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“Watchmaking must be sincere”

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This week, one year after acquiring iconic Swiss watch brand Girard-Perregaux, François-Henri Pinault, CEO of the PPR group, opens the exhibition, L’art de marquer le temps (The art of marking time) at Christie’s in Paris. In an exclusive interview for Le Figaro, he outlines his strategy in the watchmaking sector.

INTERVIEW
BY FABIENNE REYBAUD

It’s a summer’s day in a miraculously sunny, almost deserted Paris. At 5.04 p.m., the CEO of one of France’s leading groups in the luxury sector, François-Henri Pinault, meets us in his office on the 2nd floor of PPR’s headquarters on the Avenue Hoche. At first sight, “FHP” (as his team calls him) is unlike many of his peers: power does not seem to have cut him off from reality or from other people. This man, who in 2005 took over the empire founded by his father, offers a firm handshake, a natural smile and fluent, relaxed answers to our questions. In our hour-long meeting he outlines a vision of the luxury sector that is rational and down-to-earth. In short, a firmly contemporary vision.

Le FIGARO. - In 2011 the luxury division of PPR achieved sales of 4.9 billion Euros, although you seem to have developed the watchmaking and jewelry sectors much less than your competitors. How do you explain this?

François-Henri PINAULT. – We founded the luxury division* with the Gucci Group in 2001-2002, taking advantage of opportunities that fitted into our strategy. The Gucci brand was focused on leather goods and ready-to-wear. At that time we had also made an offer for LMH (Les Manufactures Horlogères) but we let it go because the price was too high. With the exception of Gucci, we prefer to acquire small or medium-size brands that have some real expertise in their field, with the aim of setting them up in their market and increasing their size and profitability. PPR has a clear portfolio-building strategy and we don’t buy something just because it’s on sale! When all our brands have reached a satisfactory level of maturity then we think about strengthening the portfolio. In fact, 90% of our growth since 2001 has been organic. We didn’t make a single acquisition in the last decade. - it was only in 2011 that we bought the Italian fashion house, Brioni and the Sowind group that included the Swiss watch manufacture Girard-Perregaux and JeanRichard watches.

François Henri Pinault with GP watchmaker- Paris 2012.jpg

How does the watchmaking acquisition look now, one year later?

Girard-Perregaux is an authentic haute horlogerie company with one of the most fully integrated facilities for the manufacture of components. It produces classic automatic movements such as grand complications, grand strike watches and the tourbillon with three gold bridges. The company has an excellent reputation and high awareness among collectors, and it also has great potential. With Michele Sofisti, the CEO of the Sowind Group, our objective is to reposition Girard-Perregaux at the cutting edge of Swiss haute horlogerie. So we have brought in an outstanding master watchmaker, Dominique Loiseau. He is working on a new approach to mechanical watchmaking that could be truly revolutionary and we will present the first models in 2013.

We also want to make GP more visible in terms of marketing and communications. The L’art de marquer le temps exhibition at Christie’s in Paris (see article below) is part of our effort in this direction.

Finally, since last year we have been reorganizing the range in order to avoid manufacturing activities becoming fragmented, because we believe the efficiency and productivity of the Manufacture can be improved. The JeanRichard lines are being repositioned at a more affordable price range of 1,500 – 2,000 euros. In 2012, Sowind’s total production will reach 20,000 watches and when it’s fully up to speed it could produce 40,000 pieces a year.

Will you be creating synergies between Sowind and other brands in the group such as Gucci, Boucheron, and Bottega Veneta?

Synergies already exist. Girard-Perregaux supplies complication movements for some of the Boucheron jewelry models and the first watch from Bottega Veneta is fitted with a GP caliber. At the same time, GP will benefit from using the distribution network of Gucci Timepieces. And at the next Basel fair in the Spring of 2013, GP and Gucci timepieces will all be exhibiting on the same stand.

Do you envisage creating a department of jewelry watches at PPR?

No, that has never been our approach. We’ve built some bridges but we’re not planning to set up a specialist entity in that sector. Each brand has to be autonomous and stay consistent with its own image. When Yves Saint Laurent launched its watches in the early 2000s it was too soon. And it is too soon for us to be dreaming about a new departure. For Hedi Slimane, the priority right now is accessories. We also want to avoid cannibalization between brands. When Tomas Maier created the first Bottega Veneta watch, he made sure it fitted into the brand’s creative universe. It is a unique, exclusive model that for more than 10,000 Euros, echoes the sophistication of the brand’s leather goods and its ready-to-wear. It was the same with the jewelry line in gold and diamonds.

Gucci is on a larger scale altogether with the biggest watch production in the group: 60,000 watches last year. It is committed to offering models with a design and a price that fits with the other product ranges from the brand based in Florence. These are excellent watches, all made in Switzerland and ranging in price from 1,000 to 3,000 euros. Gucci’s Artistic Director, Frida Giannini, has produced truly sophisticated ready-to-wear and accessories, and the watches have followed their lead.

When will we see a Gucci tourbillon or a GG haute joaillerie collection?

Gucci has chosen not to go down the road taken by other fashion houses, which offer haute horlogerie models at tens of thousands of euros. Relying on the legitimacy of these products themselves rather than on the image of the brand seems to me to be slower, more expensive and more complicated. We already have a specialist in haute joaillerie, Boucheron, which has real potential as a watch brand: only 15% of its sales come from watches although we know that this figure is 40% or even 45% for some famous jewelers. It might make sense for us to strengthen our portfolio by adding a jewelry brand, or a brand more strongly rooted in watchmaking, but our priority at this time is to develop our recent acquisitions including, obviously, Sowind.

What future do you see for the contemporary luxury watch market?

Watches are no longer objects that simply tell the time. They have become objects that people desire. They can give their owners confidence, affirm their status and contribute to their well being. I believe the external appearance of a watch should be as beautiful as its internal mechanism but it has to be practical, accurate and easy to read. Just as in other sectors of our market, watchmaking must be sincere. People need to trust its expertise, the materials it uses, its design and the functions it offers. It must be sincere in its marketing and its pricing. Sincerity is the real strength of a luxury product.

* Gucci, Bottega Veneta, Yves Saint Laurent, Alexander McQueen, Stella McCartney, Balenciaga, Boucheron, Girard-Perregaux, JeanRichard, Brioni, Sergio Rossi.
 
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