Welcome ladies and gentlemen to the most anticipated edition of Siam Paragon Bangkok Watch Week. We are thrilled to have you here for this grand celebration of horological art and innovation of watchmaking. Please join me in giving a warm welcome to Mr. Georges Kern, CEO of House of Brands as he presents the symposium on the Breitling journey, brand legacy, community, and the future of watch culture with Tantan Wang, editor at Hodinkee.
I took a shortcut. Hello everyone. It is so good to be here in Bangkok for the second annual installment of Bangkok Watch Week. And I am so happy to be joined by Mr. Georges Kern who we just saw each other very briefly in Geneva not so long ago. How are you doing?
I'm good, thank you very much. Very happy to be here in Thailand. I'm very happy that we can contribute to this fair. I think it's very important to grow culture and knowledge of the watch industry in all the countries. So congratulations to Pendulum, to all participants for this initiative. Well done.
Amazing. Well, before we get started, I just wanted to say that, you know, after our chat here about Breitling, we'll have sort of time for Q&A. So, I never like to surprise people with a Q&A. So, start thinking about questions that you might want to ask Georges afterwards. So, we'll get that started. But, in the meantime, I think, you know, before we get to what we want to talk about, to say that you've had a busy year is probably an understatement. You know, I want to know what the highlights have been for this year for you. You've had a lot on your plate.
Well, obviously we are launching two new brands. We've been launching Universal Genève in Geneva in April, but it's a process. We are starting to ship now the products in October. We're doing many many road shows. We're having one obviously here in Thailand. It's doing very well. I'm extremely happy because and by the way we have a presentation on Universal Genève a little later at 6:00 which you might want to attend. So we really add value to the market in this super high-end watch market. Then we have big news also on Breitling. We just launched something fantastic called the Miles Davis edition which is something we've been trying to do since many years. Breitling has been involved in music in history, but we never found the right hook, but we'll talk about that a little later. And then we just launched a Gallet, which is the entrance price point of our pyramid between two and a half and $4,500 US. I think it's a segment which is still very strong if you do it right. And I'm sure we will also contribute in that price point to add something new to the market.
Absolutely. It was great to see a lot of that sort of being displayed at Geneva Watch Days which was not too long ago. And speaking of which I think you know talking about the Miles Davis novelty I think that was obviously Breitling's big sort of reveal and announcement in Geneva. You know, obviously we met each other at the Leopard Room, which is if you've been to Geneva is sort of, you know, the place to be famously or infamously. But tell me a little bit more about this novelty. Obviously, it's a beautiful watch. I saw it in Geneva and that twin jet logo, you know, the dial is gorgeous. You have a limited edition as well as a triple set, even more limited edition.
Yeah, you see it on the screen here. So, yes, you're mentioning the twin jets. It's one of the most iconic editions of the Navitimer in history. And yes, not only Miles Davis was wearing it, but also for those who know music, Serge Gainsbourg in France. And it's a smaller product. It's a handwound product. We have this famous Air Racer bracelet. And I think I posted it on my personal Instagram. I think I've never had or very rarely so many comments and likes than on that particular product. Of course, it has a retro touch. And yeah, people love it and it reinforces the Navitimer which is one of our flagships which is obviously the Navitimer.
Yeah. And if I'm not mistaken, I think there is a novelty there outside after, you know, after the talk if you want to take a look at it. You'll be able to sort of take a closer look. I think one of the interesting things, you know, you really made the message clear about tying in, you know, jazz and this watch even though, you know, obviously Miles Davis is far beyond what we think about when we think about ambassadors for Breitling. It's a very different play and yet there's such a strong connection here that's about a true story. How do you see sort of this connection with jazz and we'll talk about the social clubs in a little bit which I think has that strong tie-in but you know this is something you mentioned you've wanted to do for a long time. It's important to you.
Well obviously over the last seven eight years the brand developed a lot. We evolved from I would say a kind of niche big pilot's watch into a more generalistic product portfolio but which is in my opinion much more faithful to the real history of Breitling than what we were before. I think the starting point 20 years back, 30 years back for Breitling being very niche was right. But I mean we more than tripled our turnover since we took over and that position is right and we are a generalist brand you know we had products like the Premier or like the Top Time which we relaunched which are part intrinsically of our brand. So we have three segments air, land and sea and this is another step towards telling the whole story of Breitling. Because what is also interesting if you take for instance many people ask me about Formula 1 but interestingly enough the former Formula 1 pilots wearing Breitling actually were piloting planes and then took their watch into the cars which was a Navitimer and same thing for this watch. So you believe it's blurred but it's actually not. There are clear roots in everything what we are doing. And the Miles Davis is something we wanted to do since many years indeed in the context also of our new social club or the first social club we're going to open next year in Williamsburg in New York.
So that was something very interesting to hear while I was in Geneva is you don't think you're going to hear Williamsburg being talked about, you know, when you're going to a watch event in Switzerland. But these new Miles Davis editions, you have access basically to this upcoming members club when you buy one of these. And you know, this is such an interesting concept to me and you guys, I think the more I'm learning about this, it represents such a large investment compared to a lot of the sort of lifestyle concepts that other brands are doing. So I think I'm just interested in hearing more about one this social club and also the residence which I found out is coming to Miami a few more years down the line.
Yeah. So the point is very simple. I don't believe in the old days or the way we extended luxury brands in the old days before you were even born. At that time you know 20 30 years ago people went into pens, into glasses, sunglasses etc etc but I think today the consumer wants to feel and to live an experience and when you buy such a brand as Breitling or anything else you're part of a club and you want to live that life and that experience and you've seen this by the way a lot in the fashion industry many of the fashion companies have hotels or restaurants or what have you and because we have a very clear design language and you see one of the pictures here this is one of the bars it's a very big club we have three restaurants several bars etc we have this modern retro style and we are in a beautiful building in Williamsburg which is a kind of new Soho in New York you have all the big brands being present and we could get that location to build our first club with a special vibe and it's beautifully done and for instance this is a vinyl bar. So it's old style but it's not vintage it's modern but and I think it reflects also society because you grab on something which is real and it will be extraordinary and I can only invite everybody if you happen to visit New York in September October next year to visit us it will be an experience.
So what is in the club? I think you mentioned there's a few restaurants, there's working spaces, there's like sort of a way for members to sort of mingle like I mean this is sort of coming off of a wave of New York social clubs but this is approaching it quite differently I would say.
Yeah because indeed we have three different totally different types of restaurants. As I said we have air, land and sea. So we have a kind of garage restaurant. We have a kind of pilot's bar and offices or mess club. We have on the rooftop we have a surface bar. In winter it will be changed into a fondue restaurant, you know, in snow because we're Swiss at the end of the day. It will be animated. There will be lots of music, concerts, DJs playing. And yes we have playgrounds. It will be playful. It's totally relaxed. We want to be the cool and relaxed alternative to the and I said that since many years to the more conservative and conventional brands and that will be a reflection of that strategy. And I'm sure people will love it.
I think it's so interesting to me because when we think about brands that are doing similar concepts and nothing is exactly the same, but to me these are brands at a significantly higher average price point, right? And so to sort of see Breitling doing this, that's a huge investment and almost like a confidence in sort of the customer base here.
Yeah. But again, look at the fashion brands which are also at that price level. They do it and you cannot I was talking to a friend of mine who's running one of these big fashion companies said we cannot invite everybody to a catwalk to Paris or Milano and here we have also a platform where we can talk about our brand and by the way we will welcome also people not owning a Breitling. We have some fun stuff in mind for those who will not come with a Breitling, but I will not tell you because I know that there are some competitors in the room as you will discover when we'll open the club.
So, you're saying I won't be thrown out if I'm not wearing a Navitimer?
Absolutely not. Absolutely not.
Excellent. Well, you know, I think on top of the investment that we're seeing in the social club here, I think what's even crazier that honestly I really just learned about today is this residence. So tell me more about this. It's not just a members club. This is Lifestyle with a capital L in Miami.
Yeah, as you know, we're private equity owned and then Partners Group is our majority shareholder and one of their companies is a real estate company called Empira and I was explaining that basically what I said earlier that I think in a brand extension in a different way. It's about lifestyle. It's about a feeling around a brand and then I was mentioning real estate and we could acquire these lands in Brickell in Miami and I think the location is perfect. Miami is booming in terms of real estate because everybody's moving from New York and now that they have a communist mayor everybody's moving out of New York to Texas or to Florida and elsewhere. So the market is booming and we work with fantastic architects and this building will be quite amazing. There will be roughly 300 apartments. And there will be also a huge social club in there, but the building will be ready only by 2030 roughly.
Are you going to be moving there then?
I'm very happy to be in Switzerland, you know. We have low taxes.
No, no fondue in Miami. I would say.
I might who knows? I haven't thought about it.
I think you know talking about this push towards these sort of experiential driven activations I think COVID certainly has been a milestone that we always talk about in the industry right no matter if we're talking about sort of commercial activity if we're talking about consumer sentiment if we're talking about the way people I think collect right it's changed quite a lot and obviously we have this bubble that we talk about when it comes to sort of the craziness that COVID brought and obviously part of it is a yearning to come back to experiences like this. But I'm curious to hear from your perspective here in the industry. How has those few years changed the way you look at consumer habits, the way you look at collecting habits, you know, all of this all of the stuff that people are a little anxious about these days, right? People feel at least this is, you know, when we write about stuff on Hodinkee, you see a lot of people that are more price sensitive than ever. You see, you know, people proclaiming the death of the watch industry. And so you know I want to hear from your sort of reflections what you think about all of this.
I would say two things. So obviously the environment in which we operate today has become extremely complicated. You have wars, you have political instability, you have economic instability. So that's probably the most complex environment in my 30 years of career I've been working in. That's a fact and nobody has a crystal ball to know if this will change or not. On the other side if you refer to COVID and also the post-COVID era and we call that period the revenge buying. I mean the industry was booming. I mean not only our industry the luxury industry etc. But this was exceptional. This was absolutely a unique phenomenon. This post-COVID era was unique and perhaps we should consider that what we are living today is a new normal and is that bad? I'm not sure. If the industry is growing by 5% instead of 20 or 25% okay be it. Because I believe that the industry, the watch industry will continue to grow. It's very different from the car industry where you lose the emotion and you lose it's not a commodity. The watch is not a commodity. The car lost the emotion because you don't have the smell anymore. You don't have the noise anymore. Soon you will not even be able to drive anymore. Nobody's buying a watch to tell time today. It's a statement. It's a lifestyle and I think it will be it's a kind of piece of art. It will be there forever. This being said, it will be more difficult and you see it when you look into the brand. It will be more difficult for the brands with no substance, with little financial means, you need to turn it in a positive way. Great roots, great storytelling, amazing products, fantastic movements and the financial means to communicate that and to express yourself towards a clientele because you have in a way a globalization of taste. We all watch the same Netflix series, listen to the same Spotify music, which is a shame in a way because you lose diversity, but there is a risk of polarization some big brands and some niche brands and a little bit difficulties in the middle if you don't respond to all the criteria I just mentioned.
Yeah, I think you know that's something that I distinctly notice when I come to Asia and sort of interact with a lot of the collectors is sort of a more individualistic collecting taste, right? And I think that is going to be a huge driver in helping propel sort of that return and that steady sort of sustainable growth, right? Because I agree like a homogenization, you know, it's interesting as a story, but I don't think it's actually good in developing taste and actually developing the discussion around collecting. And so that's going to be very interesting to sort of pay attention to down the line and this week I'm already sort of soaking all of that in here in Bangkok. So I think also after COVID Breitling to me has sort of spiritually changed. I think you know obviously if we talk about the company itself you know there was a lot of moves a few years ago you discontinued the sort of Colt line right and sort of price points are changing a little bit but I think especially now in the context of House of Brands and in the context of these two other brands that were recently introduced Breitling now stands for I think something else especially recently with Gallet. Breitling is not just a maker of Breitling watches it is an endorsement of other watches it makes other watches too. So, I'm just curious to pick your brain around, you know, what you think Breitling is shifting towards especially in relative context to the other brands here.
I mean, that's perfectly right. What happened over the last couple of years, it's not only that we launched products which made us to become a more generalist brand. But which are part of our history and which are therefore very faithful to our history. But we became 100% in-house movement manufacturer. So we make our chronograph movement the B01. We have now launched two years ago roughly our automatic in-house automatic and our hand wounds. Meaning that if we want to offer these movements in all our products, we cannot cover a certain price point anymore. And so we left the price points between two and a half and 5,000 because of the cost of our movements which is very different and you touched on that than just increasing prices. If you increase prices without content, you have a problem. If you increase prices, and our average price now is around $7,200 US, it's perfectly fine because you can explain it. You have another engine. You have a V12 in your car and you can explain that. And in that context, we decided to launch a dormant brand called Gallet, which will cover these price points between two and a half and let's say 4,700, but with Sellita movement, which are made, you know, millions, they make millions of these movements. So, they have a totally different price point, but they're highly qualitative. Gallet is not a copy of Breitling. It has its own history. We see here the Flying Officer which is one of the iconic products of Gallet and we have very simple approach towards the product with interchangeable straps etc. It's distributed through the Breitling network also in roughly 100 boutiques of Breitling worldwide. So we have a super qualitative distribution. We have I think a great storytelling which reflects also this post-COVID situation especially with young people where you want to discover the world where you travel where you do some exploration photography we call it it's a German word called Wanderlust which is the headline of the brand and above all we say it we write it we engrave it on the watch it's made by Breitling so it gives a certain reassurance to the client same quality same after sales service, same system and with these five elements and due to these five elements the response has been also overwhelming and we are now in 160 doors. We will strongly increase next year but I think yeah we will as I said earlier we really add value I think to that marketplace to that price point.
Something interesting that you said in Geneva is that Gallet would not be possible without Breitling. I think that's an interesting way to think about it from a business standpoint.
