Standing before a podium, in a gilded room in the French Embassy here last week, Juan-Carlos Torres, chief executive officer of Vacheron Constantin, pondered the unique position of his brand.
This story first appeared in the July 23, 2012 issue of WWD. Subscribe Today.
Since he took over as ceo in 2005, Torres has not only pushed to expand the brand’s physical presence but also the position it holds in the minds of consumers.
Introducing Brigitte Lefèvre, director of the Paris Opera Ballet, Torres spoke about the natural link of “movement” instrumental to timekeeping and dance, in a speech meant to fete the return of the Paris-based group to the U.S. after a decadelong absence.
A longtime sponsor, Vacheron hopes that the move brings awareness to the French group and the Swiss firm.
“It’s not enough to be the oldest manufacturer in the world,” Torres told WWD after the event, explaining the importance of the American consumer. “We want to have a real push here.”
The Swiss watchmaker, which opened its first U.S. boutique on Madison Avenue in New York in September, is ramping up its U.S. expansion efforts.
Next month, it will unveil a boutique in Las Vegas, followed by a store in Los Angeles’ South Coast Plaza in November. Rodeo Drive will get a store early next year, as will Miami in 2014.
“If you ask what’s the best brand, in America, everyone will say Patek Philippe,” Torres said, noting that in China, Vacheron is front of mind even if its sales are lower than competitors such as Patek and Rolex. “To be number one is not about the turnover,” he said. “The idea is to become the alternative to Patek in America.”
The ceo explained that he “doesn’t want to kill the competition,” but instead “grow with it.” In slightly more concrete terms, Torres said he hopes to double American sales in less than three years.
With 257 years under Vacheron’s belt, the question is why the Richemont Group-owned brand is pushing to expand here now.
The ceo offered that roughly 15 percent of the firm’s sales come from Americans, which is disproportionate considering it has only one store in the U.S. Like many other watch brands, Vacheron sells the majority of its timepieces here through retailers such as Tourneau.
But like most luxe brands, Vacheron believes that China is a major opportunity. With upward of 55 percent of its revenue coming from Chinese consumers, Vacheron remains committed to attracting Asian shoppers. Torres declined to provide Vacheron’s annual revenues.
Last week the brand opened its first store in Taiwan, and it plans to open a second store in Hong Kong in October, as well as its first stores in Paris in December and London early next year.
Moving into Western Europe, where Vacheron has only two stores, both of which are in its hometown of Geneva, is a strategic way to attract Chinese tourists. Due to favorable exchange rates, Torres said more and more Chinese tourists are buying watches from retailers in Europe, like Tourneau, Wempe and Cellini.
Nonetheless, with luxury brands such as Burberry and Tiffany & Co. citing a slowdown in China, and houses such as Richemont, LVMH and PPR curbing their expansion in the region, Vacheron’s growth plan may seem a tad optimistic. Those fears are backed up by recent news out of China that its gross domestic product has decelerated to 7.6 percent in the second quarter, its slowest growth rate since the first quarter of 2009, when it registered 6.6 percent growth.
“Where there are Chinese, we are strong,” Torres said, brushing off the idea that a slowdown would materially impact sales.
Part of the ceo’s reasoning has to do with the fact that Vacheron’s entry price point is $20,000, and with the majority of its wares reaching well into the six figures, the brand’s clients are not as affected by minor fluctuations in the economy.
“We will easily double our turnover here,” Torres said, returning his focus to the U.S. market. “Maybe one day we will be number one in terms of turnover, but in terms of respect, my target is that Americans understand that Vacheron Constantin is unique.”