The mood may have turned sour this year at many top Swiss watchmakers, as China has slipped into the doldrums. But at Breitling, the brand familiar for its chunky aviator timepieces promoted by avid flier John Travolta, the vibes are surprisingly good.
This story first appeared in the November 4, 2015 issue of WWD. Subscribe Today.
Sales this year should comfortably exceed 130,000 units — well above the 100,000 or so of the complex, multidial watches traditionally made each year, leading Jean-Paul Girardin, the company’s vice president and de facto chief executive officer of the group, to be “quite positive about 2015.”
The upturn stems from progressive investment in new capacity at the group’s two sites in Switzerland after the landmark decision almost a decade ago to develop in-house watch movements and other key parts, rather than outsourcing. In-house movement capacity has now reached about 50,000 a year, putting it almost on a par with those still bought from outsiders.
With so much time and money spent on boosting production capacity, Breitling’s focus has turned to improving customer awareness and distribution, Girardin stressed.
A Breitling employee since 1992 who has headed operations since 1999, he scotches almost perpetual rumors the house might be for sale. Owned by the publicity-shy Schneider family, the 131-year-old company has avoided the industry trend of ever more independent watchmakers being snapped up by the world’s leading luxury goods groups.
“If you want to sell a brand, you don’t invest a fortune on factories and new products. We want to stay in the pilot’s seat,” said Girardin. He acknowledged the dwindling number of independents and noted Breitling has itself thought about acquisitions. “But at the moment, we’ve got enough on our plates. We have good products and a good strategy. But we must fight hard in the market. The competition is very strong, and very active.”
Obvious rivals making technical and sports watches include Omega, owned by Swatch Group; IWC, part of Richemont, and Rolex, still independent but much bigger than Breitling. All have deep pockets.
But at least one former Breitling weakness has turned into an advantage. The brand’s relative underexposure to Hong Kong and Mainland China mean it has suffered less than many others from the plunge in sales resulting from the slowing Chinese economy and Beijing’s crackdown on corruption and gift-giving.
Exports of Swiss watches in the nine months from January to September fell 2 percent year- over-year — mainly due to the China and Hong Kong dive. Exports in September alone dropped almost 8 percent, compared with 2014. “Obviously, we’re happy we’re not so dependent on China. It’s not even a top-10 market for us,” Girardin said. “We were never particularly strong in China because we never had enough production capacity. And Chinese buyers traditionally preferred classic, slim watches.”
Breitling’s chunky, technical timepieces, with their levers and toggles, are more of an acquired taste — albeit one he hopes might be appreciated more by Chinese buyers in time, especially now that Breitling’s capacity constraints have eased.
The U.S., by contrast, has been cruising. Long Breitling’s biggest single market, sales have been “especially strong” this year, thanks to a stronger economy and more confident consumers, along with some one-offs.
Foremost has been the buzz from the presence at American air shows of Breitling’s aerobatics team — the world’s only civilian squad flying jets. Based in France, the team normally sticks to Europe. But this year, it spent the entire season Stateside. “That brought a lot of attention,” he said.
Second was the certification in June by the Federal Communications Commission of Breitling’s Emergency watch range. Building on the brand’s aviation tradition, this specialized line can log an owner’s location via satellite links and use the international emergency radio frequency to send a distress message.
The Emergency, launched in 2013, was arguably Breitling’s first “connected” watch. But its real foray into smartwatches will emerge with the launch in New York on Dec. 16 of the new Exospace model.
The Exospace will retail for about 7,500 to 8,000 Swiss francs ($7,600 to $8,100) in Switzerland — about 1,000 francs ($1,015) more than for one of the brand’s similar, non-connected models. Initial sales forecasts are relatively modest at 3,000 to 4,000 units a year.
The new product is designed to work closely with a smartphone, using a special app for ease of function and legibility. While typical for a Breitling offering various chronograph and multitime-zone functions, the Exospace can be programmed directly from a smartphone via Bluetooth, enjoying about four months’ battery life under normal use and easily rechargeable via a USB cable.
Some critics have questioned just how “smart” it really is, considering the connectivity is largely limited to easing the use of functions and improving legibility. That differs significantly from the multifunctional Apple watch.
But Girardin hinted the Exospace could be the first of a family of increasingly connected Breitlings, with future models offering features like gyroscopes, GPS navigation and pressure and acceleration sensors — perhaps enough to keep even a dedicated pilot like Travolta happy.
Bretiling B55 Connected, the concept piece, on which the Breitling Exospace B55 is based.