Exclusive interview: Georges Kern, CEO of Breitling

In October 2019, a few months before the Covid-19 pandemic would strike with all its vicious fury, Breitling CEO Georges Kern was in Dubai for the Breitling Summit. At the event, he showed the new Aviator 8 Mosquito, spoke about the brand’s ‘modern retro’ concept, and even introduced to the audience the Swiss watchmaker’s youngest ever ambassador – 19-year-old Luke Bannister, a seven-time world drone champion. Later that afternoon, when I asked him what were the biggest threats to Breitling in 2020, he replied, “The only threats are those beyond our control – like Brexit, the situation in Hong Kong and trade wars.”

Those were the biggest pain points on the horizon back then. 2020 though proved to have ominous plans of its own.

When we spoke again last month, Kern didn’t deny that Covid-19 has had an impact on the business, but he said a strategy that was put in place pre-Covid helped buffer it. “Before Covid, Breitling already engaged in inclusive luxury – in the way we interacted with the customer in a very relaxed manner; casual luxury – where luxury becomes more casual and you can see it in our boutiques; and sustainable luxury – look at what we have been doing with packaging and straps. These three values helped us a lot during Covid and will help us post Covid too,” says Kern.

His optimism is not misplaced. In an annual report published in March by Morgan Stanley and LuxeConsult, Breitling stayed very much in the reckoning among Swiss watch brands that powered through 2020 without falling apart.

The report states that the entire Swiss watch industry is estimated to have shrunk by one third in 2020, with figures from the Federation of the Swiss Watch Industry stating that exports dropped 21.8 per cent during the same period. Still, Breitling climbed from 13th position in terms of overall retail sales in 2019, to 11th place in 2020.

The report estimates Breitling’s turnover in 2020 to be CHF479m, occupying 2.4 per cent of the global Swiss retail market share. It adds that the brand sold an estimated 147,900 pieces, at an implied average retail price of CHF5,254 a piece. “We make roughly 160,000-170,000 watches a year,” confirms Kern. “We’ve gained market share last year. In the Middle East, we are part of the top five brands in turnover.”

Breitling’s reach within the Middle East has been extensive. Its timepieces aren’t difficult to spot on wrists here, and brand recognition is already high. In 2019, for example, Breitling announced a new limited-edition Avenger model in partnership with UAE aerobatics demonstration team Fursan Al Emarat. Earlier this year, it also became the official timekeeper for the UAE Tour 2021. “We are doing extremely well in the UAE. We have also just started to open new boutiques in Saudi Arabia – in Al Khobar, Jeddah and Riyadh. In Kuwait, we moved our boutique to a new location, and we have great partners in Bahrain, Qatar and Oman.”

Explaining the fact that its retail share increased in 2020 over 2019, Kern says that one of the reasons was that Breitling did not disproportionately focus on the tourist business either in the Middle East or its other markets. “We don’t want to be dependent on the tourist business, it’s a cherry on the cake. Our fundamental business is local, with local residents.”

The one market that Breitling still needs to break through though is China. “We are a little late in China,” admits Kern. “We started the China business four years ago when I joined the company, and we need to catch up and quadruple our turnover to reach the levels of our fair share of the business.

“The problem with China is very simple – it’s distribution. You don’t have an established retail network like we have in the UAE, for instance, with Seddiqi running stores for us in Dubai,” notes Kern. “[In China] there are difficulties in opening boutiques, negotiating and finding malls.” Despite the challenges, Kern says that plans are drawn up for Breitling to open between 20-30 boutiques in China this year alone.

Covid-19 notwithstanding, Breitling didn’t let the drip-feed of its novelties dry up in 2020. Last year, when most boutiques and retail points globally were forced shut in April, it still went ahead and launched a full-fledged Chronomat collection that included 12 references; a Breitling Superocean Heritage ’57 capsule collection with four references; and a Navitimer Automatic 35 that came in five different case and dial combinations, paired with both bracelets and leather straps.

But before the brand could be accused of being tone-deaf to the fallout of the pandemic, in May last year, it launched a Superocean Heritage ’57 Limited Edition II, proceeds of which were donated to support frontline healthcare workers. Breitling committed to donating $500,000 to countries that were battling the pandemic.
Before 2020 could draw to a close, it also released the Endurance Pro, a robust sportswatch with a Calibre 82 SuperQuartz movement.

This year too, Breitling hasn’t stepped off the pedal. Its latest releases comprise the stunning Super Chronomat collection, among whose several references include a UTC model and Four-Year Calendar model that features a moonphase. “Many clients know Breitling in the last 20 years as a brand with loud pilot’s watches. But it is much more than that. We looked into the history of the brand, in particular the 1940s, 50s, 60s and 80s. We wanted to bridge the Breitling lovers of [then] with the Breitling lovers of the recent past.”

That aim is best embodied by the new Premier Heritage Collection which includes the Premier B09 Chronograph, one of which has an unusual-for-Breitling pistachio green dial; a Premier B25 Datora which is a reincarnation of the brand’s triple calendar chronograph from the 40s; and the Premier B15 Duograph 42 that tellingly features an all-new in-house manual-winding Breitling Manufacture Calibre 15 COSC-certified spilt-seconds chronograph movement. And 2021 held another surprise with a very limited 25-piece Premier B21 Chronograph Tourbillon 42 Bentley Limited Edition to mark the nearly two-decade partnership between the car manufacturer and the watchmaker. Given the number of watches released this year alone, it’s worth remembering here that we aren’t even halfway through the calendar year.

Evidently, there’s no dearth of novelties for Breitling enthusiasts. But this much choice can also lead to considerable confusion among customers. Therefore, in March, it introduced the BreitlingSelect subscription programme, which allows customers, for a monthly fee, to try up to three different Breitling pieces over the course of a year before deciding on a watch they’d want to buy. Initially made available only to customers in the US, the pool of watches include the Superocean, Navitimer and Premier pieces.

“We are not addressing people who want a discount,” says Kern about the programme. He says that it’s actually more expensive than buying a watch upfront as there’s a monthly rental fee as well as a subscription fee, in addition to the actual price of buying one of them at the end of the 12 months. “We have a pool of watches that all participants in that programme are using. So the watches in that pool become pre-owned products, and customers can then buy it at a price advantage.”

To manage its global inventory, Breitling has roughly 10 factory outlets around the world in the US, Europe, and Asia, where it sells watches at an approximately 30 per cent discount. “We always try to help our retailers in taking back stock and refreshing their stock [so that they] always have the newest Breitling collection. The most important thing is that retailers don’t sell these watches on grey market platforms and [we] control the prices so that the value of the brand remains stable.”

Another measure that Breitling has taken to challenge the grey market, is an announcement it made in October last year that all new watches are being offered with blockchain-backed digital passport technology that can trace the entire lifecycle of a watch and which will include all its purchasing, servicing and resale history stored on an immutable platform.

An objective barometer of a watchmaker’s ability to rank above its global competitors are independent industry awards, and more specifically the Grand Prix d’Horlogerie de Geneve (GPHG). At the 2020 edition, five of its watches were nominated across categories, and two of them – the Superocean Automatic 48 Boutique Edition and Superocean Heritage ’57 Limited Edition II – won in the Diver’s and Petite Aiguille categories respectively. “Being nominated is a great sign of recognition toward the work of our colleagues, but ultimately the real recognition only comes from the customer when you sell watches.”

Kern remains tight-lipped on plans for the remainder of 2021, but judging by precedent, it’s going to be eventful at the very least. “Every two or three months there will major news on Breitling sponsors, new ambassadors, new flagship boutiques and of course new products. It’s like watching a Netflix series – there’s always a striking new episode.” A fittingly millennial reference for a brand that’s increasingly gaining ground among that very same audience.