Since joining Breitling as CEO 18 months ago, it’s safe to say that Georges Kern has made a lot of changes. Kern has completely redesigned the product offering, re-imagined the boutiques globally, introduced the Breitling Squad concept and that’s just the beginning. He has taken the brand to new markets, most importantly China in which Breitling had zero visibility before, and he has repositioned the watchmaker in line with his vision. Kern has previously spoken of how he looks at Breitling as a “start-up”, with the potential to become bigger and more visible than ever. And it seems to be working so far. During the recent Asian Summit in Dubai A&E met with Kern to discover the latest developments of the brand and his plans for the future.
A lot has changed in the products since you joined Breitling as CEO – what can you tell us about this?
When I first joined eighteen months ago, even I had difficulties understanding the collection. I would go to the store and try to differentiate the watches, and everything was more or less the same. There were essentially 26 variations of the same watch. There needs to be clear segments, that are also aesthetically different and tell different stories and this was not the case when I took over. So we actually went from 41 references to 14 with two simple designs – one in classic steel and one military. That’s it and that’s enough. When a customer comes, (especially if it’s a man), you don’t need to show him 20 watches – you show him three. Yes, with women it might be slightly different, but for a man if you show him more than three watches it’s too complicated and he will run away! So diversity is important but within our three different lines – air, land and sea – there is limited choice, because we don’t need anything more than this. In doing this we allow customers to understand the brand in a much better way.
What have been your achievements since you joined and have you achieved all of your goals yet?
We are doing very well. We are suffering less in Hong Kong than other brands because we didn’t invest there – we invested more in China – so the weaknesses that other brands are facing because of what’s happening in Hong Kong has actually become our strength and we haven’t felt the impact that others have. We have been growing in historically strong markets like The UK, Japan, The United States and we have been putting all of our investments in the last two years into mainland China. This is doing very well but it is still at a level that is too small. We need to triple or quadruple what we are doing in China to reach the levels that we want to reach, but you need to physically build boutiques and that takes time. I think we are one of the very few brands growing at this pace right now. This is also partly because we are younger and fresher, it’s like we are big start-up. We have the loft design in our boutiques which is beautiful and we have the squad concept which I think is working very well, and all the work we have done with the products has been successful. We have kept the DNA of the brand but modernised and simplified it.
You mentioned that you have had success in China – are the physical sales reflecting this?
Yes we have the sales. We have an International Warranty Card System where buyers have to register their card online and this allows us to see where the products are sold. We are having very good sales in China already but the levels are still too low compared with where we want to be. Currently we have 25 boutiques but we should have over a hundred. So we still need to grow. I think the market in China has pivoted over the last two or three years. Today, millennials especially don’t want to buy the watches that their parents bought and with the transparency of the market and digital visibility etc. they know what’s going on in the rest of the world. We had zero visibility in China 18 months ago, but because the market is more transparent, thanks to digital and because the customer knows so much more, things are doing very well and moving very fast.
How important are ladies watches to Breitling?
We have a huge plan for next year. We have two ladies lines coming and one is a sports line. Funnily enough the Superocean is the number one watch for ladies. Which is surprising as it is a tough, sporty watch. So this suggests that there are not enough sports watches in the market for ladies. There are plenty of elegant ladies timepieces, but women today also want bigger, sportier products and this is what they are getting from the Superocean.
Breitling Aviator 8 Mosquito
What can you tell us about expansion in the Middle East and what challenges are you facing here versus other markets?
I don’t think there are too many differences between markets. We have to stop thinking in this way. The luxury consumer is the same everywhere and in the Middle East there is a huge tourist business – yes that has slowed down a little bit but it is still fundamental. It’s similar in Switzerland for example where you find fifty to sixty per cent of sales are to tourists.
We have done a lot of work in the Middle East. We have new boutiques, a strong network and we’re going through the same process that we are going through in the rest of the world. We are growing really well in the region and we are very happy about this part of the business, but we still have good growth to achieve. I think one of our advantages today is that we have a very good price point and I think it is a sweet spot in the market where you can always sell. It’s a very commercial price point so we have constant business.
How are you appealing to today’s customer?
It’s obvious that we are a young brand when you look at our boutiques. We call it inclusive luxury. Everyone talks about exclusivity – yes we are exclusive by definition because of the price of the products and because of the limited distribution – but the way we talk to the customer, the way we present our boutiques and the sports that we’ve chosen to partner with through our squads, it’s very non-traditional and it appeals to everyone. We have a totally different image to any other brand. It’s not about someone being a surfer for example, it’s about what this represents and the message it portrays. What is the message if we have single celebrities in our adverts? It would be weird, you wouldn’t remember them. So this is why we have the squads – they are a statement towards a much broader audience and it allows us to give a powerful holistic message rather than a single message that can sometimes be misleading.
Breitling Avenger Swiss Air Force Team Limited Edition
How can you accommodate the digital requirements of today with the heritage of the brand?
Seventy per cent of the decision process for luxury goods is done online. So the information is gathered and the decision is already made before the customer visits the store. But that doesn’t mean that the customer is buying online. Studies have been done to suggest that millennials still want the store experience. I think in the next few years e-commerce will generate five to ten per cent of sales but you still need to have the physical stores.
What else can Breitling do going forward to support sustainability?
It is something very important to me and I think it is horrible what is going on in this world in relation to this. We as one company cannot change the world, but what we can do is to educate, inform and use a language that will have an impact. We’re not going to change the world with our ECONYL® straps but by doing this we are spreading the message to our clients and these are people that have money and influence. So by them knowing the story, it helps to encourage them to tell the story too. Of course we can’t do everything – I have to take planes for example, but it’s really about the overall message.
One other thing we are looking at is the packaging. I actually think the idea of packaging is crazy. So we are going to change our system – we are not going to ship watches with the packaging, we are going to ship them separately and we will ship fifty per cent less packaging. If somebody requests the box in the stores we will give it to them, but otherwise we won’t. Furthermore this will be recycled packaging and it will be a much smaller box. This will be happening in the next few months. Everything else we do is going to be digital. You don’t need a leaflet for anything anymore. We want to become carbon neutral, I want to reduce plastic within the company. Eighty per cent of being environmentally friendly is easy, but it’s the last twenty per cent that is difficult. You cannot be 100 per cent plastic free, but you can solve eighty per cent of the problem easily with no harm to the business.
Breitling Superocean Outerknown
How do you best sum up what you have done so far at Breitling?
We have changed everything when it comes to the image. Breitling has one of the biggest back catalogues that I’ve ever seen in the industry. It’s crazy but consumers were never aware of it because we always had the last twenty years in mind – the big, bulky pilot watches. Breitling is so much more than this. So this is why we now have the three segments of air, land and sea, and why we have capsule collections and why we have so many stories. We are closely linked to the seventies and civil aviation as well as the sea with our sporting heritage. I think with our style now it’s a whole package and it’s very interesting – it’s younger, more dynamic and inclusive. All of this makes it very different. But honestly I did not know this 18 months ago. The beauty with digital is that you can spread a message very quickly. I think the single most impactful move we have made was the Surfer Squad. This was phenomenal in terms of changing the image of the brand. It added a coolness and a relaxed way of living which is very different from say golf or tennis.
What lessons have you learnt since you joined Breitling?
I have learnt a lot from my investors. When you are working in a big corporation as I have previously, you have people for everything. But when you are in an independent company you have to do everything by yourself and I am doing things that I have never done before, especially related to finances, and my learning curve has been huge.
In one sentence how would you describe Breitling today?
We offer a cool, relaxed, and an informal alternative to other more conservative brands.