Arabian Watches & Jewellery Magazine recently met Julien Tornare- CEO Zenith Watches during his visit to Dubai
Arabian Watches & Jewellery Magazine recently met Julien Tornare- CEO Zenith Watches during his visit to Dubai to discuss the current developments, activities and novelties of the brand, in addition to Zenith’s Icon Program, e-commerce platform and Zenith’s vintage drive.
One year ago, exactly at the LVMH Watch Week in Dubai, you celebrated the 50th anniversary of the El Primero caliber. Can you take us through the journey of Zenith during the past 12 months?
We have been following up the great growth track record of the brand over the years 2017, 2018 and 2019. Moreover, 2019 was the year of celebration - the 50th anniversary of El Primero. December 2019 was a memorable occasion that I remember in particular. Our business was 58% up and we had everything going good. In January 2020, we were all here in Dubai to launch the first LVMH Watch Week which again was a great success. We received good orders and presented very interesting products including the Defy Midnight and we are all very happy about it. After that of course you know, we all got taken by surprise with this Covid-19 crisis and of course the lockdown that followed. The whole watch industry went nose diving by 80% in April and 65%, if I remember right, in May and, then step by step with the summer we started to recover to finish the year I would say on a better note by October, November and December. Some markets were even in positive growth which was a good sign. It was indeed a tough year for sure and at the end of it the whole industry including us were in the average, finishing between 25 to 30% below expectations.
It is important to consider that at Zenith after we celebrated the anniversary in 2019 when we introduced the Revival watches we started to feel a very strong interest in vintage watches for auction where we got great results. At the same time we were preparing a big launch in 2020 with Chronomaster Sport and Chronomaster Classic as well as new Defy and I took the decision to postpone the launch to 2021. We kept our brand very active in 2020 and you must have seen us on social media as well as on our website. We had been active all over the world including the AWJ-webinar and it enabled the brand to go pretty good. We launched the Defy Midnight in September, and presented the Zenith Icon program about vintage watches, so we were quite active in 2020 in spite of the crisis. Now we are in a new 2021 and have just launched Chronomaster Sport at the LVMH digital Watch Week which was the biggest success we ever had in Zenith history as well as in my own career. We are all set to bounce back this year and my ambition this year is to have a double digit growth versus 2019. I’m quite confident about the bounce back.
During 2020 you took a strategic decision to promote the Zenith’s Icon Program. Can you elaborate more on the Zenith’s pre-owned watches directions and the success of this initiative? Also, what are the benefits that Zenith is offering to the ultimate watch lover and watch collectors?
It’s one of my favorite subjects because I really believe this brings the brand great possibilities in terms of brand equity. I will tell you why. In 2019 when we came back with the revival collection and celebrated the El Primero we could feel a great interest in collectors and watch lovers on the historical pieces which included 15 – 16 iconic references from the mid-60s to the mid-80s. We identified those watches and in the meantime started to have good results in the auction business. If you will look at our records you will see we have been breaking them time and again, and by end of 2019 we went up to 250 million US dollars. The brand value will surely go up if you associate it with a very interesting article or feature. We did a good one with Robb report in May 2020 which referred Zenith as the next key brand to play an important role in the auction business.
In auction you rely on heritage to have a legendary watch or movement with elements that not many brands have. I ask collectors who are buying from secondary markets or websites or retailers what guarantee they get and I often find many are disappointed that they cannot be sure if the watch they are buying is authentic. I tell them we need to go beyond this credibility barrier that is why we created the Zenith Icon Program which is a very simple way we ensure these15 – 16 references. We open the watch and check everything inside. We replace the original components to keep it genuine, we don’t touch the outside unless the client asks us because as you know collectors want to see the proof of age. We issue an authenticity certificate along with a booklet with the whole story of the watch. We give a three year warranty and sell them only at a few of our exclusive boutiques.
Recently we displayed them at our boutique in Ginza-Tokyo and we already sold four pieces that we delivered last November. Our idea is to have four locations in Japan, Shanghai, Dubai and Paris to start with, and sell four to five watches maximum. My biggest problem is sourcing because I cannot produce these watches but can only acquire them. It’s a challenging task but I love it. People are already talking about it now and we have restored six pieces we got from our own stock and archives and museum.
Once we bought a beautiful watch from UK and I went to Italy to check on it with the retailer. The watch had been sold to a client 51 years ago and the owner kept it in his safe for many years and sold it back to the retailer who thus had a watch from 1970. It still had the A386 sticker with the price in Lira with the pouch of the retailer adding to the genuineness of the product. This particular watch was very expensive. We price a watch considering the price that we paid, the work that’s been done to restore the watch and then we also look at the secondary value in the market whether on the website on reseller or auction etc. and we arrive at the right price.
Is the objective here is to increase the prices in the auction of the Zenith watches?
It is already happening and to be honest this it creating an issue. Today my biggest problem is sourcing so if you want to sell your beautiful watch, or if you know people who are selling old pieces from Zenith let me know. More and more people now see the value of vintage going up in the auctions so they don’t want to sell their prized watches. They very well know that recognition creates and enhances value. If I put myself in the industry level Zenith is such a prized brand that is on their value list. Our value is steadily going up and quite honestly, I have to say it deserve to be much higher.
I have numbers to achieve in 2025 and have a plan which is validated by Mr. Arnouk who by the way gives a lot of priority to watches and jewellery next to the other divisions. Acquiring Tiffany as you see was a big deal for us. Now there are two sons in the family who are involved in the divisions TAG Heuer and Tiffany and it’s clearly marks a big dynamic shift.
Moving forward with the Zenith novelties of 2021, can you tell us more about your new 2021 “Babies”?
When I came on board in 2017 we launched Zenith Defy 21 because we needed to wake people up for the brand or rather to remove the dust of unawareness on our sleeping beauty and it was a very nice shot. We are very contemporary and very dynamic. Defy was a great line because it gave me two things for many years. It gave me much needed business and time to rework on Chronomaster. I never wanted to kill Chronomaster and we worked on that in the backstage. I can tell you what the problems with Chronomaster line were over the last couple of years. It went in too many directions, sizes, thickness, colors, straps and bracelet styles that customers got confused. When I look at Chronomaster basically there are three sub categories within the Chronomaster brand. It needed a revival like the A 385 where we basically re-launched a watch, which was an iconic watch from the past. You have the sporty look of the De Luca, of the rainbow of A 277, sportive casual look of the Chronomaster sport and you have the third category which is very thin elegant type of Chronomaster chronograph that we are going to launch in April. To make things very simple, you have Defy and Chronomaster, two strategic product lines and then you have two technical products Pilot and Elite. Within Chronomaster range as you see we have Chronomaster Sport and the Classic, very simple, and within Defy you have three hands, the Defy Classic, Defy Midnight then the chronograph Defy 21. The next part is the high complication where this year we are going to launch small quantity of crazy watches and also a special watch with simple material to see the mechanism in the best way. It will be 10 pieces each and is aimed to evoke an experience that 99 percent the people in the world have never had.
When you say complication, can you give us a hint on what kind of complication you are referring?
I cannot talk too much about it now but I will tell you that these watches are linked to the sky. The logo star Zenith is the highest point in the sky so it is going to be highly relevant. The major problem in the sky is gravity. So we will play around this to bring two complications but again this line will be limited to10 pieces of each. These twenty people will share an experience which in my opinion 99 percent of the people in the world have never had. We will follow this concept and we want to make something yet again and I’m sure you will have a couple of clients in Dubai interested in such a movement. Coming back to your point Chronomaster, Defy, Elite, Pilot are more technical but the big engines are Chronomaster and Defy.
Last year, you surprised the industry with the 50 years warranty offer. Can you tell us how this offer is adding more value to the Zenith brand?
It’s clear. It shows that we are very confident because we are masters of our own technique, and we are producing our own movement. Because we are putting together the movement and the case in our own manufacture, we are confident about the quality. I believe it was more than a celebration of the 50th anniversary to get this special guarantee but to communicate that when you buy a watch for your daughter it means a bond of trust. I want to add that if they have the document, they can even come back and get another 50 years. Zenith watch is something forever and at some point we will offer a lifetime guarantee.
In early 2020, we were surprised by the extensive women’s collection. How important is the feminine world to Zenith?
We estimate there are more or less around 30 percent women and 70 percent men in terms of brand buyers. Of course we launched the Defy Midnight with femininity in mind, but we are changing the way to talk about it because I don’t want to define it as men’s watch or women’s watch any more. I think this is old fashioned classification. Today we make beautiful watches and they can be worn by both genders. Think about the Chronomaster Sport, we already have many women buying it because it’s cool. Women these days often want to take their husband’s watch and they don’t always want a small one with gold and diamonds. I think we should say that we are producing watches that are unisex. I don’t want to have men and women sections in catalogues and on the website as I think this is passé.
Going back to the roots; Zenith’s perception among Swiss watch lovers and collectors is “Good Value for Money”. Would love to have your views on this statement.
It’s a statement I really appreciate and I really enjoy talking about because I have firm faith in the watch industry. Especially when we are going through a crisis period people seriously think of what they are buying, the money they are spending and more significantly if they are buying something genuine and not superficial. The new generation of buyers in particular are keen to know what they are buying, and what they are paying for. I guess the industry for the last couple of decades took some advantage of what I would call the Chinese boom. At Zenith we are always careful about deciding on the right price because we sincerely believe it makes our brand bond strongly with the buyers. People will buy more not because they have a lot of money but when they feel they are buying at the right price. I think it’s very important to note.
When you buy a Zenith watch, you buy a product made to perfection. You buy something which has a movement made under our careful eyes. If you visit our company we will show you what we are doing in there. Zenith is a very transparent brand. How many brands can you buy with a legendary movement like what we have with a cool very contemporary look like ours? We are talking here about a high frequency movement measuring one tenth of the second. When we did this watch we wanted to bring something additional in terms of chronometry. Most chronographs are beating at 28800 bph which is 4 hertz, some even going to 26600 which is 3 hertz. When you do 3 hertz you measure 1/6 of the second and if you do 4 hertz you measure 1/8 of the second. When you measure a racing car or a sprinter running you never measure in 8th or 6th you measure in 10th of a second, so this is the best essence of a chronograph. When you buy a Zenith watch I say you buy great value for money, you buy a manufacture, you buy legendary chronograph, and you buy top level finishing at the price below 10000 Swiss Francs.
Last December, you held a major event at your Dubai Mall boutique, can you tell us how important is this retail point for Zenith? How important is the Middle East for your brand? What about your expansion plans in this region?
When I joined on board Zenith we had six boutiques and 850 points of sale globally. Our strategy was very simple, we reduced the number of POS down to 450 to concentrate on the best partners and of course focused on opening boutiques in key locations. We are lucky now that we have our boutique in Dubai Mall which is one of the top locations in the world. Today we have 20 boutiques, 10 managed by us and the others are franchised. This morning I received a request from a prominent partner in Japan to open a franchise boutique. In China every two months we get to open a boutique in the cities. We feel the interest is getting stronger. My objective is to have 450 POS and 40 boutiques directly operated and through franchise.
Let us not forget that retailers play an important role in the marketing process. The manufacturer is the most knowledgeable about watches, no doubt, but most of the buyers like to go to someone to get a good advice to choose between the different brands before they decide on what to buy. If a person goes to a multi-brand store to buy a nice chronograph I honestly expect the retailer to put a Zenith on the table. I think the buyer will also enjoy this experience as this builds good brand credibility. Dubai Mall is a very important destination for me and one of the top four Zenith boutiques now. We will call it our flagship, we will make the high complication I mentioned earlier available there. When I have only 20 pieces only few boutiques will have access to the exclusive brand and the Zenith Icon Program. Dubai Mall is in the center, the hub of business in the Middle East and we need to build the brand right there. Regionally speaking, we will go step by step, we have to work with Ziad to concentrate beyond UAE of course, in Qatar, Kuwait and Saudi Arabia. These are the three markets we need to increase our presence. Ziad is working also on both retail and wholesale brand development as it is very important to us. If I emphasize Dubai again it is because Dubai is one of the top four locations we need to improve.
Retail business is changing and it is changing to meet the global customer requirements. What is Zenith’s plan for the future e-commerce?
Change is inevitable. When the lockdown started in mid-March last year I called my team and gave them four days to tell me how they will digitize their job functions to the maximum. I involved marketing, sales, finance, after sales service and other teams in the process, and they all came after four days with their proposals. Of course in sales department we had a plan to o the e-commerce over 18 months, and the sales team told me with the current situation we needed to speed-up. Instead of 18 months they developed the system in 6 weeks. We started in Europe in June and opened out to USA in July and of course now we just opened in China as well. We are going cautiously and step by step into it. The six months from June to the end of the year is very important and in a really challenging year e-commerce business went up from 0 to 5 percent globally. So the potential is huge. I was one of the first one to change my mind well in the beginning but in today’s context this transformation is very significant for survival and success. USA is the biggest market in terms of digital readiness. It’s a little slower in Europe, probably they are going cautiously and step by step as well. |