Interview: Georges Kern, CEO of Breitling

Breitling CEO Georges Kern is a turnaround specialist. Having worked with Richemont for several years where he led an incredibly successful turnaround of IWC, he’s an industry veteran who isn’t afraid to rock the boat in order to scale the business.

Two years ago, he took the helm of Breitling and has championed a series of boldfaced measures including paring down collections, introducing new ones, consolidating the retail networks, pushing forward e-commerce strategies, rebranding the boutiques and undertaking an image-building exercise which has seen the creations of ‘Squads’ that include the likes of Brad Pitt, Charlize Theron and Adam Driver fronting its campaigns.

At the recent Breitling Summit in Dubai, Kern elaborated on some of those measures he has put into place – a strategy that is paying off. The new Breitling Navitimer Ref. 806 1959 Re-Edition limited to 1,959 pieces introduced earlier this year, for example, was sold out in a few months. The Breitling Superocean IRONMAN Limited Edition sold out even quicker – within a week of its launch via e-commerce only.

The Air segment of its watches has seen some popular models come to market this year. A highlight during the Summit was the introduction of the new Aviator 8 Mosquito, a reference to the De Havilland Mosquito, a lightweight fighter jet from the Forties that was made out of wood. The Aviator 8 Mosquito timepiece is fitted with Breitling’s Manufacture Calibre 01 in-house chronograph movement. Closer to home, Breitling also partnered with Etihad Airways this year on an Aviator 8 Limited Edition timepiece that featured numerals in Arabic script. Following the summit, and on the eve of Dubai Watch Week last month, Breitling also announced a new Avenger model in partnership with UAE aerobatics demonstration team Fursan Al Emarat that is limited to 250 pieces.

At the Dubai Summit, Breitling’s youngest ambassador, 19-year-old Luke Bannister, a seven-time world drone champion who won his first world drone championship when he was just 15, made an appearance. Interestingly, Bannister is a ‘Squad’ member and shares a frame with astronaut Scott Kelly and female fighter pilot Rocío González Torres. Kern is signalling that his brand is ready to appeal to a wide range of enthusiasts.

At the summit, Breitling also showcased its new ECONYL yarn NATO strap collection made in collaboration with Outerknown, the sustainable apparel brand founded by Kelly Slater, also a Breitling squad member.

In an exclusive interview on the sidelines of the Dubai Summit, Georges Kern tells Gulf Business of his plans for Breitling in 2020, and beyond.

It’s been an intense year of consolidating collections, rebranding boutiques, introducing new squad members – what were your focus areas?
I always say, ‘Strategy with the wrong implementation is useless.’ We developed a strategy 18-20 months ago called ‘modern retro’ and you see it not only in the boutiques, but in our products and the Squad campaigns. We know what works, and now it’s all about professional implementation and a search for excellence.

It’s interesting that in the Aviation Pioneer Squad you have a space veteran like Scott Kelly, a very young drone pilot Luke Bannister and female fighter pilot Rocío González Torres sharing a frame. What is the messaging behind this?
I think the strength of a squad is that you can tell a holistic story and address a broader audience. Having Scott Kelly, or Luke Bannister or the female fighter pilot alone brings across a totally different message as opposed to having all three of them together. What we want to do with this squad is talk about pioneers in the field of aviation, about the dream to push limits, to go into space and about our link with John Carpenter wearing the first Swiss wrist chronograph in space. On the other side, we have a 19-year-old youngster Bannister within the squad who is seven-time world champion who along with our female fighter pilot presents a 360° view of what aviation was, is and will be in the future. Google recently tested a mega drone transport plane which will be the taxi in the future so that’s not science fiction anymore. This Aviation Pioneers Squad covers a broad spectrum of aviation.

What are the mistakes that you avoided making as CEO leading the Breitling brand turnaround?
In the last 10-20 years, the brand was very loud and very masculine, but still very successful because you have clients for this kind of segment. And then there’s also its heritage from the Thirties through to the Fifties and Sixties when Breitling was super strong – also in terms of design. We have a new clientele that we’ve gained with the Premier, the Aviator 8 or the more subtle design of the Avenger. So how do we balance our brand message, keeping our existing customers and gaining new ones and also generating that transformation in a rhythm that makes it digestible for the retailers who are stocking our products? We had to make sure to get that balance right.

Could you give us a business overview of Breitling for 2019?
We’ve grown in strong double digits. We’ve integrated third party distributors. Our organic sell-out growth is in very strong double digits. We are considered as the new kid on the block even though we have a rich history, but there’s a startup feeling because we have a much less conservative approach compared to the more traditional brands in the market and that has a huge impact.

Are there any key markets that you are focusing on?
In China we should have triple-digit growth for two or three years to reach the level we should be at in such a big market. We have 25 boutiques in China though we need 100-125 boutiques. But it’s physically impossible to do it all at once, it will take time. In the traditional markets where Breitling was always strong, like the UK or US, Breitling is also growing strongly. That was my biggest fear because with the changes we would lose customers but we’re actually gaining customers.

In particular, the Avenger is critical because the Avenger is the number 1 product in the UK and the US and you have a big fan base around these watches. It was a critical exercise to redo that line, and the response in LA and social media has been very positive.

The Superocean Ironman Edition sold out in a week online. How is Breitling pushing its e-commerce strategy?
We’ve been launching e-commerce in China, UK, US, and Switzerland. Other European countries are to follow. What people have to realize is that 70 per cent of the purchase decision process is made online. It doesn’t mean 70 per cent of people are buying online. So people still want the physical experience. There has been a very interesting study by McKinsey stating that millennials in China still want flagship boutiques where they can experience the brand in an analogue way. Our e-commerce today represents 5-6 per cent and at a certain stage will be 10 per cent. But people will still want physical touchpoints to buy the product.

And this year there are new variants of the ECONYL straps made from recycled fishing nets?
Pollution in the oceans is one of the most dramatic issues we are facing because sooner or later everything is going into our food chain by way of the fish eating plastic.

We want to turn Breitling into a carbon-neutral and plastic-free company. I think you can reach 60-80 per cent very quickly. But what people don’t understand is that it’s the last 20 per cent that is difficult. But I would love everyone to at least aim for this 60 to 80 per cent.

How important is the Middle East market to Breitling?
We’re growing in strong double digits in the Middle East. The royal families in many countries, especially here in Dubai, wear our products because many of them are pilots themselves. We also collaborated with Etihad on a timepiece that I’m very happy about. We’ve renovated our boutiques at the Mall of Emirates and have a new boutique at the Dubai Mall Fashion Avenue. We’ve also renovated our boutique in Kuwait and are reopening new boutiques in Saudi Arabia. We have a subsidiary in Dubai and a dedicated team in Dubai that facilitates what we’re doing in the region.

Will Breitling also engage with the auction market?
We haven’t really addressed the auction house market yet but we will do so. Breitling has beautiful products like the Premier, which is a product from the Forties. In the vintage watch market, it is substantially gaining in value.

What’s the most common misconception of the brand that you would like to dispel?
That we only do big aviation watches – which is completely untrue. We’ve launched two elegant lines: the Premier and the Aviator 8, and within the relaunched Avenger collection, we now have 43mm models. Furthermore, one of our best-selling lines is the Superocean Heritage, which is a diving watch. My dream with Breitling is that any potential customer who sees the collection as a whole, be it the Avenger, Superocean, Superocean Heritage or Navitimer, always finds a product they love from a technical point of view as well as from an aesthetic point of view or even a storytelling point of view. That’s the objective.

What are the biggest threats to Breitling in 2020?
The only threats are those beyond our control like Brexit, the situation in Hong Kong and trade wars. In the luxury industry, you need people to be in a positive mood. Even if people have money, but there are clouds in the sky, they will not spend money on a luxury car or a watch. We need a feel-good environment and that’s something I cannot influence. On the other hand, we are one of the only brands growing at this pace even if the macroeconomic situation is difficult.

What is your personal mandate for 2020?
We’ve changed the direction of the ship, now the aim is to gain speed. It’s about excellence, implementation, fine-tuning and getting better. It’s always about constant improvements.