HAUTE HORLOGERIE - Frederique Constant, Peter Stas “Affordable luxury has always been our philosophy”

August 2016

Interview with Peter Stas, Founder and CEO of Frederique Constant

In answer to Montblanc’s Meisterstück Heritage Perpetual Calendar, which was launched in 2014 at a price of €10,000 in steel and €16,900 in rose gold, Frederique Constant is taking the concept further by offering a record-breaking new QP for €7,995 in steel – that’s 20% cheaper than the Montblanc – and €8,295 in rose gold plate. This ultra-competitive pricing has thrown the perpetual calendar market into disarray. How has the Geneva watchmaker managed it? To find out more, Europa Star met Peter Stas, founder and CEO of Frederique Constant.

ES: Does such aggressive pricing for a perpetual calendar not risk “breaking” the market?

PS: No, I don’t think so. Ever since the company was founded in 1988 our philosophy has remained the same: to focus on affordable luxury. Our new QP is the logical next step in this strategy. For many people €8,000 is still a lot of money. This philosophy has served us well; since we started, we have always remained at the same level. We have never increased our prices, but our revenues have continued to climb. Our target market is relatively young, between 30 and 45; we have no reason to increase our prices because we want to keep this segment of customers. We’ve never deviated from this objective, either in terms of price or aesthetic, which has remained very conservative.

On this latter point, the market reality seems to bear you out.

Since 2010 we’ve noticed the public returning to what they consider to be “safe” investments. In the current climate our positioning has given us a considerable advantage. My feeling is that many brands have increased their prices significantly in recent years. And not just the brands – subcontractors also bear some of the responsibility for this widespread inflation. I think it’s very dangerous. In the end, it’s a form of long-term speculation. If one day you’re forced to lower your prices it can be extremely destructive, leading to enforced restructuring and often risky repositioning.

We’ve always opted for a carefully considered long-term strategy. Our profit margins are reasonable, thanks largely to our efforts to maintain high standards, and we have always felt it is very important not to give the impression of being too expensive.

Although our perpetual calendar is a complicated piece, we have worked hard to reduce the number of parts to a strict minimum, to keep it affordable. We’re being realistic! We are an entry point into Swiss mechanical watches.

How did the markets receive your QP when you unveiled it at Baselworld 2016?

Honestly, the reaction was better than we could have hoped. We thought we’d sell around 500 pieces, but in fact we have taken 1,200 orders for this year. We began delivery at the end of May. We have put a great deal into this watch, as well as an ultra-slim automatic for women.

But, with these mechanical models and your smartwatch, aren’t you perhaps performing a rather dangerous contortion?

They both come from the same spirit of innovation. The QP is innovative in terms of its mechanical configuration, its construction and the way it is assembled. The smartwatch is innovative because of the link between watch and smartphone. But they both have that the same conservative aesthetic, which is something they have in common. I’m very happy with our highly horological approach to the smartwatch. This autumn we’ll be unveiling a whole series of innovations in this domain, including a women’s watch with a smaller movement and a two-year power reserve, rising to four years for the men’s model. We’ll be introducing new functions, vibrating notifications and three new applications. In 2015 we sold 16,000 units in 6 months, and our revenues from purely mechanical watches went up at the same time! But we’ve retained the same philosophy of affordability in the smartwatch sector, with a price below CHF 1,000.

Coming back to the QP, how did you go about perfecting it?

Out starting point was the dial: what we wanted above all was to keep our house aesthetic, particularly the spacing of the sub-dials. There was no existing perpetual calendar module that could meet these requirements; the Dubois-Dépraz at 39 mm wouldn’t fit with the 42 mm diameter we were aiming for. But we examined the Dubois-Dépraz minutely, and that gave us our point of departure. We rebuilt everything with just one aim in mind: eliminating the unnecessary to make assembly, which is the greatest challenge, as simple as possible. In a QP, one of the trickiest aspects is adjusting the tension of the jumpers. This is one of the places we made innovations. We worked hard on the measurements, the component height, quality control at every stage, and pre-assembling as much as possible to gain time in the final assembly.

You weren’t starting with nothing, though; you already had a QP from your Ateliers de Monaco.

Yes, but that’s an integrated perpetual calendar, and it has the specific feature of being completely adjustable from a single crown. In order to achieve the maximum possible simplicity we had to take a completely different route. We started from our automatic manufacture movement FC-775; the QP itself is an additional plate with only 78 components. Once everything has been pre-assembled, there are only 20 components to position on the plate. Also, in the interests of streamlining production as much as possible, many of the components are reused from our other movements; the screws, for example. Everything is designed for simplicity. And I can’t stress enough the importance of controls at each stage. Two years ago, 95% of our watches passed the final test without a hitch. Today, that figure is 98%. And that is one way to bring down production costs significantly.

Source: Europa Star June 2016 Magazine Issue