Europe's rich and famous faced tough decisions as they assembled at a chic Swiss ski resort this weekend: whether to drink Taittinger or whisky-infused hot chocolate, and which piglet to back in the afternoon race.
This wasn't Davos, where the World Economic Forum will urge presidents and bankers to "rethink capitalism" this week. Neighboring Klosters, a resort favored by the British royal family, held its eighth annual snow polo tournament.
Jan. 24 (Bloomberg) -- Europe's rich and famous cheered snow polo in Klosters, Switzerland, while at nearby Davos, host of the World Economic Forum's annual meeting, young Swiss socialists protest against the power of political elites in igloos. Poppy Trowbridge reports on Bloomberg Television's "First Look."
While young Swiss socialists protest against the power of political elites in igloos outside Davos, Duran Duran sang "A View to a Kill" to several thousand polo enthusiasts revelling in a bar and nightclub made out of shipping containers and snow. The four-day event, sponsored by menswear company Hackett Ltd. and Swiss watchmaker Parmigiani Fleurier SA, is a chance to forget the global turmoil, according to founder Daniel Waechter, who runs a family business selling luxury lavatories.
"Despite the financial crisis, we've never had so many team requests," he said. "Last year we had a lot of trouble getting British teams over. Now, either they've recovered or they're saying, enough of this misery, we want to have fun."
Eight teams of three horses and riders apiece, instead of the usual four, battled it out in a slimmed-down version of summer polo, which was first played in Switzerland by British cavalry officers in St. Moritz in 1899. The horses wear flat shoes with studs to grip the snow and riders, who can use six ponies during four 6 1/2 minute chukkas, wield mallets to hit a ball between goalposts shaped like giant champagne bottles.
Call for revolution
As Klosters's VIP guests ate roast saddle of veal with morel mushroom mousse, khaki-clad soldiers rolled out barbed wire in Davos. For David Roth, president of Switzerland's Young Socialists, there will be fewer comforts this week as he builds an igloo that will serve as a base to protest against the forum.
"In the Arab revolution, it was a revolution for democracy and I think we need also a revolution for democracy," said Roth. "The politicians are not independent from the money and that is a problem."
After German Chancellor Angela Merkel opens this week's Davos forum, which will be attended by close to 40 national leaders, the first debate will ask "Is 20th-century capitalism failing 21st-century society?"
"We certainly have in the world today a morality gap," Klaus Schwab, founder of the forum, told reporters in Geneva on Jan. 18. "We have undermined social coherence and we are in danger of completely losing the confidence of future generations."
The gap between rich and poor is widening across most developed economies as executives, bankers and skilled workers reap more rewards, the Organization for Economic Cooperation and Development said last month.
The average income of the richest tenth of the population is now about nine times that of the poorest tenth, the Paris- based OECD said. The gap has increased about 10 percent since the mid-1980s with Mexico, the U.S., Israel and the U.K. among the countries with the biggest divide between rich and poor.
"I'm going to Davos to talk with business and world leaders about jobs, inequality and the excesses of bankers' bonuses," said Philip Jennings, general secretary of the Nyon, Switzerland-based UNI Global Union, which coordinates more than 20 million workers in 150 countries. "I certainly won't be going there to play polo."
Still, while Schwab warns of "global burnout," the luxury market is close to a record. The Bloomberg European Luxury Goods Index (BNLXGDEU), which includes LVMH Moet Hennessy Louis Vuitton SA and Cie. Financiere Richemont SA, climbed 163 percent since Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008, while the Stoxx Europe 600 Index dropped 5 percent.
The resort's association with the royal family makes Klosters the ideal place for London-based Hackett to promote its clothing that is a "romantic vision of Englishness," said Jeremy Hackett, 58, the firm's co-founder, who arrived in an Aston Martin Rapide.
"I feel like James Bond arriving in Zurich into a Cold War sort of atmosphere," said Hackett, adding that polo helps give his company "authenticity." "It's a way of adding credibility to the brand."
Parmigiani, which gives watches to the players on the winning team, was attracted by Klosters being the only snow polo tournament played at night, according to Catia Hoffmann, communications director at the Fleurier-based company.
"We like to do events that are a little different, not the standard things like golf or Formula One," she said. "It's a special atmosphere, very exclusive, but also very welcoming."
Swiss luxury living costs, including champagne, private jets, a Verbier ski pass and annual polo membership at Club de Veytay outside Geneva, rose 1.2 percent in the year through August, even as the franc strengthened against the dollar, according to London-based Stonehage Group, which manages the affairs of more than 1,000 wealthy families.
At Klosters, the polo matches attract a crowd that outnumbers the 2,600 delegates expected at the forum.
"Some people have just floated to the top and stayed above the crisis, particularly in the luxury sector," Paul Smith, who worked for Chelsea Football Club before starting his own company to advise soccer clubs on branding, said over a glass of champagne as waitresses served smoked salmon and shrimp canapes in the VIP enclosure in Klosters. "They're not going to think twice about buying a luxury watch or ordering a limousine."
Tournament founder Waechter got involved in polo when he took a job as head of the Klosters tourism board after his travel company was hurt by the Sept. 11 attacks in 2001. Two years ago he inherited the family business and is using snow polo to market The Golden Throne, his range of luxury portable lavatories named after European monarchs -- Elisabeth, George and Sissi.
Polo clubs are "popping up like mushrooms" and they're not only for the super-rich, Waechter said in a Dec. 23 interview in Zurich, adding that he plays with an architect, an insurer and a restaurateur.
"I got into polo because I loved golf and always wanted to ride a horse," said Stefan Locher, a doctor by training who runs his own media company and is playing at Klosters. He keeps his string of four ponies over the border in Germany, where costs are lower. "It's like golf on horseback."
In Klosters, where Parmigiani's riders edged Team BMW (BMW) 9-8 in the polo final, the sponsored racing jackets are taken off the piglets after bad weather forces the cancellation of the 3 p.m. event. As Duran Duran takes the stage to sing "Ordinary World," up the valley in Davos, Roth suspects the polo crowd is out of touch with reality.
"These people are not really connected," said Roth, as a fellow protester adds the final brick to an igloo and the temperature drops to minus 6 degrees Celsius (21 degrees Fahrenheit). "They don't relate to the problems of the world."
Reporting by Bloomberg