Since 1868, the Swiss watch manufacturers IWC Schaffhausen have been creating masterpieces of Haute Horlogerie that combine precision engineering with exclusive design. CEO, Georges Kern is a force to be reckoned with. In 2000, at 36 years old, he joined the Richemont Group. He was active in the integration of the Group’s acquisition of A. Lange & Söhne, Jaeger-LeCoultre and International Watch Company as a result he was the youngest CEO within Richemont. With a passion for innovation and technical inventiveness, Kern talks to a&e during SIHH earlier this year, about the philosophy, future plans and new models of IWC.
What is coming up for IWC?
We are re-launching our Pilots line, which is very much in the style of the ‘30s and ‘40s. It’s a gentleman’s pilot that is stylish and less warrior than what we had with the Top Gun collection five years ago. We want to make it more elegant. IWC has been growing tremendously with the Portugieser and the Pilot lines. Today, the image of the brand is more elegant rather than sporty. We reworked the Pilot line in terms of execution, colors and matt polish. We wanted to reflect a more elegant approach towards the product.
On a global level how successful has IWC been this year?
We need to get used to the crisis; this is the new normal. It’s an illusion if people believe we are going to have a gold rush like we have done particularly in Hong Kong. I think the drama of our generation will be that we will wake up every morning with a new product, new prices, new tags and a new exchange rate, and we will have to just get use to it. That will be the new normal. What you need to do is build something that is solid enough to sail through beautiful weather but also go through storms.
Consumers are looking for sure values and they don’t want to experiment. There are very few real watch brands in the market. When you purchase jewelry or bags you go for the real brand and IWC is one of them. The consumer wants a brand with history, an image and good service. The global appeal, global visibility and the actual situation are not that bad. I believe we are stronger than the others so we gain market share.
What about the future of woman’s watches?
We launched the midsize watch two years ago and it was a huge success. We were mature enough to go onto a new segment. We were making men’s watches so it seemed natural to do women’s too, but in a different style. Our women’s watches are not “girly”. We launched the 36mm watch because we have women that don’t want a really small watch; they want something more robust. I think we hit the nail on the head with that segment and I was really surprised how successful it was. There will be four lines in total offering these products for woman.
We are going to make more money than most brands do with our female lines. We have huge potential; 60 per cent of the watch market comprises of female watches. Our style is not fashion led. Our number one line remains the Portugieser because of its value. Volume wise the Portofino and the Pilot are bigger but at different price points.
Tell us about the new IWC Connect? Are smart watches the future?
The IWC Connect is a wearable watch but it’s not a smart watch although it has a receiver. It is integrated with a strap, which has an option to connect you to an app. For instance, you can have Spotify, you can also track your sleep. It’s the idea to stay modern and to offer beautiful modern options.
What I have seen others wear isn’t very appealing. I’ve not been convinced with what I’ve seen, touched and tried, so it was important to get it right. Our Connect watch is an integration of beauty and wearable aesthetics. The IWC Connect answers the needs of discerning customers by providing a high-quality luxury design solution: it not only tracks the wearer’s activities, but also allows them to interact with connected devices in their environment.
Smart watches are making millions but it is not affecting the luxury watchmaking industry. Connect watches are different; it’s like you have a beautiful car and you just want to connect your iPhone with your car. No one will swap his or her watches worth several thousands of dollars for a smart watch. We’ll just create something nice, better and appealing for the consumer. You need to constantly improve what you are doing and look for excellence. It is about perfection and excellence.
Your logo is engineered for men, if you are making more women’s watches because of the success of the Portofino line, are you going to keep your logo for the women’s line?
When we launched Le Petit Prince we wrote: “Engineered for dreamers.” For Lewis Hamilton we wrote: “Engineered for champions.” The headline is something that can easily be adapted. We will keep the logo “Engineered for men”, but add a new element to it. It remains an engineering brand that is technical and masculine but it will cater for different people.
What do you think makes a collection successful?
I have been here for 14 years. More than 50 per cent of the things that have happened at IWC were formed because of intuition and luck. For instance, one day I was on a plane and I happen to sit next to a friend of mine who studied with me in the past. We had not seen each other for five years. We were both flying to Paris but I was going to Nice. His family was related to Antoine de Saint Exupéry who was a French pilot and we thought we can do something together and so we did. We created the Big Pilot’s Watch Perpetual Calendar Edition “Antoine de Saint Exupéry” and the Pilot’s Watch Double Chronographe Edition “Antoine de Saint Exupéry”. That was an example of destiny, luck and intuition. Any guy that tells you that he has a five-year plan is a liar. It’s all about following your intuition.
What do you think are the future problems in the watch industry?
I think technically anything is possible. There will be more industrialization issues rather than innovations issues; we will question budgets to make a product or how can we reduce service cycles. Innovation is more about the design. There has been genius’s over 100 years ago that have done everything. Our issue is digital transformation, meaning how we communicate with a customer in a modern way through digital. How do you sell analogue watches through digital? In terms of innovation, I’m not sure there will be anything revolutionary in the next few years.
Before, there was a fixation about the marketing turmoil because of oil prices. We questioned how it would affect the watch industry? There will be political, social stability with oil prices, but you cannot think in geographical terms anymore because the world is global. The Chinese make 70 percent of sales in France. We are working with a global travelling clientele. 60 percent of all luxury sales made are made from people buying from abroad and not local. And even local means travelling from LA to New York, but it is still travelling. We are in total mobility. The Middle Eastern people are buying in New York and Paris; the Chinese are buying from the UAE. Also when you are on holiday you’re in the mood of buying. You will consume when you are in a good mood and if you feel at peace, not just when you have money, so we need stability.
How important is sponsorship for IWC?
First it is a lot less money than what it looks. There are so many things to consider with a brand. It is like a planet and you have satellites feeding the planet. You have PR and celebrities. The good thing about the luxury industry market is that there are no rules and no recipes. If there were recipes everyone would be successful. And not everyone is.
We use celebrities and PRs for advertising and events. US actor, Chris Evans is one of our ambassadors. He has several million followers on Instagram. One picture can get millions of likes. We work with Middle Eastern ladies too who have millions of followers. We have reached out to several million contacts and created millions of impressions in just one night working with these celebrities and influencers.
