WATCH-AFICIONADO 1/15

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WEB & IPAD SPECIAL Cover Story

WATCH AFICIONADO

Carl F. Bucherer takes it up a gear

HOT TOPICS 2015

Signals • Geneva Week – SIHH special reports Case Studies on Independents • After-sales services: a ticking time bomb?

www.watch-aficionado.com WATCH BUSINESS PAPER – USA & CANADA – VOL.51 N° 1/2015 FEBRUARY

WITH INDEX OF ALL IN-DEPTH ARTICLES PUBLISHED ONLINE

COVER STORY

CARL F. BUCHERER • With the help of its five collections, all with their own distinct identity, the Swiss brand has grown spectacularly since 2010.

And, given the extent of its distribution network, it has no intention of resting on its laurels, but plans to continue on this successful path.

by Serge Maillard

T

here are very few watchmaking brands today that can look back on a history of more than 125 years of watchmaking and jewellery expertise, and at the same time look forward to a bright future as an independent watch manufacturer. Carl F. Bucherer is one of them, a strong Lucernebased company in the hands of the family’s third generation, namely Mr. Jörg G. Bucherer.

The traditional Swiss brand produces five clearly delimited lines, all of which take their names from Latin: Patravi (I have achieved), Manero (that which is led by the hand), Adamavi (falling in love), Pathos (dedicated to passion) and Alacria (enthusiasm and zest for life).

CEO Sascha Moeri blew in like a whirlwind in 2010, and breathed new life into the centenar-

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old saying goes: don’t put all your eggs in one basket. The expression is particularly relevant in these times of exchange rate fluctuations!

SPECTACULAR GROWTH

Sascha Moeri

“We are one of the few brands that have the potential to establish themselves worldwide. “ ian firm. In fact, the Bucherer group has been making watches for a very long time. Its first timepieces date back to 1919, when the first Art Déco ladies watch collection was launched.

But it was not until the turn of the millennium, in 2001, that the watchmaking division was repositioned under the name of Carl F. Bucherer, a reference to the group’s founder.

“When I arrived, Mr. Bucherer gave me two main tasks: to further grow the watchmaking brand, and to improve its profitability,” recalls Sascha Moeri. Although the network of shops remained the group’s primary activity, it was hoping to diversify even more strongly into a second area: watch manufacture. As the

With his extensive experience in the industry, Sascha Moeri quickly set to work and focused on three elements: giving the collections a clean profile, re-evaluating pricing, and expanding its distribution networks worldwide. The efforts paid off. Between 2009 and 2014 production and sales grew from 6,500 to 20,000 pieces per year.

This year, the company intends to increase production even further, by around 5,000 watches.

According to the CEO, the growth spurt is not over, despite a rather sensitive situation in the Swiss watch industry. “We’ve reached a very interesting stage in our development: I’m convinced that we are one of the few brands that have the potential to establish themselves worldwide. Our company has still not reached its limits.” The great strength of Carl F. Bucherer, which already has a presence in 350 points of sale in more than 25 markets across the world, lies in the quality of its distribution networks. In addition to its parent company in Europe, it can count on its own distribution subsidiaries in China, Hong Kong, Taiwan, Japan and the US, as well as on the best and finest distribution and retail partners worldwide. “We have developed a good balance between our distribution partners and our own networks.”

STRONG PORTFOLIO Each of the five collections has its own distinct and individual identity. Recognisable stylistic codes and a clear message speak directly to consumers with a wide variety of profiles. The Patravi models, rather bold and sporty watches with a contemporary flair that make up the majority of sales, are particularly popular in Russia, the United States and the Middle East.

The Manero line with its more classic models and in-house movements is on the rise. With a strong following in Asia and Europe, today it accounts for a quarter of sales. The even more understated Adamavi follows closely on its heels.

Women, who make up almost half of the brand’s clients, are equally well served. The Alacria and the newly launched Pathos collections draw not

I MANERO POWERRESERVE and MANERO TOURBILLON

only from the brand’s long-established jewellery expertise, but also from its rich experience in material and technical innovation.

“Over recent years we have focused on the product. It is the basis of our success, the watch is still the hero,” continues Sascha Moeri. Matching this mindset, Carl F. Bucherer has developed its own line of in-house calibres, drawn from its patented calibre CFB A1000.

Driven by a peripheral oscillating weight, they equip a number of the firm’s watches. “Today, you can pick up a model with an in-house calibre for as little as 8,000 francs!” In order to continue to offer an entry price of 3,000 francs across an output that is almost exclusively automatic or manual – only the jewellery watch

collection Alacria and some Pathos models run on quartz – the brand also sources movements from external suppliers.

Last year the brand launched its first tourbillon in the Manero collection in a limited edition of 188 pieces, a reference to 1888, the year the group was founded. An aperture in the dial at 6 o’clock displays the result. In the centre, a hand indicates the date, whose figures change orientation at 3 and 9 o’clock for instant readability. It is worth noting that this model’s power reserve, also visible on the dial, is a generous 70 hours. Finally, the dial features a 24-hour indicator at 12 o’clock. In an 18-karat rose gold case, this watch comes in at 99,800 francs.

MODELS TO WATCH OUT FOR As 2015 gets under way and Baselworld approaches, there are new watch models to watch out for. First, a new model of the Manero PowerReserve, now available in gold with a black and white dial, will be presented at Baselworld. A hand indicates the power remaining on a semi-circular display at 3 o’clock. In addition to this feature, which gives this model its distinctive character, the watch also has a day aperture at 9 o’clock, large date at 11 o’clock and integrated small seconds at 6 o’clock. It is worth noting that 70% of the

timepiece’s components are manufactured inhouse. At its heart beats the manufacture calibre CFB A1011, appearing for the first time in a Manero model. Price: 9,400 francs in steel, 21,500 in gold. As the brand notes, “the functionality and design of the power reserve indication are perfectly combined” in the striking face of the Manero PowerReserve.

What more is there to say? It’s clear, clean and effective.

The Patravi ScubaTec dive watch, launched in 2013, is responsible for an important part of

I PATRAVI SCUBATEC DIVE WATCH

the brand’s recent success. This model, which is water resistant to 500 metres, is now available with a case in daring red gold, priced at 23,700 francs. Equipped with a manufacture CFB 1950.1 movement, a chronometer and a 38-hour power reserve, it bears eloquent witness to the brand’s diversity. Also worth keeping an eye on is the Patravi TravelTec and the Pathos collections – some surprising innovations not to be missed!

DEVELOPING MARKETS “Today our five collections are well established,” confirms Sascha Moeri. The next step is now to further push the brand’s global presence. “We are growing rapidly, but reasonably and in proportion to our capacity. With a team of 160 we have already accomplished a lot, yet we still have significant room for growth.”

Who are the brand’s biggest clients? Asian consumers, whether they buy in Asia or elsewhere in the world. “2014 was a good year for us, both in Europe and in the United States,” notes Sascha Moeri. For him, the challenge of the strong franc, which will mean raising prices by an average of 8% across Europe, is not insurmountable. “It will require some rebalancing.

I ALACRIA ROYALROSE and PATHOS DIVA JOAILLERIE

However, I am very positive about our brand.

If we could have produced 30,000 watches last year, we would have sold them.”

RED CARPET PRESENCE To increase recognition, Carl F. Bucherer can count on a number of watch aficionados such as Arnold Schwarzenegger, Sylvester Stallone, Joe Mantegna and Keanu Reeves. Even though they are not official ambassadors, the celebrities’ loyalty is evidence of their genuine admiration for the brand.

The brand also supported the Swiss Football Association in 2014 with a dedicated model

for all members of the team that played in the World Cup in Brazil. It has also entered into partnership with the Swiss luxury ski brand Zai. However, the most important ambassador remains Mr. Jörg G. Bucherer himself, who proudly favours the Manero Tourbillon model.

“With his grandfather’s name on the dial, we have a tangible link to tradition and refuse to compromise on quality!” p

Discover more on Carl F. Bucherer at www.watch-aficionado.com WATCH AFICIONADO | 5

EDITORIAL

www.watch-aficionado.com

REIGNS...

by Pierre Maillard Editor-in-chief

EDITORIAL Confusion reigns...

COVER STORY Carl F. Bucherer takes it up a gear SIGNALS GENEVA WEEK - SIHH Through the hushed aisles of the SIHH A stroll in and around the SIHH Flotilla in Geneva Harbour INDEPENDENTS Introduction: The paradoxes of independence Haute Horlogerie: when independents join forces: Kari Voutilainen, Antoine Preziuso, Vincent Calabrese, Vianney Halter, Amarildo Pilo Case studies (Part I): Vogard, Marvin, Celsius X VI II BUSINESS The most popular watch executives on the web China, Swiss watchmaking at a crossroads DISTRIBUTION After-sales service: a ticking time bomb?

RETAILER PROFILE “Italy is still alive!”

LAKIN@LARGE An oh so yummy SIHH

Read all articles on www.watch-aficionado.com

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Relativity by M. C. Escher (1953)

MANERO POWERRESERVE by Carl F. Bucherer Reference number: 00.10912.03.13.01 Classic design meets technical know-how. With an integrated power reserve indication and the high-precision CFB A1011 Manufacture caliber, the Manero PowerReserve from the Lucerne-based watch brand Carl F. Bucherer combines high functionality and sophisticated technology – indicating at all times power is remaining. www.carl-f-bucherer.com

here is a vague feeling that we are at a turning point, that we’re coming to the end of something, and have little idea what lies around the corner...

Uncertainty reigns, gathers in pockets, doing little to define the new landscape whose outlines are just visible through the haze. What lies ahead for watchmaking? Everything jumbles together, only adding to the confusion. There’s China, the El Dorado of luxury, whose star is waning under the growing pressure of the anti-extravagance campaign, and Russia, whose struggling economy has lost billions. There is also the indeterminate threat from a certain well-known ‘fruit’ company (whose market capitalisation, you may be interested to know, is 700 billion dollars, or the equivalent of 30 years’ Swiss watch exports at 2014 levels), which begs the question: will the Apple Watch sweep everything before it, or will it leave something behind? Then there is Switzerland itself, which also finds itself at a crossroads. Not only is its currency taking the executive elevator to the top floor, but with the end of banking secrecy, and international scandals such as the HSBC SwissLeaks affair further tarnishing its reputation, the insolent prosperity of this small nation is gradually being undermined. Where we’ll find the answers to these open questions is anybody’s guess. Things are all over the place, it seems. After two decades of relentless upscaling and brazen pricing, the industry is asking itself: can we carry on like this, targeting just the 1% of the world’s population that controls 50% of its wealth?

Some have chosen to follow a different strategy.

TAG Heuer, for instance, has put the brakes on its Haute Horlogerie and chosen to focus on ‘affordable’ products for young people. There are more examples, more symptoms: at the recent SIHH everyone noted that the Richemont group’s

only mid-range brand, Baume & Mercier, finally seems to have the wind in its sails. Moreover, the efforts made by Jérôme Lambert at Montblanc to offer moderately priced complications were enthusiastically welcomed.

After the frenzy of escalation the tide appears to be turning, and a fresh current of modesty is on its way in.

Of course, there are still plenty of bulky, musclebound watches around, complications continue to pile up and you can’t move for tourbillons, but there is a vague feeling that we’re starting to get a little tired of it all. In the manufactures, people are wondering whether a little moderation would not be a good thing. Quite clearly, the paradigm is changing. A new era beckons, and watchmaking will adapt or die.

Europa Star has been an interested observer since 1927, and has seen and lived through its fair share of ‘historic turning points’! History teaches us that danger has always come from the threat of technological advantage. But whether this is streamlined production in the USA, or quartz from Asia, as in the past, or today’s spectre of the smartwatch, in every case the Swiss watchmaking industry has found a way to retain or regain its pre-eminent position.

And yet again, it looks like the way forward will lie in finding a new way to ‘democratise’ the Swiss made watch, to offer unbeatable value in every respect. And this may well be the greatest challenge, in the global economy we now inhabit. p

SIGNALS

Outer space

SIHH

Jaeger-LeCoultre has introduced a new meteorite dial to its Master Calendar timepiece, making it the first dress watch to be truly from outer space! The material used to make the dials is sourced from a meteorite that came from an asteroid belt between Jupiter and Mars.

(Hauteliving.com)

The Salon International de la Haute Horlogerie kicked off the year of luxury watch trade shows in Geneva in January. The SIHH welcomed 14,500 trade visitors and members of the press, representing a 4% increase from the previous year. (www.sihh.org)

8,888

In denial

Some independent watch brands were featured at the all new Swiss Independent Watchmaking Pavilion during the 2015 edition of the SIHH in Geneva. The cost of their participation in individual booths was set at CHF 8,888, a figure chosen because the number 8 is considered to be lucky in China.

(Financial Times)

It appears that the Swiss watch industry has underestimated the impact of smartwatches. According to Reid Sherard, the lead watch and jewellery researcher at New York’s L2, a market research firm in New York, how Swiss watch executives have reacted to the Apple Watch “is a classic example of people in denial”.

(New York Times)

Slow growth

Between January and November of 2014, the Swiss watch industry grew by 2.3% compared to the same period in 2013, with exports totalling 19.7 billion Swiss francs. However, it represents slow growth compared to the average annual expansion of 17% in the three years leading up to 2012. (New York Times)

5%

Ultra thin

The world’s slimmest automatic split-seconds chronograph belongs to Vacheron Constantin. Its Harmony Ultra Thin Grand Complication Chronograph measures just 8.4 mm, but the Calibre 3500 housed inside is only 5.2 mm thick!

(Forbes)

Swatch U-turn Swatch Group CEO Nicolas Hayek was initially skeptical of smartwatches.

He once stated that Swatch luxury brands such as Blancpain were “smartwatches” because “they make you look smart.”The brand has now taken a U-turn and plans to release its own smartwatch within three months, coinciding with the debut of the Apple Watch.

(Bloomberg)

Amidst the rising value of the Swiss Franc (CHF) compared to the Euro, it appears that brands will be absorbing the increase in prices.

As a result, the Richemont group will reportedly increase its prices by up to 5% across the board in the Eurozone.

(Forbes)

Noiseless movement A group of Swiss researchers have developed a unidirectional continuous oscillator which could revolutionise the mechanical basis of watches that has existed for centuries. The so-called IsoSpring is a noiseless movement that will eliminate the ticking of watches, while also being more precise than current timepieces. (phys.org) WATCH AFICIONADO | 7

SIGNALS

Wearables for women

Emotion According to Daniel Riedo, chief executive of JaegerLeCoultre, the company wants to be more accessible to the public and focus on the ‘emotion’ of its watches.

“We are a house with such a long history and such a deep technical expertise. And now we want everybody to experience that without feeling intimidated,” Riedo said. (Live Mint)

Dropping sales According to Luca Scola, analyst at Exane BNP Paribas, the Swatch Group is particularly vulnerable in 2015 and 2016.

With its emphasis on low- and mid-range brands competing with smartwatches, Scola projects dropping sales for the Swatch Group: as much as 10% for its entry-level Swatch brand and 5% for its midrange brands like Tissot and Mido.

(Wall Street Journal)

In decline 2014 ended in decline for the Swiss watch industry, with the value of exports of Swiss watches down 2.5% in December 2014 compared to the previous year. Exports were buoyed by watches costing less than 200 Swiss francs, representing an increase of 14%, while timepieces costing over 500 Swiss francs fell steeply. (Federation of the Swiss Watch Industry FH)

According to market research firm NPD Group, 25% of men are interested in purchasing a smartwatch, against about 18% of women. However wearables for women are diverse and include three broad categories: smart bracelets that tell the time; feminine digital watches; and analogue watches with some smart functionality.

(New York Times)

Average watch cost The average cost of a Swiss watch is $739, while the average cost of a Chinese watch is only $3! (Statistic Brain)

Interactivity The new Guess Connect smart watch allows users to customise specific vibration patterns to different messaging, calling and social media alerts. It also houses a microphone which provides improved interactivity by allowing for voice commands and dictation.

(Wearable)

Pilot’s dream

Richard Mille has introduced a new $1.1 million chronograph called the Tourbillon RM 039 Aviation E6-B Flyback. With nearly 1,000 parts, the complex watch is a pilot’s dream: it can calculate fuel burn, flight time, ground speed and even measure altitude. It can also tell the time. (Wall Street Journal)

Global Luxury Watch Index: Haute Horlogerie Focus Producer of the WorldWatchReport™ – the leading market research in the luxury watch industry – DLG Intelligence is the authority in measuring, analysing and forecasting desirability globally. By analysing over 600,000 relevant online searches made daily for 18 Haute Horlogerie brands in 20 markets, the Global Luxury Watch Index – Haute Horlogerie Focus gives the decision makers an indication of the desirability of the watch industry over time.

Fastest growing Haute Horlogerie brands The brands that have seen the biggest rise in interest compared to a year ago are: Blancpain, Richard Mille and Patek Philippe.

“Worldwide consumer interest for Haute Horlogerie brands is continuing to grow for the fifth year in a row. People love exclusive timepieces and Haute Horlogerie products are considered as long term investments.”

Blancpain Richard Mille Patek Philippe A. Lange & Söhne Audemars Piguet Vacheron Constantin

David Sadigh, Digital Luxury Group ϯϬй

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+22% Y/Y

Aug-Sept-Oct. 2014 vs.

Aug-Sept-Oct. 2013

+45% +29% +29% +28% +26% +25%

HAUTE HORLOGERIE +22% Ulysse Nardin +19% Jaeger-LeCoultre +15% Girard-Perregaux +7% Breguet +5% Franck Muller +2% Baume & Mercier +1%

GENEVA WEEK – SIHH

THROUGH THE HUSHED

by Pierre Maillard

SUNDAY 18 JANUARY, 4 P.M., IN A LOUNGE OF THE HÔTEL DES BERGUES...

It’s a glorious day. The air is crisp, the Pont du Mont-Blanc is lined with the white flags of the SIHH, and the powers that be at Geneva’s City Hall have turned on the tap of the Jet d’Eau, which cascades down elegantly into the green waters of the lake. In front of the Hôtel des Bergues (which for the past few seasons has also sported an international Four Seasons label) limousines jockey for position. The SIHH opens tomorrow.

The only blot on this idyllic landscape: just three days ago, the Swiss National Bank announced that it was removing the ceiling on the Swiss franc to euro exchange rate. The effect was immediate: the price of Swiss watches jumped 20 to 25% from one moment to the next. “A tsunami for Swiss industry,” spluttered Nick Hayek in Biel. What will happen? What strategies will the groups and big brands settle upon? Will they cut their margins or pass on the costs? It’s the elephant in the room, but the huddle of people heading for the salon where Christophe Claret is about to present his Aventicum is keen to put this burning issue out of their minds for a moment, and take refuge in antiquity.

2000 years ago, Avenches was the capital of Roman Helvetia. It was to remain so for 300 years. During this period the Romans undertook some major construction works, including an amphitheatre that remains in very good condition today. An amazing hydraulic organ was also discovered there, bearing testimony to the opulence of the city, which was destroyed in 258 A.D. by the Alamanni hordes.

I AVENTICUM by Christophe Claret

In 1939 a treasure of rare splendour was discovered in a drain: a perfectly preserved gold bust of emperor Marcus Aurelius.

Reduced to a height of just 2.8 mm, it now presides over the centre of the Aventicum watch.

Placed in the exact centre of a minuscule mirror in the form of an inverted dome, the microscopic bust carved from gold appears to thrust out from the bottom of the dial. But it is a holograph: the bust is topped with a second parabolic mirror with a hole in the centre, which generates the optical illusion. The light waves reflected off the bust are magnified, making the holographic bust appear almost twice its actual size. This magical effect, which is sometimes used in children’s toys, is called a mirascope.

But achieving such miniaturisation was anything but child’s play. “It requires cutting-edge and meticulous construction techniques, as the effect cannot work unless the two minuscule mirrors are precisely curved. At that size, it really matters,” explains Christophe Claret.

Step by step, the watchmaker is clearing land hitherto largely unexplored, that of playful Haute Horlogerie. After his delicious Margot with its falling petals, and the occasional foray into poker and roulette, Christophe Claret is off playing again. He just can’t help himself. The back of the Aventicum features an oscillating weight in transparent sapphire1, which bears five numbered Gallo-Roman racing chariots. A flick of the wrist sends them racing around, and the chariot that stops over the letter ‘A’ in ‘Aurèle’ is the winner.

This playful object, 120 of which will be made each year, costs CHF 49,000 or, at today’s rates, 49,000 euros. At this price level, exchange rate fluctuations certainly seem less of an issue... A factor we came to appreciate as the week went on.

7 P.M., NEAR THE AIRPORT While the Aventicum’s chariots race, the roulette wheels are spinning at the Geneva Casino, next door to the airport, and consequently, to the SIHH. A flash of the credentials and I’m crossing a room filled with solitary punters mechanically feeding coins into slot machines; up a flight of steps, I arrive at a more elegant salon with large gaming tables. Look left, look right, and there is the SIWP, as the Swiss Independent Watch Pavilion is somewhat inelegantly known.

The brainchild of the dynamic Amarildo Pilo (Pilo & Cie), this new exhibition hall brings together some of the leading lights of independence: small but excellent watchmakers. It probably has WATCH AFICIONADO | 9

more winners of the Grand Prix d’Horlogerie de Genève per square metre than anywhere else in the world. Kari Voutilainen, Vincent Calabrese, Vianney Halter, Ludovic Ballouard, Emmanuel Bouchet, Peter Tanisman and others are here, manning their booths. Antoine Preziuso, his triple tourbillon in hand, celebrates his return to watchmaking after a pause for reflection. “Live happy, live small!” he enjoins, as a saxophonist invited to animate the opening launches into a riff, and the first champagne corks of the week are popped.

How will the week go? At least one person here is not the least bit worried. Kari Voutilainen, like his friend Preziuso, is keen to stay small. “I get by, and I do quite well. I produce 50 watches per year with 17 staff. I make practically everything myself. The majority of it goes in direct sales. As I rarely travel, my clients come to me. That’s the key: do everything yourself. But be careful: you have to have the courage of your convictions.”

Wise words, but not everyone concurs. Some have different concerns.

[For more on the SIWP, see the round table for independents, organised for the occasion by Europa Star Première.]

8.30 P.M., BY THE RHONE To celebrate the 20th anniversary of the SIHH, the CEOs receive their guests in style at the magnificent Bâtiment des Forces Motrices, now an annex to the Grand Theatre, Geneva’s opera house. Against the post-industrial backdrop, guests in evening dress greet each other with a handshake or a kiss on the cheek, press toward the Best Workers of France, who man the buffet, or signal for the World’s Best Sommelier to come and suggest some wines. “Swiss franc... euro... dollar...” the words jump out above the laughter and the general hubbub, but that’s not really what they’re talking about. Clearly, no one has a clue what to think. Rumours are making the rounds: so-and-so has decided to put his prices up by 15% with immediate effect; another is offering handsome discounts; and a third swears he won’t budge an inch. So let us move on. “Good evening! How are you?”

But it wouldn’t do to stay up too late; another Geneva Week starts in the morning.

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MORNING ROUTINE

I The magnificent Bâtiment des Forces Motrices

Monday morning. It’s 8.30, and an elegant and orderly crowd waits to pass through security. For those who have travelled from distant shores, it is just one more in an endless series of security gates. This latter-day ritual completed, we are admitted to the inner sanctum, to the familiar muted palette and tasteful upholstery of the SIHH. But relaxation is not on the agenda: first up is A. Lange & Söhne.

There’s nothing like a hefty dose of Germanic engineering to wake you up on a Monday morning. Today it takes the form of the Zeitwerk Minute Repeater, “A modern interpretation of the decimal minute repeater with digital display,” so we are told.

It’s a bold wager. Launched several years ago, the Zeitwerk was the first Haute Horlogerie digital watch, the first to feature a jumping numerals display. This original Zeitwerk, with its three discs – one for hours, one for minutes and one for tens of minutes, comes equipped with a Minute Repeater. The two hammers in blackpolished steel are conspicuously located under the hours and minutes apertures and, unusually, T ZEITWERK MINUTE REPEATER by A. Lange & Söhne

strike not outwards but inwards. The gong, which is also visible, is not circular but follows the contours of the apertures and small seconds dial. There are three different sensors – three snails connected to the display mechanism – which detect the time to be indicated with an audible signal: a low tone for full hours, a double tone for ten-minute intervals and a higher tone for the minutes.

Consequently, the minute repeater sounds not the quarter-hours, but every ten minutes, a rarity in itself. And – it is also the only minute repeater that strikes exactly the time indicated on the digital display! Its constant force movement, comprising 771 components, has been thought out down to the smallest detail.

Thus, the repeater takes precedence over the time display: if the repeater is activated just before the display is due to jump, the discs remain stationary until the chime has finished ringing. Another detail: the repeater cannot be activated if the power reserve shows less than 12 hours (from a total of 36), to ensure that the repeater function is not compromised. A red dot on the power reserve indicator serves as a warning. There is much more one could say about the meticulous detailing of this exceptional watch, whose face retains the typical Saxon understatement and simplicity. The only downside is the price: 440,000 euros, in platinum! Clearly, at this price point, exchange rate concerns seem somewhat irrelevant. But, if you are absolutely determined to own an A. Lange & Söhne – which is completely understandable – you can always go for one of the other 12 watches in the 2015 collection.

Beginning with the Lange One and its instantaneous jumping Big Date, which has had a successful facelift, and is available for EUR 29,800 in red or rose gold. (…)

Read our complete report on the Geneva Week – SIHH’s brands and models on www.watch-aficionado.com

GENEVA WEEK – OUTSIDE THE SIHH

FLOTILLA

T

he SIHH, which this year celebrated its twentieth anniversary, is a victim of its own success, attracting an increasing fleet of hangers-on around the flagship event.

The flotilla includes large cargo vessels (Hublot, Zenith), frigates such as Ulysse Nardin, pleasure cruisers (de Bethune, Christophe Claret, Urwerk, FP Journe, MB&F, Bovet, Manufacture Royale) and ocean-going monohulls such as Revelation and Ollivier Savéo, to name just a few. They all mill around the bay, not far from the Cité du Temps, an artificial island inhabited by the Swatch Group, which is exhibiting Breguet and Harry Winston there. A short distance away, on the Rue du Rhône, all the watchmaking bou-

tiques, single- and multi-brand alike, are staging their own ‘exhibitions’. And we shouldn’t leave out the Franck Muller group, which is entertaining in high style at its country seat, and Cvstos, which is partying like there’s no tomorrow in its arcade, with the help of the larger-than-life Gérard Depardieu.

Fabienne Lupo, the welcoming and considerate director of the SIHH and FHH, is resigned to the phenomenon. She nonetheless draws a distinction between the independents who, understandably, are trying to make the most of the opportunity, and the powerful groups that turn up on the doorstep, uninvited. Some years back she toyed with the idea of organis-

ing a parallel exhibition for Haute Horlogerie independents in a chateau close by the SIHH. But the brands exhibiting at the SIHH opposed the idea, and it was dropped. Which is a shame. Evidently, even elephants are afraid of mosquito bites.

Whatever the case, it was possible to find some extremely attractive deals during this hectic week. Here, as a kind of appetiser, are some from the independents (in alphabetical order, so as not to ruffle any feathers), but we will cover them at greater length in our next issue (ES 2/15) which will be published to coincide with Baselworld. Most, if not all, will also be present at the Basel fair.

variations on his Son of Sound, drawing inspiration from musical motifs and stringed instruments. This iconic piece will soon be on display at the MoMA in New York. Available in some 60 sales outlets, the brand also offers one-of-akind and bespoke pieces. (SM)

BOVET

ARTYA Launched in 2010 by Yvan Arpa, the brand is expanding its ‘Son of’ range with ...a Gun, Sound, Gears, Earth and Art. You may remember its models, whose blued cases were produced by real lightning from an electrical coil. The watchmaking entrepreneur is presenting some new

The Val de Travers brand presents several richly worked and elegant pieces. For ladies there is the Miss Audrey, whose Amadeo system allows the watch to be easily detached from its bracelet and converted into a pendant, pocket watch or table clock. Another model to watch is the jumping hours Virtuoso with five-day power reserve, optionally set with gems, in rose or white gold. The Braveheart transparent tourbillon with retrograde minute hand is also worth a look! The brand is equally active in bespoke watches; around 30% of its sales are for custom models. Bovet is also continuing its push for vertical integration, with 75% of base movements produced in-house in 2014, compared with 50% the previous year. (SM)

BREVA Breva has espoused an unusual take on watchmaking. Its Genie models, launched in 2013, have much in common with scientific instruments. The first complication was a barometer, a sort of weather-forecasting watch. The second, sportier series, was built around an altimeter. The WATCH AFICIONADO | 11

present in the unique watches that the two men create together. Introducing the latest DB25T Zodiac, Denis explained that it was about “rediscovering emotion in historical fine watchmaking.” Dials decorated with symbolic zodiac figures flourished in the classical watchmaking of the golden age. Here they are given new life, finely carved into a stunning watch of rare simplicity and rare emotion.

But De Bethune has plenty more tricks up its sleeve, notably in its more technical pieces, which we will come back to in our forthcoming Baselworld issue. (PM)

models that could not be more different: the Quantième Perpétuel and the Elégante, whose technical problems have now been resolved.

Watch this space. (PM)

MB&F Amply living up to its reputation as a ‘horological laboratory’, MB&F is launching into outer space a ‘pirate’ watch unlike anything you have ever seen. Its organic forms are dominated by

FP JOURNE new model, the Genie-03, which goes on sale in June in a limited edition of 55 (CHF 48,000), includes an anemometer that calculates ‘instant speed’ (not to be confused with the tachymeter, which calculates average speed) and maximum speed. This scientific gambit is an accurate reflection of the brand’s name: ‘breva’ is the name of a wind that blows over Lake Como in Italy. We hope this southerly breeze bodes well for the future of the horological start-up! (SM)

“I am always going back over my collections.

In 2000 I revisited the Resonance, reworked the movement completely, and added a new, rather sophisticated free detent escapement, which no longer needs a spring. The escapement wheel is making a comeback. In the same vein, I have now returned to one of my

DE BETHUNE It is always a distinct pleasure to meet Denis Flageollet, the watchmaking heart of De Bethune.

David Zanetta, its aesthetic soul, prefers to play the deus ex machina, but he is also entirely

classics, the Octa Lune, which was starting to show its age. I redesigned it, enlarged it and substantially improved its readability by, among other things, doubling the size of the date,” explains François-Paul Journe. Who could fail to rejoice at the renaissance of this elegant and understated watch, the epitome of Journe’s watchmaking. But we should also prepare for the long-awaited launch of two 12 | WATCH AFICIONADO

four sapphire domes in its four corners housing the regulating ‘turbines’ for the winding mechanism, and hemispherical hour and minute indicators. The central dome opens up to reveal a flying tourbillon with a ‘retractable hemispherical shield’ that protects its beating heart from UV rays. Inside, a highly complex motor required three years’ work to perfect, and mindnumbing 90° angular gears to work around.

But the HM6 Space Pirate has now lifted off.

We can also soon expect the latest edition of the HM3 Frog, MB&F’s bestseller, with more than 500 sold out of a total of 1,500 pieces produced by MB&F since it began. There is more to discover in our next issue. (PM)

Read the full article on www.watch-aficionado.com

INDEPENDENTS

• To illustrate the various difficulties encountered by independents, Europa Star has chosen a series of particular cases.

You’ll find below the first part of these studies per brand. More to follow in our next issue (ES 2/15 Baselworld).

NO. 1:

VOGARD

“As a shareholder I’m happy; as a creator, disappointed”

I

n 2002, a little over twelve years ago, Michael Vogt, a marketing executive who had previously worked alongside Christian Viros at TAG Heuer, launched his own brand: Vogard.

With the help of the extremely talented young master watchmaker Thomas Prescher he designed, perfected and patented a unique way of setting the time zone simply by rotating the crown. It was a first for mechanical watchmaking, and it made him the envy of many major brands. His watch is beautiful, exquisitely designed and highly recognisable. It is ridiculously easy to use, and it is the first watch capable of displaying half-hour time zones (as in Nepal, for instance) and Daylight Saving Time.

It is easily customisable to meet specific requirements (for example, pilots can display ma-

jor international airports, or golfers can consult the time at the world’s greatest golf courses); it is available in steel or precious metals, with or without subtle gemstone inlays, and will eventually be produced in several models: Datezoner, the only watch in the world that can coordinate time and date changes via the rotating bezel, and Chronozoner, which combines time zones with a chronograph function.

An aficionado of what he calls ‘useful luxury’, Michael Vogt offers watches at modest and eminently reasonable prices: around CHF 7,000 for the basic model in steel, CHF 12,500 for his Chronozoner and CHF 15,000 for the Datezoner. Over ten years he expects to sell 5,000 units, an entirely respectable figure for a small niche brand such as his. The company’s development was completely self-financed, without any bank assistance, although a minority investor helped to the tune of 10%.

Despite this relative success, Michael Vogt has decided to throw in the towel. At the end of November 2014, he announced he had sold

his patents to IWC. Everything points to his having hit the notorious ‘glass ceiling’.

“As a niche manufacturer and modest watchmaking workshop, we no longer have the financial or structural resources to continue to develop and exploit the full potential of our Timezoner technology,” he told Europa Star.

“I really had no choice. We sold well in the Middle East and the USA as, in both these regions, consumers and retailers alike are much more open to new ideas than they are elsewhere. Asia, a crucial market today for all brands, is much more difficult. It is very hard to find distributors who are genuine partners; they all dream of just one thing: working with the big, established brands.

The Chinese, for example, don’t buy a product, they buy a brand. Initially, Vogard attracted a great deal of curiosity and interest from retailers, who all privately rail against the big brands, and complain that their margins are being eroded.

But when it comes to putting their money where their mouth is, they balk; they’re afraid of taking the risk of developing a brand over the long term when it is still relatively unknown to the general public. For example, I wanted to open a boutique in Shanghai, but when I saw the conditions of the ten-year lease, which stipulated that everything had to be imported from Switzerland – furniture, POS materials, etc. – I realised I was about to jeopardise everything for a single sales outlet.”

While distribution is the biggest stumbling block for a small brand such as Vogard, which has never sold its watches on a consignment basis, other factors have also played a part.

“It has become extremely difficult, with just our own resources, to continue to develop distribution, open our own-brand stores or shop-inshops, and diversify our range as we need to. To give just one example, R&D costs have rocketed over the last ten years. In 2003 one hour cost CHF 150; today we pay CHF 450! Another concern is WATCH AFICIONADO | 13

that over time I have seen several major brands sniffing around my patent, analysing it in detail and trying to get around it. Some even went right out and copied it anyway, but even though I won in court (editor’s note: against Villemont, which subsequently went bankrupt), I didn’t get anything out of it. Quite the opposite, in fact. It was time to come to a decision! And IWC, which was one of the three firms I had identified as possibly being interested in my patents, was very keen. As a shareholder, I am happy. As a creator, I’m disappointed.” So what are his plans now?

“Vogard will continue to provide after-sales services for all the watches we have sold, but on the creative side I am going to take some time out. And personally, I admit, I’m looking for a new, bigger adventure!” he acknowledges, as if worn out by all the recent struggles. (PM)

NO. 2:

MARVIN “We simply couldn’t go any further.”

“

Given the many challenges Marvin faces as an independent brand if it is to continue to offer the best in a highly competitive, mature market, there is no option but to invest heavily. As it was not realistic for us to do this on our own, we have taken the decision to sell the brand to a third party in order to guarantee its future.”

The words of the press release issued at the beginning of December 2014 leave no doubt as to the straits in which Marvin’s independent owners found themselves, seeing no other course but to give up their brand or shut up shop. It was Chinese distributor M. Wu who won the jackpot. There is no sense that they have failed; quite the opposite in fact. Cécile and Jean-Daniel Maye (Time Avenue SA) took over the Marvin brand in 2002.

Created in 1850 in Saint-Imier by the Didisheim brothers, Marvin has had its share of the limelight, particularly in the 1950s, when it employed up to 350 staff. But it subsequently fell out of favour.

Cécile Maye stepped up to give the brand a new 14 | WATCH AFICIONADO

lease of life. The new models are very well designed, with an elegant revivalist touch, putting a modern spin on a fascinating heritage that offers many story-telling opportunities. Its marketing is well-thought-out, understated, effective and original. The products are precisely targeted and affordable, offering a good balance of quality, price and image. They are intended for a young, educated urban audience with an appreciation of design, architecture and 20th century style.

Marvin entered into a partnership with Sébastien Loeb, nine-time rally driving world champion, whose signature graced a chronograph collection starting at €1,000. People were astonished that such a high-profile champion should choose to support such a small brand.

Cécile Maye announced at Baselworld in 2014 that the brand, which had already sold 20,000 units, had seen a 63% increase in orders. So what went wrong?

“We simply couldn’t go any further, we couldn’t invest the sums necessary to take us to the next level. We hit a critical barrier,” explains Cécile Maye. “The brand enjoys an excellent reputation, where it is recognised,” she adds. “In order to activate this recognition, we need to have access to the markets. We have a sound distribution network, with almost 300 sales outlets.

But clearly that’s not enough! Distributors are in trouble, they’re not buying the stock. Retailers are under pressure. We are told the market is saturated. I don’t really believe that. Let us just say that we are being watched. There is no doubt in my mind that the big groups and established brands have a decisive advantage.

“An independent has to do everything itself: design and production, obviously, but also finance,

stock management, marketing, etc.... We could approach financiers, but they would need a return on their investment that we could not guarantee. We were looking to raise 6 million with a turnover of 3 million. But we have always refused to take the easy way out. We are looking, we were looking, at the long term. Upstream, suppliers are either bought out, or they limit their sales, or they lose control of their orders. Given the sums involved, independent brands, lacking any real possibility of making economies of scale, forced to squeeze their margins, cornered both upstream and down, are unable to move up to the next level.”

What will become of Marvin, now that it has been taken over by its Chinese distributor? “At the end of August 2014, when the takeover was confirmed, M. Wu agreed to take on the entire Marvin team. Fundamentally, the brand’s direction and its location in Switzerland will not change. Marvin is continuing along the course we set, although, clearly, it is no longer our course.

It’s a great shame that we have to leave it here, just as everything was taking off. It just goes to show that distribution is absolutely key. In two or three months, M. Wu has already opened 40 new sales outlets in China. And in the current political climate, our modest prices have become a significant factor.”

What do the Mayes plan to do now? “We’re taking a break, taking a step back, taking some time out. We might go off somewhere for a year...” Such is the harsh reality and the privilege of independence. (PM) (…)

Read our series of case studies on www.watch-aficionado.com

DISTRIBUTION

AFTER-SALES SERVICE: • With exports of Swiss mechanical watches growing year on year, after-sales service has become a key element for the industry.

• A solution needs to be worked out urgently to meet the demand, or the situation will quickly become unmanageable.

by François H. Courvoisier, Dean of the International Institute of Watch Marketing at the School of Business Administration Arc, Neuchâtel.

T

he issue of after-sales service is more relevant than ever. Each year, almost 30 million Swiss watches – including around 6 million mechanical watches – reach the market, and join the tens of millions of mechanical watches produced over previous decades.

At the 16th International Watch Marketing Day, Philippe Boutié of LAMTAR Planning & Communication in Paris talked about the “aftersales service time bomb”. To support his argument, he referred to a study he had conducted on watchmaking and its subcontractors, in which he noted that the “return rate just after [expiration of the] guarantee is one of the best-kept secrets of watchmaking.” Indeed, brands do not divulge any figures relating to returns under guarantee or once the guarantee has expired.

Nevertheless, Philippe Boutié takes no credit for the phrase ‘after-sales service time-bomb’.

Back in 2007, as the world financial crisis began to take hold, Jean-Philippe Arm devoted an entire article to the subject in his magazine WatchAround, interviewing the CEOs of a number of leading brands. He quoted François-Paul Journe as saying, “After-sales service is the cancer of every brand.” At the time, Mr Journe es-

timated that 10% of watches each year “break down because they are old, need servicing, have a fault or have been mistreated.”

50,000 NEW JOBS TO MEET DEMAND It was in order to find out more about brands’ strategy in this regard, and to clear away some of the smoke and mirrors with which clients are faced when they seek after-sales service, that the International Watch Marketing Days chose to tackle the topic in 2013. The concept of aftersales service was covered comprehensively, not only from the technical angle of watch maintenance, repair and exchange, but also and above all from the angle of managing client relations with a view to generating brand loyalty. Indeed, after-sales is just one aspect of the relationship between the brand and the client, whose foundations are laid with pre-sales service, when the client starts to think about buying a new watch, and which is cemented by ad hoc service, when the sale takes place in the shop.

Catherine Bourdin Mougel and Laurent Sage of the Chamber of Commerce and Industry in the Doubs department of France have noted that brands are heavily involved in sales of their new watches, and virtually absent from secondhand watch sales. They observe that the luxury watch market is increasingly evolving towards a service market, with a growing number of aftersales interventions compared with new watch sales. These after-sales transactions, both under guarantee and out of guarantee, should lead to an increased presence of brands in the second-hand market. Catherine Bourdin Mougel and Laurent Sage believe that by 2025, growth in after-sales service needs to generate 50,000 jobs worldwide, if it is to handle the maintenance and repair of the millions of mechanical watches that have entered the market.

ASIA, THE WEAK LINK Maarten Pieters, director of watchmaking training institute WOSTEP, points to the difficulty of sourcing enough good watchmakers for after-sales service worldwide. According to his analysis of annual Swiss watch export figures over the last decade, mechanical watch exports have doubled (from 3 to 6 million units, approximately). Using his previous experience in micro-mechanics and high-end watchmaking, he calculated that if three million pieces are exported every year for ten years, in the eleventh year around three million watches will require after-sales service! In fact, for the watchmaking industry as a whole, he estimates the coefficient of watches returned for after-sales servicing at between 0.7 and 0.9. That means, according to a reasonable forecast of new watch production, after-sales service worldwide will affect between 4.9 and 6.3 million units per year. (…)

Read the full article on www.watch-aficionado.com

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