Porsche Design Taking the helm
Porsche Design declared the end of the licensing partnership with Eterna and announced it will produce its own timepieces under the guidance of Gerhard J. Novak. A new model is expected by the end of 2014.
It was a secret that had already been leaked: Eterna, sold by the Porsche family to the China Haidian Group in 2012, had remained the license partner of Porsche Design for the timepieces, but since the last September the brands had decided to go their separate ways. The official announcement was finally made earlier this week and on the very same day I was fortunate to catch up with Gerhard J. Novak – the general manager of Porsche Designer’s watch department that is heading the most significant move in the brand’s history.
Why did Porsche Design take the decision to cut the umbilical cord from Eterna after such a close partnership?
In the end, it’s very simple and clear. What we do in timepieces is first of all very much linked to the overall strategy of the brand. The strategy of Porsche Design as a brand is to consistently grow its business in the core categories: fashion, luggage and bags, and watches. It is no coincidence that the story of the brand began with a watch in 1972. It was the watch laying the groundwork for everything to come later and we need to make sure that this category, which played an essential role in developing our brand, will have a much more positive future. A positive future doesn’t mean that we haven’t been that successful with our former license partner. But the watch industry is a highly competitive one and you need to do things with a view to the very long term. You need to maintain a certain consistency and sustainability. In the license business, there’s always the situation where you have someone else doing things for you. If you have a very close look at the industry, all the most successful brands do business on their own; there’s nobody else involved. That’s why we took the decision, for a purely strategic reason. We have been with license partners and corporation partners for 42 years, and for at least the next 42 years we would like to do things on our own, to consistently build the Porsche Design brand in watches.
Porsche Design watches were made in Grenchen, by Eterna. After a transition period, where will you produce them? Are you developing your own manufacturing facility?
The watches will, of course, be produced in Switzerland. At the moment we are developing a system designed to ensure that our production will in due course at least match the new Swiss label, meaning having at least 65 to 70 per cent of all the components/parts made in Switzerland. We are firmly attached to the Swiss Made label, a principle we have applied right from the very beginning. Our brand was indeed the first to use the famous 7750 calibre in 1972 – so we were the ones dedicated to counting on Swiss Made already back then, at a time when everybody else was starting to focus on quartz movements. We have a certain dedication to the Swiss Made label, to Switzerland being the origin of high-end watches, and we intend to stick to that.
Who will be heading Porsche Design’s technical department in this new era? Is Patrick Kury, Eterna’s CEO until the brand was sold to China Haidian and someone who has worked closely with Porsche Design in the past, a part of the project?
On one hand there’s a dedicated division within the Porsche Design Group, which is headed by myself. Then there are two supportive units: one is the Porsche Design Studio based in Zell Am See and then there are premises under construction where we already have some quite professional individuals working on the future of Porsche Design timepieces in terms of products. Patrick Kury is a very famous watchmaker/engineer. He was CEO for Eterna and he did a good job there. It is definitely something that we would appreciate but we’re not in a position to state that this will be the case.
Are you going to continue producing the same models that you’ll keep in the catalogue at Eterna or will you produce them in the new premises?
For the next at least one to one and a half years we will continue to work with Eterna with the existing models, with some adjustments, and we will come out with the first completely own Porsche Design watch by the end of 2014. This will take place completely outside of Eterna: no-one from Eterna was or is involved in the project. The watchmaking pole will be in Switzerland, while the design pole will remain in Zell Am See, Austria, and it would be crazy to change that.
First of all, the design studio was founded in 1972 and there’s an historic reason for us to be there. It is one of the most renowned studios worldwide for industrial design; we have benefited a lot in our watch category from the experience we had from other industries, from other markets, from other technologies, as well as from another viewpoint when it comes to design. It would be crazy to ignore that and do away with that support.
Secondly, some of the key players in the Studio have been working with Professor F.A. Porsche for more than 20 years and were onboard when the famous 1980s watches, which were brought to life in conjunction with IWC, were created. We would miss out on all that if we were to leave the Studio, so it was never considered. When it comes to watches, we know that in Switzerland we have the right people, the right experts, the work force, the know-how, the suppliers, the contacts. Meanwhile, in Germany we have the brand, so when it comes to strategy, product management, marketing, sales and distribution, pricing, business theory, the main issues of this kind are dealt with in Germany. It is a special set-up. We bring together the best expertise in design and watchmaking and we run the business by being a little bit spread out in Europe; we benefit in a very special way and Switzerland and Austria are not far away.
Last year you chose to exhibit outside Baselworld. This year Eterna will be back in the premises, but in Hall 5. Porsche Design won’t be present. Why did you choose not to be there?
We have to be very honest. It wasn’t our favorite decision not to be at Baselworld this year, but unfortunately we missed the opportunity last year, together with Eterna. They let slip the booth that we had occupied in Hall 1.0 for more than 20 years – something we still are not happy about. It’s not that easy with Baselworld and we didn’t want to launch the comeback of Porsche Design timepieces down in Hall 5.0, in surroundings that we do not feel are right for us. We will come back in 2015 in the right manner and with the right approach, thus avoiding something this year which could have been considered as a fairly weak statement and which we definitely wanted to avoid; so we will wait until 2015.