JAPAN WATCH REPORT


Citizen: “Reaping the benefits of our acquisitions”

JAPANESE BRANDS

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July 2019


Citizen: “Reaping the benefits of our acquisitions”

The Japanese giant is active on a number of fronts: developing record accuracy with the Caliber 0100, moving towards the connected world with the Eco-Drive Riiiver, all the while building new capacities as a group with the integration of Frédérique Constant, among other recent acquisitions. An interview with Toshihiko Sato, President and CEO of Citizen Group.

T

he Caliber 0100 is Citizen’s main innovation this year, with an accuracy of ±1 second per year. How long did it take to develop, and are you going to incorporate it into more lines in the future?

We started the Caliber 0100 project in 2014: it is a direct continuation of the Eco-Drive’s 40-year history. Back in 1975, the Crystron Mega model achieved a precision of ±3 seconds per year. Using Eco-Drive technology makes it possible to deploy it to mass production. However, we haven’t decided yet if we want to extend it to other lines. The aim of the Caliber 0100, like the ultra-thin Eco-Drive One of 2016, is primarily to showcase the high technology that Citizen can bring to the world. Based on that, we will continue our path in the midrange segment for the masses, as our name suggests.

Toshihiko Sato, President and CEO of Citizen Group.
Toshihiko Sato, President and CEO of Citizen Group.

“The aim of the Caliber 0100, like the ultra-thin Eco-Drive One of 2016, is primarily to showcase the high technology that Citizen can bring to the world.”

How would you evaluate Citizen’s overall results for 2018?

In terms of sales of complete watches, the year was good. However, we faced a struggling market for movement sales, which is another important part of our activity. The demand is high for mechanical watches and smartwatches, but the fashion watch segment, which is where we find clients for our quartz movements, is declining. Many fashion brands are moving towards the connected watch. We are now developing the team and structure to cater to that demand in the future.

How exactly are you developing the smartwatch segment?

This is one of our top priorities for this year. We have just launched a new division dedicated to smartwatch development, and we have embarked upon a collaboration with Fossil. In March we unveiled a smartwatch in the USA, the Eco-Drive Riiiver, with our own Internet of Things platform. It triggered a very good response from the tech industry, but it is not yet on the market.

“In terms of sales of complete watches, the year was good. However, we faced a struggling market for movement sales, which is another important part of our activity.”

In March, Citizen unveiled a smartwatch, the Eco-Drive Riiiver, with its own Internet of Things platform.
In March, Citizen unveiled a smartwatch, the Eco-Drive Riiiver, with its own Internet of Things platform.

The Citizen Group comprises a growing number of brands, from Alpina to Frédérique Constant, Bulova and Arnold & Son. What operations do you coordinate (or not) between these brands?

We don’t dictate to the brands that we own. It’s important for each brand to build on its strengths. We have a very diversified yet structured price range that facilitates this, ensuring that each brand has its own market. As far as synergies are concerned, we are building new capacities as a group. We started in the USA by integrating the sales team, combining them to achieve cost benefits and performance. We have applied this organisation in other regions such as Japan and Europe.

Are you considering acquiring new brands?

Since we have a multi-brand strategy, we would consider any opportunity if it is a good fit for Citizen Group. We have, however, gone through a concentrated phase of M&A these last few years, so I think it is time for us to reap the benefits through integration and added value within the group. This is the stage we are in now.

“We are building new capacities as a group. We started in the USA by integrating the sales team, combining them to achieve cost benefits and performance.”

A Super TitaniumTM pilot watch is among the 30th Anniversary Promaster limited edition timepieces.
A Super TitaniumTM pilot watch is among the 30th Anniversary Promaster limited edition timepieces.

How strong is the Japanese domestic market for Citizen, versus overseas?

Japan is obviously one of the most important markets for Citizen, not only because it is our country, but also because the average price point is higher in Japan compared to other markets. The USA is another big market. With the integration of Bulova, we are able to maintain our strong position in the mid-range market in America. We are also continuing our expansion in China. Globally, South-East Asia is the most rapidly growing market.

We are seeing a strong vintage trend in the industry. How are you responding to it?

With the Caliber 0100 we have created an incredibly clean design in keeping with the high technology inside the watch. That look pays homage to a kind of vintage or timeless look. I am aware that other brands are doing re-editions of their older productions. We prefer to use our archives as inspiration for our teams when they are designing our contemporary watches.

“Many fashion brands are moving towards the connected watch. We are now developing the team and structure to cater to that demand in the future.”

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