Swiss watch industryExclusive Interview with Georges Kern
When Georges Kern ("GK") became CEO of International Watch Company Schaffhausen in January 2002, he was the youngest CEO of any major company in the Swiss watch industry. He is both a dynamic leader and extraordinarily bright. In this exclusive interview, he discusses IWC's development, strategies and newest models.
Michael Friedberg ("MF"): You now have been CEO of IWC Schaffhausen for over two years. When you started, you told us that you were especially impressed with the company’s exceptional capacity in construction and its outstanding know-how. What do you consider IWC’s key accomplishments over these two years? Where and how has the company developed?
GK: We have continued developing that technical capacity, including adding new people. Today our technical department has 14 people working on new developments.
Besides that, we've developed new strengths. We have enhanced significantly our marketing. We've greatly increased distribution on a worldwide level with great brand-presidents. We've also developed our operations, which now are much better and with better management controls in place.
As a result, we've increased our old and added new strengths.
MF: I’ve heard that IWC’s sales have been strong, especially given generally difficult market conditions.
GK: We have gained market-share worldwide and we've out-performed our markets. IWC is still a niche brand, but in its niche we are doing very well.
MF: For SIHH, this year IWC has introduced many new models. You’ve created a whole new line –the Aquatimers— and you’ve significantly enhanced the best-selling Portuguese models. There's also new Da Vinci and Portofino models.
Having this many new models is extraordinary. Can you explain a little about the thinking underlying so many new products?
GK: There are different levels of activities, and we have had to work on product care.
First, there are aesthetics, where certain models were redesigned, such as increasing the size of certain models. Key examples are the Portofino and Da Vinci.
The second level involves us continuing to clearly position our product lines. Examples are the Flieger and Aquatimer lines, where we are making clear statements and with clear functions. At the same time, there is a parallel development with our horological specialties. Developing special complications is also our aim.
MF: Despite this diversity of new offerings, it seems there’s a recurrent thread. They all reflect great engineering. There’s innovative case engineering on the Aquatimers, new complications and complex movements. Does IWC intend to primarily convey the image that it is a “technical” watch company?
GK: Definitely. Engineering is one of our key values and we believe in technique. When we don't work on movements, we work on case technique. At any price point, it is our intent to add value.
Examples are the turning bezel and the push buttons on the new Aquatimer models. In all areas, we want to emphasize that we have added value through technique.
MF: On the Aquatimers, people are saying that the affiliation with the Cousteau Society was a stroke of genius. Would you tell us about how the affiliation came about?
GK: With the Cousteau Society, there are rational reasons. This was the first time that the Cousteau Society has had a corporate sponsor. They are really premier on the water side and on technical development. They're in the water and they are divers. It makes every sense in the world for us to be affiliated with such a diving company.
Besides, there is a more emotional foundation to the affiliation. The Cousteau team is fantastic. We like each other. We like their philosophy to show beauty and say, "this is what we have to protect". We also believe in that and have the same approach to the subject.
MF: Are the Aquatimers aimed at a particular market? I know several non-divers who want to buy one, too.
GK: Yes, of course. It is an outdoor watch. Like our pilot's watches, probably 95% of the buyers won't be divers.
We have a tough titanium Aquatimer model. We also have an elegant, steel sports model, with applied dials. One could really even wear that Aquatimer watch with a suit. But even that watch has technical features, such as the turning bezel and the ability to withstand depths. But yes, most of the time these watches won't be under water.
MF: I envision demand for the Aquatimers models will significantly exceed supply. Has IWC been taking steps to increase production?
GK: At IWC, our limit is product. That limit is the number of watches that we can produce. Increasing production is a steady ongoing process, and we can't do it over-night.
For the new Aquatimers, we must manufacture the cases ourselves. They are complicated and no one in the industry can help us. Because of the limitations on such production, there is a natural cap. We have to live with that.
MF: At the same time, IWC is producing three new Portuguese models –the Portuguese Automatic, the Tourbillon Mystère and also the incredible Minute Repeater Squellette. The first two are based on the Calibre 5000 movement. Back in 2002, you told us that IWC didn’t have enough watchmakers for such a special movement. Has the capacity for producing this in-house movement increased?
GK: We have slightly increased production of watches using this special movement. We now have three watches using the caliber 5000 base, aside from the Tourbillon. These are the Big Pilots Watch, the Portuguese Perpetual and now the Portuguese Automatic.
We've been able to shift four or five more watchmakers to produce these movements. But we are still talking about a very small number of pieces. We are not talking about thousands and thousands. There is, again, a limit on what we can produce
MF: IWC appears to appeal to a broad market –from those interested in totally new complications, like the Split Minute Chronograph, to the sports enthusiast, to the connoisseur who prefers tourbillons, repeaters and skeleton watches. This also encompasses a broad price spectrum. Is there a typical IWC customer?
GK: We have always applied ourselves to different markets. We have had, for years now, tourbillons, grand complications, and repeaters. One real strength is having credibility, regardless whether the watch is a $2,000 one or $200,000. We are fortunate to have acceptance at all price levels.
Even our entry level ones have you feel "Probus Scafusia". When you look at any of our watches, you can say "that's typical IWC". For all of our models, no one doubts the technical value.
MF: It seems to me that IWC has conquered the air with its flight watches and now the sea with its diving watches. Now will the company take steps to conquer land as well?
GK: Why not? (smiling)
MF: That's a great answer. I also sincerely thank you, both for your time here and for your support of IWC collectors throughout the world. We look forward to the future.