CEO Speak – Matthias Breschan

CEO Speak – Matthias Breschan

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Hamilton embodies American values, says Matthias Breschan, CEO, Hamilton, and a member of the Extended Group Mgmt Board of the Swatch Group, in an interview with Mitrajit Bhattacharya

Last year, Hamilton had some great launches in Jazzmaster Slim, Khaki X-Mach, and ODC X-02. How have they fared commercially? Also, how was the year?
The year was very good for Hamilton. We maintained our turnover level and even slightly increased our volume. This is very good when you consider that the four biggest markets for Hamilton are the USA, Italy, Japan, and Spain. All of these markets were in big trouble. Even then, we were able to maintain our revenue levels, which means that we got a significant market share. What was very good was that last time we had launched a collection like the Slim, which was much appreciated by the market. When you walk around this year in Basel, you see a lot of brands that take care of the entry segment. In the first six months of 2010, we will come out with models to re-enhance and reinforce our entry segment. For example, in the Slim Line, we are adding a Slim Small Second model and other models. Not just for Hamilton, but for most of the brands, this entry segment is the bread and butter. But you should not forget that when you only concentrate on this segment, in the long term you risk losing your identity, because in this segment sometimes products look similar across the brands. You need to make sure that in future the brand continues to be different. That is why in the second half of the year, we will come out with products that clearly allow us to differentiate our brand against our competition. These are the products that you need in order to build the brand image and distinguish it from others.

Do we get to see anything new in Khaki Collection?
Yes, we have a new watch in collaboration with Harrison Ford. Our collaboration with Harrison Ford has been so successful that he came back to us, asking us to renew it with a new product. We are launching a new product called the Khaki Pioneer. It is a vintage pilot watch from the 50s. It is an anti-magnetic watch. The Khaki Pioneer has a protective cage made out of iron with a very thin gold-plated protection to avoid any corrosion. This is an authentic vintage watch that we are using for collaboration with Harrison Ford.

Will the association with Harrison Ford continue?
We are going to continue the collaboration for another two years.

Will it be featured in any specific movie or is it just an independent one with Harrison Ford?
It is only with Harrison Ford. He clearly didn’t want to mix up the engagement because we also work with him separately on the movie front. Also, what was very important for us was that his engagement in conservation is really authentic. Harrison Ford does it because he really believes in it, and this is what we appreciated and that is why we immediately accepted to collaborate with him.

Are you associated with any forthcoming Hollywood films?
Yes, we have several projects. Unfortunately, some of the projects had to be postponed for budgetary reasons in 2009. The next movie is Killers, starring Ashton Kutcher and Katherine Heigl, which will feature our watches.

Which watch is this?
There are two watches actually, namely, a Khaki Field Chrono Auto and a Khaki Chrono Quartz.

What is the deciding factor for success today?
Sensible pricing and value have been the reasons for Hamilton’s huge success over the years. The entire Swatch Group with all the 19 brands must be disciplined in the pricing for each brand. They want a big and strong brand in each segment of the market. What happened with many brands in the past five years was that prices were increased a lot without very clear tangible reason. The main reason for the big success of the Swatch Group in the past years has been the discipline of brands like Hamilton. There is no reason for us to go lower, because we have Tissot, and higher, because we have Longines. Our focus is on offering the best value in our price range of CHF 500 to CHF 2,000. In this price range, Hamilton offers an unmatched value in the market.

How did you manage to stay afloat and do well in the past one to one-and-a-half years?
In America, we have repositioned the brand over the past six years. Earlier, Hamilton was selling a lot of low-end quartz watches. We have cleaned up a lot of the distribution and also improved the mix of products. We brought in more mechanical watches, which correspond to our sales in all the other countries. Now about 80 per cent of our collection is mechanical watches; while the rest is quartz.

Was that strategy dictated by the downturn?
The major reason for success, particularly in 2009, was that our value-to-price proposition was so unique in the market. The consumer just honoured and rewarded the outstanding quality and value of the products that we offered.

You have been in India for almost three years now. What do you expect from the market?
Definitely India will be a huge market not only for us but for the whole watch industry. One of the big problems that we all face today is that there are a lot of issues with bureaucracy, administration duties, etc. It is not something that anybody does on purpose and India is now step-by-step trying to solve these issues. Once this is done, then the watch market in India will develop very rapidly.