On a quick trip to New York from Lengnau, Switzerland, Rado’s home base, Matthias Breschan, the company’s chief executive officer, caught up with WWD to talk about the niche that is affordable luxury in the watch industry.
This story first appeared in the November 14, 2011 issue of WWD. Subscribe Today.
WWD: What sets Rado apart from the competition?
M.B.: Rado is a very young brand compared with many of the other brands in the watch industry. It has only existed since 1957. From the beginning, Rado has been opposite from the other brands. While most of the watch brands focused on innovative movements — Rado always remained focused on having innovative designs and using new, high-tech materials. Rado has had a huge amount of success in this. It’s been 25 years since we’ve launched the ceramic watch.
WWD: What was Rado’s inspiration behind using ceramic?
M.B.: Well, first of all, it’s a nice material to wear on the skin because the temperature of the material adapts to your body temperature. Secondly, it’s hypoallergenic, and thirdly, it’s superlight. The most important part of any watch is the movement and the case. Ours is Swiss made, but we wanted to use innovation in terms of material. A Rado watch that you bought several years ago still looks the same today. It doesn’t age. It really lasts over time.
WWD: How has Rado’s business grown over the last five years?
M.B.: Rado has always shown growth even during the economic crisis. We don’t give out sales figures, but we’ve had double-digit growth in 2011.
WWD: Why do you think that is? Is any of it driven by Rado’s affordable price?
M.B.: Five years ago, everyone in the watch industry wanted to become luxury, but the only thing those brands changed was their price. The quality of the product didn’t increase. Of course, as soon as the economy worsened, those brands suffered. Rado has an outstanding ratio of quality to price. We always stayed in our price segment of $1,000 to $3,000 and this never changes. I’m not saying that a brand can never upgrade, but when it does upgrade, it can’t only change its price. We have stayed in our price segment, but we continue to provide customers with an outstanding state-of-the-art product for our price range.
WWD: Talk a bit about how the fluctuations in the Swiss franc have impacted your business.
M.B.: The Swiss franc today is at an extremely high level. I think it’s very important now to stay calm and not increase prices. The Swiss franc will go down later in the year, and so we can’t out-price ourselves in a situation where the Swiss franc is strong. When you think about the U.S. market, consumers don’t have more money. We are really extremely prudent to stay in our price segment. We even compromise when we take lower margins into account in order to maintain our product in the given price range. We have invested a lot in our manufacturing facilities to increase our productivity, in order to maintain the price level without sacrificing our margins.
WWD: What’s your favorite thing to do in New York when you visit?
M.B.: What I love about New York is that it’s a city that never stops innovating. It is constantly changing and trying new things in order to build upon its existing success. That’s something we try to do also with our products.
WWD: I thought you were going to talk about your favorite club or restaurant…
M.B.: (Hesitates, then laughs). In the clubs they innovate, too. Every time I come to New York there’s a new hot spot, a new hotel, a new restaurant. That’s what I love about New York.