How was 2017 for Alpina and Frédérique Constant and what is in store for 2018?
We had a good year. We started to integrate some of our sales activities within the Citizen Group. We started in Japan and the United States, then the UK in the middle of last year and now we are merging our operations in Italy as well. There have been quite lot of changes, therefore, as far as distribution is concerned, but otherwise nothing has changed. We are already seeing the first results from the United States. We now have 500 people representing us there; we used to have 17. So it is not just a few more people, it’s a whole different ball game. We see this going forward in 2018.
There is a big hole opposite your office where, although it’s hard to believe, you will have a brand-new building by early next year. What is that going to bring to the group?
It is a question of more capacity. We have people working in the old Alpina conference room, which means that Alpina doesn’t have a conference room any more. We have some offices with six people working in one room, so we need more offices. On the first and second floor we will reorganise our T1 and T2 operations. On the ground floor we will have a very big customer experience area, where we can invite people. It’s something we would like to develop more. It is indeed a big hole, but I have been told that by the end of April the entire concrete structure will be finished. Then they will start with the façade and the main work should be finished by the end of August. Then we will have to start on the interior. So things start slow, then shoot up quickly, then slow down again.
You were ahead of the curve with smart watches in the industry at a time when other brands were hesitating...
We started in 2015, grew in 2016 and grew again in 2017. The growth curve was not as steep last year, but we did not launch any new smart watches either. The horological smart watches now account for around 12% of our sales, so it has developed into an important category. By the end of February this year we will come with something very new for Frédérique Constant and we will also have something new for Alpina at Baselworld.
I feel that the Swiss watch industry still doesn’t understand how much the Apple watch and other smart watches have eaten into the figures, particularly the figures for quartz movements. The Apple Watch Series 3 is the next level, which moves from notifications and fitness tracking to health orientation. I think this is where we will start to see the true benefits of the smart watch and once again Apple is in the lead. They are starting to inform people if their resting heart rate is too high and are even branching out into medical information. Apple has sold 15 million watches and when I go to the US I see more and more people wearing Apple Watches. The Apple Watch is now in its third generation and who knows what they will bring with the fourth generation. If they start to adapt the case and have something other than just a black screen then the Swiss watch industry could be heading for trouble. I still say quite frankly that many of my colleagues in the industry don’t know what is happening.
What about the argument that it gets younger people interested in watches? Do you not subscribe to this view?
I do, but you have to be very careful. If this is your only defence while your industry goes down the drain then you are fooling yourself. Business is still very tough, even though the statistics look a lot better. Things are still not great in the US and we know that what happens there will gradually move eastwards. It used to take ten years but I’m not sure it will take that long any more. It might just be a few years.
What about e-commerce?
With our e-commerce department we have gained a lot of experience. We realised we needed to be much more hands-on and do many different campaigns rather than just talk. One of the things we learned is that a successful digital campaign needs hundreds of different ads. We started some campaigns with 50 different advertisements but some of them went up to 150 different ads. If I try to explain this to other people in the industry they think I’m mad. We have been recruiting younger people because I have noticed you need high energy levels and strong stamina for this kind of work. I think many people in the watch industry are simply not mentally capable of this kind of task. You also need to take a little bit of risk. We are seeing the first results but there is still a long way to go.
What about Baselworld 2018?
We hear a lot of things, many of them negative. We will have our stand downstairs as usual. We had a good Baselworld last year, despite there being fewer people. We expect the same for this year, so unlike many others I am quite positive about Baselworld this year. It’s still too expensive and the organisers are still not amenable to negotiation, but it will still be the most important exhibition for us.
