WatchPro grabbed five minutes with Mr Benoît Lecigne, Hublot’s brand director for France, Belgium, Luxembourg, the United Kingdom, Ireland and Eastern Europe, to discuss the current plight of the Swiss watch industry, the impact of Brexit, and Hublot’s own fortunes.
WP: How has Brexit affected Hublot’s business both here in the UK and in Europe?
BL: Without considering Brexit, Hublot’s business has dramatically increased in the United Kingdom over the past few months. We have strengthened business relationships with our key partners, we have encouraged the development of the Classic Fusion Collection to demonstrate that everyone could find his Hublot and we have eventually organised many marketing activations to broadcast the brand motto, being “the First, Unique or Totally Different”.
This favourable trend was supported by the shadow of Brexit that has caused, since December 2015, the pound to weaken against the other principal worldwide currencies. And of course, Brexit was “the icing on the cake” as, after the declaration of the result, the pound fell to its lowest level since 1985: watches suddenly became even cheaper to overseas customers and every foreigner had the feeling to benefit from good bargains while doing his shopping in the United Kingdom!
Nevertheless, and knowing the current volatility of all the currencies, I would not say that Brexit has affected Hublot’s business in Europe. Other geopolitical variables, such as terrorist attacks and the current feeling of insecurity, jeopardise more severely the business in Europe.
WP: To what extent do you think these effects will be permanent?
BL: If the prices for luxury watches have remained static in the United Kingdom for months, I am convinced that rises in prices are round the corner for two reasons: firstly, most luxury watch brands have their headquarters in Switzerland and consequently they import the watches in the United Kingdom; the fall of the pound results in a decrease of the margin and therefore brands are expecting to increase prices to compensate. Moreover, one of the biggest challenges for brands is to maintain price parity across key markets; prompt action should be taken very soon to balance this decrease of the national English currency.
Consequently, if the value of the pound stabilizes at around 1.20 euros, all the luxury watch brands will increase their prices in the long run. The question is now more the percentage of increase.
That being said, I am not concerned at all by the development of Hublot in the United Kingdom with or without any price increase – the brand still has great potential for development and, knowing its worldwide dynamism and innovation, it can still win much market share. The target is thus to double the turnover in three years.
WP: What’s been the big focus for Hublot this year, both from a design point of view and a business strategy perspective?
BL: Generally speaking, 2016 is a difficult year for luxury watch exports. Economic growth decrease coupled with anti-corruption measures in China, the drop in oil prices, the general instability of currencies, terrorist attacks along with global political and economic volatilities, have all affected the luxury watch business.
And while other brands have been overcautious this year, releasing expected and classical novelties at lower price points, Hublot has differentiated itself by launching truly innovative watches. Firstly, the Big Bang Unico Sapphire models – Sapphire and All Black Sapphire – which have been cut straight from sapphire, without losing sapphire’s unique and rare character; but also the Classic Fusion Berluti models – Berluti Scritto and Berluti All Black – with their leather dial and which come with their impressive leather box that includes leather care tools and a watch travel pouch. And the Big Bang Meca-10 – Titanium and All Black – models which represent the perfect mix between atypical architecture with Meccano-type design and an audacious in-house movement.
If the products are one of the pillars of development of a brand, the second one is the distribution network – Hublot’s strategy is to focus on its main business partners who strongly believe in the brand and consequently to close the points of sale which do not invest in the brand and do not grant it adequate stock and visibility.
WP: How hard is it to remain relevant and distinctive in the eyes of watch consumers?
BL: It is always in times of economic crisis that some brands win more market share. But that also means that the brand has to constantly question its strategy and its products. And this is exactly what Hublot has been doing since the launch of its iconic Big Bang Collection by Mr Jean-Claude Biver in 2005. Whatever the global context is, Hublot constantly invests, Hublot constantly innovates and Hublot constantly surprises.
How is the brand getting to this result? Because Hublot is a brand close to its customers. Whereas other brands have installed intentionally a distance with their final customers, at Hublot we have launched many tools and we create many occasions to meet our customers and to understand their feelings, worries and wishes.
To put it a nutshell, it is really hard to remain relevant and distinctive in the eyes of watch consumers but if the brand encourages interactions, the customers themselves will help the brand meet this challenge.
WP: What are the main ways in which the watch market is evolving, and how is Hublot adapting to these changes?
BL: Hublot’s success does not depend on its ability to follow trends but, on the contrary, on its ability to set the future trends!
Knowing the success of connected watches and the downturn of some classical watch brands, the market is evolving towards differentiation; the brands which will meet the greatest success will be the ones that will offer to customers something different. And no doubt that Hublot will be one of these watch brands.