INDEPENDENTS - Haute Horlogerie: When Independents Join Forces

March 2015

Living in the shadow of the sector’s giants, what place is there for small independent watchmakers in the highest echelons of creative watchmaking? Are they equipped to meet the many challenges they face, alone? Debate.

Almost all of them are the product of the same fertile breeding ground: the Académie Horlogère des Créateurs Indépendants (AHCI), which was founded in 1984. While they might not agree on everything, they share a common outlook.
Between the poker and roulette tables of a casino adjoining Geneva Airport, not far from the SIHH, over the course of a week they exhibited their latest wonders and some older models, several of which have been awarded the prestigious Grand Prix d’Horlogerie de Genève.
Watchmakers Kari Voutilainen, Antoine Preziuso, Vincent Calabrese and Vianney Halter have been brought together thanks to Amarildo Pilo, instigator of the first Swiss Independent Watchmaking Pavilion (SIWP).

INDEPENDENTS - Haute Horlogerie: When Independents Join Forces

Europa Star met up with them one evening to discuss the future of ‘independence’ in Haute Horlogerie. During an informal, interactive and uncensored debate, punctuated occasionally by some unprintable words, these creators expressed their hopes and fears, and ended up brainstorming a new business model and exploring ways to work together to defend their position.
Love them or hate them, they are certainly worth listening to. So, what does independence really mean? Here are some possible answers.

What does it really mean to you, being ‘independent’ in watchmaking terms? It’s a bit of a catch-all term.

Vincent Calabrese: It’s a term I’m very attached to, given that I used it thirty years ago when I created the Académie Horlogère des Créateurs Indépendants. At the time, the term was reserved for watchmakers who worked alone.
Today it is often used to describe far larger companies, which is a misuse, in my opinion. The same goes for the word ‘watchmaker’, which is bandied about indiscriminately.
That is why the name of the academy specifies ‘watchmaking creators’.

So, independence in watchmaking is primarily a matter of size?

Vianney Halter: No, on this point I must disagree with my colleague! A large watchmaking company that is not accountable to any investors or financiers who might impose external criteria is also entitled to consider itself independent. A company such as Rolex could be considered independent, perhaps even more than myself! (Laughter)
Independence is not about size; it’s about freedom of spirit and action. When it comes down to it, who are we really accountable to? A lone watchmaker might be independent, or he might not. Some of my colleagues were independent in the past, but aren’t any longer. Or they have lost some of their independence because they are associated with other organisations that support them.

Antoine Preziuso: The word is something of a misnomer, because you are always dependent on something...

Kari Voutilainen: Whether you work for yourself or for a company, independence means creating alone at your workbench, in total freedom. But there are two aspects: financial independence and creative independence. The one is supported by the other.

You began your activities last century. Do you think it’s more difficult to be independent today – given the problems of distribution, for example – or is it easier because of the new design tools, and communication tools such as social networks?

Antoine Preziuso: I often compare independents with mice. Mice are resourceful, they can slip through the cracks. We rub shoulders with giants, but we always find our own little place. We don’t have their hitting power, but we also don’t have their inertia.
We adapt, and that’s an ongoing process. These days, I use the internet and blogs a great deal, as a communication vector and sales tool. The Grand Prix d’Horlogerie de Genève is also an excellent showcase for independents.

Vincent Calabrese: Going back a few years, ‘unknowns’ were not always allowed into the watchmaking world. That has changed. Every year now we see new brands appearing. There has been a kind of renaissance in watchmaking over the last thirty years: some independents, such as Franck Muller, have grown very big, which has caused problems for the established groups.
Today, the most difficult thing is the strong competition. Obviously, new brands continue to appear, but the imbalance between independents and groups has worsened. You see greater pressure on retailers when it comes to taking on a new brand. Many are born, but many go out of business or are bought out. Watchmaking’s success has created a climate of emulation, but a lot of people have lost their shirts. It’s a little like the casino we’re in today!

Kari Voutilainen: It’s true that distribution has changed a great deal; by creating their own mono-brand boutiques, watchmaking groups have caused problems for retailers. On the other hand, you could also say that it provides an opportunity for independents to fill in the gaps...

Vianney Halter: There are certainly too many products on the market today, and not enough of the right products. Supply exceeds demand.

Vincent Calabrese: But there are also a few more billion people on the planet since a few decades ago. There may still be room...

INDEPENDENTS - Haute Horlogerie: When Independents Join Forces

At the same time, the groups are promoting Swiss Made output around the world, and new markets have opened up. You’ve benefited from that too, haven’t you?

Vianney Halter: It’s true that twenty years ago, when we turned up out of nowhere with our strange, complicated watches, there wasn’t really a market for all our new products. At the time, people would split their sides laughing at my watches! My first Baselworld, in 1998, that first day I genuinely asked myself what I was doing there. On the second day I realised I’d created an opening, I’d engaged people; they were laughing a lot less. The groups helped me to secure contracts, which enabled me to design and finance my own products.
These days, it’s possible for certain small quality independents to pull ahead of the mass of brands that need considerable investment to survive. Even compared with powerful groups, we’re appreciated for our specific characteristics. Having said that, I don’t want to downplay the difficulties. It’s by no means easy these days to launch a brand, to sit down at your workbench and create a watch that will put food on the table. You need nerve and persistence.
Fundamentally, the groups don’t always like us, because they can’t control us. But it’s the groups that bring high-quality Swiss watchmaking to the attention of the entire world. And we reap the benefits. Without the groups, there might not even be any Swiss watchmaking today.

Antoine Preziuso: Storefront visibility nevertheless remains key, and the independents’ position in the shop windows is coming under increasing pressure. It’s a big problem. Thankfully we still have the internet, the virtual shop window. Because it’s extremely expensive to have your own shop.

Vianney Halter: Visibility is a matter of personal will, and it’s also dependent upon the spirit of community between us. At one point, Vincent Calabrese came up with the idea of helping independent creators to join forces. And the academy is going from strength to strength.
The creation of the SIWP is an extension of that idea: letting people know that we’re here, on the sidelines of a major exhibition, inviting people in and telling them about our work.
We must be responsive, we must be able to work together, pool our resources.

And are the independents doing enough in this respect? Could you take this partnership further?

Vincent Calabrese: That’s where the problem lies: being independent, and cooperating with other independents. It’s a paradox, don’t you agree?

Antoine Preziuso: We could cooperate more. For example, we could club together to buy a CNC machine to build our cases...

Vianney Halter: Well, look at what we’ve done here: we are funding a joint communication platform! Machines are important, but communication is equally so.

A few years ago, the Fondation de la Haute Horlogerie considered creating an ‘independent annex’ to the SIHH. Certain brands were against it. Is that because you could cause problems for them?

Vianney Halter: People can be wrong! The problem is that the games of musical chairs between brands are worse than I ever saw at nursery school. As independents, paradoxically, we often have a better idea than the groups of the direction we want to go in. There is more continuity in our management. As talented watchmakers, you must sometimes be approached to join bigger companies. Are you ever tempted to abandon your independence?

Antoine Preziuso: Of course there are always temptations. And sometimes they provide an opportunity to tell a beautiful story. One example is the Opus watches for Harry Winston. They asked certain members of the academy to create timepieces for them, and the project was a success. It helped us, because we were able to piggy-back on their prestige.
We also file patents. We’re full of ideas. And groups ask to buy them. That also helps us. There are positive relations, and some excellent opportunities.

Vincent Calabrese: When they need a hand, there are no hard feelings (laughter).

Vianney Halter: I think we’ve reached an understanding. There is no war. On the contrary, some group managers support us. But it is true that distribution is an increasingly critical factor, not only because of the pressure being brought to bear by the groups, but also because retailers don’t always support us.
Retailers regularly give my products away to their best clients, to thank them for a big sale or to win their loyalty. It drives me crazy! Retailers should also be more independent in their choices. Today, their stocks are full. Some would do better to clear out a few drawers full of products they know they’ll never sell, and have a bit more imagination.

Watchmaking history is a succession of cycles of concentration and decentralisation. What cycle are we in now?

Vincent Calabrese: Today we are talking about the relationship between independents and groups in Switzerland. I think that a major change is on the horizon, which will colour everything else.
Tomorrow we’ll be talking much more about the relationship between Swiss watchmaking and Chinese watchmaking, or foreign watchmaking in the broadest sense. That’s what’s around the corner.

Amarildo Pilo: I’m the only representative of the mid-range sector at this table. Fifteen years ago, the Swiss watchmaking industry represented 7% of global watch sales; today, that figure is 2.5%. I think we’ll be obliged to go even further up-market to maintain our presence. There is a danger that the entire mid-range will slip through our fingers. It could be extremely beneficial for us all if the mid- and high-end independent watchmakers could cooperate more.

The former Audemars Piguet CEO George-Henri Meylan created MELB Holding to relaunch H. Moser & Cie and Hautlence (read our next issue). He says he’s ready to welcome other small independent brands, to set up a ‘pool’ on the marketplace. There could be opportunities for independent mini-groups.

Vincent Calabrese: I believe it’s the only way forward: set up small groups of independents, as the academy has done, and perhaps also incorporate the mid-range. At MELB Holding they also have the advantage of producing their own escapements. That’s a key factor; it is difficult to find independent suppliers.

Vianney Halter: There are now a few retailers, still sadly in a minority, who are making it a priority to represent independent brands. The public wants to see greater diversity.

Antoine Preziuso: But we should go further. I think we should open our own AHCI shop! One in Hong Kong and one in New York, for example. We could probably find someone to fund it. After that, we’d have to agree which of us would be treasurer (laughter).

Vianney Halter: But if it was just down to us, it wouldn’t last long! We’d have to find people with skills that went beyond pure watchmaking; we’d need a marketing and sales structure to attract people to our shop.

Vincent Calabrese: We’d need a manager. I’ll give you an example: Max Büsser, the founder of MB&F, is a hugely talented communicator. He’s an example to follow.

You have a business model! It’s your destiny to form a group!

Vianney Halter: (laughing) Let’s take it slowly. Ten years ago, you wouldn’t even have got us around the same table to talk about it...

Source: Europa Star February-March 2015 Magazine Issue