Favre-Leuba 3.0: cashing in emotionally
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New Delhi: Favre-Leuba watches are coming back to India after a gap of nearly 40 years. On Monday, the Swiss watchmaker, which is now a wholly owned subsidiary of Titan Co. Ltd, announced its relaunch in India with the release of the new Raider and Chief collections. A total of 21 references will be sold through select Ethos watch boutiques in the country.
The relaunch is significant, especially its timing, considering that the demand for Swiss watches continues to fall. According to a Bloomberg report, demand for Swiss watches declined 16% in October 2016, the biggest such monthly fall in the past seven years.
“That’s why it is a good time to launch,” said Thomas Morf, CEO and a watch industry veteran during the relaunch. “This is the time of consolidation in the industry. Some makers will shut shop. That is the time to reinvent.”
The second-oldest Swiss watch manufacturer, Favre-Leuba was founded in 1737 by Abraham Favre. Over the centuries, the Zug-based brand was renowned for high-quality timepieces. At its peak in the 1960s, Favre-Leuba launched the Bivouac, the first mechanical watch with an altimeter and aneroid barometer, and the Deep Blue, one of the first diver watches, and produced more than half a million pieces a year.
But Favre-Leuba did not survive the onslaught of the cheaper quartz watches in the next two decades. The brand changed hands from the Favre-Leuba family that ran the brand for eight generations, to Benedom SA to LVMH. Along the way, its identity died a slow death.
That was till Titan Co. Ltd (then Titan Industries Ltd) bought it for a throwaway price of €2 million (around Rs13.8 crore then) in 2011. Titan, the maker of Tanishq jewellery and Titan and Fastrack watches, signed an agreement with Spain’s Valfamily SL and Switzerland’s Maison Favre Leuba SA to acquire global rights for the brand.
“Ethos is the best luxury watch retailer in the country. Favre Leuba has been non-existent in India for almost 40 years. Our objective was to launch this brand properly. It has a heritage attached to it,” Bhaskar Bhat, president of the board at Favre-Leuba AG and managing director, Titan, said over phone.
Ethos will initially sell Favre-Leuba watches at its Chandigarh, Delhi, Mumbai, Hyderabad and Bangalore stores. “Eventually, we will expand our offering to more stores and other cities. We will also be selling the watches through our e-commerce platform,” said Pranav Saboo, co-founder at Ethos Watch Studios. Ethos is run by watch components supplier KDDL and is the authorised retailer of 61 luxury watch brands in India, including Rolex, Omega and Rado.
The company currently operates 45 premium stores in 14 cities and is planning to open 25-30 more stores, taking the store count to 70 by 2020. Ethos closed 2015-16 at Rs370 crore in revenue.
The hiatus was important, Morf said. Not only to reassess the brand but also to fix the damages caused by the previous owners. “The idea was not to rush things. When you rush, you tend to forget minute details,” Morf said. “We had only one chance and we had to do it right. That’s why it took time. The first three years went in understanding the brand and charting the future course of action and what you see today is the result of the next two years.”
As it passed through different owners, Favre-Leuba tried to do too many things. Its watches became a mix of everything—Omega’s bezel, Hublot’s dial, Tag Heuer’s hands. They sacrificed the brand’s design DNA.
With the current team, the strategy is to dial back to the 1960s. The new watches are distinctly Favre-Leuba—tetradecagon bezels, square indices to mark the hours, square pointers on the hands and the bridge on the side. “That’s exactly what we wanted to do. To create strong products with the DNA from the past. We wanted to make watches that use design elements from the past and bring them to the 21stcentury,” Morf said. “We could have done many other things. But we decided to do things that made Favre-Leuba distinct. We have to be distinctively different and not lookalikes.”
The focus now is to create a strong brand identity. “We can’t follow trends. We have to create our own,” said Morf. “We have to build the brand inside out. We can’t do it outside in. And it might sound arrogant but that’s how it has to be.”
The price segment that Favre-Leuba is targeting is the 2,000-8,000 Swiss Francs (around Rs1.34-5.4 lakh) at which the main competitors are brands like Officine Panerai and Tag Heuer. The Raider and Chief collections come for Rs1.3-3.4 lakh. “The air is getting really thin above 10,000 Swiss Francs and there is huge competition in the below 1,000. It is the 2,000 to 5,000 range that is not suffering as much,” said Morf. “So that’s going to be our core range.”
The phased relaunch started in Japan a in October. Next on the radar are countries in the Gulf and Europe. Next year, to mark its 280th anniversary, Favre-Leuba will launch a limited edition of 280 Bivouac watches.
Smartwatches, Morf said, are not a threat to the Swiss watch industry. “There were connected wearable devices before. But since Apple’s arrival, people have become more anxious,” said Morf. “A smartwatch is packed with technology, but has no soul. You can’t compare Red Bull with a fine bottle of wine from Bordeaux just because they are both drinks. There will be smartwatches but the mechanical watches will not die.”
According to a study by industry lobby group Associated Chambers of Commerce of India, the luxury market in India is expected to grow five-fold in the next three years. The market is expected to cross $18.3 billion in 2016 from $14.7 billion in 2015, growing at a compounded annual growth rate of about 25%.
There are several similarities between where the Jaguar and Land Rover brands were in 2008 and where Favre-Leuba was in 2011 when the Tatas gave them a new lease of life. Whether they can pull off a JLR with Favre-Leuba is for time to tell. Right now, Favre-Leuba may be hoping to cash the emotional connect it had with India in the 1950s and 60s and chart a steady way forward.