Shaping Time
Georges Kern has a track record of turning around the fortunes of a company. He’s repeating that winning formula as CEO of Swiss watchmaker Breitling
When Georges Kern became CEO of Breitling in 2017, it was apparent that disruption was on the card. A let-it-be-as-is approach never did cut muster with the former CEO of IWC, and he wasn’t going to change his ways at Breitling. Just how dramatic those upheavals would be – overhauled product lines, fresh ambassadors, an all-new brand aesthetic and a radical change in its messaging – caught many off guard. “I think we made a couple of changes, and from the outside, it certainly looks major. But the reality is that we stuck to the roots, the DNA of the brand. Many clients know Breitling in the last 20 years [as a brand] with big, loud pilot’s watches. But the brand is much more than that. We looked into the history of the brand, in particular the 1940s, 50s, 60s and 80s. We wanted to bridge in a way the Breitling lovers of the 40s, 50s and 60s with the
Breitling lovers of the recent past,” says Kern in an exclusive interview.
It’s the raw numbers that have proved the merit of Kern’s strategy. In an annual report published in March by Morgan Stanley and LuxeConsult, sales by the entire Swiss watch industry is estimated to have shrunk by one third in 2020, with figures from the Federation of the Swiss Watch Industry stating that exports dropped 21.8 per cent during the same period. Still, Breitling climbed from 13th position in terms of overall retail sales in 2019, to 11th place in 2020.
That report estimates Breitling’s turnover in 2020 to be CHF479m, occupying 2.4 per cent of the global Swiss retail market share. It adds that the Grenchen-headquartered brand sold an estimated 147,900 pieces, at an implied average retail price of CHF5,254 a piece. “We make roughly 160,000-170,000 watches a year,” confirms Kern. “We’ve gained market share last year. In many countries like the UK, Japan, the USA, and Germany, we are among the top three. In the Middle East, we are part of the top five brands in turnover.”
The Middle East has been a historically strong market for Breitling, and under Kern, it has only accelerated. “In the last twelve months, we have opened new boutiques in Saudi Arabia and Kuwait. In the coming months, we have plans to modernise the existing point of sales and further expand our distribution network across the region. This includes new boutiques in Bahrain, Riyadh, the UAE, India and Turkey.”
Breitling’s audience over the last few years has been getting younger, and among them, the issue of sustainability is of paramount importance. It’s one that the watchmaker’s CEO has been proactive about rather than reactive. In 2018, Breitling collaborated with Outerknown, an American sustainable clothing company founded by surfing champion Kelly Slater, which recycles discarded fishing nets to create the Econyl yarn from which NATO straps can be made. Last year, the watchmaker also introduced a packaging box made from upcycled reclaimed PET plastic bottles, with the packaging itself completely recyclable should the customer wish to do so after they have received their timepiece.
Kern has shown a razor-focused business-like approach to the issue of sustainability. “Our focus right now is on gathering data and establishing clear baselines to inform ambitious, yet realistic targets. To this end, we recently completed carbon accounting across Scopes 1–3 of the Greenhouse Gas (GHG) Protocol, focusing on key impact areas such as purchased goods. Further, we are working with our key suppliers to complete annual EcoVadis sustainability assessments. These provide an independent review of sustainability performance across dimensions: environment, labour and human rights, ethics, and sustainable procurement. Sustainability is an increasingly important factor in supplier selection, and in 2020 Breitling joined the Swiss Better Gold Association (SBGA) to contribute a positive social impact along our value chain,” notes Kern.
This year, there have been a number of new timepieces from Breitling. It includes the Super Chronomat collection, among whose several references included a UTC model and Four-Year Calendar references that feature a moonphase. There’s also the new Premier Heritage Collection which includes the Premier B09 Chronograph, one of which has an unusual for Breitling pistachio green dial; a Premier B25 Datora which is a reincarnation of the brand’s triple calendar chronograph from the 40s; and the Premier
B15 Duograph 42 that tellingly features an all-new in-house manual-winding Breitling Manufacture Calibre 15 COSC-certified spilt-seconds chronograph movement.
And 2021 held another surprise with a very limited 25-piece Premier B21 Chronograph Tourbillon 42 Bentley Limited Edition in April to mark the nearly two-decade partnership between the car manufacturer and the watchmaker. However, last month, the two brands announced that following a 19-yearpartnership, they would be parting ways. But while severing some ties, Kern has also guided the watchmaker to forge new ones. In July, Breitling announced a long-term partnership with British motorcycle manufacturer Triumph. It would give rise to a limited-edition watch as well as a customised motorcycle which is expected to be revealed next year. To keep the brand’s visibility high, Breitling has steered clear of sports that are otherwise saturated by watch sponsorships. “We are going into fields which are not tennis, not Formula One, and not golf. As a brand, we need to be approachable, so we need to be involved in sports or activities which are approachable. Therefore, we were the first luxury brand that really went into surfing. We have a surfing squad with Kelly Slater, we went into triathlon with Jan Frodeno and Chris McCormack, and we sponsor the Kona Ironman world championship in Hawaii.”
As Breitling builds on its product offerings and partnerships, it is also pushing out digital tools to showcase its products. Kern says that roughly 70 per cent of the brand’s media budget is spent on online media, and the remaining offline, because as he explains much of the decision making and discovery of their products happens online.
“At the end of the day, the consumer doesn’t care if he buys from a retailer or your own store or through e-commerce – the appearance and the quality have to be impeccable to run this multi-channel strategy,” says Kern. Part of the digital push also means the brand exploring technology such as blockchain in its operations. A few months ago, it showcased a system whereby all new watches are offered with blockchain-backed digital passport technology that can trace the entire lifecycle of a watch and will have all its purchasing, servicing and resale history stored on an immutable platform. It’s a smart way to counter the grey market. To manage any excess inventory and to prevent it from slipping into unauthorised retail channels, Breitling also has roughly 10 factory outlets of its own around the world in the US, Europe, and Asia from where it sells watches at a discount of approximately 30 per cent. “We always try to help our retailers in taking back stock and refreshing their stock [so that they] always have the newest Breitling collection. The most important thing is that we fight grey markets, [ensure] that retailers don’t sell these watches on grey market platforms and [that we] control the prices so that the value of the brand remains stable.”
Apart from the blockchain technology, another innovative rollout is the BreitlingSelect subscription programme which the watchmaker introduced earlier this year. It allows customers, for a monthly fee, to try up to three different Breitling pieces over the course of a year before deciding on a watch they’d want to buy. It was initially made available only to customers in the US, and the pool of watches include the Superocean, Navitimer and Premier pieces.
“We are not addressing people who want a discount,” says Kern about the programme. As he explains, a participant in the programme must pay a monthly rental fee for the timepiece as well as a subscription fee, in addition to the actual price of buying the watch at the end of the 12 months. “We have a pool of watches that all participants in that programme are using. So the watches in that pool becomes pre-owned products, and customers can then buy them at a price advantage.” With an overall focus on a modern retro theme for its collection, Breitling loyalists have been waking up to the price advantage of not only the current collection and its potential future appreciation, but also that of the brand’s historic models that are now gaining increasing attention at auctions. “We’ve always had a close relation with auction houses providing them with relevant historical information on the Breitling watches, as well as extracts from the archives. We are also a regular buyer at auctions to build the brand’s heritage collection. We observe a growing interest in vintage Breitling watches overall, driven also by our recent re-editions and in general due to our modern-retro positioning,” says Kern.
He doesn’t reveal exactly what’s coming up next for the brand, but says enough to keep Breitling collectors engaged. “In terms of new male offerings, we will be introducing a capsule collection inspired by our archives from the 1960s. Expect a modern interpretation of a stylish chronograph, with an exciting twist.” It’s the twist that Kern does best.