• by Sarah Mahoney  @mahoney_sarah, April 5, 2011

Luxury watchmakers found plenty to cheer about at their recent Baselworld trade show, with attendance up 2.5%--bringing attendance at the trade show to its second-best year ever. And amidst the usual celebrity fanfare--including Jacob & Co. introducing actress Milla Jovovich as its new "Jacob Girl"--attendees say sales of time pieces and high-end jewelry were brisk. Buyers, especially from Asian regions, seem confident that consumers are ready to step up and splurge on more bling.

Patek Philippe says it achieved record results, for example. Chopard also says its sales were up, and TAG Heuer claimed double-digit gains from the prior year's show. And Chanel says the show was the most successful sales in its history.

But there's also clear evidence of an industry struggling to keep pace with a changing luxury market. "Luxury watches and jewelry are an extremely vulnerable category," says Pamela N. Danziger, author of the forthcoming Putting the Luxe Back in Luxury. "And it's not just because of the recession. They face significant demographic threats. In older consumers, especially men, a fine watch is a mark of status they felt they needed in business. But younger affluents--those in the 35 to 44 age group, which is the most acquisitive time--don't feel they need them. They're much more practical." Instead, she says, they're more casual in their dress, and more likely to invest heavily in personal technology, not a flashy watch.