Hubert Burda Media

Five Giants of the World’s Leading Watch Brands Speak

Senior figures at five of the world’s leading watch brands explain how they plan to steer a course through some decidedly uncharted territory in the years to come.

“A watch does not just tell the time; it shows who you are”

Arnaud Bastien
President and chief executive of Graff Diamonds Asia

What have been some of the most significant achievements for Graff Diamonds in 2017?

We opened our first flagship salon in Singapore’s ION Orchard in early September, which represented an important milestone for the company. Our founder and chairman, Laurence Graff, made his first trip to Asia in the 1970s and the first place he visited was Singapore. This is the place where he began meeting important clients, including royalty.

For ladies’ watches, we have enjoyed continued success in creating fabulous jewelled timepieces. The Snowfall collection, for example, is available in a variation of gemstones and is the first collection that’s been extended to a jewellery line. Our new Spiral watch, which features an uninterrupted spiral as its design to epitomise endless love, is the new access line of Graff with a starting price point of HK$94,000.

For men’s watches, the extension of the GyroGraff novelty has been a tremendous success: the GyroGraff Universe dial and the bespoke Japan Mount Fuji, Hong Kong and Shanghai skyline dials have all been very well received.

Which timepiece have you worn most this year and what makes it so unique?

The GraffStar Slim Eclipse is an elegant dress watch of understated luxury. It’s very light, being made of titanium and features an iconic Graff faceted dial.

What do you expect to be your largest markets in 2018?

While China will keep dominating the luxury market, we also foresee positive growth in southeast Asia.

What do you anticipate as the dominant trends for the luxury watch market next year regarding materials, design and features?

The use of rare and refined materials with state-of-the-art mechanics.

How much of an impact have smartphones had on your business in the past 12 months and do you foresee any revolution in the mechanical watch business in response?

Smart watch brands are targeting those who are loyal followers of the latest gadgets. But when it comes to a proper watch, clients are still looking for a design, a brand, a timepiece that is timeless and a representation of their status and sophistication.

Are there any specific releases aimed at the youth market for 2018?

We have two commercial watches that target young professionals. The Eclipse for men – a watch that I wear daily – and the Graff Spiral diamond watch
for ladies.

What factors ensure a watch retains its popularity over the years?

Reliability and accuracy, complemented by a timeless and elegant design.

Swiss brands continued to report growth in sales across China and Hong Kong at the 2017 Hong Kong Watch and Clock Fair. How much of a pivotal role will Hong Kong play for the brand in the future?

Hong Kong will remain a very special place for the watch industry. Its status as a duty-free port is vital to the success of the luxury market.

What are you most excited about for 2018?

We’ve recently acquired the second largest diamond rough in history, at 1,109 carats, and I’m very excited to see the creations from this fabulous rough.

What’s your opinion on the new “Swiss made” 60 percent rule, and how do you think it might impact the industry?

The mechanics and technical aspects of Graff watches are made in Switzerland, whereas the diamond settings are completed in our high jewellery workshop in London. This rule does not affect us at all as we uphold a high standard in our production line.

What defines a watch for you?

Smart watches are fun, but I consider them a gadget. A watch does not just tell the time; it shows who you are. A simple yet elegant design that’s true to the brand aesthetic is the key to a successful timepiece.

 

Jerome Biard, CEO of Corum
Jerome Biard, CEO of Corum

“We will continue to focus on what we know. The only ‘bridge’ we are concerned with is the Golden Bridge”

Jérôme Biard
CEO of Corum

What will be your focus for Corum in 2018 and beyond?

First of all, I’ll be listening to major players involved in Corum – staff, clients, suppliers, press – and second, I’ll be working out what the brand’s priorities are and how to implement them. Ultimately, my focus will be “less is more”.

What were some of the standout moments for Corum in the last year?

This year has been a strong one in terms of creativity, as evidenced by the updating of the Bubble watches – including The Girl with the Pearl Bubble by photographer Juliette Jourdain – which represented a great partnership for us with some talented artists. We have also been focusing on small VIP events organised for our Golden Bridge line and haute horlogerie timepieces. We had an extraordinarily good response from clients in Hong Kong, Malaysia, Taiwan, Thailand and the US.

The launch of the Golden Bridge Round in late 2016 encountered great success with a sell-through rate of almost 100 percent in certain countries – almost unheard of these days. This demonstrates that despite the difficult economic situation, there is still potential for brands like us to succeed. 

Which timepiece have you worn most this year and what makes it so unique?

I like to wear the Golden Bridge Round and the Admiral Legend 42mm in rose gold. Both of these watches are iconic and of great value to Corum.

What factors ensure a watch retains its popularity over the years?

Quality and perceived value, merchandising on the point of sales, plus continuity and sustainability in the products and communication strategy.

How much of an impact has the technological revolution had on your business in the past 12 months?

We believe smart watches are definitely not for Corum at this stage and our humorous answer was presented at Baselworld with Bubble Disconnected.

I don’t believe that smart watches will be quite so popular in the future. The wrist will be free again for classic timepieces. Nevertheless, we have to better understand that our clients’ mindset changes faster now than it did, say, 30 years ago.

To get the younger generation on board, are there any specific strategies aimed at the youth market for 2018?

Social media is definitely a tool in which we need to invest. We’ve also studied the success of budget watches such as Daniel Wellington and Kickstarter brands building a group of aficionados, just like Panerai some years ago. Beside the Bubble watch, we will launch a Corum e-boutique in 2018 aimed at the younger generation.

What are you most excited about for 2018 – any upcoming events, releases and rumours that have got you feeling excited?

At the beginning of 2018, we will launch another collaboration watch to support our Golden Bridge line. The watch will reflect our philosophy and approach at Corum in a modern, classical style. There was plenty going on at the end of 2017, too: we launched Iguana Yachts last September [with the French boat builder of the same name], and a new Admiral will additionally be presented at the end of this year.

What’s your opinion on the new “Swiss Made” rule implemented in January 2017?

The Swiss Made 60 percent rule is an important step in the right direction. We also have to keep in mind that 100 percent Swiss would not be possible and that today, more than ever, RRP matters. It has to be connected to the real value of your products. However, the signature brand on the dial has to be the ultimate guarantee for quality and value, rather than the “made in”.

What defines a watch for you – is there ever an overlap between mechanical and digital timekeepers?

Today a watch has not so much value to my eyes for its first function of giving the time, but for its interpretation. It’s more about the fusion between art, craftsmanship and technicality – that is what I like about a watch.

How do you expect the brand will bridge the gap between the demands of consumers for traditional timepieces and the modern appetite for their digitised, automated cousins?

We will continue to focus on what we know. The only “bridge” we are concerned with is the Golden Bridge.

What has been the most significant change you have witnessed in your
25-year career?

The internet has changed and accelerated everything in the watch business. We now have to take good care of the specificities of each market. But we are small and should never forget it. The value of Swiss watch industry exports stood at CHF 19.4 billion (HK$151.3 billion) in 2016, which is nothing compared with Apple or Samsung’s turnover.

 

Nicholas Rudaz, COO of Franck Muller
Nicholas Rudaz, COO of Franck Muller

“The new ruling is far too flexible … it’s shameful that such a strong branding as ‘Swiss Made’ actually means nothing to the end user”

Nicholas Rudaz
COO of Franck Muller

What have been some of the highlights for Franck Muller in 2017?

The 25th anniversary of the brand, which was celebrated at our headquarters in January, in May in Japan and this September in Hong Kong, marked a milestone for a young and unique brand known for its complications and designs.

Which timepiece have you worn most this year and what makes it so special?

I love wearing our Crazy Hours Curvex in white gold with Swiss flags on the dial. Its fun complication uses the heure sautante complication to keep a correct timing while having the numbers scattered in a uniquely odd order. The Curvex shape is our DNA, our emblematic shape and the complication is unique. It’s a very emotional watch in the sense that when I show it to friends or clients, they don’t understand how it works. It’s only when I show them how the jumping hand functions that they, too, appreciate the complication.

Where did Franck Muller sell well in 2017?
The nice surprise of the second quarter is to see the business growing in Hong Kong. The market is definitely rising here again, and we expect it to grow further in 2018.

There is an increasing number of smart watches on the market. Do you foresee any kind of revolution in the mechanical watch business in response?

A true mechanical watch will always be sought after by watch collectors. The [appeal of the] smart watch is short-lived, as every six months the old generation is replaced with a new technology. We prefer to let other brands exploit this market and concentrate on the purity of traditional watchmaking.

To get the younger generation on board to become Franck Muller aficionados, are there any specific releases aimed at the youth market?

The Vanguard case (which launched in 2014) is sportier and appeals to a younger audience, with a starting
price that’s more affordable for younger generations.

What defines a watch for you – is there ever an overlap between mechanical and “smart” timekeepers?

A watch is a timekeeper to be worn with pride and joy on the wrist. A mechanical timepiece encapsulates a long history of savoir-faire. Of course, there are many different ways to show the time, and a smart watch is just another possibility.

What are you most looking forward to in 2018?

Next year will be the 15th anniversary of the Crazy Hours watch and to mark this occasion, we will be presenting some new, unique colours for our southeast Asian and Hong Kong markets. In 2018, we will also extend two buildings to offer 16,000 square metres of additional production space at our Watchland headquarters in Genthod. We’re also very excited to be presenting some wonderful novelties this January at our World Presentation of Haute Horlogerie (WPHH) event.

What’s your opinion on the new “Swiss made” 60 percent rule?

The new ruling is far too flexible, which enables some manufacturers to produce all their components in Asia at cheaper costs before mounting the movements in Switzerland. It’s shameful that such a strong branding as “Swiss Made” actually means nothing to the end user. Indeed, the consumer is deceived into buying a product seemingly of good quality, but in fact, the origin of the product is from another continent. At Franck Muller, we are fully verticalised, and all our components are made in Switzerland. All Swiss watchmakers should be proud to state that their watches are made in Switzerland, if that is indeed the case.

What factors ensure a watch retains its popularity over the years?

Its creativity and design. As for watchmakers, it’s their dedication to quality.

 

Goris Verburg, Managing Director of northeast Asia for IWC Schaffhausen
Goris Verburg, Managing Director of northeast Asia for IWC Schaffhausen

“We’ve seen the market grow tremendously and it might well be that China overtakes sales in Hong Kong next year”

Goris Verburg
Managing director of northeast Asia for IWC Schaffhausen

What were some of the standout moments for IWC in 2017?

To mark the 50th anniversary of the Aquatimer diver watch, we launched the Aquatimer Perpetual Calendar Digital Date-Month in ceratanium, an alloy of ceramic and titanium: we’re the first brand to use this material for a watch case. We also re-launched the Da Vinci collection, which first hit the market in 1985 with the perpetual calendar for men and a more female-oriented 36mm dial. We additionally bought back the Engineer collection, first launched in 1955; an anti-magnetic watch that engineers could wear in the lab. The new Engineer has the look of the original 1955, whereas previous re-launches recalled the 1976 model.

Our new CEO, Christoph Grainger-Herr, took over on 1 April [from long-time CEO Georges Kern], and that’s also a big change for the brand.

Which timepiece have you worn most this year and what makes it so special?

I wear watches like I wear suits and ask myself, “what do I feel like wearing today?”. Some of my favourites include the Portuguese Perpetual Calendar in white gold, which syncs through the crown. I appreciate the mechanism and the aesthetics are quite sophisticated, too. I’ve also enjoyed wearing the Big Pilot Special Edition, which has a silver dial and orange tinted hands.

Were there any surprises from your most recent sales reports?

Hong Kong is traditionally our biggest market, and for the luxury watch market in general. That’s still the case, although the market has been difficult over the past three years. In April, when China raised taxes on luxury goods purchased abroad, we’ve seen the market grow tremendously, and it might well be that China overtakes sales in Hong Kong next year. South Korea also does extremely well for us – many don’t recognise that’s it’s one of our top-performing countries.

What will be the dominant trends in the luxury watch market next year?

I think sports watches will become a lot stronger than classic models, and this is partly driven by demand from mainland Chinese consumers. Their attire is becoming more casual, and they’re looking for sporty, bigger watches. Sporty models globally are also doing better, and that’s something that will probably continue next year. I think they’ll also be more limited edition pieces, and references to historic watches in designs.

Are there any specific releases aimed at the youth market for 2018?

We’re not developing watches aimed at the younger generation. Next year will be our 150th anniversary, so there will be a number of limited edition watches to commemorate that. We want to be true to our price segment; we have a wide range of watches already in the HK$30-35,000 price bracket [to appeal to younger consumers] while most are priced at around HK$80,000. Our key customers are aged between 30-45, which represents a younger clientele when compared to other brands.

What defines a watch for you?

When you’re doing sports, a digital watch is great as it has GPS and displays details like altitude. But besides the convenience of it, there’s no emotional attachment there. Mechanical watches have a soul, a history; there’s a beauty in the finishing, movement, and construction. While some may keep their watches in a winder, I enjoy setting the time … the sensory experience of feeling it and winding is a joy, as it the heritage that you carry around with you.

How will IWC bridge the gap between artisanal timepieces and their digitised cousins?

The purpose of them is very different, and I think mechanical watches are something to keep, something that
can be passed on, a watch from your father or mother. Young people still want to reward themselves with a luxury watch at a special moment in their life, such as a graduation, and we’ll continue to play on these emotional moments. We’re not competing [with digital watches] on a day-to-day basis. In principle, there’s room for both, as they offer two distinct functions.

 

Thierry Stern, President of Patek Philippe
Thierry Stern, President of Patek Philippe

“Most brands are a bit lost. When times are easy, you can sell anything … it’s another story when times are difficult”

Thierry Stern
president of Patek Philippe

How does Patek strike a balance between preserving provenance and history, and staying progressive?

The fact that we are a family business gives us a big advantage. I benefit from my father’s know-how and, in return, he benefits from my youth and difference in opinion. It’s this link that makes us quite powerful. Although I strive to always innovate, I also have a [brand] guardian in my dad who reminds me to keep to our DNA and do things a certain way. This allows us to evolve without forgetting our tradition of innovation – that’s how I grew up. I always say that I need to play a little bit of the devil: It means I have to go on the line but be careful not to fall on the wrong side. And this comes with experience. I ventured too far when I was younger, and my dad had to warn me: “Thierry watch out. This is too far”. Many years later I am able to check myself. Perhaps one day, I will have to take the place of my dad
and do the same with my children.

Do you find it difficult to keep that balance in an age of disruption?

Not really. I have a clear vision of where I want to go with Patek Philippe. We never change our strategy, and when you have a clear strategy, it’s much easier to continue to innovate and try new things. The pilot’s watch [Pilot Travel Time, 2015] was a good example: It was a little different, but it’s still a Patek Philippe. I know the quality and movement have to be to be beautiful and precise, and every detail is very important. You need to take risks, but you have to calculate them – it’s like a game of chess.

How does Patek Philippe cater to the rapidly rising Chinese demographic?

We don’t. I think it will be a big mistake to adapt to a single market. People like Patek because of the design and the philosophy of our brand. Once you adapt yourself to a single market, you’re going to lose that. I know many brands do that, but I believe it’s a mistake: If you’re willing to buy a Swiss watch, you may not expect to see dials with Chinese information on it. My task is to understand everyone’s needs, and the biggest challenge is to create one watch that would be nice for the European, Asian and American markets – this is what’s most important. I have to make one product that seduces everybody, and I will not do specific pieces for a market because that will make me lose my identity. You can always create a special dome clock for a specific market, but we are talking about one clock, one pocket watch, or three to five beautiful enamel dials – those I’ll agree to, but not for the core collection.

How is Patek tackling the digital age?

I’m not willing to tackle it. I’m using technology to educate people, not to sell. It’s a good moment when one buys a Patek Philippe. It’s when you sit down, talk about watches and try them – the internet cannot do that. I strongly believe it would be a mistake to sell Patek Philippe watches through the internet. I’m not selling something mass – [a Patek Philippe watch is] unique and you need to choose your watch very wisely. And to do that, you need to wear it on your wrist first. It’s not the case on the internet: You go [to the website], look for the best price, and order. This is not the strategy for Patek. The day it’s going to be like that would be the one you question the need to do something exceptional. Imagine all of us sitting in our beds and ordering everything – food, watches, etc. It’s going to be boring. I don’t want to see this happen for us.

What are your thoughts on the rise of luxury conglomerates?
I think they are getting too big. They are businessmen, not watchmakers, and that’s the difference. To have 10 to 15 brands under one roof is not easy. You have to control all of that. With every brand turning to the same supplier, watchmakers and after-sales service centres, you will end up suddenly losing your personality.

Do you consider 2016’s slump in the market a momentary blip?

It’s difficult to say. However, I believe that the industry will never be the same again – we will not be going back to how it was a few years ago. The world is evolving, and it’s our duty to adapt. This happened because too many watchmakers produced too many watches – it’s as simple as that. They made a heavy mistake, especially with mainland China. They thought it would be a fantastic year and they were going to sell so many watches. I never understood that. I was the youngest one in the industry, and I said quite early: “I will not go to China like this”. It takes time to educate people, and you need to do things step by step. If you believe that people are just buying – you’re a fool. People are not stupid. I warned many of them but nobody listened, and they produced, produced, produced. Look at what happened; it was a disaster.

Ultimately, do you think this is an adjustment period for the industry?

Most brands are a bit lost. This is when you see the really good ones. When times are easy, you can sell anything – watches, books, cars, whatever. It’s another story when times are difficult. Only the good ones are still staying alive, and I would like to be one of them.