These Watches Used To Be A Secret Of The Ultra Rich. Not Anymore

(Bloomberg Businessweek) -- Greubel Forsey SA wants to put its unique watches on more wrists. That’s not the easiest thing for a Swiss brand that was used to making fewer than 110 timepieces annually. Its huge, extraordinary mechanical marvels come with meticulous hand-finishing and can cost 1 million Swiss francs each ($1.1 million)..But the watchmaker has started a campaign to make more products and at more affordable prices to lure customers. Its old clients are a dedicated group of ultrahigh-net-worth timepiece collectors, and there just weren’t enough of them to sustain any real growth. And yet, it turns out making more and cheaper watches may not be sustainable either..Greubel Forsey embarked on its new strategy in 2020, during the first wave of the pandemic, when sales and production all but ceased. That’s also when Chief Executive Officer Antonio Calce joined the company. At that time, Greubel Forsey had about 95 workers—almost one employee per watch—and the average price per unit hovered around 500,000 francs. Richemont, the Swiss luxury conglomerate that owns Cartier, Van Cleef & Arpels and Vacheron Constantin, still held a 20% stake in the brand it had bought in 2006..That investment, coming just a year after watchmakers Robert Greubel and Stephen Forsey founded the company, spoke to the significance their project held in the industry. French-born Greubel, a veteran of IWC, was working at movement manufacturer Renaud & Papi SA when he met Forsey, an English watchmaker who’d once specialized in restoring antique clocks. They struck out on their own, making complex movements for others—and their own revolutionary Double Tourbillon 30˚—before registering their company in 2005..The pair immediately attracted notice among watch cognoscenti with innovative complications, thick cases and three-dimensional cutaway dials featuring angled balance wheels. Of particular note were their tourbillon escapements, gyroscopelike spinning spheres that improve accuracy. (The young brand once produced a watch featuring four of them.) Their creations won the prestigious Aiguille d’Or, the top prize at the Grand Prix d’Horlogerie de Genève—the watch industry Oscars—not once, but twice, in 2010 and 2015..“Since the beginning, Greubel Forsey has chosen to position itself as an ultraniche and high-end brand talking to highly literate watch geeks,” says Oliver Müller, head of LuxeConsult, which helps Morgan Stanley publish its annual financial report on the Swiss industry. “It is a benchmark for any other watch brand on the high end of watchmaking.”.With so few watches in circulation, the brand was little known outside of the die-hard horology circles of the uber-rich. Robert Downey Jr., himself a connoisseur, wore a Greubel Forsey Double Tourbillon Technique in 2019 when he and fellow actors dipped their paws in cement to be immortalized at Grauman’s Chinese Theatre in Hollywood. (The sturdy watch survived just fine.).Soon after, the company brought on Calce, a convivial Swiss-born Italian who’d been a longtime industry executive with stints at Piaget, Panerai, Corum and the then-Kering-owned Girard-Perregaux. On a mission to focus on business strategy and operations, he sat down with Greubel and took stock..“It was a big challenge for all of us,” Calce says from the Greubel Forsey headquarters and atelier in La Chaux-de-Fonds, Switzerland. The existing structure of the company hadn’t adapted to shifts in the market at its very high price point. There are only so many centimillionaires, and just a fraction of them are true watch geeks. There was also increased competition from brands such as Audemars Piguet, MB&F and the fast-growing Richard Mille, which were making creative, high-horology, well-finished timepieces at prices that were still eye-wateringly steep, but lower, on average, than those of Greubel Forsey..The company simply needed to sell more watches to survive—even though its factory and workers weren’t prepared for a major production increase. “The goal was to, step by step, secure the growth for the future,” says Calce, who cuts a stylish, avuncular figure. He’s big and tall and favors dark navy suits paired with open shirts and designer sneakers..Among the first major moves under Calce’s leadership was to buy back Richemont’s 20% stake, which allowed Greubel Forsey to take its place among the growing list of true Swiss independent watchmakers that rose to prominence in the past half-decade. Collectors appreciate such brands because they’re viewed as more approachable, passionate and artistically driven than corporate assets chasing sales targets..The deal was announced in 2022 for an undisclosed price; Calce, Forsey—who continues to serve as a “technical expert” to the company—and Greubel are now the sole shareholders, with Greubel the chairman and majority owner. “Greubel Forsey needs now to generate the financial means on its own to finance its ambitions,” Müller says..Speaking to Bloomberg News in 2023, Calce said production could eventually reach as many as 500 watches a year, while the average selling price would be cut in half to capture a wider market. The company’s atelier, built around a centuries-old farmhouse in La Chaux-de-Fonds, needed to grow. “It was a big fight at the beginning, because we had to protect all the incredible creativity the brand had created,” Calce says. But “you can’t secure the brand for the future at this price level. It’s impossible.”.Some progress has been made, but Calce now concedes the company won’t reach that goal. It added about 50 workers and made approximately 225 watches last year, he says..Prices now average roughly 290,000 francs, and the company is offering some watches with much more wearable diameters of 41 millimeters and 39mm. It even plans a sub-38mm watch this year—a massive shift for a brand that regularly made 45mm and even 47mm monsters. The designs are decidedly more Space Age, eliminating numerals from the dials and favoring sharp bridges. For its Balancier Convexe S2, the brand is employing a carbon case for the first time..One of its new watches, the Balancier 3, in titanium, costs a relatively approachable 160,000 francs, despite the 30 hours of hand-polishing required on just one bridge. Calce said in the Bloomberg News interview that he hopes watches priced from 120,000 francs to 250,000 francs will eventually account for more than half of Greubel Forsey’s production..But the original idea to raise output to 500 watches a year was too ambitious. Calce is scaling down planned production from 300 in 2024 to about 250. “At this level of quality that we always push, I don’t think it will be possible to reach 500 pieces” a year, he says. “We need to take a step back.” The expansion of the atelier has been delayed as well..Neeshu Hajra, a business executive and collector in Austin, owns three Greubel Forseys and is on the list for another. He says any production increases by the brand will be “infinitesimal” in the grand scheme of things, and he feels inspired when he wears his GMT Sport or Balancier housed in a carbon case..“It’s very much buttoned-up perfection,” he says of the timepieces. When he’s wearing a Greubel Forsey, he says, he expects that “I’m going to present today, and I’m going to knock this shit out.”.The goal now is maintaining quality and shrinking distribution to fewer but better locations. The brand used to be in 60 retailers that were allotted perhaps one or two watches a year. Now it’s in just 22, with plans to reduce that to as few as 12, Calce says. Boutiques recently opened in New York and Tokyo (Japan is the brand’s biggest market). Singapore, Dubai and Mexico City could be next..“It’s always difficult to reposition a luxury brand descending the price ladder,” Müller says. Rival brand Richard Mille, in comparison, sold about 5,600 watches last year at an average price of 275,000 francs. “They’re taking the right decision to expand the volume a bit by moving to more sustainable prices,” he continues. “But the air is very thin up there.”.More stories like this are available on bloomberg.com.©2024 Bloomberg L.P.

These Watches Used To Be A Secret Of The Ultra Rich. Not Anymore

Greubel Forsey, whose impossible-to-get timepieces could cost a million Swiss francs, is trying to get onto more wrists.

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