The jewel in the crown of German watchmaking is A Lange & Söhne based in Glashütte, Saxony, a town known for its watchmaking heritage. Having fallen into obscurity during the GDR era the company was revived by its founder’s descendents at the end of the Cold War and acquired by Richemont in 2000. Wilhelm Schmid became CEO in 2011, having worked for both BMW and Burmah Oil Germany. We catch up with him in Australia to hear about his plans to grow the business.
Monocle: How does the slump in the watch market impact on your decisions about new designs?
Wilhelm Schmid:It doesn’t. We haven’t changed our strategy and we haven’t needed to. Yes the market is tough but it doesn’t look like it’ll be the worst year in our history; it will probably go into the bottom three. It’s harder work than in the heyday but it’s still a very good market for us. We keep our distribution fairly balanced, while our main customer group is watch collectors. They’re more resilient against the ups and downs than spontaneous buyers.
M: What exactly do you mean by ‘balanced’ distribution?
WS:A third of our buyers are in America, a third in Asia and a third in Europe. We’re not yet available in Africa but have growing interests in the Middle East. It’s not like we go down if the European market goes down – the same goes for Asia and the US. One thing that would really bite us is if we allocated watches to a market that doesn’t perform; then we can’t supply to a market that performs perfectly. So we’re careful with opening new markets. It’s a longer-lasting process.
M: Is it difficult for you to respond to short-term shocks?
WS:We have a clear product-development pipeline and are working now on 2022/2023. So we know what we’ll come out with until then. People underestimate how difficult it is to come up with new watches, at least the way we do it. I can’t really react to changes in the market but we don’t need to: we produce a few thousand watches, not millions, and for a market that is growing and will continue growing.
M: The watch market is so connected to geopolitics, with Russian sanctions and China’s corruption crackdown. Do you keep an eye on the news?
WS:Yes. To understand you have to travel and get the opinions of people that live in any given country. That’s why I’m in Australia: to understand what’s happening on the ground. Who better to tell me than those living here? I collect information, I read the news and then I speak to people.
M: How might President Trump’s mooted tax on imports affect you?
WS:I wish I knew. At the moment it’s all smoke and mirrors and the US is still in campaign mode. In the months to come we’ll have a better idea of whether they will impose it. We have about 30 employees in the US; we are well represented and invested there. So I hope they know what they’re doing.
M: When it comes to competing with the Swiss watch fraternity, how do you distinguish yourself?
WS:There’s a great misunderstanding here. There is no Swiss watchmaking, there is no German watchmaking; there is fine watchmaking and there is other watchmaking. If you play in the field of fine watchmaking you offer a package: heritage and history; performance and innovation; craftsmanship and quality. That’s our package. On our dials you’ll see the “Made in Germany” mark. People associate lots of things with that label and it suits us perfectly: engineering, craftsmanship, sustainability, longevity and clear design. Do we specifically emphasise it? No but we don’t need to because people in the know are aware of it already.
There’s been a welcome return to watches that tell the time with a certain calmness rather than dazzle you with glittering embellishments. It’s a shift that’s seen the watch trade going back to the things that matter and taking care of their old-school markets and customers. But that doesn’t mean that what peeps out from your cuff has to be totally demure; you’ll still be able to wear a watch that ticks all the right boxes.