Richard Mille announced two major new sponsorship agreements this summer. The first as official timing partner of Manchester City football club, the second as the watch of choice of Jamaican sprinter Yohan Blake. Both announcements put the brand on a head-to-head marketing offensive with Hublot, which sponsors the main rivals of the club (Manchester United) and the athlete (Usain Bolt). But it was the new partnership with Blake that generated the most headlines, since Mille encroached not only on the turf of Hublot, but also that of Omega… in the middle of the Olympic Games! Yohan Blake donned a customised Richard Mille tourbillon with a highly visible yellow Velcro strap as he lined up for the 100 metres final in London. The audacity of this cleverly orchestrated public relations initiative (which flirted with breaking the rules imposed by the International Olympic Committee on athletes featuring in advertising during the Olympic Games) generated unprecedented coverage for the brand.
Prompted by this apparent marketing boost, Europa Star quizzed Richard Mille on the strategy for his eponymous brand.
Europa Star: Earlier this year you mentioned keeping production limited to a maximum of 2500 pieces per year. Does this objective still stand?
Richard Mille: I think it will be around 2600-2700 but it will be more or less within this range. I am not interested in volume. I think the day that Richard Mille starts producing 5,000 watches, for example, I would enter an area where I don’t really want to be. I would have more commercial worries and I would have to put aside some of the things I do now. For example, I wouldn’t be able to launch five or six new watches each year like I do now. That is not something I’m interested in.
ES: Does that mean that you are not interested in growing the business?
RM: Our average price continues to grow, which leads to a notable increase in turnover each year. Plus there is a small but regular increase in volume. There are also some reservoirs for further growth because there are still a lot of countries where we are not present. Germany, for example, or Scandinavia, or Eastern Europe.
ES: What about the countries where you are present? Which ones are doing best?
RM: As I am lucky enough to have demand outstripping supply, I organise sales into three different zones and try to distribute products equally across the Americas, Europe and the Middle East and Asia. This works very well and I would like to stick to it for reasons of caution.
ES: You have a very simple way of naming your watch models. Is there a logic behind it?
RM: No. I didn’t want to lose any time searching for names for the models. I preferred to spend my time working on the models themselves. It works like this: if I think up a model, we do a feasibility study, which is usually quite quick. It will simply say whether it is doable or not. If it is doable, we go ahead—without considering what the final cost or development time might be.
ES: You offer a five-year warranty that even covers certain shocks. How do you determine whether a shock is intentional or not?
RM: I put myself in the customer’s position. He may have spent upwards of CHF 200,000 on his watch and, after a slight shock, it might stop. Then the customer’s watch is sent back to the factory, where they look at it under a loupe and say that there was a shock so the warranty is not valid. I wanted to stop the endless discussions about shocks, so unless the watch has clearly been thrown against a wall or something, then we will honour the repair under warranty. I also need to be consistent: there is no point in putting my watches on the wrist of Felipe Massa, Rafael Nadal or Yohan Blake and then at the same time saying that if you have the slightest shock to your watch then it is no longer covered by the warranty.
ES: How do you organise customer service for such small production quantities?
RM: We have set up a sort of “service station” in each of our three main zones. If you look at the statistics, 80 per cent of customer service issues are not serious. It may be a small shaft that breaks, or a hand that comes loose. These are things that can be repaired on site. Only the watches that have stopped and require more complicated work are sent back to the factory. If you think about when you have your car repaired, the garage may keep it for a few days. But if you send your watch in to be repaired you might not hear anything for months. That’s when the love of a brand can suddenly turn to hate. So we have set up a system on our website where the customer can follow the repair process. We even include photos to explain what we are doing.
ES: You mentioned the sportsmen who wear your watches. What is the strategy behind your more recent sponsorship announcements with Manchester City and Yohan Blake?
RM: The owners of Manchester City are very big watch fans and have close associations with the automobile world, so this is something we have in common. Furthermore, the coach Roberto Mancini also loves watches, in particular Richard Mille. There are also a lot of the players who wear Richard Mille watches. So the association came about naturally. It was a similar thing with Rafael Nadal. He loves watches but he would not entertain the idea of competing wearing a watch, so I had to convince him with a watch that had been made especially for him.
ES: So it’s important for you that these athletes wear the watch?
RM: It’s compulsory! I will not sign a contract with the athlete unless they wear the watch.
ES: Can we expect to see more Richard Mille stores opening?
RM: Yes. Most of our stores are managed as joint ventures with local partners. But we have seen that it was a good idea to open them. We opened inside Harrods in London last year and the watches are selling really well and they account for the biggest share of sales for watches in Harrods. The store in Geneva is managed by Audemars Piguet, who have been taken aback by the sales. The Paris store is doing very well, as are all the stores in Asia. Sales at our Tokyo store were up 50 per cent, despite all the problems in Japan. Our priorities for the future are Miami and New York, Milan and Germany. Then in Switzerland we will open in Zurich.
ES: And what about your sales for this year and your predictions for the future?
RM: We have done very well this year because we were able to organise our deliveries much better. Sales are progressing well, even in Europe. There seems to be more availability from suppliers, so my deliveries have improved as a result. I am very optimistic for the future.
Source: Europa Star October - November 2012 Magazine Issue