Market analysis in Morgan Stanley’s much-quoted annual report on the Swiss watch industry makes it clear that the likes of Jaeger-LeCoultre, Panerai and IWC are not just lagging behind rivals in the market but acting as a drag on Richemont’s performance overall, while the bulk of its forward momentum is provided by Cartier, Van Cleef & Arpels and Vacheron Constantin.
That makes the recent appointments involving those three brands of more than usual note.
Nicolas Bos, previously chief executive of Van Cleef & Arpels, has been promoted to the newly re-established role of chief executive officer for all of Richemont.
Louis Ferla, CEO of Vacheron Constantin, will succeed Cyrille Vigneron as head of Cartier from September 1.
Mr Vigneron is retiring after eight successful years at the helm of the Cartier, and will assume the position of chairman of Cartier Culture & Philanthropy while working with with Mr Ferla to ensure a smooth transition.
Catherine Rénier, currently head of Jaeger-LeCoultre, will succeed Nicolas Bos at Van Cleef & Arpels, also effective September 1.
Does it matter who is CEO of these brands?
Richemont gives its CEO’s wide but not complete autonomy in how they run the brands under their charge with the idea that the group is there to take care of support systems and let its stars lead in terms of what the brands produce and how they sell the brand and the products.
In practice, the group is an ever-present party to decisions even down to peer review of product decisions.
It’s this tendency, shared by LVMH and the Swatch Group, that’s often used to account for the gap in growth numbers that now exist between the groups and the big independents, the idea being that the laser-like focus towards a single purpose that the likes of Richard Mille can deploy sits in stark contrast to the unwieldy apparatus of a group.
I don’t quite buy this. Rolex has just a complex structure as any of the groups (possibly more so but you don’t get to see).
I think personality and character matter greatly whatever the structure. Just look at events across the border in Germany.
Just look at the success that the likes of Red Auerbach, Larry Brown or Chuck Daly have consistently delivered.
Perhaps this isn’t the most obvious frame through which to look at Richemont’s reshuffle of executives and in terms of turnover and immediate pressure, the comparison doesn’t bear too much weight.
Managing an NBA team is a low life expectancy pursuit, but this points to the impact that great coaches can make, and may make the argument for routinely changing the backroom staff when a slump cannot be ignored.
The way I see it, CEOs, like coaches, really do make a difference.
They set the tone, in terms of product design, communications and culture.
They need to do the day job; the targets, the corporate reporting and the general management, but their success or failure rides on their ability to choose the right product and sell it to the world.
Look at François-Henry Bennahmias at Audemars Piguet or George Kern at Breitling; they forcefully changed perceptions of what their brands represent by giving good briefs to their design and product teams and then backing up the marketing through their willingness to get out and sell their vision to the media and retailers (and direct to consumers via social media in Kern’s case).
If you follow the watch world, you’ll know exactly who they are and what their brands stand for.
Similarly, Cartier’s resurgence since Cyrille Vigneron took over as CEO in 2016 can be accounted for by a product mix that’s more understandably Cartier than before.
Thierry Stern, president of Patek Philippe, could easily delegate product responsibilities away but, correctly, chooses to lead from the front, owning both the decision on what to make and the rationale behind them.
So what of the new appointments at Richemont?
Nicolas Bos is clearly a star, simultaneously able to generate creativity and excitement within his teams and navigate Richemont’s corporate waters without making waves.
It’s no accident that Van Cleef & Arpels has succeeded under his leadership with a combination of character and individuality that sets it apart from its peers, achieved through making his people enjoy the journey (notably, Bennahmias, Kern and Richard Mille inspired utter loyalty from their teams).
Can he do this as Richemont CEO with a team of CEO’s under him? I would bet on him in a flash.
Louis Ferla’s resurrection of Vacheron Constantin over the last few years is proof of what can be done.
Long seen as Patek’s slightly dusty aunt, Vacheron is suddenly hot. That’s due to good product choice and good communications (as well as the sense to tone down Vacheron’s academic tendencies), so that’s another tick.
Catherine Rénier’s tenure at Jaeger-LeCoultre has clearly not been so obviously successful (the numbers don’t lie though there are extenuating circumstances) but she returns to Van Cleef & Arpels as a known quantity to a ship that couldn’t be in better shape, so that’s another tick.
Whether those appointments will help close the gap remains to be seen but stranger things have happened.