NICOLAS G. HAYEK — THE SAVIOR
Ask anyone and they’ll tell you. The one man most responsible for saving the Swiss watch industry is Nicolas G. Hayek. In the ’70s, when the Swiss watch industry was almost totally decimated by the onslaught of the Quartz Crisis (and in equal parts by its self-reinforced nicheness), Hayek stepped in to turn the tide. He kept the Swiss watch industry alive through the creation of the Swatch — a cheap, cheerfully designed, disposable, collectable timepiece that was all-importantly stamped ‘Swiss’ to state its country of origin. The Swatch went in opposition to everything the traditional Swiss industry represented at that time. While the industry was always insular, Swatch embraced the outside world. While the Swiss industry’s products had always been uni-directional, going from factory to consumer with no dialogue with the end user, with Swatch, Hayek responded to consumer demands.
Hayek looked to the modern world for inspiration, as expressed in Swatch’s bold graphics. He created special editions with artists like Keith Haring and photographers like Helmut Newton, and for events such as the United Nations Earth Summit. While the Swiss watch industry had been niche, by virtue of its volume, Swatch went mass. Indeed, the environment of the watch industry today, in which the entire industry is attempting to claim new ground and expand its market by creatively anticipating what consumers want, was set into motion by Hayek. The Swatch also invented the concept of ‘limited edition’; no doubt, the creators of Panerai probably took the basic principles of their intentional rarity from Swatch’s booming limited editions.
Hayek likes to provoke. He states, “Provocation of society is something I’ve done all my life.” His communication with Swatch was arresting, appealing and vibrant. Hayek wasn’t just selling a new kind of Swiss timepiece; he was selling a new vision of youth oriented life. He was the first to modernize the image of the traditional Swiss timepiece.
Commendably, instead of taking the money and running, Hayek began to reinvest the wealth he made with Swatch back into the Swiss watch industry and single-handedly kept key industries alive. For example, Hayek purchased Nivarox, the single largest producer of almost all the regulating mechanisms for the entire watch industry. He also saved legendary movement factories such as Frédéric Piguet and Lemania. Then, by purchasing ETA, he made the rebirth of the Swiss watch industry possible by supplying brands with the engines they needed to power their timepieces.
Almost every major commercial brand that exists today is alive because of their reliance on ETA movements in the past. And while in-house calibers have now been emerging for over a quarter of a century, only ETA continued to make viable, functioning movements. Hayek also purchased and revived some of the most significant names in watchmaking such as Omega, Blancpain, Longines and Jaquet Droz, and personally took on the difficult role of restoring the much tarnished Breguet name to its former glory. His success at this has brought tremendous haut de gamme credibility to the Swatch group.
Hayek also revolutionized global distribution by setting up his own offices around the world. He explains, “We don’t have one man selling 19 brands. For each brand, we have one man selling it, loving it, taking care of it, marketing it and selling it on the spot.”
What is the emotional power of the mechanical watch? Beauty! It is the most important thing that the watch gives to us. Many specialists this year told me that our La Tradition Tourbillon is the most beautiful watch of the fair and they have given different reasons. They use words like DNA, etc. But I think you can over analyze why you find something beautiful. When you encounter a beautiful woman, you don’t say I find her beautiful because of who her grandparents were. The emotional response to beauty is the most important thing when it comes to a watch, because it is a piece of art.
How is emotion powerful? Emotion is what I created in the watch industry. 25 years ago, the Swiss watch industry used to only sell machines. When we created the Swatch watch, we told everyone that this was a jewel, a decoration to provoke and please you. It is not for telling the time, but to reflect who you are. You should have a watch for every dress you own. It took me time to explain that to survive in the post-quartz world, a watch must give emotion; it must be a piece of jewelry and not a simple machine.
What is the power of communication? If you are an artist, you have to be able to communicate your thinking. It is also important to be innovative in the way you communicate if what you want to communicate a new message or vision. The Swatch was a watch that we created to compete with the Japanese. In the process, we came out with a way to integrate much of the support structure of the mechanical movement into the case itself. Instead of using 150 pieces to make an unsophisticated movement, we needed only 50. At the time, I tried to explain how this allowed us to make a reliable, low-cost Swiss-made watch. But nobody was interested. At the time, even the ladies in my tennis club laughed at me and said, “Nick Hayek, who is going to buy that?” Even though it was more reliable, the fact that it had less parts actually made people less inclined to buy it. So, I had to think of some other way to communicate it. Because I always feel that every brand must have a message. What was the message with Swatch? The message for Swatch was: high quality, low price and provocation of society! How did we communicate this? In a very provocative way.
What is the power of provocation? This is the story now taught at all marketing schools. Because we didn’t have money for advertising, I had to make a peaceful revolution… I had my team build a huge Swatch watch that was 140 meters tall. And we hung it on the skyscraper of one of the most famous banks in Frankfurt. And we wrote three things next to it: “Swatch, Swiss, 60 Deutschmarks”. You had this incredible contrast between the word “Swiss”, which implied quality, and the price, which was very low. This was a provocation of society, which was reinforced by hanging a cheap Swiss plastic watch from the marble and gold building of one of the most prestigious banks in Europe. It took us two weeks before every baby in Germany knew the word ‘Swatch’.
What is the power of the message? I’ll give you two scenarios to illustrate the difference between an image and a message. You have a young man, his wife and a homosexual in a room together. They open a magazine like REVHLUTION and they see an image of a beautiful woman not wearing very much as you often have inside. The man says, “Gee, I’d like to meet her.” Because he is attracted to the image of her beauty. The woman says, “She must be dishonest because everything about her from her hair color to her eye color is fake.” The homosexual says, “I don’t like the way she’s displayed like a piece of meat.” So you see, an image can be easily rejected or misconstrued. But if you get this woman to come into the room and say something warm-hearted and absolutely, perceivably true, then the man will say, “Wow, not only is she erotic, but she is honest, warm and intelligent.” The wife will say, “She is at least an honest woman, I like her.” The homosexual will say, “Well, she can’t help being good-looking, but she has depth and substance, and I’d like to be her friend.” In the first example, you have an image; and in the second scenario, you have a message. A message will always win people over, but as I said, it has to be absolutely, perceivably true.
Thousands of skiers are on their way from Maloya to S-Chanf in southeastern Switzerland as they participate in the annual Engadin ski marathon on Sunday, 12 March 2006
Bernard Arnault — The King of Luxury
Factoring the incredible diversity in the world, both in the man-made realm and in nature, it is all the more impressive to discover, here and there, concentrations of primacy — in power, influence and importance. Where the luxury industries are concerned, one group may be likened to Jupiter, which is large enough to contain all the other planets in the Solar System (despite being largely composed of gas): Moët Hennessy Louis Vuitton (LVMH). With more than 50 brands under its umbrella, this sprawling behemoth registered more than three billion Euros in profits last year, exceeding that of the Richemont Group and Swatch Group combined. Helming the industrial giant that he has built up over a span of some 20 years, is French businessman Bernard Arnault, ranked seventh last year on Forbes’s World’s Richest People list. He owns nearly half of LVMH and has an estimated net worth of US$26 billion — more than the entire GDP of some countries! If empire-building was likened to making an omelette, then it is well known enough that the latter cannot be made without breaking eggs. And it seems that Arnault has broken many eggs. He is known as much for his appetite for acquisitions as his hard-nosed, rationalist style of management that borders on the brutal: buying over companies, sacking non-performing executives, bringing in managers from outside the industry… it was just not done — more an American thing and so… un-French. But in the face of economic stagnancy, liberalizing global trade and challenges from low-cost manufacturers in the developing world, Arnault has demonstrated the ‘Big Business’ way for the formerly cosseted luxury sector in Europe to survive, and indeed triumph. In no small part due to Arnault’s vision, acumen and grit, much of what constitutes ‘good taste’ remains Euro-centric.
They are the elite, the untouchable deities who reconstructed the luxury watch industry with their bare hands and the force of their will. Without them, there would be no luxury watch industry, no new Golden Age for horology. They are, collectively, the men with the vision and courage to constantly believe in a future for the mechanical watch. Amongst them, they have created enormous brand equity and safeguarded the craft and business of watchmaking for the generation that now waits in the wings to succeed them. Here then is our list of the Establishment — the elite power core of the luxury watch business.
G. Nicolas Hayek — The Director
G. Nicolas Hayek was a filmmaker before he took over his father as the CEO of the Swatch group. In many ways, we are actually very curious to see what kind of films he would have made if his path as a director had continued. We’re inclined to think that he would have made epics, the vast David Lean or D.W. Griffith epics, such as Lawrence of Arabia and Birth of a Nation. Because in the years since he’s taken the Swatch Group’s reins, he’s helped it to ascend to an even higher level of epic global dominance. In a statement issued on 19th March 2007, the Swatch Group reported a 32.38 percentage increase in operating profits from the previous year to CHF973 million! The best-performing sector is the core segment of watches and industry, where sales growth was a high 13.8 percent. Says Hayek, “Group sales have reached an incredible CHF5.05 billion!” Also of note is that net income is up 33.7 percent to CHF830 million, operating margins are up to 20.2 percent from 17.1 percent, and gross sales are up 12.3 percent to CHF 5.05 billion. Where his father left off, creating major distribution points around the world, G. Nicolas Hayek is poised to have a serious presence in the retail arena as well. He has already set up numerous boutiques around the world, both as single-brand shop fronts and under the Tourbillon umbrella for haut de gamme timepieces. He is currently in the process of purchasing major real estate to unite his brands under a single roof. Finally, understanding the power of communication, G. Nicolas Hayek created the City of Time in Geneva, an exhibition space dedicated to the culture of watchmaking. The choice of his first exhibition was brilliant — by electing to celebrate Nivarox-FAR SA, he subverted the common perception of the Swatch Group as being closed off and secretive of their industrial infrastructure. At the same time, he wonderfully and honestly highlighted to the entire world that almost every brand, including Rolex, is still dependent on Nivarox-FAR SA for their micro-regulating components, which collectively create the heart of the mechanical watch. As Hayek perfectly put it, “If someone is unhappy with the truth, it is their problem, not ours.” And in this way, Hayek reveals himself to be an equally able documentary maker. Because the truth is, without the Swatch Group, there would be no Swiss watch industry.
Francesco Trapani — The New CaEsar
Installed at the helm of Bulgari at the tender age of 27, when his two uncles appointed him CEO of the family business in 1984, Francesco Trapani has overseen very radical changes at the company, steering Bulgari’s growth from an artisan company producing fine jewelry to a public-listed, globalised company — one of the fastest-growing in its sector and the third largest luxury jeweler after Cartier and Tiffany. Today, Bulgari employs more than 2,500 employees in 22 countries, with stores in 38 countries. It is a diversified, professionally-managed company with interests in jewelry, watches (to supplement its own Bvlgari watches, Bulgari also acquired Gérald Genta and Daniel Roth in 2000), fragrances, and even financial services, hotels and resorts. Certainly, a far cry from its humble beginnings when Greek silversmith Sotirio Bulgari migrated to Rome and founded the brand in 1884. In 1905, with the help of his sons, he opened a store at No.10 Via Condotti, which remains Bulgari’s flagship store.
But the real power of Bulgari lies somewhere behind the superstar growth figures… not least as an Italian answer to the great French houses like Chanel and Hermès; but Bulgari is also an outstanding example of a successful transition from a localized, niche artisan set-up to a diversified global brand that retains its soul even while changing gears. Although it funneled its diversification and explosive growth into new territories by listings on the stock exchange, it remains largely family-owned (Paolo and Nicola Bulgari, the aforementioned uncles, and Francesco collectively own a 52 percent controlling stake in Bulgari). Yet, the continuity of family-ownership is not allowed to deepen into malaise, as it has for many dynastic companies: the management, with the exception of CEO Francesco, comprise professionals not drawn from their family.
Not content with its own success, Bulgari is also helping other Italian artisan companies in the luxury goods sector survive the modern business climate, setting up a private equity group Opera in aid of ailing Italian companies with much greater flair in producing beautiful things than running their businesses. Nursing these companies back to viability not only preserves a part of Italy’s heritage, it’s also good business when they are sold back at higher worth.
What these acts show of Bulgari and the man helming it is their incredible business savvy, flexibility and pragmatism, tempered by vision — a formidable combination driving the up and up of the house of Bulgari.
Scheufele had a vision to elevate Chopard to become one of the most powerful high luxury brands in the world
Karl Scheufele — The Patron
Karl Scheufele purchased the Chopard name from Paul André Chopard in 1963. The story goes that Scheufele was keen to enter the luxury watch business and had traveled all over Switzerland to find the appropriate manufacture to invest in. As fate had it, at the time, Paul André Chopard, the grandson of Louis-Ulysse Chopard, had reached something of a crossroad.
None of his children were interested in continuing the family trade, so he was searching for a viable means to ensure that the Chopard name would endure. Scheufele knocked on Chopard’s door and quickly became enamored with this small, discreet creator of lovely timepieces. However, what no one except Scheufele had was a vision to elevate Chopard beyond a simple watch manufacture to become one of the most powerful high luxury brands in the world. That he did this in the short decades that followed is a testament to his extraordinary will, unmatchable work ethic and commercial ingenuity.
Scheufele received something of a baptism of fire when he was put in charge of his own family jewelry business at the tender age of 20, starting with 50 staff. When he bought Chopard, that brand only had five employees. Today, Chopard has in excess of 1,200 employees.
Scheufele has expanded the Geneva factory four times and Chopard has been a market leader in building a factory in Fleurier to produce L.U.C watches equipped exclusively with in-house calibers.
Scheufele has extended the Germany factory twice, and bought over a gold-chain factory next door. Today, he has distributors and subsidiaries in America, Asia and Europe, including countries like Germany, France, Spain, Italy and the UK. Scheufele started the first Chopard boutique in Vienna in 1988, which was inaugurated by Mr. José Carreras. Today, Chopard has 95 boutiques worldwide, and Scheufele still personally selects the location of every boutique in the world and interviews every employee of the company.
But it is perhaps in terms of its equity as the ultimate symbol of traditional opulence that Chopard shines brightest. Because in the heady environment of film festivals and, now, even movie placements as evinced in the Venice Film Festival’s award-winning Hollywoodland and Woody Allen’s Scoop, it is clear that Chopard is inextricably entwined with the fabric of luxury.
Chopard is, in essence, a vast commercial empire — one that was constructed stone by stone by Karl Scheufele. That it today rivals Cartier as one of the most enthralling commercial luxury powerhouses is nothing short of astounding.
What is the meaning of “power”? ‘Power’, in my opinion, is the brand’s ability to evolve and grow without having to compromise and subsequently losing its identity in the process. This is particularly true of a family-owned business like Chopard, that we respect tradition while continually progressing on. Most importantly, our progress has ‘empowered’ us (Chopard) to give back to society through our involvement with the José Carreras Foundation for the fight against leukemia and the Elton John AIDS Foundation.
What is the emotional power of the luxury watch? Chopard has chosen to claim an original and powerful symbolic dimension for itself: the term ‘Happy’ represents the universal human ideal of happiness in all forms. On the other hand, we have recently adopted the name ‘Passions’ for our men’s magazine. For me, passion is the driving force behind the establishment of our manufacture and creation of our exceptional timepieces.
Hence, it is our hope that the ownership of our products will allow our consumers to have tangible ownership of the emotional equivalence to happiness and passion.
how can we empower ourselves to ensure that the LUXURY watch industry stays healthy? In order to stay ahead, we (in the luxury business) must be open to ideas, yet stay very focused. And again, there’s no room for compromise.
The Chopard brand could not exist in today’s world without expressing itself through various forms of communication: products, advertising, films and sponsorship. Ultimately, being empowered with a strong passion and firm dedication to watchmaking is fundamentally what drives us and our highly motivated team to develop and produce exceptional ‘works of art’.
Bulgari is an outstanding example of a successful transition from a localized, niche artisan set-up to a diversified global brand that retains its soul even while changing gears
Patrick Heiniger — The Humanitarian
It’s no small irony that one of the most recognizable brands in the world — indeed, it is the largest watch brand in the world with annual production of almost a million watches — is also the most secretive. It’s safe to say that anyone who knows what a wristwatch is, has heard of Rolex, even if he’s never seen one in his life. Yet, compared to watch companies and conglomerates that have whole divisions devoted to ‘communications’ or ‘investor relations’, Rolex keeps resolutely and stubbornly mum about itself. Rolex is independent, privately held by a foundation that Hans Wilsdorf, who started Rolex in 1905 in London, set up to keep his beloved company private (a widower, Wilsdorf died without an heir). There are no stockholders’ meetings to account to external parties, no annual reports stocked in public libraries, and it’s a blue moon when top executives grant a press interview — in this noisy age of democratized everything (technology, culture, information), Rolex stands apart, marching to its own beat and imbuing all it does with an economy of movement that is the characteristic of masters at their craft, a well-oiled enterprise powered by its own perpetual engine.
Perhaps that is the allure of a watch company that lets its watches do almost all the talking. And in this regard, Rolex watches have spun volumes from the onset, carving the image of accurate timekeeping, reliability and extreme robustness by allying itself with the most extreme human endeavors of the times: Channel swim, deep sea exploration to the deepest points of the earth, conquering Everest, a full wash and spin cycle in a washing machine… In all these exploits, Rolex watches have come out ticking, on time and unfazed.
Heading this remarkable watch company is Patrick Heiniger, only the third managing director in Rolex’s 100-year history, when he succeeded his father André Heiniger in 1992. As the MD of Rolex, he not only leads the foundation in running Rolex, he is also the custodian of Wildorf’s humanitarian ideals. As Rolex has benefited from its association with individuals who have accomplished remarkable deeds, wearing their Rolex watches to the ends of the world and back, Rolex has reciprocated by actively championing the human spirit, celebrating and rewarding extraordinary deeds that “advance human knowledge and well-being”. To this end, Patrick Heiniger chairs a special committee made up of distinguished individuals from diverse fields, which administers the Rolex Awards for Enterprise. Set up in 1976 to commemorate the 50th anniversary of the Rolex Oyster, the world’s first waterproof wristwatch, the Awards is held every two years, providing financial support and recognition to individuals who have made a positive difference to the human condition. Past winners have included eminent scientists, explorers, environmentalists, and many who have no formal qualifications. Indeed, winners do not fit any particular demographic; they have only one fundamental thing in common, that is, through innovation, courage and determination, they have made the world a better place. “The winners of the Rolex Awards for Enterprise are making a difference, and that is what counts in today’s world. Thanks to them, our future looks a little bit brighter,” said Patrick Heiniger in a statement.
Heiniger is also the chairman of the Rolex Mentor and Protégé Arts Initiative, which was set up in 2002; it is Rolex doing its bit to safeguard mankind’s cultural heritage. Essentially, this is done by identifying highly talented artists from around the world (in music, the performing arts, visual arts, film, literature) and putting them in a one-year mentorship program with a master in the same genre. There is no pressure on the selected young artists to produce anything concrete at the end of the mentorship year, but one can surely hope that something magical follows when two minds connect, realized in the time-honored tradition of the mentor-protégé relationship as a vehicle for imparting knowledge in the arts.
winners of the rolex awards have only one fundamental thing in common: that they have made the world a better place
Ephraim Grinberg — The American
Europe has its luxury conglomerates, and so does America, in the shape of the Movado Group. While not quite in the same league as Richemont and Swatch in terms of size, the Movado Group boasts an impressive portfolio of watch brands, covering almost every segment in the business with Movado, Ebel, Concord, and fashion brand watches under license such as ESQ, HUGO BOSS, and Tommy Hilfiger. Like many of its counterparts, the Movado Group also has immigrant roots: company founder Gerry Grinberg fled Cuba to escape Castro’s regime in 1960 and sold watches out of a suitcase. Today, Movado (which means ‘movement’ in Esperanto), is headed by Gerry Grinberg’s son, Efraim Grinberg. Since he became president and CEO in 1990, Efraim Grinberg has overseen the company’s initial public offering in 1993, and grown the business to the tune of more than $470 million in sales last year. Under his direction, Movado acquired Ebel from LVMH in 2004. Mirroring his father’s track record in revitalizing watch brands, Efraim Grinberg has injected new life into Ebel and Concord by appointing top executives from outside Movado to helm the brands — efforts which, we expect, will quickly bear fruit, judging from the new collections showcased this year by Concord and Ebel.
What is the emotional power of the mechanical watch? If you look at the movement of a mechanical watch, in particular its balance, it’s like looking at a human heart beating. This aspect of the movement immediately expresses that it is a living organism, almost like a human being. At the same time, the watch is a thing of beauty. If you look at the craftsmanship and labor applied to finishing and decorating something as simple as a screw, you realize that a watch is also a piece of art. We have to make watches that make people feel good when they see them, when they buy them and when they wear them!
What is the power of proprietary movements? We are particularly proud of our proprietary movements, in particular the ones we make at Ebel.Our chronograph caliber 137 was created during a period when very few brands were making an effort to keep the mechanical watch industry alive. So, it’s nice to feel as if we made a contribution to the preservation of the Swiss watch industry. The new caliber 139 is something that takes our chronograph caliber and brings it to a new performance and creative direction.
What is the power of a family-owned company? It allows us to build brands for the long term. If we have a strategy and clear vision for a brand, we can put it into practice and stick to it. At the same time, we have the pleasure of making the best possible products for our customers.
When we created the Swatch watch, we told everyone that this was a jewel, a decoration to provoke and please you. It is not for telling the time, but to reflect who you are… It took me time to explain that to survive in the post-Quartz world, a watch must give emotion
almost every brand is still dependent on Nivarox-FAR SA for their micro-regulating components, which collectively create the heart of the mechanical watch. As Hayek perfectly put it, “If someone is unhappy with the truth, it is their problem, not ours.”
Norbert Platt — New World Order
The appointment of Platt, the German CEO of Montblanc — not the most conspicuous brand within the Richemont Group — as the CEO of the Richemont Group came as somewhat of a shock to many members of the Group’s old guard. But it was also a clear statement that the previous administration, which was deeply connected to the Vendome Group’s old regime, was being phased out to be replaced by a New World Order, as embodied by the brilliant Platt. Platt’s success as the CEO of Montblanc was unprecedented. In his 17 years at the helm of the brand once primarily associated with fountain pens, he single-handedly transformed it from a niche luxury marque to one of the most profitable mass luxury brands in the world. By the time he was appointed the CEO of the Richemont Group, Montblanc was the second largest brand in the Group, in terms of net profits and revenue. As CEO of the Group, Platt has continued to encourage healthy competition between the various brands. He has also made a concerted effort to gain technical independence for the Group.
With the writing on the wall that the Swatch Group will no longer be offering ebauches to other brands in the near future, it is of fundamental importance that the Richemont Group have the vastly industrialized ability to efficiently and cost-effectively render a vast array of movements. As such, Platt set up ValFleurier, the in-house movement making factory that serves to support all the brands in the Group. Look at key acquisitions made by Richemont under Platt’s helm and you will see a marked interest in brands with a particular strength in movements, evidenced by Minerva and the minority share purchase of high complication specialist Greubel Forsey. At the same time, Platt has encouraged verticalization of each brand, so they can continue to push new technical boundaries individually. Says Platt, “Brand verticalization equals brand independence.”
Do these brands share resources? Says Platt, “They (the brands) have never been more independent. Sometimes, we discuss how we should organize exchange of savoir faire and know-how among the brands, which is difficult to do because they are all competitive.” Two such brand-specific developments include A. Lange & Söhne’s focus on the creation of viable hairsprings and Jaeger-LeCoultre’s expertise in mainsprings. But it’s interesting that it was in Panerai’s new 2007 movement that these two springs were first unified in a single movement.
Johann Rupert — The Power of One
Born to a wealthy South African family that made its billion-dollar fortune in the tobacco industry, Johann Rupert first worked in several American banks before returning home to take over the leadership of his family business. Emblematic of the new era of global power players, Rupert proved to be immensely diverse in talents and entered the high luxury arena with Compagnie Financière Richemont AG.
Johann Rupert quickly built Richemont into the second largest luxury group in the world and it has now become the single most powerful player in the luxury watch industry. In each instance, at the helm of Richemont, Rupert has been infallible in his vision.
When Rupert purchased the VDO brands of A. Lange & Söhne, IWC and Jaeger-LeCoultre, jaws dropped at the what was considered a staggering purchase price of US$1.8 billion, based on six times the combined annual revenue of the three brands. But in under a decade, all three brands have proven their value many times over.
In his managerial style, Rupert has also been enormously innovative. He actively encourages his stable of brands to not just compete with brands outside of the Richemont Group, but also with each other. This is in marked contrast to the mutually beneficent policy of the Swatch Group. But while his approach has been somewhat radical, it has also been incredibly effective. Instead of completely industrializing his company and using key industrial bases to create products for all of his brands, Rupert has allowed the brands to retain their individual manufacturing facilities. The result is brands that have the most solidly built brand identities and amongst the most valuable brand equities on the market. It has also resulted in an incendiary maelstrom of technical achievements and product creativity from every brand in his group. He is also the master of orchestrating healthy internal competition within his group. One such famed rivalry is that between IWC and Jaeger-LeCoultre, which is helmed by arguably the two most dynamic CEOs in the entire Swiss watchmaking industry.
Rupert has also displayed an uncanny feel for products. According to the Richemont Group senior executive director Dr. Franco Cologni, Rupert was on holiday when he saw a vintage Italian military watch. When he asked what it was, he was told that it was a watch for divers called Panerai. Inspired by this watch, Rupert purchased the brand and set into motion its transition from being a military tool to becoming the hottest luxury sports watch brand on the planet: a brand named Panerai.
Under Platt’s helm, you can see richemont’s marked interest in brands with a particular strength in movements
WITH HIS APPETITE FOR AQUIRING COMPANIES AND HIS tough, RATIONALIST BRAND OF MANAGEMENT tHAT BORDERS on THE BRUTAL, ARNAULT HAS DEMONSTRATED THE ‘BIG BUSINESS’ WAY FOR THE LUXURY INDUSTRY TO SURVIVE
Philippe Stern — The Innovator
The extraordinary accomplishment of Philippe Stern is this: he was given the most prestigious watch brand in the world to run and, in terms of brand equity, technical innovation and commercial vision, he has brought the brand to an even higher level.
Technically, Stern is one of the most consistently exciting and daring brand owners. Under him, we’ve seen the creation of the world’s most complicated watch, the Caliber 89, which heralded the return of high complications for the entire industry; the Sky Moon Tourbillon, which is still the most desired haut de gamme high complication wristwatch; and the first cathedral gong minute repeater. Stern also invented the annual calendar wristwatch, which fused pragmatism with high complication appeal by having what is in essence a perpetual calendar that only needs to be adjusted once a year, at the end of February. Last year, Stern launched Patek Philippe’s first in-house automatic chronograph caliber. Fittingly, this movement, intended for use in rugged sports watches, bristled with new modern technology — including a vertical clutch as well as a unique monocounter to display the elapsed hours and minutes in a format similar to civil time. Stern has also pushed for innovation in the microscopic world of teeth profiles to aid in smoother chronograph coupling, and an isolator mechanism for his Lemania-based rattrapante.
In recent years, Stern has decided to move away from tourbillons — “There are far too many tourbillons on the market” — and focused on advances in escapement technology. At his behest, Patek Philippe became the first manufacture to use silicium in a traditional Swiss anchor escapement. He was also the first to create a silicium hairspring, which was treated with a layer of silicum dioxide to combat variations in hardness as temperature changed. The interest in escapement technology is also a statement of Stern’s vision for Patek Philippe’s future independence. Says Stern, “As you know, we’ve always worked with Nivarox… but if anything should happen, we could produce components independently.”
Stern has simultaneously done a fantastic job at broadening the appeal of Patek Philippe. He’s shown that while Patek Philippe may still occupy the highest place in watchmaking royalty, the manufacture is far from stiff. Stern listens to consumers and creates the products they desire, as evinced by the decidedly modern 5960 annual calendar chronograph and the facelifted Nautilus family, which now also features his in-house chronograph movement. At the same time, he has reinforced Patek Philippe’s reputation as a bastion for artisan watchmaking, as expressed by the manufacture’s highly collectable 5959 ultra-flat rattrapante. Says Stern, “We don’t want to be a monoculture brand. We want to have different families, and each of those families should correspond to a different customer.”
As proof of his intentions, Stern has also made Patek Philippe one of the largest producers of women’s watches with the 24 range. Stern has also led the industry in communication, creating the single most memorable and emotionally evocative ad campaign in watchmaking history. Finally, what is perhaps the best proof of Patek Philippe possessing what is undeniably the strongest brand equity in the business, is the ascending values of their timepieces in auctions. As Stern now grooms his son, Thierry, for the role of the top man at the world’s most prestigious brand, we pause to examine his work in the context of the Stern men who have come before him, and what is undeniable is that, not only has he lived up to them in some ways, he has outshined them as well. At the same time, we are cautious about believing that Philippe Stern will be retiring anytime soon. Why should he? He’s obviously at the peak of his abilities.
What is the emotional power of the mechanical watch? The mechanical watch is still made by human hands. Through the watch back, you can see all the components of the movement and the human labor that has been expended on perfecting it. What do mechanical watches fulfill? Everybody needs to be in touch with human culture. This is particularly important today because we live is such a technologically advanced environment. We have a lot of very good customers working in high-tech sectors, in computers and so on, and they are the first ones to look for a mechanical watch. It’s as if they need to have contact with their own humanity. At the same time, the watch is stable and endures. It can be handed down from one generation to another, and this stands in stark contrast to the increasingly disposable condition of the modern world.
In relation to Patek Philippe, there is a huge emotional factor in the decision to buy one of our watches. It shows that you have achieved something in life; that you’ve got a cause for celebration or you’ve reached some milestone. And so, each Patek Philippe usually has a meaning because of this association.
What is the power of an independently owned watch company? It gives you the power to stay faithful to the values of high watchmaking. I’ll give you an example: the watch I’ve been wearing for many years is a watch with our caliber 240 movement with a perpetual calendar. I decided to launch the development of this watch in 1972, which was the worst time to try to create a complicated watch because the industry was in the throes of the Quartz Crisis. Everybody was throwing away tools for mechanical watches. Everyone was saying that the future was with Japanese watches, that the Swiss watch industry was dead. But I said, “If there is going to be just one manufacture that continues to produce mechanical watches, it is going to be Patek Philippe.” So I told everyone that we are going to push on. I invested in new mechanical developments to create this caliber and everyone literally thought I was crazy.
When we came out with the watch, we honestly had no competition — no one was doing anything in complicated watches. We had the world’s thinnest mechanical movement with perpetual calendar.
Around 1985, when little by little the demand came back, we already had a few complicated watches ready. We had already begun to develop our minute repeaters that were launched in 1989, so we had a headstart because we never lost our know-how; we never lost the culture and traditions of high watchmaking. And being an independent family-run manufacture gave us the ability to do this.
the manufacture is far from stiff…stern listens to consumers and creates the products they desire
FRANCK MULLER — THE GENIUS
In today’s heady environment of would-be watch celebrities and later-day horological saints, there are far too many self-proclaimed egotists professing themselves to be ‘modern- day equivalents of Abraham-Louis Breguet’. But if this much bandied about term can be applied to anyone, it should be applied to Franck Muller. Just as Breguet has been able to channel horological talent with such contemporary vibrancy that it ignited a global hunger for his watches at such an unprecedented scale, Muller has created the single most successful new watch brand in the last 100 years.
Franck Muller was born of mixed Italian and Swiss parentage into the watchmaking hotbed of La Chaux-de-Fonds in 1958. He joined watchmaking school at the age of 15 and graduated in 1978 at the age of 20. Even in watchmaking school, Muller was literally one in a million. Like the high school quarterback with that arm of gold, he was preternaturally gifted; and like all gifted people, he knew it. Graduating from watchmaking school, he was already being commissioned by some of the world’s most famous collectors to make unique timepieces. By 1984, he had already created his first tourbillon wristwatch and worked on complications for well known brands. He was, in other words, a technical prodigy. But his abilities were not limited to watchmaking alone. Muller demonstrated enormous flair for marketing and self-promotion. During his time restoring watches at the Patek Philippe Museum, Muller happened across a Patek Philippe Gondolo case that tapered elegantly at the lugs, but filled out with Botero-like volumetric insistence. This watch became the inspiration for Muller’s signature Cintree Curvex case and gave him the final component he was searching for in launching a brand of his own.
In 1992 Muller launched his brand and became the first modern watchmaker to merge real high-end (haut de gamme) artisan watchmaking with a sense of contemporary sex appeal. He essentially defined the modern era of watchmaking. While men like Nicolas G. Hayek created the infrastructure for horology’s rebound, Muller gave us back the dream of high-end watchmaking by remaking them as vibrantly modern high luxury symbols of the contemporary world. At the moment, the world awaits the return of Franck Muller. With his immeasurable talent, it is only a matter of time before he reasserts his genius on the horological universe.
What is the emotional power of the mechanical watch? For me, it is the only object that is your companion, because you wear it and it lives with you. It has a heartbeat like yours. It accompanies you all the days and nights of your life and it represents your personality. The ability of the watch to express who you are is, in many ways, far greater than that of a car, because you take it with you wherever you go. At the same time, you have the opportunity to be unfaithful to your companion without feeling guilty — something that you can’t replicate in your personal life. You can wear one watch one day, then switch to another one with a completely different personality the next day. The watch is also interesting because it represents something of a merger between science and art. It is, at its core, a scientific instrument that works 24 hours a day in perpetuity, regardless of temperature, humidity or any other condition, which is actually quite extraordinary if you think about it. Finally, there is a huge emotional power related to who owned it before you. You become a link in the life of the watch.
What is the power of credibility? You have to have credibility in order to be legitimate. To achieve credibility, you need to have contributed in some meaningful way to the story of watchmaking. I won’t dispute that every new watch is credible from a creative standpoint. But to be real, you must go beyond something that is a design and create something that nourishes the spirit of watchmaking. I am wary of people who apply legitimacy at their convenience. There was a discussion in Switzerland about how to define high watchmaking, and one proposal was that a company can be defined as such so long as they create a greater proportion of mechanical watches than quartz watches. To me, the very core of being a credible watchmaker is to create only mechanical watches, even if they are women’s or jewelry watches.
Vartan Sirmakes — the boss
Armenian by origin, businessman Vartan Sirmakes founded the Franck Muller Group in 1991 with the self-proclaimed “Master of Complications”, Franck Muller. Wowing a then-staid industry with dazzling high complications and wild styling, the Franck Muller watches were a terrific success. In the mere span of a decade, the young brand had edged out much older manufactures to become one of the most recognizable brands in haute horlogerie, with astronomical price tags adding to its notoriety in the public imagination. For a moment though, the future of the Group seemed uncertain with the departure of Franck Muller, and the very public dispute between the former and Vartan Sirmakes. The pair have since reconciled: Frank Muller is now a consultant with the Group, while Vartan Sirmakes heads it. Since its founding, the Group has added other brands under its umbrella, including Pierre Kunz, Rodolphe, Martin Braun and Alexis Barthelay.
What is the emotional power of the mechanical watch? It’s extraordinary. In my life, I’ve seen people take a doctor’s stethoscope and listen to the heartbeat of the watch. They are the most human organism that we’ve ever created. They are emotionally powerful in the way in which they capture time. Take, for example, a perpetual calendar. Think about how many springs and teeth you need to move one small wheel every four years or every 100 years. It’s incredible.
How does a manufacture arrive at the power of legitimacy? Our power of legitimacy comes from achieving world’s firsts and the indisputable fact that we have innovated things that have never existed before in watchmaking. We also possess the ability to deliver what we’ve shown at each of these fairs. That is very important, because we are not in the business of making concept watches, but true legitimate timepieces. At the same time, we also claim legitimacy because of our independence as a Group.
What is the power of family? It gives the customer the assurance that there will always be someone there to uphold and safeguard the values of the brand in the correct way. For many years my son, Thierry has been working to eventually take over my role. But what he knows, the commitment he feels for the brand cannot be taught to an outsider. He shares the same vision as me. He may make small adaptations to connect with the modern world but he also understands the essence of the brand. You can’t teach this. It is within my son and this is one of the strengths of a family business.