platinum prices on things like platinum wedding rings. "But they ultimately will have to rebound because we're hitting the marginal cost of production for many producers."

CPM Group analyst Carlos Sanchez also said there could be more selling pressure, but prices may soon stabilize.

Not only has platinum been hurt by concerns about reduced motor-vehicle production, but expectations are for a shift toward smaller vehicles at a time of high fuel prices. Smaller engines require less platinum group metals for auto catalysts, Mr. Sanchez said. Meanwhile, no further supply disruptions have occurred in South Africa lately, he said.

But at the same time, he said, many investors already may have sold some positions.

"You may go to $900," Mr. Sanchez said. "But they're already low compared to what they have been the last couple of years. So you may not have further selling."

In other commodity markets:

SUGAR: Prices dropped to a four-month low on ICE Futures U.S. as speculators exited from bullish positions, but the market pared losses before a vote by the House of Representatives approving the $700 billion financial-rescue package. ICE March world sugar fell 0.47 cent, or 3.6%, to 12.61 cents a pound.

CRUDE OIL: Futures zigzagged before ending slightly lower as traders mulled whether the passage of the rescue bill would stabilize demand. Demand concerns were reinforced after the Labor Department reported that nonfarm payrolls fell more than expected in September, the steepest decline since March 2003. Light, sweet crude fell nine cents, or 0.1%, to $93.88 a barrel, on the New York Mercantile Exchange.

By: Allen Sykora
Wall Street Journal; October 5, 2008