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CEOs HAVE THEIR SAY - GEORGES BRUNET, CEO ZRC

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June 2016


Charles & Georges Brunet, ZRC fourth generation
Charles & Georges Brunet, ZRC fourth generation

- 1. For us, 2016 looks like being a good year. In fact, with the value of the Euro having dropped against the US$ our exports to the USA are by far the best for 10 years. We’re otherwise in full development phase with our GF300 watch, which already promises to be a great commercial, aesthetic and technical success. Finally the reorganisation of our clients into central purchasing groups helps us to strengthen our partnerships and thus increase our dealings with the larger accounts. The only flat-spot is the growth of the yuan and the HK$ which penalise our Far East purchases and consequently reduce our margins somewhat. In part, foreign currency exchanges help us compensate for this phenomenon without always negating it completely. I think that 2016 will see an increase in our export turnover as well as our relative position in France.

- 2. An absolute must is the consolidation of the internal French market, which currently represents 70% of our turnover. With an ever diminishing cake, the slices are costing more and more and it’s imperative we defend our position. The systematic market stimulation through “Push Marketing” schemes has become an absolute necessity in business-to- business to stand out from the opposition, but also between evolving communication methods and others we have the tools to take control. We developed the B to B site in 2015 which accounted for 5% in its launch year and our objective is to increase this to 10% in 2016. Today this type of modernisation is obligatory: access to accounting and sales data, online stock control, order tracking, delivery traceability, etc. Our watch bracelets are now marked with a serial number which allows us to establish when they were manufactured and this is a first in the business. Pricing is a highly sensitive subject in the current context. It’s best to keep an ear to the market and above all don’t try to impose price undercutting at the risk of rapid loss of standing.

- 3. I think that a man’s only real piece of jewellery is his watch. The return to basics and a more vintage style appears to me an inescapable and timeless fashion trend. The great industrial food and drinks lobbies inundate us with new drinks, each one apparently more delicious than the last but we always persist in uncorking a good bottle of Bordeaux or Burgundy. For my part, mechanical watchmaking has a healthy future ahead of it if it’s prepared to adapt well in design and look. Perhaps the smart-watch will remind the younger generation that it’s not “has-been” to wear a watch on their wrist and perhaps, in “growing up”, they’ll have developed the habit of wearing a watch to their own taste. Along with their purchasing power, this may well evolve to a point where they chose to move on to a good automatic.

- 4. This year we won’t be directly involved in Baselworld, however we’ll be meeting up with more than a few of our customers on site. The most important thing for us is to consolidate our position but above all to do so at our own pace. With the GF300 watch, we don’t yet have the capacity to open too many markets in one swoop, taking into account limited stocks and a fairly narrow collection. That said, for us Baselworld remains unmissable.

EUROPA STAR’S FOUR QUESTIONS

1. What are your predictions for 2016? Do you think that exports will recover, or will the markets stagnate or continue to decline after the slump we saw in 2015? And what do you think were the reasons for the downturn in 2015?

2. What are your priorities for the coming year: consolidating your existing markets, actively exploring new markets (if so, which), rationalising / consolidating / expanding your distribution network, launching new products, PR initiatives, etc.?

3. Over the longer term, do you believe that mechanical watchmaking will gradually die out, hybridise, or continue to occupy its own exclusive niche? Do you see the advent of smartwatches as a potential threat, or an opportunity for growth and diversification?

4. What exactly do you hope to achieve from your participation in Baselworld 2016? Do you feel your presence at the fair is essential to your business, or are such forums less important now than they were in the past?

LIST OF RESPONDING CEOs