oday, Maurice Lacroix is getting back to its grassroots and playing on the quality-price ratio to charm primarily the middle class – two themes we dealt with in great detail in our first two features this year. As the old adage says, when you cut yourself off from your roots, you risking losing your soul – and your customers... The time has come to do something about it!
“This is our plan: to stay exactly where we are! The objective: consistency and continuity!” David Sanchez, product manager at Maurice Lacroix, now has a clear roadmap that he intends to stick to: to be the champion of ‘perceived value’ in the CHF 1,000-3,000 segment. Originally positioned at the entry level, the brand wanted to move upmarket and is now coming back to much more affordable products.
The manager is stoical in the face of misfortune: “We learned a lot from our brief stay at the top end of the market, and we’re applying it to our current products. We’re concentrating on our flagship models, Aikon and Pontos. We’re also reducing the number of products we made: we’ve come down from 380 to 250 and our long-term objective is a collection of around 180 watches.” A grand exercise in strategic repositioning to reboot its commercial success.
Lessons have been learned: Maurice Lacroix is a high-volume brand that should be playing in the value-for-money arena. So, surprise – yes, but a different kind of surprise: “We want customers to pick up an Aikon and say ‘what, is that all?’ when the retailer says its costs CHF 850 francs.”
An original success story
Founded at Saignelégier in the canton of Jura, in 1975, right in the middle of the quartz revolution, Maurice Lacroix was the brainchild of Desco von Schulthess, a Zurich-based company that produced private-label watches for the watchmaking industry. Since 1989 and the buyout of Queloz, the brand has been independent where its watch cases are concerned. Maurice Lacroix gradually established itself as an independent brand of repute that did some production in-house, enjoying healthy growth and conquering international markets. Germany is its traditional stronghold.
“What made Maurice Lacroix so successful in the 1990s and the early 2000s was that it made a good product for the price,” underscores its managing director Stéphane Waser. “We had to fight hard, because we weren’t a marketing heavyweight; instead we often represented the retailers’ insider tip for their customers.” Between 1990 and 2003, the Calypso (which was the inspiration for the Aikon model) turned out to be the greatest success in the brand’s history in terms of volumes sold.
In the early 2000s, there was a sudden change of direction: in a lucrative market, the decision was made to position Maurice Lacroix in a more upmarket niche as well. That meant investing huge amounts, which culminated in the launch of their first inhouse movement in 2006. The brand kept on innovating, producing watches that were striking both aesthetically and technically. The pinnacle of its achievement was the launch of the square movement, the Powerlite alloy and a silicon escapement. By that time, the Masterpiece collection had become the cornerstone of Maurice Lacroix. The stars seemed to be shining favourably on Maurice Lacroix.
- Stéphane Waser, managing director of Maurice Lacroix
DKSH and ambitions in Asia
In 2008, Maurice Lacroix sold its distribution rights in Asia to
the Zurich-based international giant DKSH (turnover in excess
of CHF 10bn). DKSH bought the brand three years later
at the time when all the watchmakers were making a rush for
China. “It was a marriage of convenience,” Stéphane Waser
recalls. “DKSH is the grand specialist of distribution in Asia,
and Maurice Lacroix wanted to develop into the Far East.”
But in 2014, storm clouds gathered over the luxury brands in the Asian skies.
That marked the end of the golden years for
the watchmaking industry in China; in fact only since early
this year do Swiss exports seem have found the way back to
(much more moderate) growth. DKSH, whose core business
is not watchmaking, rapidly took the decision to sell the brand, which it announced in the summer of 2015 but has
not yet succeeded in doing. “Maurice Lacroix is a business
of great value and – above all – a valuable brand. DKSH won’t
sell it below value,” Stéphane Waser points out. The ideal
scenario for the brand would be a purchase by an investor
whose principal line of business is watches.
In the meantime, DKSH has sold its other watch brand, Glycine, to Invicta Watch Group. It has also terminated its involvement in a joint venture with Zino Davidoff. Watch case manufacturer Queloz is also up for sale. As for Manufacture des Franches-Montagnes, another cog in the little watchmaking cluster created by DKSH, it will be shutting down this year...
A return to former glory?
Like a tree after the storm, Maurice Lacroix is now counting on its remaining roots to put out new shoots. With more modest ambitions, the company now faces a challenge of no minor proportions: will it achieve its former glory? Because in the meantime, other companies have jumped into the breach left by this historical champion of affordable watches. Longines, TAG Heuer, Frédérique Constant and Raymond Weil are some of the names that have put down certain roots in the terrain deserted by the brand from Saignelégier.
But Maurice Lacroix is making an ordered comeback, underlines Stéphane Waser: “All those strategic changes have helped us acquire enormous experience in the dynamics of the different price segments in the watchmaking sector.” It has been developing one key skill in particular for the past two years: branding, with the aim of raising perceived value. “We still have our key assets: we’ve developed 14 in-house movements, we’re the Swiss-made brand with the greatest number of Red Dot Awards for design and we’re present in 2,200 sales outlets in 65 countries…”
The brand is already rethinking its quartz collections that it had neglected: they accounted for only 40% of sales three years ago, but the objective is to attain 50% this year. “Even in Asia we oblige our retailers to offer the Aikon and quartz is selling well, although we thought it was more a market for mechanical watches. Our customers are looking for classic, versatile, wear-everywhere watches. casual watches in other words.”
The accent is on the network of retailers. As for their sponsoring contract with FC Barcelona, it has not been renewed. “Our ambition now, whether for quartz or mechanical watches, is always to be among the first-choice brands when it comes to price. The Aikon must be 15-20% cheaper than comparative models. Since we don’t have the same marketing budget as our competitors, we have to be ultra-competitive to stand out above the rest.”