Frédérique Constant Interview with Peter Stas
Our editor-in-chief spoke to the Frédérique Constant CEO about the brand’s aggressively priced Slimline Perpetual Calendar watch launched at Baselworld 2016.
Last year you were ahead of the curve with your horological smartwatch and this year you have stolen the thunder with an 8,000 Swiss franc perpetual calendar. How do you do it?
It’s not so difficult. We already had a perpetual calendar movement with Ateliers de Monaco [Editor’s note: the high-end watch brand that belongs to the Frédérique Constant Group] that was much more complicated. We just adapted this to make it as cost-efficient as possible and design it so that no adjustment was required during the movement’s assembly. But first of all we designed the dial so that the layout was adapted to a 42mm case size. We went through about 30 different proposals before we found the one we liked. Once we had that we designed the movement underneath to match the locations we needed for the pivots. Since we do everything in house we don’t have any external costs. If you tried to do this with an external supplier you would already have a 40-50% mark-up and all these different external margins add up to make a much more expensive end-product.
The big question then, of course, was what the retail price should be. Other brands have a perpetual calendar for 10,000 Swiss francs, but we can make our full margin at 8,000 Swiss francs. For a brand like us, this is still an expensive watch. We were only planning to make 500 but we already had 350 orders in Basel so we have doubled this to 1,000.
Have your watchmakers had to adapt to working on a perpetual calendar movement, since it is one of the most complicated types of movement?
We have made a lot of effort here in terms of our workflow. We produce 20,000 in-house movements a year, so we have developed detailed instruction manuals and tooling manuals for all our staff. The department responsible for this prepares all the material and then passes this on to the T1 department [Editor’s note: the department responsible for movement assembly]. This was one of the reasons that we decided that the movement could not be adjustable.
"I could come to Baselworld next year with a tourbillon for 12,000 Swiss francs, no problem."
We are now seeing increasing competition on price even in the segment for complicated watches such as tourbillons and perpetual calendar models. Could this work to the advantage of Frédérique Constant over the coming years?
Our perpetual calendar is a reaction to the strategy of other brands. They have encroached upon our territory and we have reacted to that. We could react to the tourbillon in the same way very easily. I could come to Baselworld next year with a tourbillon for 12,000 Swiss francs, no problem. Should we do that, though? I’m not sure and I have another idea instead.
Frédérique Constant was one of the first Swiss brands to react to the smart watch trend with the Horological Smart Watch. How is the product doing one year on?
Last year we got an enormous response for the Horological Smart Watch. We sold 16,000 of them in just six months, but we don’t want to become associated only with this watch and we also need to defend the remaining 93% of our production. We have recently signed a contract to acquire the licence to the patents of Fullpower. We are going to expand our software team in Geneva to 12 persons to cover the firmware, the iOS app, the Android app and the cloud. We will move the cloud to AWS [Amazon Web Services] in Europe in the next few weeks and will therefore no longer have any issues with privacy. We are working on a ladies’ version that we plan to launch in September. It will be quite flat and 33mm in diameter and as far as I am aware there is no similar smart watch for ladies on the market at the moment.
Signing a new partnership agreement with Gwyneth Paltrow is another big step for the brand. How did this come about?
We said last year that we wanted to communicate more on a global level as several existing sponsorship agreements were coming to an end. I decided that I wanted to find an A-list ambassador that we could use globally. This started a whole process to find the ambassador and we already went down one dead-end which proved too expensive. I’ve heard Gwyneth Paltrow speak and she is very intelligent and she seemed perfect for the brand. Aletta and I met her in Los Angeles and we connected because we share similar values as far as our charity work is concerned. We have signed a two-year agreement for worldwide use in all media.
Frédérique Constant has made a successful business out of offering affordable luxury, experiencing growth rates well above the industry average. The owners have a clear mission to make fine watchmaking available to the largest possible audience of watch enthusiasts at sensible prices.Find out more >
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