Posts Tagged ‘gucci’

Who’s the King?

August 16, 2008

We all love ranks, lists, competition and knowing who is the best. In the watch industry many players crown themselves as the king of the industry. Consumers always want to own the best watch. But who is actually the king?

Is Rolex the king of the watch industry, like many people (want to) believe? Or, did Rolex crown itself as the king of the watch industry, and therefore have a crown as their logo?

Rolex Logo

Rolex Logo

Like many people, I always wondered what watch brand was the absolute number 1. But who and what defines the number one? As a small child, I always believed the one that produced the largest quantity of watches, is the number one. Since I was infected with the Swatch virus, that started in 1983 (I was four and had a Swatch on my wrist – I couldn’t even read time), I believed Swatch was the number one. As I grew older, Swatch grew to be a huge international hype. When I grew even older and started to understand the value of money and recognize the diversity of the many brands, I believed Rolex was the number one. Not only because it seemed everybody who spoke about watches, spoke about Rolex; but also because it seemed the ultimate watch brand for many.

When I started high school and started to work in the family business during holidays, I learned there were so many more brands out there. Many of them weren’t even sold in The Netherlands and I started to fall in love with Jaeger-LeCoultre, Patek Philippe and Audermars Piguet. Now that I am working in this industry for more than 10 years, I have the greatest respect and appreciation for the geniuses that are still alive and create amazing, innovative movements (like: FP Journe, Richard Mille, Grubel & Forsey, Renaud & Papi, etc). But also people, like Kurt Klaus, who work for the major brands (I had the honour to have met him on many different occasions and even drove him from one side of The Netherlands to the other – the poor guy, I drilled him for the complete two hours).

At the end of this post I will share my opinion of whom I believe is the king, but first let’s define some means to measure the greatness of a brand. First and foremost, people will always define quantity. But this is tricky, since some Japanese or Chinese manufacturers most probably produce more pieces annually than the complete Swiss watch industry. So, we need to narrow this down. The second definition that pops into my mind is exclusiveness and that is immediately linked to luxury. And, to measure exclusivity one can use recommended retail prices and therefore crown the most profitable watch brand as the king of the watch industry?! But, what about values at auctions? Let’s propose historic and/or market prices as a third definition.
As a fourth definition we could consider is independence as a parameter… We all know “money makes money” and with enough marketing budgets, one can ‘buy’ exclusiveness, market shares, brand awareness and raise auction priceses (Antiquorum Scandal and remember the Omegamania auction?!). So, independent brands should be considered more successful, if they excel in a market that is dominated by huge globalized public listed companies (Swatch Group, Richemont, LVMH and others). And, last but certainly not least, perception is a parameter I want to consider. For my bachelor thesis I did research about brand identity versus brand image of watch brands. This is a very interesting and timeless subject: The self-perception of almost anyone (persons and companies) is different if compared to how we are perceived (but then again, the truth is in the eye of the beholder 😉 ).

If we look at these five parameter to define who is the king of the watch industry, we have to analyze each paramter:

1. Quantity
As discussed already, some single Asian brands produce annually more watches than the complete Swiss industry, so we need to narrow it down. In the trade we generalize and split the market in to three segments: Low-end (up to EUR 1.000), mid-range (between EUR 1.000 and EUR 3.000 – some say EUR 5.000) and high-end (a.k.a. Haute Horlogerie – from EUR 3.000 or EUR 5.000) and up. And in the high-end there are many sub-segmentations possible, but we will neglect those for now. In the low-end, Seiko is the king of quantities. In the mid-range, I find it very difficult to quantify, but I personally believe it is Tissot (please share if you have any statistics – I couldn’t find any now). And, in the high end it is indisputably Rolex! Although Rolex does not publicize any figures, there are rough estimates that Rolex manufactures about 1 million watches a year. We can conclude this by the figures the COSC publicizes.

COSC Certificate

COSC Certificate

2. Exclusivity/Profitability
Many watch brand nowadays compete for the title to have created the most exclusive watches. Some say the most expensive watch is the most exclusive (I believe that today this is still the Patek Philippe Sky Moon Tourbillon). Others say that this is not only one of the most expensive watches, but also a watch that has been produced in a limited series… Of course, a piece unique should win this title… lately people say it is the replica of the Breguet Marie-Antoinette. But let’s not forget the IWC Grand Complication Il destriero scafusia, Vacheron Constantin Tour de I’lle and Blancpain Le Brassus 1735 Grande Complication. Of course there are a few more that belong in this list. But measured overall, Patek Philippe is the brand that creates and manufactures the most exclusive watches in the market (you’ll rarely find discounts on these watches – many models will be sold with a premium). Their aim was from the start to create the best watches in the market and even today they live by this promise. Linked to this, I dare to say it is the most profitable company, if measured by market price divided by quantity sold annually (no numbers know, so this is pure my personal hunch).

Breguet Marie-Antoinette

Breguet Marie-Antoinette

3. Timelessness/Market Values
Although recommended retail prices could indicate how exclusive a timepiece is, but wouldn’t market prices be an even more important tool to classify the exclusiveness of watches? As discussed in the previous paragraph, there are only a few watches that actually sell above the asking price. The first watch that comes to mind is the Rolex Daytona in stainless steel for a watch that is still in production and on auctions almost all vintage Patek Philippe watches break records (In the top 10 of The Most Important Vintage Wristwatches (made before 1990), all 10 watches are by Patek Philippe!). Therefore I believe Patek Philippe is the undisputed king of timelessness and holding its value. Or even more important, proving to be a good investment: It will only go up in price. On top of that, nowadays, almost every new launched Patek Philippe watch sells for a higher price than the recommended list price! But ofcourse the also produces models that make many of us wonder what the designers where thinking while creating these pieces.

Patek Ref. 1415 HU - Most expensive wrist watch (USD 4 million)

Patek Ref. 1415 HU - Most expensive wrist watch (USD 4 million)

4. Market size: Independents vs. Groups
After the quartz-crisis in the 1970s, not many watch companies survived and most of them that survived joint forces. Nowadays, we can conclude that the luxury goods sector is dominated by corporations. And this also counts for the watch industry. Many international watch brands (mostly haute horlogerie brands) are now part of a large consolidated corporation selling watches, jewelry, leather goods, hunting weapons and writing instruments. Although Swatch Group is the only luxury corporation that focuses on the watch industry, it is by far not the largest group, measured in turn over. The top 10 of luxury good companies that manufacture watches is (in 2006 in billion USD):

1. LVMH (Zenith, TAG Heuer, Hublot, Dior, etc.) = 20,2
2. Richemont (Cartier, Mont Blanc, IWC, Panerai, etc.) = 6,3
3. PPR (Gucci, Bedat, Sowind, etc.) = 4,7
4. Chanel = 4,6
5. Swatch Group (Omega, Breguet, Blancpain, Longines, etc.) = 4,2
6. Valentino (Valentino, Hugo Boss, etc.) = 2,6
7. Hermes = 2
8. Giorgo Armani = 2
9. Dolce & Gabbana = 1,4
10. Bulgari = 1,3

Unfortunately all these groups do not publicize the individual figures of the subsidiaries and therefore we can’t analyze and compare individual watch brands. On top of that the individual watch brands also do not publicize their turnovers and profit margins, so therefore we have no clue who is the ‘largest’ watch company by turnover. But if we have to guess what group is the largest, based on their turnover generated by pure watch sales, Richemont is definitely the largest! Although LVMH is more than three times larger, their watch sales most probably do not surpass those of Richemont! We have no clue how profitable Patek Philippe and Audermars Piguet exactly are, but everybody in the watch industry indisputably assumes that Rolex is the largest and most profitable individual watch brand/company. There is no manufacture that produces around 1 million quality watches annually with an average price of approx. USD 8.000! And then we do not even take Tudor in to account, but that is probably pocket change for Rolex S.A.?!

5. Perception
This is a difficult one! As written before, I have written my bachelor dissertation about Brand Identity versus Brand Image. They only way to quantify this is to do a large-scale poll. In this poll one should assess the identity of a brand and compare it with the perception of its consumers. So litteraly compare the image of the consumers with the identity a brand. Again I emphasize that this post is my personal opinion and I am heavily generalizing here. My purpose is to provoke responses, so please do share your opinion. If I have to guess, I believe that Rolex believes they are the king of the watch industry (therefore have a crown in their logo). On the other hand if you ask the majority of the population and ask them what the best watch brand is, probably 80% will say Rolex! Rolex ranks number 72 of the Top 100 Best Global Brands (Newsweek), so that is not very strange. The funny things is two years ago the Swatch Group publicly attacked Rolex (the subject of my next post), by claiming that in three years time Omega will be bigger than Rolex, measured in turn over. So, in 2006 Nick Hayek Jr. claimed that by 2009-2010 Omega will be bigger than Rolex (therefore admitting Rolex is the king) and aiming to be the king of the watch industry.

What about the 20% that doesn’t believe that Rolex is the king… Many people who have decided to by a good watch, go out there without analyzing the large selection of watches available and buy a Rolex. They buy a Rolex, because they believe they bought ‘THE’ best watch out there. But, often they are disgusted by the fact that ‘everyone’ has a Rolex (or Lolex – or any other look-a-like). If their passion for mechanical movements grow, they are obliged to look into other brands. If you want a chronograph (and have a Daytona or can’t get one) you are obliged to look at other brands. If you want a watch that is even more complicated, you definitely have to look elsewhere. So, for lovers of mechanical movements and complications, I believe Patek Philippe is the undisputed king, and I simply base this notion on the fact of the auction results! But even the true WatchFreaks often love Rolex watches too! Rolex has made and still makes iconic/minimalistic/qualitative movements and watches! Personally I have loved Rolex, then the love passed, it come back again and now turned into a love-hate relationship…. Yes, I know: Love is complicated 😉 Maybe a nice topic for another post! 

Personally I believe that the King of the watch industry is a watch brand that finds a balance between heritage, innovation, quality and timelessness (read: is of will be a legend). Personally, I believe Patek Philippe is the king of the industry, because:

– Like many other watch brands, has an amazing heritage. It is still a family company (but not the Patek or Philippe family – but still independent).

– It is one of the most innovative watch manufacturers out there. I believe Patek was the first one to create silicium spare parts in their movement. But to be honest, Audemars Piguet and Ulysee Nardin are as innovative. But it underlines again that the independents invest more in the long term, versus the short term profit strategy of many groups.

– I believe innovation and quality go hand in hand, but when Patek Philippe was founded their aim was to produce the best movements and watches out there. This is proven by the results on auctions. Today they also produce one of the best watch movements and watches, this is underlined by the huge waiting lists for models and the premiums people are willing to pay for the new watches!

– In the battle of who produces the largest watches, Patek still sticks to the ‘old-fashioned’ small and thin movements. I believe that is very daring, but then again, that shows vision and faith in their own identity and strategy!

– Last, but not least: Exclusivity/Distribution. Even though Rolex doesn’t really have many retailers compared to other brands, Patek is truly exclusive. It only has a handful retailers and they only work with the best retailers in every city/country! No concessions to quality and service! 

The funny thing is, I believe that Patek is the King of the watch industry, I still do not have the urge to run out and get one particular Patek at this very moment. I do love the 5960p, but still I love my Portuguese Chrono more (sorry!). And I always loved the Nautilus (am a huge fan of Gerald Genta – AP Royal Oak is my favourite), but even though the new 5711/1 grew to a good size of a 43mm, I find the watch thin (case and bracelet)! But what an amazing movement and what a finish on every single detail! 

Yes, when I am a bit older and have a lot more grey hair, I definitely want a Perpetual Calendar in white gold (5140G). But still, 37mm is very small. My wrist is not to big and therefore I don’t wear watches over 44mm, where 42mm is ideal for me. 39mm is really the minimum for me, but just for the love for the brand and this model it is a dream to wear the 5140! But first I want the IWC Portuguese Perpetual Calendar (IW502218).

I am very curious who you believe is the king of the watch industry!

A mechanical greeting,


P.S. Rolex was founded in 1905 and the Crown-logo was registered in 1925.

Breaking News: Gucci buys stake in Sowind Group (GP & JR)

June 14, 2008

On April 25th we reported that another independent watchmaker was taken over by a big luxury group (LVMH bought Hublot). Today we report the purchase of 23% of the Sowind Group (Girrard Perregaux and Jean Richard) by Gucci Group (owned by PPR).

Please share your opinion about this fact. Is it a positive or negative move by an independent watch manufacturer? And will the other independent watch manufacturers be ‘tempted’ to sell their companies as a result of the huge sums of money offered by the big luxury firms?

Here follows the official press release by PPR:

“PPR and Girard-Perregaux sign a long-term strategic partnership.

 PPR announced the signature of a long-term strategic partnership with the Sowind Group, a Swiss holding company based in La Chaux de Fonds headed by Luigi Macaluso. The Sowind Group includes the Haute Horlogerie brands Girard-Perregaux and JeanRichard, a Research and Development Centre, as well as Sowind Manufacture, maker of high-end watch movements. Under the partnership, PPR will own a 23% interest in the Sowind Group, with the possibility of increasing its stake under the terms of a shareholders’ agreement. Mr. Macaluso will retain control of the company.

This strategic partnership represents the materialisation of a shared vision between the two partners regarding long-term growth prospects in the Haute Horlogerie segment. It will allow PPR and Girard-Perregaux to combine their know-how and knowledge base in terms of R&D, design, brand management, distribution networks and sourcing. Mr Macaluso will join the Gucci Group Management Committee and the Boucheron Board of Directors. François-Henri Pinault and Robert Polet will become Directors on the Sowind Board.
This long-term agreement offers Girard-Perregaux, one of the last independent, high-end Swiss watch “Manufactures”, and the JeanRichard brand the means to fully exploit their potential for growth and innovation by teaming up with one of the major players in the luxury goods industry. As for PPR, the agreement confirms the Gucci Group’s goal of building a strong presence in the Haute Horlogerie segment, one of the most promising luxury goods markets. The Gucci Group brands will thus benefit from outstanding watch-making expertise and will extend their sourcing for timepiece components.
François-Henri Pinault, Chairman and CEO of PPR, declared: “I am pleased that the bonds between our two groups are being strengthened, as we build a joint future in one of the most prestigious sectors of the luxury goods business. The PPR and Sowind groups share the same entrepreneurial values passed on through long family tradition. I have a great admiration for Girard-Perregaux, a brand founded in 1791 whose identity and worldwide influence is exceptional.”  
Luigi Macaluso, Chairman and CEO of the Sowind Group, stated: “I am extremely pleased to be able to work with a major group like PPR and, specifically, with the Gucci Group. This will be a truly rewarding experience. Our varied and complementary skills are based on common values of excellence. This agreement will mean new synergies and new long-term projects.”
Robert Polet, Gucci Group CEO, said: “This is a tremendous opportunity for our brands to be in contact with the greatest watch-making expertise of Sowind. We are convinced that this
agreement will create a number of important synergies for our watch brands and their further development.”
About PPR 
PPR develops a portfolio of high-growth global brands. Through its Consumer and Luxury brands, PPR generated sales of EUR 19.8 billion in 2007. The Group is present in 90 countries with approximately 93,000 employees. PPR shares are listed on Euronext Paris (# 121485, PRTP.PA, PPFP).
To explore the universe of PPR brands go to Fnac, Redcats Group (La Redoute, Vertbaudet, Somewhere, Cyrillus, Daxon, Ellos, The Sportsman’s Guide, The Golf Warehouse and brands of the plus-size division), Conforama, CFAO, Puma and the Luxury brands of Gucci Group (Gucci, Bottega Veneta, Yves Saint Laurent, YSL Beauté, Balenciaga, Boucheron, Sergio Rossi, Alexander McQueen and Stella McCartney).
Sowind Group, the pinnacle of Swiss watchmaking Art
The Sowind Group is a Swiss « Haute Horlogerie » company owned by Luigi Macaluso who has been heading it since 1992.
Based in La Chaux-de-Fonds, the Group incorporates the Girard-Perregaux and JeanRichard brands, a watch « Manufacture » that develops and produces a complete portfolio of high-end movements (more than 100 variations) and collections of mechanical watches.
The Research and Development Centre is the company’s cornerstone, with more than 80 patents and a strong percentage of the firm’s turnover being re-invested in it.
Girard-Perregaux’s roots date back to 1791 and the company history is rich in innovations bringing together design and technology, like the renown Tourbillon with three gold bridges created by Constant Girard in the 19th century.
 Girard-Perregaux is represented globally in 550 prestigious points of sale and several exclusive boutiques, like the one in Gstaad.
JeanRichard is a brand dedicated to Daniel JeanRichard (a pioneer of watchmaking in the Neuchatel region during the 17th century) and presents a daring and innovative interpretation of the codes of traditional Swiss watchmaking.
Key Figures:
§ 350 employees
§ An annual production of around 20 000 units
§ Watches with prices ranging from around 6 000 to 500 000 Euros
§ Two unique museums: the Girard-Perregaux museum in Villa Marguerite and the museum dedicated to watchmaking tools and machinery in the Villa JeanRichard.”

Update BaselWorld 2008: Fashion

April 9, 2008

Today was my fourth day in Basel and my last day on the fair. The day was completely filled with meetings with jewelry manufacturars and we ended the day with the finalization of the packaging of the Ace Watch (for updates, keep track of Before we started in Hall 2.0, we did a quick round in Hall 5.0 to see what is happening in the Fashion sector of the watch industry. In this post I will show some pictures of the booths (maybe fun to see if you never have visited BaselWorld) and in the second part some fashion watches (we wrote an article about what watches should or shouldn’t be labeled as fashion: “Couture Watches vs. Fashion Watches“. In this post I name the watches that are designed by fashion houses and produced for the price range that people should wear them as fashion accessories (buy a new one every year), fashion watches.

1. Fashion Booths in Hall 5.0:

In my opinion the most successful stand in Basel is the one of Patek Philippe, but if we look at the stands of fashion watches, the stand of D&G won by far (in my opinion):

D&G: One moment the stand is completely blue-ish…

The next moment the complete stand is red!

Guess believes sex sells…

And Breil doesn’t (anymore… Remember the commercials?!)

Dior thinks: J’adore Montres!

Hermes is understated elegance.

Ferregamo started making watches too…

… And, Moschino finds itself “Cheap & Chic”!

2. Fashion watches presented in Hall 5.0:



Sector: Is it a fashion brand?! (Sorry for the bad picture & reflection).

Valentino: Like Gucci made a complete black watch for ladies!

Tomorrow I am off to Geneva to visit the SIHH. Stay tuned for a report of all the Richemont brands plus AP, GP and Parmigiani.

Update BaselWorld 2008: Trends Confirmed

April 8, 2008

Today was my second day at the trade show and I wrote a post about the following brands on

– Ebel
– George Jensen
– Oris
– Gucci
– Hamilton
– Omega
– Breitling
– Breitling for Bentley
– Maurice Lacroix
– TAG Heuer (phones)

Yesterday I wrote about what I believe the trends for 2008 are:

1. Diamonded watches for ladies AND men are STILL hot, hereby AGAIN confirmed:

Ebel Beluga
Ebel Beluga

Gucci Chiodo
Gucci Chiodo

2. Big is still the trends, we thought that 46mm is large, well it got confirmed AGAIN:

Breitling Chrono-matic 49
We keep on benchmarking against the IWC Big Pilot of my father, here the 49mm Breitling Chrono-matic 49.

Hamilton Code Breaker
The crazy rectangular Hamilton Code Breaker of 48,5mm.

3. Black cases are still very trendy, black PVD on steel or titanium or ceramic. Another trend confirmed:

Gucci Signoria Black
Gucci Signoria newest update: COMPLETE BLACK CASES & STRAPS FOR LADIES!

Hamilton has many black cases in the collection!

4. Pink Gold is here to stay (it was in the 1920s and the 1950s). This is again confirmed in the 21st century:

Omega Museum Watch
The Eighth Omega Museum Watch in Pink Gold (Limited Edition).

5. HiMech = HiTech Mechanical Watches and up and coming, this was confirmed today by many brands:

Ebel Trekton Skeleton
Ebel Trekton Skeleton

Oris BC4 Side
A side view of the Oris BC4 Chronograph Automatic.

Hamilton X-copter Side
A side view of the Hamilton X-copter.

The year 2008 seems to be another amazing watch year! Enjoy!

Couture Watches vs. Fashion Watches

February 26, 2008

Carol Besler wrote an interesting article about how we should title watches made by haute couture houses like Chanel and Hermes. In the article “Don’t call us fashion watches”, published on the website of the AIHH, Besler proposed to make a difference between watches made by fashion brands. For prices below USD 1000 we should continue calling them Fashion Watches, where as when mechanical movements are used and the prices evidently will be higher, Besler proposed to name them Couture Watches. I strongly agree with Besler and think it is an excellent idea, because Chanel ofcourse wants to differciate it’s high-end Tourbilion watch from the high-volume Guess watches.

Don’t call us “fashion watches”

A fashion watch is not so-called because of its affiliation with a fashion house, and yet a fashion watch can have such an affiliation. Furthermore, a watch can be fashionable, even if it is not designated as fashion watch, as long as it hits a certain price point.

In the 1980s, the Swiss watch industry, having been crucified by the invention of quartz movements a decade earlier, was miraculously resurrected when Swatch created the “fashion watch.” It was a cheap, plastic, fashionable and accurate alternative to the mechanical watch and, low and behold, it spawned a brand new segment in the watch industry.

Fashion watches, a term utterly ambiguous

Other “fashion” watches followed. There was Guess, Fossil, Nina Ricci, DKNY, Burberry, et cetera, et cetera. Because some of these watches were produced under license from luxury fashion houses, it so happened that, ever after, any watch bearing the name of a luxury fashion brand was dubbed a “fashion” watch. This understandably rankles companies such as Chanel, which objects to the notion of anyone placing, for example, its baguette-diamond-set J12 Tourbillon in the same category as a USD 250 quartz Nina Ricci (nothing against Nina Ricci ; it’s a great watch !). Even within the industry, the moniker “fashion watch,” still sticks to anything with a couture-sounding name. The term has therefore become utterly ambiguous, referring to anything from a USD 150 DKNY to a USD 2,000 Gucci to a USD 130,000 Chanel, depending on the person using the term and what they conceive it to mean. Because of this confusion, brands are shying away from the title in droves.

“We are not interested in participating in an article about fashion watches,” came a terse reply from Chanel when approached for this story. “We are watchmakers.” Similarly, Hermes, whose watches are made in Switzerland by one of the world’s most respected watchmakers, Vaucher Manufacture Fleurier, commented : “From ready-to-wear to leather to watches, it is our policy to join forces with experts in that field. We are not producing fashion watches.”

So noted. A fashion watch, then, is not so-called because of its affiliation – license or otherwise – with a fashion house, and yet a fashion watch can have such an affiliation. Furthermore, a watch can be fashionable, even if it is not designated as fashion watch, as long as it hits a certain price point. But what should that price point be ?

Time to address this crisis of designation

It is perhaps time someone addressed this crisis of designation, a crisis which, it should be noted, also besets the jewellery industry : the term “fashion” formerly referred to costume jewellery, which is made of base metals and rhinestones rather than noble metals and diamonds, but today, the term refers to all jewellery that is non-bridal, and stems from the notion that it is fashion-driven.

For watches, I humbly propose the following new segment designations. For all high-end watches – that is, with mechanical movements, complications and/or high jewellery pieces, AND which bear the name of a luxury goods brand, I propose the name “couture watches” (this would include Chanel, Hermes, Dior and Gucci). Brands with all of these qualities except a fashion house brand name designation should be called “luxury watches” (this would include Cartier, Piaget, Boucheron). And finally, brands that are primarily quartz, under USD 1,000, let’s say, and may or may not bear the name of a fashion house should retain the name “fashion watch” (DKNY and Nina Ricci, but also Fossil and Timberland).

There may linger some ambiguity in (or hostility toward) these categories. Some will argue that “fashion” should include anything under USD 2,000, but if we do, those in the USD 1,000 and up range might object. Others will object to the title of “couture,” which might not be perceived as sufficiently accessible to designate a mass luxury brand… I predict all sorts of objections. But it’s a start.