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CORDER’S COLUMN: Private companies outperform thanks to long term thinking

Baselworld 2018 | Impressions

Tiger Woods wins The Masters and straps on his trusty Rolex Submariner before facing the cameras; Breitling pulls out of Baselworld, but Tudor commits to a larger stand-alone booth for 2010.

These seemingly unconnected stories have a common thread: they show how the long term vision of Rolex is rarely if ever buffeted by events, passing fads or media hysteria.

Many brands abandoned sponsorship deals with Tiger Woods as injury crippled his career for a decade and myriad extra marital affairs destroyed his carefully created image.

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Rolex stood firm and this weekend reaped the rewards of its loyalty as testimonee Tiger won his first Major since 2009.

I wonder whether the same instinct for keeping calm while rival brands flap around looking for short term gains will work for Rolex, and particularly its second brand Tudor, when it comes to Baselworld, and Breitling’s withdrawal could backfire.

We do not know the exact size of either Tudor or Breitling. Tudor is cocooned in the opaque charitable trust wrapper of Rolex while Breitling has been owned by private equity firm CVC Capital Partners since 2017, which does not share figures.

At the time of the CVC acquisition, Bloomberg said the company’s annual turnover was approximately CHF 420 million. Swiss investment bank Vontobel said sales in 2017 were CHF 430 million.

Last year, according to American investment bank Morgan Stanley, Breitling sales were CHF 360 million.

The same report by Morgan Stanley estimated Tudor sales last year at CHF 280 million, closing in on Breitling. Moreover, the report reckons Tudor sold 195,000 watches last year, compared to 135,000 for Breitling.

Figures may not be perfectly accurate because there are no publicly available reports from the two private companies, but it is fair to say they are in the same ball park as competitors and, by virtue of their product lines and positioning, competing for many of the same customers.

This background is important when it comes to whether Breitling or Tudor have the correct approach to Baselworld.

Tudor — schooled in the art of long term thinking by its parent company Rolex — has decided to expand its presence at what remains the world’s largest watch event. Breitling believes it is better off running its own ‘summits’ where wholesale partners and press can be immersed in the brand’s messaging for a day or two.

I have written before that I want and expect Baselworld to bounce back, and have voiced full support for the new management team and its fresh thinking. There is every possibility 2020 will mark the beginning of a new era for the event as it transforms from a trade show into a global celebration of watchmaking.

Breitling found itself with one of the best positions in the show this year. LVMH, Rolex and Patek Philippe stands line the central stretch of Hall 1.0 left and right, but Breitling was dead ahead, dead center and dominated the field of view with a massive video wall.

I wonder whether Tudor has taken the opportunity to grab that space and, if it has, will keep it for years to come and position itself as one of the world’s largest watch brands.

Breitling has successfully portrayed itself as a giant of the industry, despite global turnover around one-third that of TAG Heuer and Audemars Piguet.

Tudor is nipping at Breitling’s heels, and ramping up its presence at Baselworld is likely to cement that impression in the minds of the trade and consumers.

 

Tags : breitlingCorder's ColumnRolextudor
Rob Corder

The author Rob Corder

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