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Frédérique Constant - Interview with Peter Stas

Frédérique Constant Interview with Peter Stas

Peter Stas talks Swiss Made smartwatches, industrial-scale movement development and the economic outlook with WorldTempus.

You have a lot of things going on with Frédérique Constant at Baselworld this year, starting with your new e-strap. Are you confident that this will work, given that Montblanc seems to have abandoned their e-strap?
I have news for you: Montblanc will be presenting the second generation of their e-strap soon, so they have certainly not abandoned the idea. But our e-strap is half the price and a quarter of the thickness of theirs.

You now have the e-strap as well as your own clip for mechanical watch analytics. Will you sell these through the same retail network as your watches?
Not necessarily. We have already had discussions with Hirsch, for example, to sell these products through the after-sales channel. The analytics is still mostly sold through retailers but also online on our own portal. We have already sold around 1,300 units since we launched it at the end of November last year. There are a lot of enthusiasts who are interested in it. We have also spoken to Chrono24, who could offer it to their customers.

Interview with Peter Stas

What has the take-up been for the analytics module? Is it mainly purchased by your existing customers?
We can see from the cloud that watch enthusiasts can have up to 25 watches. We see that they own Patek Philippes, Rolexes and a lot of vintage watches, plus some Frédérique Constant watches, but this is only a minor percentage. The analytics is more about the app than the clip itself. People are interested in being able to take a photo and upload it to the cloud. You can have combined graphs for the same watch over time, so you can see the watch’s evolution. We are also starting to introduce coaching, where we give tips.

This year for the first time MMT has a separate stand for the sales of their smart watch modules. Do you spend much time there?
No, not at all. We have completely spun out MMT and the company has its own CEO, Philippe Fraboulet, as well as its own sales director and a complete team. I went there the first day to see how the stand looked but I am not involved at all any more, other than the fact that I am a shareholder and they are also one of my suppliers.

Was MMT set up to offer the possibility of a Swiss Made smart watch?
It’s true that at MMT all the technology is Swiss Made, even the PCB (printed circuit board). But this is not the main reason that we established the company in Switzerland. The main reason was speed: to allow us to develop things much faster. The split between Silicon Valley and Switzerland is that we have relatively small production runs, but we have many of them. In Silicon Valley they have fewer series but much larger production volumes. The Swiss watch industry is based on much smaller series with many models and Silicon Valley doesn’t really like that. We see with MMT that they now have three different modules, plus the e-strap, plus all the different implementations. This is what is driving the business.

How easy is it to find the right kind of people to work at MMT?
The CEO Philippe Fraboulet is the only person who joined the company during the spin-off. We started to hire young people from all over Europe. They enjoy working in the watch business because it is an interesting project. It wasn’t easy to find them but we did find them nevertheless.

Once again you are presenting a ground-breaking new movement that is unbeatable on price and once again it is an evolution of a movement from your high-end brand Ateliers de Monaco. Did you always intend this brand to be a kind of proving ground for new developments?
Ateliers de Monaco has always been a kind of research and development laboratory, but at the same time it has been a way to keep the really talented watchmakers within the company, because otherwise they may have left the company to set up on their own. This was our way of encouraging them to stay with us and have the tools and funding to experiment and learn, while at the same time seeing their work implemented later at Frédérique Constant and Alpina.

Does that require a particular mindset from the watchmaker, knowing that their developments ultimately need to be scaleable for large-scale production?
No, they really do their own thing and then we might see whether we can scale it up. But these new movements do not necessarily need to start at Ateliers de Monaco. It’s true that our new flyback chronograph movement started there, but we also had a version at Alpina. Only now are we introducing it at Frédérique Constant and we are doing this intentionally because a chronograph is the most difficult movement to develop. We will be producing a few thousand of them, so it was important to start things off at low volumes a couple of years ago (with a slightly different version) with Alpina.

Interview with Peter Stas

How do you scale up the production of such movements to allow you to offer such unbeatable prices?
We tell the engineers that they must above all make the movement as simple as possible. Furthermore, they have to design the movement in such a way that when the watchmaker assembles the movement it must work right away without any need for adjustment. That means that the development time is longer and you have to be more precise. But once the development work has been done, the assembly time is a lot quicker, and that is what saves us time and therefore money, which is reflected in the price.

Frédérique Constant has been known for its sound growth figures over the past few years. Will you be able to keep up the momentum in these uncertain times?
In January we had zero growth and in February we had 0.3% growth and we forecast plus 4-5% by the end of March because we had some delivery delays. I was quite surprised to see the industry figures for February, because it means the pain is still not over. We feel it also but we are more confident.

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