Luxury swiss watchmakers Jaeger-LeCoultre are expanding their flagship boutique in Lebanon — owned by Atamian. Executive sat down with Renaud Pretet, regional brand director for Jaeger-LeCoultre in the Middle East, India, Turkey and Greece, to discuss the regional market in these difficult economic times.
Where would you position Jaeger-LeCoultre within the watch industry?
It is hard to position Jaeger-LeCoultre because technically we can do everything and have created everything for the last 108 years, from the smallest spare parts to the highest complication. So we have the Reverso which is a watch that can start at 6,000 euros and we also have the highest complication in the world which is the Hybris Mechanica Grande Sonnerie which is a watch that is valued at 1.2 million euros. What is common and could be defined as the position of the brand is the spirit of invention and for this we have registered more patents than any other watch company, more than 400 patents.
Which category within your line sells the most per number?
Per number, technically, the Reverso is still the bestseller because the Reverso can be found at 6,000 euros. If you talk about turnover and not quantities, the high complication provides more of the base because it is much more expensive — more than 100,000 euros and up to 1 million euros — so few quantities are sold but the highest turnover is from them.
Are the demands for these complications more in the American market, the European market or the Asian market?
Historically the American market is very much geared toward sports watches. Europe is a good market —and I would add Lebanon here — you have very strong collectors or even a connoisseur who buys and knows about the technical content of the watch, not just its resale value. This is the market that is interesting for us — the connoisseurs — and you have a lot of those in any market influenced by Europe. For the last four years, we have had a push from China which is picking up very quickly on the collectibles segment and is learning fast about the technical aspects of the watch because historically China and Japan have an appreciation of fine arts and care about the ‘know how’ and craftsmanship. We consider Europe and China our strongest markets and our new markets are the Middle East and America.
But Lebanon has been in a crisis for the last few years. Not only did the international financial crisis affect it but so did the recent regional developments, especially in Syria, which has affected the Lebanese purchasing power. How is this reflected in the numbers and performance of LeCoultre in Beirut?
First of all, despite this crisis, we are extending the boutique so this should give you an indication of how the brand is performing and how confident we are in the brand. Secondly, in times of crisis, people who used to buy three or four watches would reduce their purchase to one or two credible watches with good resale value so within them you might have Jaeger-LeCoultre. So it does not affect [us] so much actually, not in Lebanon and not even at a worldwide level. If you look at the statistics from the Swiss industry, you will see that the high-end segment — even in times of crisis — is still performing very well.
Why is that?
Because the rich in times of crisis seize the opportunity and become even richer; it is the history of crisis, whether we like it or not. The brands that have been affected are the sports watches or the ‘bling bling’ showoff watches as the rich are requiring more discreet classical and traditional watches, and this has benefited us.
Is your flagship in Lebanon fully owned by LeCoultre or is it an agency?
Technically, you cannot own a shop if you don’t have a subsidiary in the country and Richmond [owners of LeCoultre] has no subsidiary anywhere in the country. Secondly, especially in a country and market that is new to us and where the relationship is very important, we work with partners who have a long relation with the clientele. It is owned by Atamian Boutiques [as an agency].
And Atamian is the only agency for LeCoultre in Lebanon?
We don’t have agency and we don’t give exclusivity to any country in the world. We have different retailers in different countries and in Lebanon, we have Cadrans as well.
Who is faring better in terms of sales?
Having a boutique provides a strong advantage simply because in a boutique, the retailer’s experience is something that tourists are looking at: people who are coming for a vacation look on the website for a boutique. So having a boutique in the Gold Souks attracts tourists. Talking about the local market, both partners have their own strengths in creating a relation with the local market.
So you are enlarging your flagship in Lebanon?
Yes, we are enlarging it by 10 [square] meters so far. We have 54 boutiques in the world, which is the biggest number of boutiques for a pure watchmaker, and there will be 100 boutiques globally within two years. We have a 500 square meter flagship in Paris, the biggest boutique of any watchmaker in Paris. Lebanon, with the size of 60 square meters (sqm), is still well behind the dimension of the brand that we should have for a proper boutique. We should have more than 100 sqm in Lebanon because our offer is very large and the boutique needs to reflect that.
During crisis, a lot of partners — and in order to keep up with the expectations of the brand — tend to give too many discounts or sometimes even dump watches on the market. How do you work with your partners in order for them not to resort to this?
First of all, we trust our partners because usually they are long-term partners. If they wanted to play these kinds of pricewar games, I don’t think it would be a good strategy for them. Secondly, there are a lot of products which are already in short supply at Jaeger-LeCoultre so there is no reason to discount when we cannot deliver most of the products.
Any final words?
Because of its positioning, Lebanon is a fantastic bridge between the Middle East and Europe. Everything we do in Lebanon has an impact on and facilitates the job we are doing in the United Arab Emirates, Saudi Arabia, Kuwait and Qatar because Lebanon is an image for those countries in terms of trendsetting. The great thing is that Jaeger-LeCoultre is already popular in Lebanon because of your understanding of fine watchmaking through your relation to Europe; you understand the brand and that helps with the job we are doing in the Middle East Peninsula to promote the brand.