LUXURY: Raymond Weil, the Swiss watchmaker, is unfazed by clients’ eroding wealth and hopes creativity will carry it through.
The current economic meltdown is bad news for luxury brands. As their clients see their wealth evaporate into thin air, their owners have braced themselves for a huge drop in sales — all except Olivier Bernheim. The president and CEO of Swiss watchmaker Raymond Weil says his price tags are just what people want in these difficult times.
“When they are worried, people go back to the basics. Raymond Weil is the answer to the crisis,” Bernheim told Business Standard on his umpteenth visit to India to launch the Nabucco Cuore Caldo limited edition. (Nabucco is an Italian opera and Cuore Caldo is Italian for warm heart.)
Priced at Rs 7,00,000 apiece, Raymond Weil will make 500 of these chunky mechanical watches. Each is crafted out of high-grade steel, titanium, carbon fibre and 18-carat pink gold. To coincide with the launch, Raymond Weil has come out with its first range of writing implements and accessories — a table pen cuff links. “This marks the entry of Raymond Weil into accessories,” says Bernheim.
Bernheim is the son-in-law of Raymond Weil, who started his line of Swiss watches way back in 1976, and is a total Indophile. Headquartered in Geneva, Raymond Weil’s factories are in the Swiss Jura, the area famous for its watches. All told, the company employs some 1,700 people.
At the moment, Bernheim is apprehensive if Christmas sales will sparkle this year in the US, his biggest market. But he expects Russia, China and India to make up for any shortfall. “You know which are the new powers of the world,” says he.
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No surprise then, the entire spectrum of Raymond Weil models is sold in India through 24 retailers: Parsifal, Tango, Shine, Don Giovanni Cosi Grande and Freelancer. The most sales happen in the Rs 35,000-80,000 bracket. Every timeRaymond Weil advertises in India, sales (to Indians) pick up all over the world.
Still, it is unlikely that Raymond Weil will come out with a range that is Indian in flavor. Indian buyers, Bernheim argues, look for international experience in a luxury brand. “And we will give them just that.”
Over the years, Bernheim has tried to focus on the young and upwardly mobile for sales. The average Raymond Weil buyer, according to Bernheim, is between 25 and 45 years of age, works for a professional services firm and is perhaps a new entrant to the world of luxury brands — just the kind of people who have seen their pay stubs cut in the current financial turmoil. Bernheim is still optimistic: “These people have to buy something. It’s in their blood. Raymond Weil is the best option.”
In the pecking order, Raymond Weil brand is positioned somewhere below Breitling and Omega, comparable with Baume & Mercier and Tag Heuer and slightly above Longines. This has caused its own set of headaches for Bernheim. Young people, including women, now prefer mechanical over quartz watches. While the latter are easy to make, the mechanical watches require a high degree of craftsmanship. And this has raised the cost of production for Raymond Weil, one of the last family-held Swiss watch brands.
In the men’s category, Bernheim says, over a third of his sales comprise mechanical watches, up from 5 per cent four years ago. (Raymond Weil does not make the movement for such watches but can improvise the ones it buys.) “It takes about four years to train a man. One-third of our people are there just to control what others have done,” says he.
In these tough times, Bernheim hopes what will keep him ahead of his rivals is creativity. “Work has started on the mechanical movements for 2010,” says he. It takes at least 18 months for a Swiss watch to move from the drawing board to the retail stores. For the moment, Bernheim has put his bets on Nabucco Cuore Caldo.