It’s interesting that luxury brand LVMH has just agreed to acquire Hublot, the Swiss watchmaker for something like $300 million at a time when everyone else is nervously looking at the tanking US market and wondering how much of the rest of the world it will drag down with it. LVMH’s statement exudes confidence. It thinks Hublot, which has most of its sales in Europe, can withstand a downturn in financial markets and offer potential growth in Asia.

What bothers me is that I don’t think LVMH would even have considered acquiring another jewellery brand. That’s because other than the bejewelled kind, watches have very little intrinsic value and sell purely on the perceived values the brand offers. The jewellery industry for the most part, is still stuck with the old concept of luxury lying in intrinsic value.

After all these years, most people in the jewellery industry don’t seem to have cottoned on to the fact that intrinsic value itself, is a perceived concept – an illusion if you will. And the perceptions or illusions that built up the concept of intrinsic value in traditional materials like gold and diamonds, are based on ideas that are literally thousands of years old. Anchored to intrinsic value, jewellery doesn’t have anything to offer a huge proportion of today’s luxury consumers.

These consumers dominate the demographics even in the emerging markets and jewellery might be missing the bus there as well. At this year’s Baselworld watch and jewellery show, some of the most prominent buyers were from Russia and the Middle East. They were weighed down with cash and they had eyes only for the big watch brands.