So what were their respective situations at the outset? Greubel Forsey, at the pinnacle of luxury precision watchmaking and decorative excellence, but needing to restructure its product offering and sales network; Parmigiani Fleurier, recognised for its stylistic originality, proprietary movements and fine craftsmanship, but a financial headache for its owners; Zenith, a historic brand and manufacture, a former “sleeping beauty”, awakened by the injection of millions yet still not restored to its former glory; Louis Erard, specialising in smart, affordable mechanical watches but operating in a declining segment allowing little scope for independent artisans; and Doxa, the instrument watch pioneer at risk of falling into oblivion.
One thing that all these brands had in common was the appointment of a new CEO and – most notably – a CEO with considerable experience and heavily steeped in watchmaking (not parachuted in from a prestigious business school).
These were, at Greubel Forsey, Antonio Calce (Piaget, Panerai, Corum, Girard-Perregaux); at Parmigiani Fleurier, Guido Terreni (20 years with Bulgari, including ten years at the helm of the watchmaking division); at Zenith, Julien Tornare (Raymond Weil, then 17 years with Vacheron Constantin); at Louis Erard, Manuel Emch (Jaquet Droz, Swatch, Romain Jerome); at Doxa, Jan Edöcs (Omega, Swatch Group, Milus, Hanhart).
Greubel Forsey, Parmigiani Fleurier, Zenith, Louis Erard, Doxa… all very different brands but which all have one thing in common: they recently pressed the reset button and hit the jackpot.
1. ANALYSIS AND DIAGNOSTIC ASSESSMENT
Regardless of the (considerable) differences between these ailing brands, the prerequisite for any diagnostic assessment is an analysis of the status quo.
Let’s start with the example of Antonio Calce and Greubel Forsey. When he arrived in August 2020 at Robert Greubel’s request, he found a tough situation that he knew perfectly well was not explained by Covid alone. Two months previously, for the first time, Greubel Forsey had laid off 12 people out of a total of 100 employees who produced 100 watches a year.
In actual fact, ever since its founding in 2004 by Robert Greubel and Stephen Forsey, and despite having acquired an outstanding reputation for its state-of-art mechanical and chronometric research and the excellent quality of its finishes, the Greubel Forsey brand was far from reaching its full potential.
The real “milch cow” was CompliTime, the company created by the same two men but separate from Greubel Forsey. The extremely discreet CompliTime works in complete confidentiality for the biggest watch brands, for which it provides state-of-the-art services in development and design, prototype building and first series production. Of all the watches it has produced, CompliTime only has permission to publicly reveal the names of Planétaire by Richard Mille and Histoire de Tourbillon by Harry Winston, among numerous other high-flying creations.
- Antonio Calce, Greubel Forsey
Despite this, Greubel Forsey suffered from a number of inherent handicaps: the very high-tech brand was positioned at a vertiginous altitude above the CHF 400,000 mark, but confined to a hyper-specific niche – the quest for absolute chronometric accuracy and superlative finishes – that only a highly specialised, ultra-rare and no doubt ageing customer base was fully able to appreciate.
According to Antonio Calce, and in full agreement with Robert Greubel, at this point in the diagnosis, you either continue to position yourself in this absolutist niche and confine yourself to a customer base of around 50 collectors worldwide, or you change your business model, in part by expanding and diversifying your product offering. This, in turn, allows for further integration of skills and development of the team.
This he believes is a perfectly realistic option, as the brand has some incredible advantages: “There’s absolutely extraordinary know-how here, magnificent tools, outstanding innovative strength, rare artisanal excellence and a very high degree of vertical integration. It has everything it needs to move forward! And”, he adds as an aside, “I think Robert Greubel is a watchmaking genius.”
At this point in the diagnosis, you either continue to position yourself in this absolutist niche and confine yourself to a customer base of around 50 collectors worldwide, or you change your business model.
Guido Terreni arrived at Parmigiani Fleurier on 26 January 2021, after having succeeded brilliantly in bestowing genuine watchmaking credentials on jewellery-maker Bulgari and installing the brand among the top-rankers, carrying off numerous awards in the process. What drew him to Parmigiani Fleurier were the brand’s deep cultural roots.
This highly prestigious company is acknowledged for its disruptive character, but its roots lie in restoration, an art of which Michel Parmigiani is one of the most eminent representatives. Guido Terreni praises and admires his deep historical knowledge, whether of the mechanical or decorative aspects: “Michel knows all the finishes in watchmaking history by heart,” he confesses, admiringly.
- Guido Terreni, Parmigiani Fleurier
Another crucial advantage is that Parmigiani Fleurier is part of a powerful and rare industrial watchmaking concentrate built up since the 2000s by the Sandoz Family Foundation, its wealthy proprietor. The grouping forms a complete, fully integrated watchmaking manufacture, with excellent mechanical movements by Vaucher Manufacture (founded in Fleurier in 2003); Atokalpa (Alle, December 2000), capable of producing all the components that go to make an oscillator – around 20, including the balance spring, pallet fork and escape wheel; Elwin (Moutier, January 2001), specialising in high-precision micromechanics, screw cutting and the production of specific, often complex components; Les Artisans Boîtiers (La Chaux-de-Fonds, May 2000), highly skilled in the production of high-end watch cases; and Quadrance & Habillage (La Chaux-de-Fonds, December 2005), specialising in high-end artisanal dials.
Yet despite widespread recognition, Parmigiani Fleurier had not made a profit for the past nearly 25 years (with the exception of one year, it seems). Worse still, its losses, estimated at 22 million Swiss francs in 2019, coming on the heels of losses of 18 million in 2018, weighed heavily on the rest of the group, which was otherwise profitable. Rumours were circulating that it was up for sale. Guido Terreni saw the “urgency of the figures”.
He also noticed that, in his own words, “the brand had lost the public’s interest, as if it no longer had any sense of the market”. He was struck by one detail in particular: although the brand was about to celebrate its 25 years of existence, not a single event was planned for this major anniversary. What could be done?
“The brand had lost the public’s interest, as if it no longer had any sense of the market”.
Tapped by Jean-Claude Biver, at that time chief of LVMH’s watch division, Julien Tornare took over as head of Zenith in May 2017. The brand he inherited wasn’t in the greatest shape. It had been through several drastic management shakeups, was struggling to turn a profit and, with no clear direction, was drifting.
Its standout product, the El Primero movement, was more famous than the brand itself. This venerable Manufacture, established in Le Locle in 1865, boasted a long and storied past but was no longer aligned with modern production standards. It sat on a steep hillside, spread across eighteen buildings which made it difficult to manage workflow. Marketing was also in need of a serious rethink. The brand lacked visibility at its points of sale, promotional material was dated and the sales network was in dire need of a boost.
- Julien Tornare, Zenith
If Julien Tornare were to restore profitability and revitalise the brand, he had his work cut out. There were many positives to build on nonetheless, starting with Zenith’s rich history and the fact it made its own movements (something it did very well) including the famed El Primero – although this would be just one part of the new CEO’s strategy. Julien Tornare’s first task was to define how best to unlock this dormant potential, remotivate staff (all excellent) and put the brand itself back front and centre. Yes, it had an enviable heritage but mostly from the twentieth century. It was time to catapult Zenith into the twenty-first century.
This was an opinion shared by the brand’s “veterans”. When Julien Tornare sat down with eight octogenarians who, alongside Charles Vermot, had developed the hugely innovative El Primero, the first automatic chronograph beating at 36,000 vibrations/hour, released in 1969, he had expected them to do nothing but reminisce about the past. Instead, they reminded him that they had been the innovators of their day, start-uppers before the word was invented, and urged him to forge ahead. This meeting, he would later say, strengthened his belief in the strategy he intended to implement in order to restore Zenith to its rightful place in the pantheon of twenty-first-century brands. And so he put together a battle plan that would attack every front simultaneously.
Zenith’s standout product, the El Primero movement, was more famous than the brand itself. This venerable Manufacture boasted a long and storied past but was no longer aligned with modern production standards.
In late 2018 or early 2019, Alain Spinedi, then at the head of Louis Erard, issued an SOS to Manuel Emch, a strategy and creativity consultant with his organisation, Le Büro: the brand was shipping water, its business model seemed obsolete; should they continue and if so, how could they ensure its longevity?
Louis Erard was founded in 1931, enjoyed a certain amount of success with ups and downs, but by 2003 was on a downhill slide, employing no more than seven people in Le Noirmont in the Swiss Jura. Alain Spinedi acquired it together with some fifteen shareholders and succeeded in relaunching it with a strategy that was right on target: offering a high-quality, mechanical Swiss watch at a very affordable price. The spearhead of this strategy was to become the brand’s symbol: the rare and highly graphic regulator display.
“At the start, in 2004,” he explained to Europa Star in 2020, “our position at the entry level of mechanical Swiss watches was the right one. And it stayed that way for ten years, with around 20,000 watches a year. But it was progressively eroded by a number of factors combined”. The wind changed in around 2014.
- Manuel Emch, Louis Erard
“Although there was rapid growth at first, price could not be the sole sales argument, especially as in the meantime other brands positioned themselves in the same category. Louis Erard became a generic brand.”
Manuel Emch lists the different factors that crippled the strategy that until then had been a winning one for Louis Erard. From 2014 onward, the brand saw its identity disintegrate for a variety of reasons: with the shock announcement by the Swatch Group that they would no longer be delivering mechanical ETA movements in the years ahead, and that in the meantime they would be raising the price (for example, the Valjoux 150 by ETA rose by CHF 300 at the same time that the Swiss franc strengthened significantly), Louis Erard was forced to return to quartz – whereas its whole identity reposed on mechanical watches.
Moreover, he explains, “although there was rapid growth at first, price could not be the sole sales argument, especially as in the meantime other brands positioned themselves in the same category. This resulted in a headlong rush, with a multiplication of products and collections culminating in more than 350 different product references. Naturally, the image and history of the brand was completely diluted. Louis Erard became a generic brand. Added to this was the financial issue of margins. In short, the business model no longer made any sense and from 2012-13, the brand lost money.”
To his mind, to ensure the brand’s survival a complete reset was called for. A great decluttering.
It was in early 2019 that Jan Edöcs took up the reins of Doxa. Born in Biel, he has long years of experience in the watchmaking world behind him, having worked for Omega, Swatch and Milus – which he put back on the rails – and in-depth knowledge of the markets, specifically those of Hong Kong and China (with groups Peacemark and then Chow Tai Fook) and the US. In 2018, he returned to Switzerland and met the Jenny family, the owners of the large private label company, Walca, which bought Doxa in 1997.
Founded in Le Locle in 1889, Doxa had a rich history but ran the risk of becoming a “museum brand”, as Jan Edöcs puts it. “It still had fans and collectors, but they were all getting on in years.” The brand had long since become somewhat diluted and no longer had a clear identity. Neither did it have any real distribution channels and only sold its watches online. It was in great danger of disappearing altogether.
- Jan Edöcs, Doxa
But behind this rather sad façade the brand had hidden treasures, in particular a true icon, though somewhat forgotten: the Doxa SUB, the first diving watch compliant with professional specifications but affordable by the public at large. It also had a patented innovation: its revolving bezel, designed to calculate decompression times, and a striking face with an orange-coloured dial. Released in 1967 in Basel, it was adopted by Jacques Cousteau, who popularised it the world over. In 1968, it became the Doxa SUB 300T, the first diving watch to incorporate a helium release valve. A real legend.
“The timing was perfect,” Jan Edöcs explains. “The vogue for instrument watches was in full swing, the SUB 300 had a real history, strong legitimacy and I also saw a broad avenue opening up for physical distribution in addition to its online sales presence over the past ten years.” All it needed was the right decisions, and to put them into action. And on the production side, Doxa was able to count on its “right-hand man”, Walca, which had already produced millions of private-label watches for its customers. But time was short: the objective was Basel 2019.
Founded in Le Locle in 1889, Doxa had a rich history but ran the risk of becoming a “museum brand”, as Jan Edöcs puts it.
2. DECISIONS AND ACTION
Once the status quo had been analysed and the diagnosis established, decisions were needed before action could be taken. What is striking about these turnarounds is the speed at which the repositioning took place. The companies were all of different sizes, and a small skiff is far easier to manoeuvre than a supertanker of a watch manufacture...
At Greubel Forsey, Antonio Calce became a shareholder alongside the majority shareholder, Robert Greubel, and Stephen Forsey. Richemont, which had bought a 20% stake in 2006, sold its shares. “This newfound independence will give us complete freedom to define the next stages of development and maturity. A company is never as free as when it owns 100% of its own capital,” stated Antonio Calce at the time.
In his view, “the essence is there, the know-how extraordinary but not fully exploited”. Building a watch brand is a “globality” that he sees as five fingers of the same hand: invention and innovation; hand finishing and hand watchmaking; performance and reliability; architecture and design; rarity and exclusivity.
To broaden the brand’s base and win over a younger audience while respecting these five commandments, they had to create another category of products, exclusive but priced between CHF 150,000 and CHF 300,000. As for the products costing more than CHF 400,000, they would be limited to 11 items per year and per model. It was a way to retain the brand’s rarity.
They had to continue to offer innovation and excellence, but in other ways, making the products more attractive – and also more wearable.
Without compromising on precision and reliability, “other ingredients” had to be added. They had to continue to offer innovation and excellence, but in other ways, making the products more attractive – and also more wearable. The luxury they embody had to be felt, their valued perceived, especially through the finishes.
As for the calibres, the decision was taken to limit their life cycle. For example, the GMT released in 2022 will end its cycle in 2024, a production volume of 66 timepieces in all. A nod to collectors and connoisseurs.
Antonio Calce intends to launch a continuous process of innovation and excellence, the crucial objective of which is to ensure the brand’s longevity – but longevity demands sustained activity. To this end, he intends to step up the vertical integration of production. Greubel Forsey has bought the surrounding land and plans to construct a new building in the same spirit as the astonishing and iconic current building.
And in his view, people management is one of the key components of the puzzle he is in the process of assembling: “Greubel Forsey incorporates a wealth of outstanding knowledge, brain power, skills and know-how. But the aim is not to run after growth at any price, but to strive for even greater excellence. Whether we succeed is a question of alchemy and integration of the different skills, and that demands excellent work conditions and flexibility. We want to think outside the box, with regard to both our products and our way of doing things. It’s a continuous process that’s already under way.”
At Parmigiani Fleurier, Guido Terreni began by “stopping everything”. He imposed a period of reflection (Covid was in full swing which, paradoxically, did him a favour). His first task was to ask his teams: “Who is Parmigiani Fleurier? Who do we sell our products to?” One fact soon became evident: Parmigiani Fleurier is not an ostentatious brand. Its territory lies in the realm of “discreet chic”. It addresses a competent, independent-minded, cultivated and sophisticated customer base.
So: what would this type of customer – in the 30-40 age bracket – like to wear today? In their eyes, elegance is of primary importance, but a less formal elegance than before and one that can be adapted to suit all circumstances. A creative product, but pure, pared-down, designed with extreme care. Parmigiani Fleurier already has a rich history behind it; it must not copy anyone else. It has to interpret these requirements in its own way. The period is propitious: historically, the strong momentum generated by a continually expanding luxury market works in favour of independents.
- Parmigiani Fleurier Tonda GMT Rattrapante
On the strength of these findings, Guido Terreni and his team quickly got to work, poring over every detail of the product and redefining, one by one, its fundamental aesthetic codes. The goal was to create complete, easily recognisable stylistic coherence between the different products. The Tonda was to serve as the basis, but its case was subtly reworked because it did not fit the metal bracelets that were from now on to be semi-integrated, creating perfect, identical stylistic continuity, whether the watch was fitted with a metal bracelet, or a strap made from, leather or any other material.
The first collection, with 25 different variants, was designed in three weeks. Eight months later, the first prototypes were ready.
The bezel was finely fluted and inclined, becoming a subtle yet striking signature feature. The finishes of the dial were revised, the movement lowered and the guilloché pattern, which had always been there although very conventional in design, was miniaturised to form a fine tapestry. The logo, formerly no more than a rather invisible maker’s mark, became an elliptical cartouche in the proportions of the golden ratio so beloved of Michel Parmigiani. The colours are subdued, but none is banal. The bracelets are extremely supple. Lastly, the motor itself, with its 3mm micro-rotor, is still produced 100% in-house.
The first collection, with 25 different variants, was designed in three weeks. Eight months later, the first prototypes were ready. In April 2022 at the Watches & Wonders trade show, Parmigiani Fleurier showcased the Tonda PF Skeleton, the Tonda PF Flying Tourbillon, the Tonda GT Chronograph in a big date and annual calendar version, and a world premiere that really impressed: the Tonda PF GMT Rattrapante.
At Zenith, Julien Tornare set to work on various fronts, each equally demanding of attention. His objective, remember, was to put Zenith on a twenty-first-century trajectory. He began, symbolically, by giving Zenith’s star logo “a prominent place” and introduced a new slogan – Time to Reach your Star – that was aimed as much at his own staff as at the public. The brand could no longer live in the shadow of past production. At the same time, these historic references had a role to play in its revival.
Tornare set about rethinking the brand’s entire history and defining its fundamental qualities, foremost among which are innovation and the quest for precision. This history would be central to the El Primero’s 50th anniversary celebrations in 2019: not through reissues but by building on the brand’s history and earlier successes to drive it forward. Vintage was all the rage but there was never any question of labelling Zenith as a vintage brand.
A review of the product lines confirmed that there were too many SKUs. The brand had spread itself too thin with a plethora of models and movements, some of which were vegetating. It was time to rationalise. Going forward, Zenith would focus on four product lines only: Defy, Chronomaster, Elite and Pilot. They would be completed by Zenith Icons, a curated collection of “rare and sought-after watches that have been sourced, restored and certified” by the brand. This was guaranteed to get collectors’ pulses racing.
- Zenith Defy Chronomaster Sport
Marketing and communication were another area in need of a shake-up, if they were to serve this new direction and relay the message of a historic brand with its roots in the past but very much attuned to the present.
There was another delicate issue still to be tackled, and that was the high product return rate. This led to a top-to-bottom review of production and inspection methods and flows: a “humungous job” carried out at the Manufacture between 2017 and 2019. In 2017, in Julien Tornare’s words, “the house was on fire”. By 2019 Zenith had turned a corner and efforts were beginning to pay off. Then Covid happened. “I know a lot of people suffered,” says Julien Tornare, “but having this ‘time out’ actually helped us speed up the transformation we had started.” A key area in which the brand was able to make faster progress was e-commerce, rolling out online sales in a few months rather than the planned two years.
However, Julien Tornare was convinced this wave of innovation had to extend beyond products and improvements to production, to include a host of smaller details; what he would call “a trail of pebbles”. The new CEO was upfront about his plans and ready to listen. It was time to instil fresh energy and pride into the staff. Innovation was also applied to working methods and management style, and micro-initiatives were introduced that, while seemingly insignificant, nevertheless contributed to rebuilding the brand. He opened up the Manufacture for what would become hugely popular tours and to give another example, suggested a rooftop garden where employees could grow and harvest their own vegetables. A new mood. A new era.
Vintage was all the rage but there was never any question of labelling Zenith as a vintage brand.
At Louis Erard, Manuel Emch began his “great decluttering”. The key idea was “to return to its beginnings with the strongest possible value proposition, which does not exist in the affordable price range”. Basically, the idea was from now on to work in terms of offer, not demand. All efforts had to be focused on the product, with a genuine value proposition, clear differentiation and a strong identity. The latter was ready-made: the Regulator was to be its spearhead. To become sustainable in the long term, growth would not be linear but stepwise, following a steady, precisely established programme.
At Louis Erard, Manuel Emch (originally an industrial designer by profession) defines himself not so much as an ordinary CEO, but more as an artistic “curator”. And it was in this role that he organised the brand’s new roll-out.
He began by radically reducing the number of product references, from around 350 to a few dozen. He standardised production, working with just two different cases and three base movements – Sellita – and resisting any temptation to jeopardise quality through over-production. The product offering was subdivided into three collections: Excellence (limited to 99 or 178 items); Héritage (7 models) and La Sportive (8 chronograph models).
At Louis Erard, Manuel Emch defines himself not so much as an ordinary CEO, but more as an artistic “curator”. And it was in this role that he organised the brand’s new roll-out.
The Excellence collection was at the vanguard of this complete overhaul at Louis Erard. With a new model released virtually every month, it set out to impress. Excellence is based on four types of collaboration: with master craftsmen and women, renowned watchmakers, architects and what Manuel Emch calls the watchmaking “ecosystem”. And all at unbeatable prices, so much so that many of these limited editions sell out rapidly.
- Le Régulateur Louis Erard x atelier oï
For the price of CHF 2,500, Louis Erard offers Grand Feu enamel watches by dial specialists Donzé, watches featuring hand-guilloché and soon marquetry or even flinqué, paillonné or champlevé enamel finishes. The instantly recognisable Regulator display and small-seconds dial have been revised and retweaked by Alain Silberstein, Vianney Halter, the designer Eric Giroud, Massena Lab, Label Noir and even architects Atelier Oï. The same collection also includes dials in malachite, aventurine and lapis lazuli, all at the same price of CHF 2,500.
To achieve this kind of renewal so rapidly, the company’s organisation has been completely rethought. Previously pyramidal, it is now transversal and collaborative. There is no longer any hierarchy; all the employees (just 12 people – excluding the people responsible for the prototypes, encasing and finishes, which are outsourced to a neighbouring workshop, but still in Le Noirmont) have access to all information and are free to organise their work as they think fit. Success rapidly ensued.
At Doxa, Jan Edöcs and Romeo F. Jenny decided to rethink the whole operation. They had to shake up and wake up the market and attract new communities of fans. The timing was right, because the vintage-style instrument watch was back at the centre of watch ranges. The current, classic-style collections were abandoned completely and all efforts concentrated on the diving watch at the heart of Doxa’s history, the symbol of its undeniable legitimacy. There’s so much to say about the adventures of Doxa, about water…
Jan Edöcs decided to drop a bombshell at the 2019 Basel fair – 2019 also being the brand’s 130th anniversary – showcasing, to everyone’s surprise, the SUB 200 T.GRAPH in 18-karat gold with a dial in the historic orange colour, mounted on the iconic “beads of rice” bracelet for CHF 74,800, or on an orange rubber strap for CHF 49,800. Unheard of at Doxa. The stand heaved with visitors; everyone wanted to see these exceptional timepieces. But the nub of the matter lay elsewhere: to its visitors, Doxa presented and introduced its SUB 200 collection, priced at just – CHF 950. This colourful watch with its rubber strap and Sellita movement was “cool” and targeted the “desk diver” category, as Jan Edöcs calls them.
With this highly structured offering, Doxa staked out its territory very precisely and stuck to it. The brand is going to stay in the water, so to speak.
The SUB 200 was only the prelude to a complete new roll-out of the offering, one which aimed to be more transparent, more easily comprehensible, one which would be spread rationally across a range starting at CHF 1,000, peaking at CHF 5,000 and spanning models for “desk divers” (because it is a well-known fact that the percentage of diving watches really used for their primary function is negligible) to re-editions of historic, professional timepieces, namely the SUB 300 from 1967 and the SUB 300T from 1968 with its helium release valve, watertight down to 1,200m. Each of these collections (except the Doxa Army limited series) comes in the same seven colours.
With this highly structured offering, Doxa staked out its territory very precisely and stuck to it. “Doxa’s going to stay in the water, so to speak, because we’ve got so many stories to tell! The spectacular success of the Doxa Army alone, inspired by a 1968 model specially designed for a secret unit of Swiss army divers, the limited edition of which sold out in just a few hours, is proof of Doxa’s renewed appeal,” says a delighted Jan Edöcs.
3. DISTRIBUTION AND RESULTS
After analysis and diagnostics were complete, it was time to make decisions and take action. Although action primarily related to the product offering, in every case it also played a role in the vital aspect of distribution. Ultimately, the outcome of any strategy depends on the retail sector’s ability to channel and sell product.
When Antonio Calce was appointed CEO of Greubel Forsey in August 2020, the brand distributed its timepieces through a network of around 50 sales outlets. That is, for production amounting to 100 watches per year, an average of two watches per outlet. This was not enough to generate any desire for emulation, or even any stock rotation. Antonio Calce set out to reconfigure this network. Today, the number of sales outlets has been cut down to 30. But that’s just the first step, because the ultimate objective is to restrict distribution to just 12 to 15 sales outlets – in the form of flagship stores, in collaboration with the most highly reputed names.
- Greubel Forsey GMT Balancier Convexe
This radical reduction is going hand in hand with a gradual increase in production volumes. The final objective is to supply around 50 watches a year per sales outlet in order to absorb 90% to 95% of a production volume that will, in consequence, gradually rise. Ideally, 60% to 65% of this business should be generated by the new offering, situated in the CHF 150,000-250,000 price range.
In parallel with this, efforts had to be made to ensure that the value of pre-owned Greubel Forsey watches rose by a large margin. To this end, the brand decided to “organise” rarity and exclusivity, especially of the most important models, which will be limited to 11 items. This is deliberately not enough to satisfy the demand of all collectors, which is estimated at 35 to 40 copies per model.
So, what are the initial results of this strategy? With four launches in 2022, in a slightly lower price segment with a touch of modernity and greater youthfulness than previously, the wager seems to be paying off. According to Antonio Calce, since 2020, the brand has seen double-digit growth and turnover has doubled, as has the number of watches produced – 200 this year – with a sell-through rate of 93%.
The final objective is to supply around 50 watches a year per sales outlet in order to absorb 90% to 95% of a production volume that will, in consequence, gradually rise.
When Guido Terreni arrived at Parmigiani Fleurier, the brand – the average price of which is now between CHF 35,000 and CHF 40,000 – was sold through more than 200 outlets. These have been drastically reduced to around 80 today.
The selection was made not exclusively on the basis of the prestige of those outlets, but also according to more cultural and generational criteria, because, in the words of Guido Terreni, “retailers have to know how to interact with the kind of customer we’re now addressing”. The clientele is diverse, sophisticated, urban and educated, cutting across all sectors of society, and far broader than the usual collectors and “horology fanatics”.
The clientele is diverse, sophisticated, urban and educated, cutting across all sectors of society, and far broader than the usual collectors and “horology fanatics”.
To achieve this, Guido Terreni believes “firmly in multi-brand distribution”. The relationship between the brand and the retailer has to be “you scratch my back, I scratch yours”. No discounts should be offered and in exchange the brand has to offer a potential for steady sales. The “purity” at the core of its product offering has to be present in every aspect of the brand, including presentation at the sales outlets: this should not be invasive but simple and self-explanatory.
Today, distribution is equally balanced between Europe, the US and Japan, as well as Singapore and Malaysia, where the brand has just begun to establish a presence. And what about China? The brand is not present there and “for the moment, it’s not a priority target”. So what are the initial results of this strategy, launched in spring 2022? More than encouraging, so much so that Guido Terreni explains that they are “no longer able to keep up with demand, which has exploded. In 2022, we’ve already multiplied our 2021 turnover by five”.
When Julien Tornare joined Zenith in May 2017, the brand, which is part of the LVMH group, wasn’t profitable. It was rumoured to have lost CHF 30 million in 2016. By the end of 2017 it was still to turn a profit, although it was close to breaking even. Julien Tornare and his team spared no effort during this first financial year. No fewer than 434 events were organised worldwide along with 529 press briefings. Tornare personally gave more than 50 interviews.
By end 2018 they were beginning to reap what they had sown as double-digit growth took the brand ever nearer to break-even. There were some misfires along the way, notably the highly anticipated Defy Lab whose groundbreaking single-piece oscillator made of monocrystalline silicon proved unsuited to series production. The episode didn’t hamper Zenith’s progress, however.. The brand was poised to return to centre stage.
The distribution network was slimmed down from 848 points of sale in 2017 to a more selective 590 today. And whereas the brand didn’t have a single own-name store in 2017, there are now some thirty Zenith boutiques.
From being non-existent, e-commerce currently accounts for between 7% and 8% of sales: a complement to bricks-and-mortar distribution that is far from negligible. Importantly, e-commerce enables the brand to reach customers outside big cities, in the United States or Australia for example. It’s also significant that the brand has acquired a considerably younger clientele, with the average age of customers dropping from 45 to 33. Not to be overlooked is the decision to no longer categorise products as men’s or women’s. Zenith watches are now marketed to every gender.
The brand has succeeded in making an intelligent comeback with a clear, multi-level offering across the four main collections that build horizontally on legacy products to offer a coherent and contemporary catalogue. After winning the Chronograph prize at the 2021 Grand Prix d’Horlogerie de Genève for the Chronomaster Sport, Zenith again caught enthusiasts’ attention with this year’s launch of the Heritage capsule collection of 10 pieces, equipped with the exceedingly rare Calibre 135-O. Developed to compete in observatory chronometer trials, each movement has been restored and hand-decorated by Kari Voutilainen. An eleventh, cased in niobium with a salmon guilloché dial and pink gold-plated movement, was recently sold by auction house Phillips / Bacs & Russo for a handsome CHF 315,000. All proceeds benefitted the Susan G. Komen Breast Cancer Foundation.
This is just one of the “pebbles” strewn along Zenith’s new path, as the brand looks forward to a record 2022, both for sales and profit, with overall growth of 35%. This comes on the back of a strong performance in 2021 when, according to analysts at Morgan Stanley, the brand posted sales in the region of CHF 112 million. As further confirmation that its star is rising, Zenith’s once shrinking workforce has increased from 220 to 340 staff.
It’s also significant that the brand has acquired a considerably younger clientele, with the average age of customers dropping from 45 to 33.
When Manuel Emch came to the rescue of Louis Erard, the brand with 350 product references was distributed in 400 sales outlets belonging solely to two retailers. The average margin was 60% and there were twenty different price lists. “The whole focus was on sales support,” Manuel Emch explains. At the time, the largest historical market was Switzerland, while the US was virtually non-existent and China was absent, but the brand was present in a host of markets of secondary importance, such as Albania, Croatia and Kazakhstan. It had no digital presence, no press files.
The entire distribution channel and mix were reorganised. Today, there are only 100 partners worldwide, including the principal opinion leaders (Cellini, The Hour Glass, Chronopassion), large, multi-brand retailers, flagship platforms and influencers. The aim is a perfectly balanced mix between its physical and digital presence. Four thousand watches a year, distributed by one hundred partners, or 40 watches per partner. The margins are the same the world over: 35% on collaborative watches, 40% on artisan watches, 50% on the standard collections.
All the agents receive exactly the same information, there is no obligation to buy and they make their own choices about the limited editions. “The sales outlet is turning into a marketing argument. The aim is to build the brand and its image together,” Manuel Emch emphasises. "As with our entire organisation, the philosophy is to be participative and collaborative at every level.” The outcome of this new strategy? Unprecedented visibility, media coverage that has exploded, a secondary market that is “beginning to emerge” and above all, starting in 2020, the brand has become “very profitable” again.
“The sales outlet is turning into a marketing argument. The aim is to build the brand and its image together.”
When Jan Edöcs took over the management of Doxa, the brand – a pioneer of online sales – sold its watches exclusively via the Internet and, with few exceptions, no longer had any physical presence on the markets. Jan Edöcs, a connoisseur of the American market, reversed this situation. A subsidiary was opened in the US and an agreement signed with Watches of Switzerland, which has exclusivity over physical distribution throughout the American market. The ultimate objective is to open 85 to 90 stores there, with between one and two retailers at the most per major city.
“We’re taking our time, advancing step by step, so as to have full control over our distribution.”
In all, the brand has gone from having zero sales outlets to 90 across the US, the UK and the Middle East. In 2022, Doxa moved into the Middle East with the inauguration, on the same day, of premises in the United Arab Emirates, Saudi Arabia, Kuwait and Bahrain. In 2023, it will be the turn of Qatar. In Europe, the brand is already present in Spain and Germany. The brand now only sells its watches online via its own platform, inaugurated in 2001.
- DOXA Army
“We practise the same prices everywhere, whether in physical stores or on our platform,” underlines Jan Edöcs. “We’re taking our time, advancing step by step, so as to have full control over our distribution. We’ll be looking at Japan very soon, but we’re moving forward at a reasonable pace, waiting to have the requisite structure, creating a buzz first. As for China, that will come last. Just entering without preparation would be too costly. First of all we need to educate the future Chinese clientèle about the world of diving.”
And are the results good? “We’ve already sold 10,000 watches in 2022,” replies Jan Edöcs with a broad smile.