The outbreak of the epidemic has undoubtedly further plunged the Swiss watch industry into a quagmire. In addition to seeking a balance between innovation and tradition, increasing revenue and reducing expenditure has also become a top priority.
Kering Group’s century-old Swiss watch brand Ulysse Nardin and Girard Perregaux CEO Patrick Pruniaux recently stated that due to the negative effects of the epidemic in the next few years, unnecessary expenditures will be further reduced, and staff are expected to be laid off at the end of this month. 100 people to ensure the long-term sustainable development of the brand.
According to Fashion Business Express, Kering’s revenue in the second quarter fell 43.5% year-on-year to 2.175 billion euros. The other luxury goods divisions of the watch business recorded a 44% drop in comparable sales in the second quarter and a 25% drop in revenue in the first half of the year. To 919 million euros, the operating loss was 11.7 million euros. The group has never released performance data for specific businesses, but in the first half of the performance report, Ulysse Nardin and Girard Perregaux have been hit hard by the epidemic.
According to data, Kering Group set foot in the watch industry for the first time in 2008, taking stakes in watch manufacturers Jeanrichard and Girard Perragaux, and then acquired these two businesses in 2011 and acquired Ulysse Nardin in 2014.
Patrick Pruniaux took over the watch business of the Kering Group in 2017. As he was responsible for managing the business in the UK and Ireland at Apple, and served as the CEO of Europe, the Middle East and Africa, he also participated in the launch of Apple Watch and other backgrounds. Analysis and speculation that he will lead two brands to keep up with the general trend of smart watches and compete for market share with rivals such as LVMH's TAG Heuer.
However, in the past three years, neither Ulysse Nardin, founded in 1846, nor Girard Perregaux, who is already 227 years old, has not launched smart watches, but has continued the brand's ultimate pursuit of watchmaking technology and aesthetics. Taking Ulysse Nardin's latest hollowed-out watch with an automatic tourbillon as an example, Patrick Pruniaux said he firmly believes that Swiss watches have irreplaceable competitiveness in the face of smart watches such as Apple Watches.
Beginning last year, Patrick Pruniaux also began to merge some of the manufacturing resources of the Ulysse Nardin and Girard Perregaux brands to further improve production efficiency. While announcing the layoff plan, he said that in the future, the two brands will continue to focus on research and development activities, high-end watch workshops, enamel dial manufacturing, apprenticeship training and after-sales service.
It now seems that in the current environment full of uncertainty, subtraction may be far more practical than addition.
Since this year, the Swiss watch industry has been hit hard, with exports from January to July falling by 32.4% compared to the same period last year. According to the latest report released by the Federation of the Swiss Watch Industry, watch exports in July fell by 17% year-on-year, although it was narrower than the 35.1% decline in June, but the performance of important markets such as the United States, Japan and Europe still recorded high In the double-digit decline, only Mainland China and the United Kingdom experienced growth. The report also showed that the export volume of watches with an export price of less than 200 Swiss francs fell 41.5%, and the export of watches with a price higher than 3000 Swiss francs fell by 11.1%.
However, some analysts believe that the fault of Ulysse Nardin and Girard Perregaux lies in their low-key style. Compared to watch brands such as Jaeger-LeCoultre, Piaget and IWC under the Richemont Group, and TAG Heuer under LVMH, Ulysse Nardin and Girard Perregaux do not have a high sense of presence in the most potential Chinese market at the moment, and have not entered the sky so far. Mao has opened a flagship store, and the scale of offline physical stores is also controlled at about 20.
In this regard, Patrick Pruniaux has his own set of views. He believes that "authenticity" is the most basic pursuit of today's consumers for brands. The high quality of Ulysse Nardin and Girard Perregaux is the best convincing power. Only the products can be used to attract consumers. People’s attention will enable people to study brand history more deeply and continue to be interested. “When we create a new series, we always ask ourselves'why?'. If the answer is because we have already spotted a business opportunity, then It is fundamentally wrong."
Patrick Pruniaux particularly emphasized that each brand has a unique "soul". Ulysse Nardin was originally a technology company specializing in marine instruments, but it tried to innovate in every generation. Girard Perregaux pursued perfection from beginning to end. From Constant Girard's three-golden bridge tourbillon to the iconic constant force escapement watch, innovation is the core driving force of the brand.
To be sure, embracing the brand heritage has always been a practice in the Swiss watch industry, but it is no longer the era when the "quartz watch crisis" could be overcome by manufacturing substitutes. Faced with the Richemont Group standing in line with Alibaba, and increasing jewellery For LVMH in the watch market, staying in place is the biggest step backward. If Kering wants to make a comeback in the watch field, it will still face severe challenges.
