LuxuryBriefing.H.Moser

Luxury Briefing
Issue 169
rArE
PriZe
LUXUrY BrieFiNG iNSiGHt : Edouard MEylan, H MosEr & ciE
h Moser & Cie is a family-run business in Schaffhausen, Switzerland, with 50 employees producing just 1,000
handcrafted watches a year: ingenious, elegant, restrained products with smart solutions. the company, founded in
1828, was recently acquired by the Meylan family under its holding company MElB holding. it is now in the throes of a
major makeover, lowering production costs, making communication coherent and developing a new marketing strategy,
with a view to balancing the budget by 2015. Co-owner and CEo EdoUArd MEylAN tells lB about the challenges of
running ‘the small pearl of Schaffhausen’
What is the story behind the start of H Moser?
h Moser & Cie is an old brand, started in 1828 by an amazing Swiss
gentleman called heinrich Moser, who was the son of a watchmaker,
and the grandson of a watchmaker. he did his apprenticeship in a
small village in Switzerland and learned the hard way, sleeping in the
workshop. But he was stubborn, a real entrepreneur in his own way
at that time. he decided, against all recommendations, that the best
way to start was to go to russia, to St Petersburg. At the age of 21 it
took him several months to get there, he almost died when a storm
hit his ship and damaged many of the goods on board. But he was a
very good watchmaker; he repaired the watches of the Czar and the
nobility in russia, he became very well known and built his company
there – he really had a vision. he had a production and workshops in
Switzerland, representatives in several countries and four boutiques in
russia, and he was extremely successful – he made 500,000 watches.
Everything he did was very high quality, trying to reach perfection.
he made some very complex watches and also some very simple – but
for him it was also very important that they were reliable, as there was
no such thing as after-sales service – logistics at the time would have
made this very difficult.
he came back to Switzerland, much later, to Schaffhausen where
he was born. he built a castle and began to industrialise the whole
region as a real pioneer; he created the first hydro-mechanical dam
to generate energy in the region, which helped not only the watch
business. he was really like an industrialist in his own way, and that is
how people remember him – as someone who industrialised this part
of Switzerland. An amazing man, with really strong family values,
the desire to help people around him, and a strong character – when
he had an idea, he went his way. if you look across the history of
the company these are core values: these ideas of commitment, of
entrepreneurship, of the human touch, of a man behind the brand
but also a big family working together.
2
LB169 Magazine v03.indd 2
03/04/2014 14:01
Issue 169
What was the situation when you took over the brand?
the brand disappeared for about 10 years until it was revived
12 years ago by Moser’s great-grandson together with two other
entrepreneurs and with the same kind of spirit: doing things without
compromise, really going into detail – high quality, innovative, crafted.
this company, started in 2002, was very well received right away
by collectors because of what it was bringing to the market – very
ingenious products, very elegant, a bit of a German touch, with design
that doesn’t put things in your face; it was about understatement,
about bringing only what was useful to the user, and you needed to
discover the functions. Unfortunately, there were financial issues
because for engineers creating products, sometimes cost is not really
an issue, and they didn’t look at it in terms of revenue management.
Eventually they ran into trouble and this was when my family – coming
from a long heritage in the watchmaking industry – looked at it. the
name for this brand in the region is ‘the little pearl of Schaffhausen’.
We saw it as a rough pearl. there was so much we could do – with this
basis, with what they had created from a product standpoint, with the
history and the beautiful castle. We decided to take it over 18 months
ago, and since then it’s been a lot about how to restructure something
like this without breaking it. there’s so much value in what has been
done since 1828.
What is the current ownership structure?
it’s a holding that we own together with another Swiss family, a
very well-known family in Basel, the Straumanns; they were the
previous owners and are still there as minority shareholders and we
are the majority shareholders. the Meylan family has been in the
watchmaking industry for a few generations. My father worked for
Cartier and was for 25 years CEo of Audemars Piguet. We grew up
in the mountains and my cousins, brother, father, friends all work in
the watch industry. So my family created a company called MElB
holding, named after the initials of Meylan, Edouard (that’s me),
léonore (my sister) and Bertrand (my brother) which is 100% our
own, and we invest in real estate, in medical engineering (because
there’s a link with where we grew up) and in luxury brands and
distribution. My brother is a client of mine – he manages MElB Asia,
an entity we have in hong Kong which distributes the watches in Asia.
My sister works on the media side.
What were your first steps in restructuring the rough pearl?
We had about 80 people working there, and it had been losing a
significant amount of money over the previous 10 years. those
products had been designed as a dream without attention to how
much they cost. the prices in the market were way too low compared
with the cost of making them. So when we did the due diligence we
realised there were a lot of ways, with our expertise, to improve that
without changing the products themselves – improving quality,
reducing assembly time, reducing the cost of spare parts, optimising
the whole organisation. it was tough: unfortunately we had to reduce
the number of people and then do the re-engineering of the products.
this was a very interesting phase. We only have expert watchmakers to
assemble our watches because they are complex. We worked on that a
lot. the other issue was that here was a really interesting brand which
everybody loved, but nobody could really tell us what it was about.
they said ‘very understated and good value for money’. For me you
cannot build a brand on ‘value for money’. So a first step was to
understand what were the core values and the sense of the brand.
We were not there to destroy what had been done, but to build on what
had been done. Some people said we needed to act fast, but i felt i
needed to understand.
Luxury Briefing
the fact that he didn’t care what people said. When people told him
to go to italy, he went to russia – it was not the easiest way. People
said that we needed to challenge and to be different. i think we have
this entrepreneurial spirit. We are entrepreneurs in the way we work:
we’re a small team, we discuss, we fight, we find solutions, we are very
reactive and we do things differently. that’s a strong link.
the second aspect is that we are a ‘manufacture’: we produce the
parts of our movements. We actually produce every single part of the
movement – this is a fundamental difference – and we also supply to
other brands. the escapement is the beating heart of the watch and
there are only five companies in the world which produce them and
we are one of them. i think that’s very romantic, and something we
are very proud of. When people come and visit we show them how we
do it. We are not industrialised, and that’s the way we want to keep it.
We’re not planning to do thousands of watches. true luxury is about
exclusivity and the one man who is behind the making of your watch.
the third one is linked to the products: they are all very ingenious.
it’s an important word for me, and it describes what makes our
products different. We innovate in trying to do things smarter than
the others. the complications we have – date, month, time zones
etc – nothing has been invented in the watch industry in the past
200 years, so what we’re trying to do is do it smarter than the others.
For example, the perpetual calender tracks the full leap year cycle
and jumps straight to the correct date. Usually those watches are very
fragile, using a lot of energy – you have to be careful the way you touch
them. our watches are built like no other. All those small things make
a difference.
What other differences are there between H Moser & Cie and other
Swiss watch brands?
it’s also this elegance. if you look at watches today it’s about showing
as much as possible to increase perceived value. We believe it should
be the other way around – that people who are part of this club will
understand what you are wearing. So we try to make our watches as
complicated as possible yet showing just what you need, to keep it
clean, sleek and elegant – and that’s really what differentiates us.
Also, last but not least, the quantities: we produce about 1,000
watches a year. A lot of watches claim exclusivity when they produce
50,000. it’s hard to say exactly how long it takes to produce one
watch: we have 20 watchmakers producing 1,000 watches a year.
the assembly of a perpetual calendar can take a week. you have 326
parts in each product and it takes a week to assemble them. overall it
takes a few months. that’s why they cost around 16,000 Swiss francs.
What did you identify as the core values?
there are three aspects. A lot of brands talk about how proud they
are of when they were created, and it’s a competition about who is
the eldest. From our standpoint, it was more about asking what links
us to heinrich Moser – and i think it’s this entrepreneurial aspect.
3
LB169 Magazine v03.indd 3
03/04/2014 14:01
Luxury Briefing
Issue 169
“
To be profitable we need to produce about 50% more watches, to around 1,500 watches. Then there is huge potential
in Russia – particularly for us, with our history. What is interesting is that, in Russia, people used to say they were buying
a Moser – it was the generic word for a good watch. That’s in the collective memory. Every week we get emails from people
saying their grandfather was a general in the army who was given a Moser as the ultimate present, and asking us about the
history and value of individual watches – it’s very interesting for us”
How are H Moser watches retailed and which are the key markets?
We don’t have our own stores – we could have one next to our office
and use it in an opportunistic way because so many people come to
visit the manufacture and ask if they can buy, but we don’t do this. We
prefer to wholesale to a network of preferred retailers – for example in
hong Kong it is my brother. We try to have exclusive partners in every
market: in london there is just one, William & Son. Eventually we will
need two or three. With 1,000 watches that’s the only way we can keep
up with supply. in Switzerland we have a key partner called Bucherer,
a multi-brand store in lucerne, Zurich and Geneva. We have those
partners in around 25 countries including China. Europe and Asia are
our primary markets and, within Europe, Switzerland and Germany
are key because people really know about the brand, and the same
goes for hong Kong; we’re looking to develop France, italy and the UK
where we think there’s a lot of potential because of the watches being
elegant, round, traditional yet with a bit of spice and sexiness. i think it
really appeals to the UK market, but we’re not really well known here
yet. We’re looking at South America; but as a small brand you cannot
be everywhere. in the US there are just eight points of sale –
it’s nothing really.
What about Russia, where Moser started?
to be profitable we need to produce about 50% more watches,
to around 1,500 watches. then there is huge potential in russia –
particularly for us, with our history. i want to go to russia and look
at the archives because it’s definitely a story. What is interesting is
that, in russia, people used to say they were buying a Moser – it was
the generic word for a good watch. that’s in the collective memory in
russia: people really remember the brand. Every week we get emails
from people saying their grandfather was a general in the army who
was given a Moser as the ultimate present, and asking us about the
history and value of individual watches – it’s very interesting for us.
Are today’s customers essentially collectors?
luckily, with our size, we have the chance to talk to our customers on a
regular basis because they come and visit and meet the watchmakers.
i like this human touch. When we meet them, i feel there’s two types:
on one side, it’s the ones who are understated, for whom the value
of the watch is not something you can see at first sight – you need to
discover it. Some of these are collectors who go deeper into a watch,
read about it online and know a bit more than the standard luxury
watch customer. that’s still, today, an interesting niche for us. Next to
that is the second type of customer, which is interesting considering
our history: a lot of entrepreneurs. they take the time to understand,
to appreciate – they don’t care about the brand because they are also
people who don’t need to show off. it’s amazing – they want to buy
themselves a beautiful watch which fits who they are, not to be noticed
in the street; and that’s a lot of our customers.
How have you tackled your marketing and communications plan?
it was a brand that a lot of people in the industry knew; and on my
travels i met people who said they loved it and it had to be successful.
But i think there was a problem in the way it was being communicated:
it was looking too much at what the others were doing. When you’re
small and you have no budget, you can use the same values of tradition,
technical value and long history that Patek and Vacheron use, but if
you play them at their game you’re never going to win. our marketing
budget is not even a percentage of Patek’s worldwide. you need to be
creative, ask what makes us different and play with that. We started
brainstorming and taking a few words – ingenious, entrepreneurial –
but how do you communicate that? i’m an engineer, not a marketing
man. you need to find that brilliant, creative idea, or end up spending
millions instead. that’s when we got in touch with london Advertising,
a year ago, and i came over with two of our sales guys and the
marketing manager, and we asked them to take a gamble. they took
the challenge. So we entered a new universe with our communication
campaign: a new logo, website, new shop displays, new colours – a
complete rebranding – to tell the story. i didn’t want to break what had
been done before, just make it more dynamic, do something that other
brands wouldn’t do and take some risks. Because we are a very quiet
product, so we needed to do something else. london Advertising came
up with the tagline ‘Very rare’, which summarises those values we were
talking about: independent, entrepreneur. that’s how Moser started.
the other thing london Advertising did was not to feature the product
in the advertising. We could claim ‘Swiss manufacturing since 1828’ but
there are 20 others who can say the same. So we had to find something
that people would remember.
Does this approach work across all markets?
the first time i went to Japan with this concept of not showing a
product, i wished i had the london Advertising team with me to
present it. i went and presented to our partners in Japan for 30
minutes, talked about the values etc, and they thought it was fantastic.
i was really surprised. they said this was what the brand needed.
they felt the brand had been lost for 10 years. this was a clear, simple
message and they said ‘don’t translate it into Japanese – keep it in
English, simple.’ it was the same thing in China, Singapore, everywhere
– everyone said ‘it’s crazy, but we can see where you’re going and it’s
an evolution.’ We showed them how we were using this new direction
to get attention – to make people ask themselves what makes h Moser
very rare. And by building the catalogue and website around it, we
answered this question: we’re entrepreneurs, we manufacture in
house, we create ingenious products. it was really an artistic approach,
just one idea, and people appreciated it. Even some of the critics went
online to send us a message. it’s given us the chance to say ‘We’d be
very happy to show you’ and more people have come to see than would
ever normally have come. it’s about opening the door and starting the
dialogue – there had been no dialogue at h Moser before.
So you do use social media to communicate?
it’s a different tool. there’s mass market social media or there’s
opening a dialogue and what i like about social media is that you can
talk directly to the customers. it’s not something you can outsource
4
LB169 Magazine v03.indd 4
03/04/2014 14:01
Issue 169
– you have to do it yourself. We know from when people come to the
manufacture and meet us, people get very emotionally involved and
want to buy our products, and we then send them to our network. But
not everyone around the world is able to come and visit. So through
social media we can build this direct dialogue with those customers.
i am the only one who can answer everyone’s questions and we are
small enough to deliver the human touch. We see this human touch
right through the process: when you come to visit us it’s important
that the master watchmakers stop, stand up and explain what they’re
doing, taking half an hour – this also differentiates us. What is true
luxury is the human touch. it’s not all about brand.
We also use social media – Facebook or Weibo – to preview
new products and get some people excited: bloggers, journalists,
collectors... We launched a picture of a product on Facebook and a
week later we had 10 retailers around the world calling us to order
one. it was because the customers were discovering it through social
media. it was very interesting for us, because it stimulated demand
and got people into the shops asking. But it has to be complementary
to what we do otherwise.
How important is innovation to a brand like H Moser?
innovation helps you communicate. you don’t have to have something
new at Basel every year but communication is important – and it’s
easiest to show another innovation. A lot of people make concept
products they never actually sell, for this reason. We need to attract
attention and do a few unexpected things. our strategy for this year is
that we’ll have three new products. one will be presented in Basel, so
we can communicate a bit about it now, create some demand, and it
will be in the shops a month later. the second product we’ll show for
the first time in Basel and start the communications there, and then it
will appear in shops about two months later – the products themselves
are important but we use Pr to string out the launches and find
interesting angles to talk about.
Do you train your own watchmakers?
A few of our watchmakers have been there for 10 years, a lot for five
years. there are a lot of very young people and we train them ourselves.
it takes a long time. So we have to find a mixture of good people who
are already experienced and take others to train, planning a long way
ahead. there is a shortage of good watchmakers. once you have them,
you try to keep them – especially by involving them in exciting projects.
Do you undertake any bespoke commissions?
We try to avoid it because it’s really logistically not easy – and the way
we produce our watches is almost bespoke anyway. Ultimately we
would accept any request, but we would put a price on it.
What is your definition of a luxury watch?
For me, ultimate luxury is going even further into a small atelier
with one person producing two or three watches a year and no shops
around the world; a watch where he doesn’t put his name on it and
Luxury Briefing
people would recognise it as a piece of art. that’s originally what
luxury was – small artisans in ateliers doing something over a long
period. today we have easy access to the entire world, but we try to be
as close as possible to that – one watchmaker in charge of one watch.
i want to go back to having movements with just one hallmark and
people will recognise Moser without us even having to put the brand on
it. Ultimate luxury should be something you want whatever the price,
and that people recognise it. if you put the brand on it, it’s not truly
luxury – they would recognise the signature. that’s extreme luxury
and difficult to achieve. We get as close as possible to that.
Who are your heroes among other luxury brands?
As a brand and what it stands for, hermès is an amazing brand – it’s
very inspiring, what they do and how they do it. they’ve used their
signature orange to great effect to keep the luxury feeling. We’ve
adopted a yellowish green for our colour and we try and use it as our
dynamic touch in the same way. And it’s a family business with values
that stay true to who they are. they always shied away from overt
branding – and even lV is now going that way. it’s a brand we can learn
a lot from, it has never become diluted. long term, that’s valuable.
in recessions we continue buying luxury but go to secure brands like
Patek, hermès. i also like brands that have been successfully revived
like ours. look at Mini – the way they managed to keep the essence but
turned it into a product for today. in fashion, Moncler was almost dead
but is now very fashionable – it’s really smart how they managed to
do that. it’s inspiring for us – so we keep going with the luxury values,
the history, the idea of being entrepreneurs – and we do an ad without
a watch in it, using the colour instead – going a little bit further than
everyone else would go.
Do you have a five-year plan?
it’s a family business so we don’t have the pressure of a group; equally
we also do not have the means, so we need to work hard to make it
profitable. this is the aim for 2015, along with increasing production
ultimately to up to 3,000 watches. i want to open up in russia. And
i want to integrate production a bit more – we do everything on the
movement side but not on the casing – so to go even closer to this
definition of luxury we have talked about. MElB owns and distributes
another brand, and we’re looking at different brands every day. We’re
not a big group though, and we need to make what is in our hands
really successful. Bill Muirhead, who used to be my father’s right hand
man and led the restructuring of Breguet, overlooks all the operations
for us, and we look at investments together. We need someone who
can take a 10-mile vision over everything we do and look at next big
steps. h Moser is in the same situation as Breguet was 20 years ago –
but still in the hands of Swiss independent family. that is important
to our customers. it’s a breath of fresh air.
WWW.H-MOSER.COM
5
LB169 Magazine v03.indd 5
03/04/2014 14:01