In an industry renowned for cautious, reserved executives, Georges Kern is an exception.
The sharp-suited, silver-tongued German took the helm of Richemont-owned IWC Schaffhausen 12 years ago at the age of 36 – making him at that time the youngest chief executive of any brand within the luxury conglomerate’s portfolio.
He was charged with a difficult task: turning a small, 146-year-old watch house – the only watch brand based in eastern Switzerland – into a competitive global name.
To date, his approach – once described by the Financial Times as the creation of “a butch, luxury sport- watch brand that offers the take-it-or-leave-it proposition of large watches for real men” – has met with commercial success.
So when IWC unveiled a “midsized” collection as part of its Portofino range this year, the industry took notice. The collection was IWC’s first aimed at women as well as men.
“I don’t know why people are surprised. We’ve always sold to women – they now make up 25 per cent of our sales base, so it seemed a fitting next step,” says Mr Kern. The option of reduced case-diameters was also devised with Asian customers in mind.
“I like that we break rules. We must be a contemporary brand – we are not a dusty brand. And the appetite for our designs is there, from a valuable and growing customer demographic.”
That approach is also evident in the frothy advertising campaign shot by Peter Lindbergh, the film-maker, which features a constellation of Hollywood stars wearing tuxedos and lounging about in the Italian coastal town after which the collection was named.
Mr Kern, who once described one IWC product as “beautiful and useless”, stresses that expensive advertising and sponsorship is critical to building enduring client relationships and brand loyalty in a competitive industry.
“We live in a world fixated on the transactional power of the image. So you need to find ambassadors and environments that resonate universally with consumers,” he says. The campaign is also running on social media. “One must be progressive and relevant,” he adds.
In less than three weeks the Portofino video gained 4.7m views on YouTube – notable, given the reluctance of Swiss luxury watch houses until recently to harness the potency of digital advertising platforms.
But with the rise of wearable devices, and the prospect of the launch next year of the Apple Watch, brands such as IWC must show more agility online than ever before.
“I am not concerned by the impact of smartwatches on our sales – they are at a vastly different price point, so we are not competing for the same consumer,” says Mr Kern.
But the battle for wrist real estate looks likely to be a fight between fast fashion and timepieces that represent traditional craftsmanship. “To make sure consumers understand this involves positioning ourselves in all the right places.”
This means the brand is adding to the number of its boutiques globally, including a flagship store on London’s New Bond Street, expected to open in December. But it is not only concentrating on Europe: luxury spending hubs such as New York, Miami, Dubai and Tokyo have also seen IWC stores open in recent years.
“A decade ago we were a very Eurocentric brand – we had zero visibility in the US or Asia, let alone emerging markets,” says Mr Kern. “We’ve worked very hard with our retail strategy to ensure we are not dependent on any one region.
“These stores – all of which are interactive, experiential environments themed around our collections – are critical.”
But volatile exchange rates and mounting geopolitical instability appears to be taking its toll on the global growth rate of the watches and jewellery sector.
Richemont, IWC’s parent company, reported organic growth of 4 per cent in the five months to August 30 – excluding currency shifts – missing analysts’ expectations.
Sales have slumped in Hong Kong thanks to recent democracy protests, while conflict in the Middle East and fears over the Ebola virus have hampered travel. All continue to cast a shadow over the industry.
But Mr Kern refuses to give in to gloom. “My job – what I am paid to do – is steer my company and staff through moments like this.”
IWC to open New Bond Street store in central London
London has been the missing piece in the retail jigsaw for IWC – until now, writes Camilla Apcar. The Swiss watch brand will open a boutique on New Bond Street in the West End at the end of the year.
With existing stores in cities including New York, Paris and Tokyo, “obviously London was missing”, says Georges Kern.
The complexity of the London real-estate market was among the reasons why it took IWC so long to find a site in the UK capital, Mr Kern says. The search took three years.
The new store is partly about prestige and partly about attracting Chinese tourist shoppers. Currently, Chinese visitors must apply for a separate UK visa on top of that required for the Schengen area, covering most of Europe. Despite that inconvenience, Mr Kern anticipates increased footfall in London: “[estimates] say that by 2020 there will be 200m Chinese travellers around the world [at any given time].”
New Bond Street will serve a global clientele. Mr Kern thinks of his customers in terms of social demographics rather than by their country of origin.
“We are not in a segmented country-by-country luxury market,” he says. “That’s why it’s so important to have the same kind of visibility around the world. Today we are in a global luxury market with a global luxury consumer.”
At around 90 sq m, the three-floor boutique will display the full collection of IWC watches (including a limited-edition timepiece available only at the London store) and feature a retail showroom, private consultation area and event space.
Until now, IWC watches have been available in London through retailers including Harrods department store and Watches of Switzerland. But Mr Kern says the ability to offer the brand’s full collections and employ its own trained staff are among the advantages of standalone boutiques.
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