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| Watches |
Watchmaker’s Renaissance
James D. Malcolmson
01/01/2004
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The discounting—a problem unfortunately common even among prestigious watch brands—resulted from a parallel gray market in Breguet watches that dumped products into shady outlets for quick profit. On his first day at the newly purchased Breguet, Hayek discovered an allocation of a few hundred watches destined for the Congo—hardly the haunt of many high-end watch collectors. Obviously, these pieces were intended to return to major markets, where they would provide an attractive alternative to inflated retail prices. "When you invest in advertising, and then your pieces sell at a 30- to 40-percent discount, it just kills the brand," observes Patrizzi. "This was the problem with Investcorp."
 | | Breguet established standards that have informed the designs of competing watchmakers over the last two centuries. The newly restructured company seeks to set technological ones to match. |
The attentions of Hayek, whose energies are legendary in the industry, may well prove the salvation of this latest attempt to revive Breguet. Although still chairman of the Swatch Group, he has relinquished day-to-day control of the other divisions to focus on every facet of Breguet’s operations, from manufacturing to distribution to marketing. Tightly controlled distribution and a network of boutiques target the gray market and service problems. On the product level, Hayek has folded Nouvelle Lemania, also a Swatch Group property, into an exclusive Breguet manufacturer, investing a considerable sum to create a state-of-the-art plant with extensive quality control over the designs. The overall objective is to align the current models with the look and feel of vintage Breguets. "The appearance of the watch is very recognizable," says Hayek, "and under my personal guidance and with a highly critical eye, we’ve recreated [this look] using a number of very gifted designers who are true Breguet lovers."
One of the by-products of the Swatch Group purchase has been a dramatic appreciation in the value of vintage Breguet pieces. With the avowed intention of creating a world-class Breguet museum, Hayek began snapping up many of the old pieces. The activity spurred higher bidding at auction as speculation circulated that Hayek intended to corner the market on a potential rival to his new Breguet watches. "At the beginning,"
he explains, "I really didn’t think about raising the value of the old pieces. I wanted my museum because I love Breguet watches."
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