Haute Horlogerie in these times of crisis

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January 2009

Interview with Franco Cologni, President of the Fondation de la Haute Horlogerie


Europa Star: The economic crisis is raging. No one knows when the storm will pass, or when growth will start up again. In this context, what is the message that the Fondation de la Haute Horlogerie would like to get across?

Franco Cologni: This crisis amply demonstrates that we live in a globalized world whether we like it or not. Yet, at the interior of this global village, we target those whom we know well—and in fact who know themselves very well. Aficionados of Haute Horlogerie are looking for, above all, an aesthetic and technical expression of time. They are thus looking for beauty. They are not looking for superficial attractiveness, but for true beauty. Now, in watchmaking, true beauty is what finally results from savoir-faire and the human genius that is contained in and summed up in a highly technical product. The desire to own such a product, crisis or no crisis, will always exist.

ES: Does that mean that Haute Horlogerie will not feel the effects of the economic downturn?

FC: It is true that today there are, overall, less funds available. But, you need to look carefully at this picture, and its many nuances, in order to distinguish the different types of clients that this sector appeals to. Honoré de Balzac used to say, “Those who spend too fast never grow rich.” But actually the wealthy people, real or false, ephemeral or lasting, are only somewhat affected by the crisis. They represent a very modest market in terms of volume but, in terms of value, this market is immense. To satisfy this particular niche, the products offered by watch brands must be steeped in culture as well as infused with know-how, while being both innovative and creative. This clientele—even if people sometimes scorn the tendency towards ostentation displayed by some of its so-called ‘emerging’ members—is becoming more and more sensible and informed, and knows how to discern real quality. With this in mind, the FHH must thus continue its cultural work, actively participate in provi-ding a better understanding of the fundamentals, and vigorously promote the values of Haute Horlogerie. This must be done whether there is a crisis or not.

ES: Beyond this particular niche group, doesn’t the Haute Horlogerie sector concern a larger number of people, those who suffer more directly from the economic slowdown?

FC: The Haute Horlogerie segment must obviously become more democratized - which is already happening - but, and this is an import-ant nuance, it must not become commonplace. Today, the bourgeoisie represents a large part of the population throughout the world. And, it is also true that this group is more affected by the crisis. But, while its purchasing power is partially threatened, its understanding of the values of Haute Horlogerie is often more profound that that of the ‘new billionaires.’ This is because the bourgeoisie appreciates the notion of patrimony, identifies with its values, and aspires to it. Therefore, even if sales slow down due to today’s economic problems, it is indispensable to send these people a strong message of confidence. It is also necessary to support this confidence with the quality of the products in order to get across the idea that an Haute Horlogerie timepiece is an investment, not strictly in economic terms, but in terms of handing it down to the next generation. Patek Philippe has understood this concept very well, as is quite evident in its ad campaigns.

ES: But doesn’t this crisis also signal a change in our era? Aren’t we witnessing a profound reversal of the trends, so that they now favour legitimacy over newness and novelty?

FC: Creating new products is a necessity, as long as it means continued development. But, legitimacy returns to centre stage. We can no longer keep doing just old things. Those products that will emerge unaffected from the crisis are those that have a strong iconic value. The watch market must become more responsible. In a certain manner, it has arrived at its saturation point. It has eaten too much, become obese, and now it must thin down by following an appropriate diet. We are going to see a deep and rather healthy cleansing of the market that will give value to the products and brands that survive. The ‘bazaar’ is closed. Choices will have to be made. In a certain way, it will be the law of the strongest, not strongest in terms of power, but in terms of quality!

ES: Is it a good thing, in a context where quality is prime, to reduce workers, at the risk of losing indispensable savoir-faire when the recovery does occur?

FC: Everyone is cutting down on personnel. This is an error. To create quality products, which have a soul and are truly beautiful, human capital is what counts the most. A watch in the Haute Horlogerie category is not merely the product of management, but rather it is the result of a whole chain of individuals: watchmakers, workers, administrative people, commercial associates, etc. Curing oneself of obesity involves an intelligent and consistent approach, not surgery that indiscriminately cuts off arms, legs, and heads.

ES: No one knows with any certainty when the crisis will end, but what is your feeling about this?

FC: I could evoke President Mitterand’s catch phrase: what we need is ‘tranquil force’. If we look back over the last fifty years of history, Haute Horlogerie has always been the last to suffer from economic downturns and the first to bounce back. And, bouncing back is inevitable. How long will it take? In the Bible, it is written that seven years separated the period of lean times from the period of prosperous times. Taking into consideration, however, that times have accelerated, I would bet that, by the end of 2010, we should see the first signs of recovery. By definition, the mission of the Fondation de la Haute Horlogerie targets the timeless. We are thus going to continue imperturbably our programme and cultural activities with realism and with a strong orientation towards the artistic, cultural and artisanal values of this world.

ES: In this context, however, don’t you think it is necessary to provide a better and more precise definition of Haute Horlogerie? Aren’t the current criteria that describe its boundaries a bit vague?

FC: Today, the boundaries of Haute Horlogerie as we understand them apply to about sixty brands. These are not all brands that work exclusively in Haute Horlogerie, but all those with product lines that fit this category. In my opinion, these boundaries should be widened and should be more precisely delineated to better define the responsibilities of the brands. To accomplish this, we have decided to create a working group in order to clearly determine the criteria and specifications required to reach a high level of quality—for the product, distribution, and service—that are worthy of the ‘Haute Horlogerie’ appellation, an appellation that we must clearly distinguish from ‘Luxury’ or even ‘Haut de Gamme’ and ‘Prestige.’ These criteria will allow us to determine who is truly investing in the development needed to reach the summit. And, beyond the brands alone, there is also a rich background of sub-contractors. Some of these already have the necessary culture and are developing the indispensable savoir-faire without which this entire segment of watchmaking would quite simply not exist at all. We must never forget them.

The Haute Horlogerie enters into the virtuous circle of the Swiss watch industry, a unique reference in the time measuring world. They need each other. Together, they make the ‘tranquil force’ for the future beyond the crisis. Belief, hope and ethics are the eternal virtues.

This interview was realized in collaboration with HH magazine

Source: Europa Star December-January 2009 Magazine Issue