While everyone was obsessively looking towards China, and even the smallest Chinese investment in Swiss timekeeping was scrutinised down to the last detail, there was a bit of news, announced just before BaselWorld, that took the Swiss watch community totally by surprise: the Japanese group Citizen had acquired Manufacture La Joux-Perret! Or, to be more precise, it purchased the holding company Prothor, which, besides the La Joux-Perret manufacturer of movements and modules, encompasses the component parts maker, Prototec, and the high-end watch brand, Arnold & Son. The transaction was reportedly in the neighbourhood of CHF 65 million, with the Prothor group earning about CHF 40 million in turnover, employing some 150 people.
You only need to leaf through the Manufacture La Joux-Perret client catalogue of complete movements and additional modules to understand just how important this sale is. There, you will find, in no particular order, names such as Baume & Mercier, Raymond Weil, Louis Vuitton, Concord, Corum, Hublot, Montblanc, Eberhard & Co., Panerai, Graham, Franck Muller, Paul Picot, Girard-Perregaux, Carl F. Bucherer, and Jaquet Droz, among many others.
To learn a little more about the reasons behind this “transfer”, Europa Star talked with Frédéric Wenger, former majority stockholder in Prothor and currently general director of Manufacture La Joux-Perret.
Europa Star: Why was La Joux-Perret sold, especially since its order books seem to be so well filled?
Frédéric Wenger: It is another step in an adventure that goes back to 2001 when, along with other investors, I bought the movement maker Jaquet. As everyone knows, Jean-Pierre Jaquet, who had been active in the company’s operations, suffered many personal legal problems starting in 2003. We cut off all relations with him, and took everything in hand ourselves. We developed the company and, in 2007, moved it to new facilities, better suited to mass production. After ten years of continual growth, we asked ourselves what was the best way to ensure the long-term survival of our enterprise. Becoming part of a group seemed to be the best solution to guarantee this longevity. Moreover, some original investors wanted to cash in their investment. Under these conditions, we started the classic process of finding a suitor, passing by the advice of our bank.
ES: Were there many potential candidates?
FW: Yes, of course. We had offers from several interested parties and groups. I obviously cannot say who they are, since this would violate the confidentiality agreements. At the end of our search, however, Citizen’s proposition seemed the most interesting, not only from a financial point of view, but also because Citizen’s activities closely corresponded to what we were looking for.
ES: What do you mean exactly?
FW: Citizen is also industrial, and not a product of mere marketing. The Japanese company has the long-term industrial vision that we were seeking. It is a group worth some CHF 3 billion, and is the world’s fourth largest watch company, with around a five per cent share of the global market. This will allow us to actively develop our company and strengthen its position in the domain of the mechanical watch.
ES: Mikio Unno, the president of Citizen Watch, officially declared that “the primary goal of this transaction is to strengthen Manufacture La Joux-Perret as an independent producer of mechanical movements and component parts,” but that Citizen “will also utilise mechanical movements produced by Manufacture La Joux-Perret for Swiss Made collections of our own brands and those under licence, and will thus differentiate them from other haut de gamme products.” It seems, then, that Citizen has a two-fold interest in this endeavour.
FW: Citizen wants to be a major player in the global watch market in the long run, and realises that, to achieve this, it must move into the haut de gamme sector. We are opening the door for them. I also want to strongly emphasise that our decision to accept Citizen’s offer was because it allows us to strengthen our independence and remain fully open to all other brands, which was not necessarily the case with some of the other prospective suitors. We want to become a central Swiss player in the domain of the mechanical movement and component parts. We will expand our range of products for the high-end and be a reliable partner for the long term, working closely not only with our traditional suppliers but also with our longstanding partners. Citizen’s acquisition thus preserves our independence, and even strengthens it.
ES: What is, today, the precise strength of Manufacture La Joux-Perret in terms of offer and production?
FW: What characterises us, perhaps, is our flexibility. We currently produce some 50,000 movements and modules per year, which range from relatively simple transformations based on the 2892, 7750, or compatible calibres (for example making a 7750 into a tricompax), to much more complex constructions such as a flyback chronograph. Between these two ends, you will find many possibilities: power reserve, big date, etc. This highly reactive flexibility owes much to the advanced reliability of our proven sub-sets that allow us to design many different configurations. Having this great modularity opens many opportunities for collaboration with brands that do not limit themselves to simple “customisations”, but want to create products that are authentically and integrally dedicated to the brand in question in terms of casing, display, functions, and mechanical architecture. For this reason, we have designers working in-house alongside our 14 developers and prototypers, who work closely with the client. In the mid- and high-end range, we are developing larger ranges of in-house movements. We are also developing movements that are specific to a particular brand. Among others, we have an ultra-flat calibre as well as two ranges of tourbillons, with superlative traditional watchmaking finishings (hand-chamfering, polishing, etc.), or more contemporary pieces such as the Flying Tourbillon T-Bridge for Corum. At this time, we have many major and new products in the pipeline.
ES: In addition to Manufacture La Joux-Perret, the high-end watchmaker, Arnold & Son, came with this acquisition. What does Citizen plan to do with this brand?
FW: The goal is to promote its historical origins as the British Breguet. This is a prestigious and haut de gamme brand that is very classic, but that is advanced in terms of its mechanical nature and its display. It is also a way to showcase our savoir-faire since all the Arnold & Son movements, from classic to tourbillons to tourbillon chronographs, are made in-house. For Citizen, this is a good way to enter into the Swiss haute de gamme segment and into the Swiss Made arena. By investing in this brand, which has many advantages and offers interesting opportunities, Citizen is also looking to confirm its place in global watchmaking. No major watch group can today afford not to be in the highest category of the market. [Europa Star will return soon to Arnold & Son.]
ES: We have seen other “grafts” that have not worked out. Do you run the risk of having a culture shock between different practices and mentalities?
FW: Quite frankly, I do not think so. Citizen has an industrial and pragmatic approach, as we ourselves have. I am remaining at the head of the enterprise, and all our other employers are staying on as well. We also are maintaining our subcontractors and partners. I feel that there is a mutual respect in this relationship and that we come together perfectly well, not only because we both have a vision based on the long term, but because we are of the same metier, with the same values of precision, reliability, and quality control. We each bring a particular know-how to the table, and in return can ensure our development and our independence. It is a fair deal!
The production equipment
We were quite impressed with our visit to Manufacture La Joux-Perret and Prototec in La Chaux-de-Fonds. From the technical bureau and its 14 constructors (whose average age is less than 30 years, it seems) to the ateliers for assembly and encasing, we were able to follow the entire chain for the production of movements and their component parts: cutting of the raw material on impressive presses, production of brass, bridges, and plates carried out by a series of CNC commands, equipment for transferring, stamping, correcting, traditional or CNC profile-turning, wire erosion, washing, grinding, polishing, sand-blasting, rolling, decoration, engraving, chamfering, etc.
A question of independence and reactivity, the manufacture creates all its own tools in-house, including those used in cutting, in the large mechanical workshop. Of the 150 employees, twelve work only in quality control. Add to this a methods office, a logistical centre, and a design bureau and you have an idea of the production capacity of the enterprise, a capacity that is closely linked to the complexity of demand.
Here are the links to the other articles in our “mechanical alternatives” dossier:
Introduction - alternative solutions
Optimo, a new alternative source for assortments
Technotime: double barrels, tourbillons and balance springs
Centagora, a new type of watchmaking coach
The universal additional plate from AJS
Source: Europa Star August - September 2012 Magazine Issue