Georges Kern: Ahead of his time

m&k: Georges Kern, eThere are people today who consider art, culture, and luxury to be dispensable. I assume you disagree?

Georges Kern: It’s not just me—consumers, too, apparently. After all, we know that consumption of luxury goods was extremely high immediately after the lockdowns. We can see how quickly the Chinese market has recovered. We’ve all noticed how phenomenally well Christmas sales performed after the lockdown. The art market is booming; I know many art dealers who have never sold as much as they have this year! A crisis like this fuels the desire for things that enhance the quality of life, for beautiful products. Perhaps people also have more money to spend on nice things because they haven’t gone on vacation.

 

So consumer behavior hasn't changed?

I think what has certainly changed in some respects is that consumption has become less superficial. Twenty-five percent of food products are now organic; people want to buy higher-quality items. In that sense, I would say there is a trend toward high-quality products, a high-quality lifestyle, and enjoyment.

«A crisis like this fuels the desire for things that make life worth living—for beautiful products.»

 

On the topic of the COVID-19 crisis: In an interview last year, you commented on how some governments have handled the pandemic. You were critical of lockdowns as a one-size-fits-all measure. Do you feel that some politicians lack entrepreneurial agility and ingenuity?

There are examples of political leaders who are extremely creative—Tübingen Mayor Boris Palmer, for instance, who is searching for new solutions. But aside from that, it is alarming how parts of the media, academia, and the political sphere—especially in Europe—have failed during this crisis. At first, the uncertainty surrounding an unknown threat may have justified lockdowns and restrictions. But since then, basically everything that could go wrong has gone wrong. Starting with the procurement of masks, the digitization of schools, and vaccinations… it’s dramatic.

«There is a trend toward high-quality products and indulgence.»

 

While your boutiques here had to close several times, they were able to remain open for the most part in Asia.

Thank goodness there were countries that were able to get the situation under control relatively quickly. That helped the entire industry find some balance in terms of sales. Being able to continue doing business there was our saving grace. It’s like an airplane that compensates for the failure of one engine with another.

You were among the first in your industry to embrace e-commerce in the premium segment. Did that also benefit you during the pandemic?

We have a global presence and pursue an omnichannel strategy. We’ve made significant strides in digital transformation, particularly in digital marketing, the introduction of the blockchain-based digital passport… and, of course, in presenting our products via webcasts and online sales. When it comes to the latter, however, we have to remain realistic: e-commerce is challenging for products in this price category. Even though our sales in this segment tripled last year, the brand experience in the boutiques remains essential. People want to immerse themselves in the brand’s worlds and experience them firsthand. That’s why our boutiques remain a key pillar of our communication and distribution strategy. We’ve just opened three stores in Germany—in Stuttgart, Hamburg, and Cologne—with more to follow.

«Boutiques remain an important pillar of our distribution strategy.»

 

In doing so, you’re focusing on «the courage to establish a local presence»—so you’re not just targeting megacities?

That's right. I believe that mobility will be reduced in the future, despite the easing of restrictions. For example, I think people are getting used to Zoom calls. Those trips—which, unfortunately, I’ve also taken—where you fly to London in the morning, then spend an hour traveling into the city center, attend meetings, and fly back to Switzerland at 10 p.m.—I won’t be doing that anymore. At the same time, tourism-related travel will decline: No one knows, for example, when Chinese visitors will return to Europe. But they’ve brought us excellent revenue in our own country. In that respect, whether in Europe or Asia, we want to be a local brand—not a «tourist brand.».

 

So Breitling's strategy is to engage people emotionally online, and then direct them to the brand experience and a purchase at the hyperlocal store?

Exactly. We know from studies that 70 percent of the decision-making process takes place digitally. Customers mainly gather information online. Online, you have neutral sources of information like blogs where people can exchange ideas. You have a multidimensional experience with videos, YouTube, and the like. And we have our own Summit webcasts. The actual purchase, on the other hand, is a completely different story. It still largely takes place in person at the store.

 

Since you brought up webcasts: Are international trade shows, as a catalyst for innovation, finally a thing of the past?

Yes. You can and must continue to meet with journalists and retailers in their respective countries. Consumers themselves don’t need trade shows. After all, not everyone who wants to buy a new watch can fly to Geneva (laughs). Even before COVID, we were holding local roadshows in Asia, Europe, and the U.S., which we subsequently digitized as webcasts during the pandemic. From that perspective, trade shows were already a thing of the past before COVID—and they still are. Unless, at some point, someone were to organize a trade show designed as a cultural event—with key questions like: «What exactly is an analog watch?» Or: «How does the industry work?»—one that focuses on genuine exchange, not just sales.

«There are very few brands that are as diverse as Breitling—even from a historical perspective.»

Breitling was able to generate a significant amount of activity during the pandemic. For example, you launched «Breitling Select,» a platform that allows customers to try out the brand’s classic models for a small fee. Is this how you’re addressing the «commitment issues» that «Generation Tinder» faces even when buying watches?

No, there are other reasons for that. Our goal is to reach customers who need more time to choose a watch. Or those who don’t feel the need to buy an expensive watch, even though they could afford one. In other words, we want to reach a clientele that isn’t made up of the typical «here-and-now consumers,» but rather people who enjoy trying out different things. Similar “Select” concepts also exist at Porsche and Ralph Lauren; this shows that a massive shift is currently taking place. And of course, we want to respond to this change!

 

Another new development: the newly launched watch line. It pays homage to the 1940s and is different from your previous products. Why are you going back to that era?

Because we can. It’s as simple as that (laughs). The point is: there are very few brands that are as diverse as Breitling—even from a historical perspective. For example, we launched our «Endurance Pro» last year. It’s a very lightweight «athleisure» watch, colorful and designed primarily for athletes. The Triathlon Squad is associated with this product. We have professional pilot’s watches, and now we’re introducing classic watches inspired by the 1940s. We’re a generalist, comparable to an automaker: we have an SUV, we have a convertible, and we have a sedan. We want to be—and can be—a generalist in the watch industry within our segment.

You’re making your brand accessible through «Breitling Select,» e-commerce, and a fresh aesthetic. Is «accessible luxury» the order of the day?

You’ve identified that very well. We define the luxury we offer as «casual luxury,» «sustainable luxury,» and «inclusive luxury.» And what you’re referring to is «inclusive luxury.» Of course, we’re exclusive in terms of distribution and price, but we interact with customers in an approachable way. The sports Breitling is associated with aren’t Formula 1, golf, or tennis, but surfing and triathlon. Our webcasts are very laid-back, not so formal—I don’t wear a tie (laughs). Or just visit our boutiques: you’ll want to live there! And that’s the kind of accessibility we want to create. We want to be the cool and laid-back alternative to the very traditional, conventional brands.

 

How did you actually come up with the idea of having your brand ambassadors appear in groups of three?

Go out on the street and ask people who the brand ambassador is for Brand A, B, or C. People hardly know and can’t put a name to it. At Breitling, however, our Squads already set us apart visually from brands that work with individual brand ambassadors. And the way we convey this aesthetically—very cool, very laid-back, in our «Modern Retro» style—also aligns with that desire for differentiation. Besides, teams are always stronger than individuals: If you have a campaign featuring men, women, and people of different nationalities, you have a much broader story to tell. Or take our Cinema Squad with Brad Pitt, Charlize Theron, and Adam Driver—and Daniel Wu in China—where we have the opportunity to develop truly amazing narratives.

 

How do you get Brad Pitt to become an ambassador for your brand?

I’ve been in the industry for a very long time and know Brad Pitt’s manager. He’s a friend of mine. For about twenty years, I’d tell him every now and then, «Someday I’ll call you about Brad!» (laughs). So that’s what I did; it was settled quickly. But that takes a lot of trust. Celebrities like Brad Pitt are extremely discerning. They don’t need Breitling’s endorsement. They make good money from their movies or other endeavors, so you couldn’t entice them with fees. What’s much more important to them is that, when collaborating with a company, the results are absolutely perfect and live up to the image they want to project as stars.

«By the end of 2020, it was clear that independent brands had significantly outperformed the major groups.»

 

Your early career took place within a global corporation; as a co-owner of Breitling, you are now an entrepreneur in your own right. Have you ever regretted that decision during the pandemic?

Do I regret it? Not at all. But the first one or two weeks of the lockdown weren’t easy. Of course, you have to consider every operational aspect; after all, we didn’t know anything about the situation back then. Will this whole thing last two weeks, six months—what does that mean for our business? How do I manage production, the employees, and so on? I’ve been through many crises over the past 25 years—the financial crisis, the SARS crisis in Asia… but this was a very complex time that required a lot of improvisation.

 

Did you ever have any doubts about your role as an entrepreneur?

You’re far too immersed in day-to-day operations to be worrying about things like that. Your focus is on making quick decisions, instilling confidence, and ensuring liquidity. Those are the concerns that hotel and restaurant operators have to grapple with today as well. As I said, because we have an international presence, we were able to navigate the crisis a bit better. Restrictions in China were lifted relatively quickly, so we all breathed a sigh of relief. And in the U.S., business continued to go well, except in New York, Las Vegas, and Los Angeles. By the end of 2020, it was clear that independent brands had significantly outperformed the chains. And why? Because we generally have lower costs and can make decisions more quickly, flexibly, and proactively.

 

You can see that, for example, at the launch of the new collection.

And that brings us back to your first question. People still want to enjoy the finer things in life. That’s not going to change; people are who they are. They’re pleasure-seekers (laughs). Because of that confidence, we never fell into a state of shock.

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Georges core He studied political science in Strasbourg and business administration at the University of St. Gallen. In 2000, he joined the Richemont Group and played a key role in the integration of the brands A. Lange & Söhne, Jaeger-LeCoultre, and IWC. In 2002, at the age of 36, he became 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, but shortly thereafter became the new CEO of Breitling SA.