SECRETS OF SUCCESS. It’s no secret that Longines has consistently been the leader in its market segment. Walter von Känel, the brand’s passionate president, shares his recipe for success
Walter von Känel with brand ambassador and actress Kate Winslet at the Longines manufacture
When Walter von Känel talks, he booms.
He bangs the table excitedly, points with his finger and often recites numbers that only an insider should perhaps know. All that, however, is what makes him possibly the most invigorating person to talk to in the business. Then again, Känel has been in the industry for almost fifty years now, first joining Longines in 1969—which is, quite hard to believe, 47 years ago. Whatever he says, then, not only comes out of profound knowledge but also years and decades of irreplaceable experience that only a veteran like him would be able to comprehend.
Känel himself spent his childhood not far from where the Longines company actually resides. Growing up at the top of the Saint-Imier Valley in the Bernois Jura, he long had dreams of becoming the driving force of global watchmaking which basically sprang up from that tiny region in Switzerland.
It didn’t take long, though, for the enthusiastic Känel to attain a watchmaking-related job: First, at Jean Singer Ltd., a watch dial manufacturer in La Chaux-de-Fonds, in 1963, and three years later at the Longines company as a sales executive. In the following years, he took on further training with the brand in New York and subsequently climbed up the corporate ladder owing to his persistent nature. Känel finally became the president of Longines in 1991 and has been tremendously successful in steering the global brand ever since.
Even during the economic dip in the last couple of years, Longines maintained its worldwide performance. The brand has aggressively expanded and intensified its presence in many parts in the world, too, not to mention in Indonesia where the brand is now available at retail boutiques run by Time International. As he touched on a number of key points, it became clear that any businessman could absolutely learn a thing or two from the 75-year-old Känel.
Read the interview on the following pages.
DA MAN: Given the current economic situtation, how has Longines been this couple of years?
Walter von Känel: We have a tremendous year this year. Last year was fantastic, too. Despite the economy, we did not lose anything. Longines made more than CHF1.5 billion, so we certainly had a good year. If you’re asking from a wider scope, Longines has been successful in multiplying the turnover by five in the last ten years! Hah! [Laughs]
DA MAN: Considering the slowdown in the market, what’s the secret behind that?
Walter von Känel: Thanks to China. First of all, it’s because we are in the right price positioning. This price segment is not at all affected, or not so much affected by the anti-corruption campaign. But the real secret is consistency, continuation, focus and staying in the same price league. Don’t do this yoyo business move, up and down, up and down. Be close to the market; listen to the market; have local people; be very close with the retailers; and never try to do everything.
While the result has clearly shown the strengths of our company in China, we have unfortunately lost a lot in Hong Kong. The Umbrella Revolution in 2014 where the protesters occupied Hong Kong’s tourist area made the government take a decision to drastically reduce group tourist visas. So, the Chinese tourists then shifted to Japan or to Thailand for their holidays. We could, luckily, compensate for the loss of sales in Hong Kong with that from Europe. Even last year with Korea suffering from the spread of MERS, we still managed to continue our crazy success story.
The Longines Master Collection Moonphase
DA MAN: Speaking of success stories, is it true that the Swatch Group is going to create smartwatches?
Walter von Känel: It’s not my problem. Within the Swatch Group, two brands have expressed their interest in this business, and you can ask those brands directly. The group has given us liberty for the direction of the company, and Longines will not go into this line of business at least for the time being.
If you ask me why, I’ll go back to the statement: consistency, continuation and staying in our league. I’m very pleased that Apple, Samsung and some of the Chinese companies do this because they have the expertise. They possess the rapidity to play around with such a product. We have also investigated the subject in our way. After the survey we did with the people who have smartwatches, the main purpose of this watch is not time. But, I believe that Apple, Samsung and other brands, will help us convert some of the people having this product on their left wrist to one day go into the traditional watch business.
As per my understanding for having been in the industry close to fifty years, a watch today is not only about time, but it is also a status symbol. Apple is not a status symbol. A watch is a branded, emotional consumer product.
I’d like to anticipate the next question: What do you think about Swiss traditional watch companies going into this business? We’ll see in one or two years, especially of the brands who want to do everything, from creating tourbillon, then cheap watches, to connected watches, glasses and so on. You know we’re in the traditional watch business. That’s our job. So, it’s better to stay in our league.
DA MAN: If so, then what about Longines’ business direction this year? Or, do you remain stagnant, so to speak?
Walter von Känel: No change in the business direction. Why should I change considering the success story we have? In each line, we’ve added so many additions in terms of sizes, or dials, and we’ve also killed some unsellable pieces. This year we produce 1,400,000 units, and the Master Collection alone makes up 310,000 pieces. Again, looking at the market share and the revenue, why should we change?
This year, we beefed up the ladies’ watches quite heavily in spite of the fact that the ladies’ watches already made up more than 50 percent of our business. So, we have a new DolceVita, Symphonette, PrimaLuna and, in fact, the new Equestrian is doing well. We’ve also added some novelties to our favorite Heritage collection, which is not a big business but a big pleasure. To cut a long story short, it’s all done with consistency and continuation of our policy and strategy, but we watch our market very, very closely.
The Longines Equestrian Pocket Watch Jockey 1878
DA MAN: Some brands are already gearing up by producing their own movements, which jack up the price of some of the watches, too. What’s your take on this?
Walter von Känel: Once again, we want to stay in our price segment. 85 percent of our business is the three-hand (hour, minute and seconds) watches. Of course, we have chronographs, but those are not the main business. On the subject of movements, for us, we sell watches. These watches have a brand, design, price and quality, etc. We sell a final product, but we don’t sell a movement. You see the big difference? Some of my colleagues in France, they focus on the movement. I focus on the final product. And we have a lot of the exclusive movements, but we don’t talk about them. The bulk of our business is using exclusive movements, in fact, but I want to sell a final product with the design, quality and brand.
DA MAN: Do you think that the market is not asking for in-house movements?
Walter von Känel: Do you think my performance is not confirming what we do is correct? We don’t want to do everything. Our competitors are mostly talking about everything and actually not doing everything. We don’t want to do that. We simply cannot do everything.
DA MAN: Last but not least, do you think the Longines company today has grown to be as how you wanted it to be?
Walter von Känel: Number four in this industry! Number four! And number one in my price segment! With a very profitable market share. How else do you want the company to be? Hah! [Laughs]
This article first appeared in DA MAN Caliber 2016. Get your copy here.