The Strategy at Girard-Perregaux is on Time

[ad_1]

“I think the problem with Girard-Perregaux in the recent past was that it had fantastic people but only creativity, and no strategy” for its product or distribution, he said. It also faced the external challenges of the watch industry at large, including the slowdown in Chinese demand and the complex aftereffects of terrorist attacks in many parts of the world.

Photo

Antonio Calce is the chief executive of Kering’s Sowind Group, which includes Girard-Perregaux.

Credit
Clara Tuma for The New York Times

Raised in Neuchâtel, Switzerland, to Italian parents who immigrated there after World War II, Mr. Calce has a Swiss penchant for precision and practicality along with an Italian passion for watchmaking and the heritage and craftsmanship that surround it.

“For me, the watch is a piece of art,” he said. “You cannot imagine how many skills that go into it. For the dial, you need more than 40 different skills; to make a case, you need more than 80.”

Instilling a sense of excitement among luxury spenders, he said, is crucial to the survival of the entire watch industry. Its current problems are not related to a lack of people with money to spend, but rather about persuading them to spend it on something for their wrists.

Mr. Calce referred to a 2016 report by Bain & Company, the management group, that said sales of luxury goods, including watches, remained flat at 249 billion euros ($289.1 billion). This was in spite of an increase in overall luxury spending, to an estimated €1.08 trillion in retail sales, with experiences such as travel and gastronomy being the only bright spots.

“Our goal is to promote our work to the end consumer and convince them to spend their money on watches, not just luxury experiences,” Mr. Calce said. “The money is there, we just have to rethink how we take care of our heritage.”

Creating excitement, he said, includes developing a clear strategy focused on a brand’s heritage and strengths, rather than one that relies on the latest trend for the biggest or the slimmest or the most complicated timepiece. “You have to be innovative and move with the times but you have to do it authentically,” he said. “To succeed in luxury, you need quality, brand identity and a recognizable product.”

Photo

Girard-Perregaux’s Neo Bridges in titanium.

Credit
Clara Tuma for The New York Times

At Girard-Perregaux, this meant dipping into its past to select the most iconic and the most successful collections for new attention.

First was the Laureato, a thin, elegant sports watch introduced in 1975. Girard-Perregaux’s response to the quartz crisis (the rise of electronic watches and corresponding decline in demand for traditional mechanical timepieces), it was one of the first quartz watches made by a Swiss watchmaker.

The design has been produced in many forms, including the introduction of a mechanical Laureato in 1995. But in January, at the Salon International de la Haute Horlogerie in Geneva, Mr. Calce introduced the first family of Laureato timepieces, 36 references for both men and women, in four sizes from 34 millimeters to 45 millimeters.

The 150th anniversary of the Three Gold Bridges also provided an opportunity to introduce the Neo Bridges model, with a starting price of less than $25,000. (If not cheap, it at least was less expensive then its 2014 incarnation, the $150,000-plus Neo Tourbillon.)

Broadening the collection’s price range was one of Mr. Calce’s first decisions at the company. “I said, ‘We have such an incredible signature, we can’t just have one tourbillon at 200,000 Swiss francs. We really have to extend this offer, especially because it’s so recognizable as a Girard-Perregaux piece.’ ”

Pricing, he said, is another thorny issue all brands face today. “Value for money is more crucial than ever in the watch industry,” Mr. Calce said. “If you analyze haute horlogerie, more than 50 percent of business is in the price segment 5,000 to 12,000 Swiss francs ($5,001 to $12,001). If you’re not in that segment, it’s difficult.”

Photo

Girard-Perregaux’s Laureato Skeleton in rose gold.

Credit
Clara Tuma for The New York Times

Thanks to the Laureato designs and a steel version of its 1966 model, “we have the opportunity to be really present in this segment now,” he said. “It’s crucial for Girard-Perregaux’s future.”

The final part of Mr. Calce’s plan is honing the company’s distribution for better alignment with its market position. “This is not a push brand, it’s a pull brand. We have to create the demand,” he said. “This is why in the U.S., for example, in the near future we will close around 14 doors because I really want to create a sense of exclusivity around Girard-Perregaux.”

To some, fewer doors may sound like fewer sales (although this is a strategy other Swiss brands, including Patek Philippe, have taken), but Mr. Calce said it was a question of quality, not quantity.

With fewer stores representing the brand, more time can be spent building good relationships with those stores and educating their sales staff. “We don’t sell potatoes, we sell high-end watches,” he said.

Almost three years into carrying out his turnaround strategy, Mr. Calce said he was “very happy with the results so far.” Kering does not disclose performance results for its watch brands, although its report for the third quarter of 2017 noted that they had “enjoyed very encouraging growth over the quarter.”

Mr. Calce’s next challenge? He wants to further improve brand awareness, which, along with all the other factors, he hopes will ensure Girard-Perregaux’s long-term success.

“I always say, ‘I have a piece of gold in my hand and I have to take care of it,’ ” Mr. Calce said. “If I don’t apply the right strategy, if I don’t hire the right people, if I don’t boost the R & D department with new skills, what will happen in 10 or 20 years? That is the reality.”

Continue reading the main story

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *