After adding a cool one billion Swiss francs in sales in 2012 (+14 per cent), the Swatch Group clearly pleased its shareholders, who saw the value of their bearer shares jump by almost 50 per cent over the year and can look forward to an increase of 17 per cent in their annual dividends. When the Swatch Group’s CEO Nick Hayek announced these impressive figures in March, he also committed to a further investment of between CHF 400 and 500 million this year alone, to match a similar amount that the group invested last year. The group’s growth will also bring more new jobs, in addition to the 900 new jobs that it created last year in Switzerland alone. In the first of three articles about this veritable powerhouse in watchmaking, whose ETA division alone is now producing a staggering 14 million components per day, we take a look at what to expect from a number of brands in the Swatch Group at BaselWorld this year.
"It’s not a manufacture, it’s a watch factory,” Tissot’s CEO François Thiébaud says with a hint of gluttony. A “factory” destined to provide a continuous supply of watches to the world markets, which swallow between 7 and 8 Tissots every minute. That’s 460 Tissot watches sold per hour, 11,000 each day (24 hours a day, 365 days a year)! Given that the average price of a Tissot is around CHF 450, we can let you do the sums yourself! (Editor’s note: these are unofficial figures because the Swatch Group does not publish production quantities or figures by brand).
There is no better way to get a physical idea of this firepower than visiting the brand’s logistics centre at the heart of its complex in Le Locle. There you will find a fully automated storage and shipping facility, staffed by robots travelling at 4 metres per second between rows of shelves 15 metres high that house trays containing 5 to 6 million watches and components.
It is the constant movement of these trays, which travel along kilometres of tracks, passing through stages such as labelling and checking before ending up packaged in cardboard boxes ready for shipping. A quick glance at the boxes reveals some astonishing destinations – proof of the ubiquity of the brand, which is distributed in 160 countries. Here, a package for Almaty, there one for Pristina, there a huge one for Moscow, then a smaller one for Chisinau...
Others would make a big show of this and milk the publicity for all it’s worth. But this is not François Thiébaud’s style. As we walk around the immense corridors of the “factory”, which celebrates 160 years of existence this year, this affable, cordial and friendly man calls all the employees he meets by their first name. "I’m just passing on the baton,” he says, “I am following the Tissot adventure, which is bigger than mine.”
“It’s both easy and difficult to understand what Tissot is,” he explains in his big office that overlooks Le Locle, surrounded by snow-capped mountains.”Tissot is a multi-specialist that offers a whole range of ‘normal’ products and some more specific products that demonstrate a unique and innovative know-how, such as the touch-screen technology of the T-Touch. But what these categories have in common is that they represent good-quality watchmaking credibility at a fair, loyal, real and transparent price. We have never tried to make things cheaper by reducing quality, quite the opposite in fact. It’s also a question of our ethics towards the end customer and the respect for the image of Swiss watchmaking. A customer’s attachment to his or her watch is nothing to do with price. It is always an intimate object, a witness of important dates, which frames – but does not control – our time on this mortal coil.
“Having said that,” he continues, “Tissot is and will remain extremely competitive and we must therefore control costs strictly at all levels. Our volumes help us here: we are without doubt the biggest partner of ETA, Universo for hands and the sapphire crystal specialist Comadur, which equips all our watches. We also assemble our watches in the cantons of Jura and Ticino, where the wages are lower than in Neuchâtel or Geneva. Then everything ends up here, to be processed, meticulously checked and shipped. The notion of quality is central, because I believe that customer service is an absolute priority, in marketing terms. The customer’s trust is an overriding element and there should not be the slightest dent in this trust. Should anything ever happen to affect this, we have to do our utmost to regain this trust or even take advantage of the situation to strengthen it further."
Enormous margins of progression
Since Tissot has enjoyed double-digit growth since François Thiébaud’s arrival at the helm in 1996 (with the exception of the “black” year 2009, when the brand recorded single-digit growth), how does he see the brand’s future?
“Tissot’s future will be dictated by that of Swiss watchmaking as a whole,” he explains. “In terms of quantity, the Swiss watchmaking industry only accounts for around 3 per cent of the watches produced worldwide, but in terms of value the figure is 50 per cent. With the increasing standards of living in emerging countries, the potential for growth is enormous and Switzerland could quickly reach 10 per cent in terms of quantity and grow from the current figure of 20 billion at export to 100 billion! But for this to happen, we need to continue with our massive industrial expansion, because we need entry-level products as well as the ’grands crus classés’, which we are fortunate to have but which are far from being everyday products. And it’s by stressing our Swiss know-how in this field and the way in which Swiss watchmaking is communicated as well as produced that we will get there. This is why, like many others, I am fighting for a strengthening in the Swiss Made criteria to 60 per cent of the value.”
150 new references at Baselworld
At Baselworld 2013, Tissot presented 150 new references. Among these will be the arrival of a new self-winding movement, the Powermatic 80. Based on the ETA 2824, it has been optimised for a big power reserve of 80 hours (compared with 36 hours for a 2824). This improvement (requested, it must be noted, by François Thiébaud himself, who was fed up with seeing his watch stop after leaving it in a drawer over a weekend) was achieved by developing a new sprung barrel and by removing the traditional index-assembly (and by replacing it with an innovative system whose details are confidential) and by creating a balance without adjustment screws that oscillates at 3Hz (instead of the usual 4Hz). The Powermatic 80, which also comes in a COSC-certified chronometer version, is first used in the new T-Luxury, with a very classic design, which will be sold at the highly competitive price of CHF 800 to 850 for the COSC version on leather and CHF 1050 on the steel bracelet. It would appear to be unbeatable. Over time this movement will be used in all of Tissot’s self-winding watches.
Another important new arrival is the T-Race Touch, dedicated to the motorsports of which Tissot is a fervent supporter, namely as official timekeeper and partner of MotoGP. With 11 functions operated via the touch screen, including stop watch, split times, 99 recordable lap times, alarms, compass etc... It is a veritable sports coach and sells for CHF 500.
The Tissot Heritage Navigator is also a flagship for this anniversary year. Inspired by a model from 1953, when the brand celebrated its centenary, and fitted with a COSC-certified self-winding chronometer movement, it has 24 time zones that are instantly readable on the 24-hour scale on the dial, with the “Home Time” read against the 12 hours on the bezel.
But these are just a handful of the new arrivals from the brand with a thousand references.
A billion more reasons to bank on Bienne
- The Swatch Group’s well-oiled watchmaking machine
- Tissot: The watch factory
- Blancpain: The farm next door to the factory
Source: Europa Star April - May 2013 magazine issue