Recently, Georges A. Kern, the global CEO of the Swiss independent watchmaking brand Breitling, sat down for an exclusive interview with Luxe.CO. Throughout the interview, he exuded unwavering confidence and immense anticipation for the Chinese market. Under his leadership, the Breitling brand has achieved remarkable success in Asia, particularly in regions like Japan and South Korea. Currently, the Chinese market is poised to become the focal point of the brand’s next major expansion phase.
With his extensive industry experience, Kern had previously worked for the Richemont Group for many years before joining this independent watchmaking brand in 2017. Currently, he not only serves as the brand’s CEO but also holds a 2.8% stake in Breitling.
• “I don’t see the reason why people should wait for three years for a watch.”
• “It is only a matter of time before we achieve the same level of success in China.”
• Breitling will open 20 more boutiques in China.
• Brand building is like driving a nail into a wall; it requires continuous effort.
• “Chinese consumers rarely buy brands that are not very successful outside of China.”
Introduction to the man behind the scenes
In 2000, Georges A. Kern joined Richemont, the Swiss luxury goods group, and played a key role in integrating the brands A. Lange & Söhne, Jaeger-LeCoultre, and IWC Schaffhausen after their acquisition. At the age of 36, in 2002, he made history as the youngest CEO within Richemont when he was appointed to lead IWC Schaffhausen. In 2017, he was promoted to Head of Watchmaking, Marketing, and Digital at Richemont, where he focused on overseeing the Specialist Watchmaking Maisons.
In the same year, Georges Kern took on a new challenge as the CEO of the independent watch company Breitling SA, while also becoming a shareholder. In his role at Breitling, Georges Kern is dedicated to fostering the growth of one of the world’s most renowned watch manufacturers, with the aim of transforming it into a leading neo-luxury watch brand.
Breitling Superocean Automatic 36 in turquoise, white and orange
“I don’t see the reason why people should wait for three years for a watch.”
Luxe.CO: Please use three keywords to describe Breitling.
Georges A. Kern: History, coolness, and reliability.
Luxe.CO: What made you join Breitling back in 2017?
Georges A. Kern: CVC Capital Partners, Breitling’s major shareholder at the time, extended a compelling invitation to me, urging my involvement with the brand, and I accepted the offer without any hesitation.
I wasn’t aware at that time about the full potential of Breitling. I knew that with the new team, I could do much better than the predecessors, but I didn’t imagine that we could do that good.
Luxe.CO: From 2017 to 2022, Breitling’s sales doubled, and its ranking entered the top ten from the 19th. So what has Breitling done right to achieve this progress in just five years?
Georges A. Kern: When I first joined Breitling, I looked through the archives of Breitling’s history.
During this exploration, I uncovered a remarkable legacy dating back to 1884. I found that the brand had pioneered collections inspired by the realms of land, sea, and air while establishing a robust distribution network. We could build on the models introduced in the 1940s and 1950s and infuse them with new values and design elements. I believe this is the main reason for the brand’s success today.
Breitling’s 2022 Aviation Chronograph Watch (NAVITIMER)
Luxe.CO: You once led many watch brands in the Richemont Group, and now lead Breitling. In your opinion, what are the advantages and disadvantages of independent watch brands compared with brands under a group?
Georges A. Kern: It’s like asking if you prefer to be single or married, [laughing]… I don’t want to say that being single gives you more freedom, although it does seem that way.
While being part of a larger group allows access to the group’s strengths and service expertise, being independent grants us the freedom to act swiftly and adapt. We have a completely different pace of development as an independent brand.
Reflecting on the past three years, particularly in the face of the pandemic, it has become evident that independent watchmaking brands often outperform their counterparts operating under a group.
Luxe.CO: Since the pandemic, high-end watches are increasingly in short supply. Does Breitling have plans to increase production capacity or limit the number of products?
Georges A. Kern: It’s true that our production capacity is currently limited compared with the market demand, particularly with the increasing demand we’re experiencing in multiple markets. Breitling has been growing steadily at an impressive average rate of 25% per year.
We do not want to artificially limit the offer. If we could double the production, we will do it, but we cannot. I don’t see the reason why people should wait for three years for a watch.
Breitling’s headquarters, located in Grenchen, Switzerland
Luxe.CO: How do you see the luxury industry?
Georges A. Kern： When talking to investors, I often show them how large luxury groups have capitalized since the 1980s.
Whenever I wanted to buy shares of these groups, the banks would caution me that the prices were steep. However, I would say that this would be the low point in a year, and it would keep going up.
Because whether in countries like China, India, Indonesia, or Vietnam, there is a universal desire among individuals to acquire luxury goods, the luxury industry is the real world.
Even in the face of global uncertainties, people want to enjoy life and indulge in the finer things. Luxury is like caffeine, often provoking impulsive moments of purchase.
Think about it, why would you need a piece of jewelry or a watch? Nobody needs these things, but everybody wants them.
“It is only a matter of time before we achieve the same level of success in China.”
“Breitling has achieved great success worldwide, and we are one of the fastest-growing brands in the industry,” Georges emphasized twice during the interview.
Luxe.CO: What is the current sales proportion of Breitling in the Chinese market?
Georges A. Kern： Around 5%. Based on our projected growth rate, Breitling will get a rightful market share. We hold high expectations for revenue growth in China, and I have full confidence in our success.
Retailers adore our independent operation, which allows for greater agility and direct communication. As we have already established our presence as the fifth leading brand in numerous other markets, it is only a matter of time before we achieve the same level of success in China.
Breitling SuperChronomat B01 44
Luxe.CO: What is the positioning of the Chinese market in Breitling’s brand strategy?
Georges A. Kern: Approximately five years ago, for unspecified reasons, the previous owner of Breitling lacked interest in the Chinese market. However, since taking over the brand, we swiftly initiated our expansion in China. Unfortunately, the pandemic interrupted our progress.
Now, with a new team and leveraging the valuable connections from my past experiences, we are reigniting our efforts. Breitling has rapidly emerged as one of the industry’s fastest-growing brands.
Having achieved success in Southeast Asia, Japan, and Korea, replicating our accomplishments in China is a natural progression. The key lies in implementing the proven strategies we have employed globally to secure an equivalent market share in other regions across the world.
*Note: In 1979, the Swiss Schneider family bought the brand from the founding family of Breitling and restructured the brand; in 2017, the private equity fund CVC Capital Partners (“CVC”) announced its acquisition of 80% of Breitling, leaving the Schneider family with the remaining 20%. (In October 2021, Swiss private equity firm Partners Group acquired a significant minority stake in Breitling from CVC and increased its equity stake in a transaction in December 2022 that made it the company’s largest stakeholder.
Breitling’s Largest Flagship Store Worldwide, Opened in February 2022, Located in Hannam-dong, Seoul, South Korea, featuring a Street-Facing Breitling Café and the Brand’s First Restaurant: Breitling Kitchen.
Breitling will open 20 more boutiques in China
Luxe.CO: How does Breitling plan the distribution of its boutiques and outlets in China?
Georges A. Kern: I think in China, it is very different. In China, boutique stores are important.
So the question is, how many do you run yourself, we call them internal boutiques, or how many are run by our retail partners. And here, we need to find the right balance.
In the upcoming year, our target is to open more than 20 new boutiques.
It is important to acknowledge that China is an emerging market where the luxury industry has thrived for only 20-30 years. In other words, while you may see a mix of large and small retail counters in the U.S., the established retailer network is less extensive in China, leading consumers to gravitate more towards boutiques.
Breitling Boutique on Wangfujing Street, Beijing
Luxe.CO: What are the advantages of Breitling in the field of watches?
Georges A. Kern: I believe that Breitling customers are primarily drawn to the brand’s attitude, seeking a “cool and relax alternative” to the very conservative and traditional brands which are all there.
Our commitment to inclusiveness sets us apart from our competitors, not only in the sports arena (we are involved in sports such as triathlon and surfing) but also how we communicate with our customers.
This inclusive approach is also evident in the design of our boutiques, which feature elements like motorcycles and industrial aesthetics, creating a welcoming atmosphere enhanced by soothing music and pleasant fragrances.
Furthermore, our product designs embody this inclusiveness, despite our higher average pricing range. (Note: Breitling’s official website shows that our units are priced between $3,950 and $8,000.)
Brand building is like driving a nail into a wall; it requires continuous effort.
“I saw that this brand had a lot of high-quality assets waiting to be explored,” Georges expressed during the interview when discussing his initial motivation for joining the brand.
Luxe.CO: What are the main challenges for Breitling in China?
Georges A. Kern: China is a vast country with distinct variations between its cities. We acknowledge that Breitling has relatively low visibility in second and third-tier cities. However, we firmly believe that these challenges are solvable.
When it comes to marketing, communication, and building brand awareness, it’s akin to driving a nail into a wall. It’s not a task that can be accomplished with a single knock. Instead, it requires a long-term and consistent approach.
When that nail is done, you can hang your favorite painting, and obviously we’re not doing that yet, so we need to do more of the same things in China that we do in other markets, like appointing local spokespeople, etc., and leveraging the influence of local celebrities to bolster awareness across the country.
On June 15th, Breitling held a media press conference at the iconic Shanghai building, Palais de Bund, known for its decorative artistic style. During the event, the brand officially announced Chinese actress Angelababy and actor Huang Jingyu as their brand ambassadors. In the photo from left to right: Huang Jingyu, Angelababy, and Georges A. Kern.
“Chinese consumers rarely buy brands that are not very successful outside of China.”
Luxe.CO: How do you see Chinese consumers, especially the younger generation? What are the characteristics of their watch consumption?
Georges A. Kern: Chinese market boasts a significant young consumer base, with Generation Z which is buying luxury goods.
It is noteworthy that many young people in China are living with their parents, and research data reveals that these young people are spending 40% of their income purchasing luxury goods, which is insane.
China is also demographically large enough to be home to 1.4 billion people, and our sales reach an impressive 300-500 million individuals within this vast market, while the total population of the United States is only 300 million.
Also, we are seeing in Switzerland or other European cities, Chinese tourists are coming back, and this is a great opportunity for Breitling because they will see the huge power of the brand in these markets, and Chinese consumers rarely buy brands that are not very successful outside of China.
In today’s interconnected world, Chinese consumers, especially the younger generation, share similar musical preferences and tastes with their international counterparts. I don’t see these many differences.
Breitling Chronomat Automatic GMT 40
Luxe.CO: What are your observations on Breitling’s consumers?
Georges A. Kern: In line with global market trends, Chinese customers have historically exhibited a conservative inclination, favoring the three-hand watches and slender, elegant models.
But nowadays the younger customers are quite different, as they are looking for something more sporty and cooler. From product development and design aesthetics to the embodiment of brand values, Breitling embraces a distinct departure from the convention, which also sets it apart from its traditional counterparts.
Luxe.CO: What is the sales situation of the brand’s women’s watches, and what is the proportion?
Georges A. Kern: Women’s watches account for about 12% of our revenue, and we want to bring that number up to 30%.
It is the same thing. We want to be a “cool and relax alternative” in the female market, both in product design and advertising, steering away from the conventional notion of a purely romantic timepiece.
Breitling Ladies’ Watch – SuperChronomat Automatic 38
Luxe.CO: What do female consumers pay more attention to when buying a watch?
Georges A. Kern: The long-standing phenomenon of men predominantly purchasing for themselves while women assume the role of recipients continues to prevail. However, the tides of change are undeniably evident, with an increasing number of women confidently asserting their preferences.
This transformative shift signifies that not every woman seeks an elegant, romantically styled timepiece. Instead, a growing cohort of women desires a bold, robust sports watch that reflects their alternative lifestyle.
Conclusion:
According to investment bank Morgan Stanley’s estimation, Breitling’s sales in 2022 grew by approximately 25%, reaching 860 million Swiss francs, ranking 9th in the list of Swiss watch brands’ sales. Among the top 10 brands on the list, independent watch brands occupy 5 positions.
“Breitling’s sales growth far exceeds the industry average,” said Oliver Müller, founder of LuxeConsult, a Swiss watch industry consulting firm, in March 2022.
The data shows that in 2022, Breitling sold a total of 230,000 watches, accounting for 2.6% of the market share in the Swiss watch industry.
| Image Credit: Provided by the brand, Breitling official website
| Editor: Zhu Ruoyu
