Ironically, Breguet possesses perhaps the greatest historical heritage in watchmaking. Abraham-Louis Breguet’s technical achievements between 1790 and 1820 were staggering: The tourbillon movement, shock protection, the overcoil balance spring, jumping hour and power reserve indicator, to name but a few, are Breguet inventions that remain staples of the complicated watch today. Additionally, Breguet’s aesthetics—including fluted cases with distinctive numerals, hands and delicately worked guilloché dials—form the basis of a style that remains the most emulated in the watch industry.
 

Breguet invented the tourbillon movement, here incorporated into the Cassique Grande Complication, in 1795; he applied for a patent in 1801.

Breguet’s heirs, though talented, did not inherit the full measure of his genius, and the company was unable to exploit the extraordinary reputation the name enjoyed among Europe’s most exclusive clientele. "After Abraham-Louis Breguet’s death in 1823, the quality level began to slowly decline," explains Osvaldo Patrizzi, CEO of Antiquorum Auctioneers, a major venue for fine watch collectors. "There were still good watches made in the 1840s and ’50s, but by the end of the century, the production was very small and unexciting." In fact, the Breguet family sold their interest in the firm in 1870. The new owners, an English family named Brown, ran the company essentially as a retail business with a shop in Paris. The clientele was still exclusive, but outside suppliers in Switzerland, who strayed from the originality of design and technical brilliance that once characterized the brand, performed the principle watchmaking.
 
Two additional sales—to Parisian jeweler Chaumet in 1970 and to Investcorp, a London-based consortium in 1987—before its final acquisition by the Swatch Group in 1999 further clouded the company’s murky history. Chaumet and Investcorp attempted to revive the look and spirit of the original Breguet, but with mixed success. Despite a renewed commitment to producing high-end complicated watches and investment in redeveloping the firm’s manufacturing capability (an effort bolstered by the use of well-respected movements from Swiss maker Nouvelle Lemania), overall quality continued to falter, and inept distribution and marketing excluded Breguet from the industry’s true top tier.

Breguet’s troubled history leaves the collector to confront a remarkable chasm in the value of the historical pieces. Original Abraham-Louis Breguet timepieces—of which only a few hundred survive—represent a theoretically perfect collectible commodity. Extremely rare, many have appealing historical qualities or impeccable provenances that make them the indisputable highlights of auctions. "One thing we shouldn’t forget," explains Aurel Bacs, international cohead of the watch department at Christie’s, "is that the Breguets that are currently flying at auction are almost all unique pieces—literally unique—more unique than [the watches] any other brand made in the 18th and 19th centuries. A watch selling for $250,000 is rarely unique."

One would be hard-pressed to apply this adjective to many of the com-pany’s later models. The brand Nicholas Hayek’s Swatch Group purchased had a few fine pieces, a great name and obvious potential, but was fundamentally sick. Although the complicated pieces were admired, many of the less expensive ones were viewed as mediocre in design, or worse yet, beset with technical problems that made them a service nightmare. The perception that the company used outsourced movements at a time when collectors were putting a premium on the idea of an in-house manufacture also hampered it.

As with many rebranded vintage timepieces, the lack of distinction in either their design or mechanics prevents them from appreciating in the same fashion as pieces from the most highly regarded houses. And so for those who purchase a modern Breguet still in production, the emotional return on investment (the satisfaction of owning the watch), as much as the financial return, depends on the future reputation and health of the house. The owners of these watches are, in a sense, stakeholders in the prestige of the brand, and as such, the success or failure of Hayek’s revival efforts are as crucial to their emotional investment as to the company’s future sales.

Fickle distribution strategy restricted these sales in the past. At retail in the United States, the brand was whipsawed between pricing that exceeded other markets worldwide on one hand and rampant discounting on the other. "In the United States, we had a distributor who was not as passionate about the brand as we are ourselves," explains Hayek. "He did not have the service that we would have provided for our clients and certainly his public prices for Breguet were higher than the rest of the world. What they were trying to do was to make money quickly. Many of the people under the previous management were motivated to produce quick profits, not build a long-term brand."

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."

Whatever the motivation, Breguet watches have assumed a new importance on the auction circuit that can only benefit the brand. Offers Patrizzi: "As Hayek has started to buy back pieces for his museum, people have started to rediscover Breguet, both for the new pieces and for what was created 200 years ago."

By traditional measures, Hayek’s program has already demonstrated success. Sales are up some 400 percent, an impressive performance given the economic conditions of the past several years. Increased demand bodes well for those gauging the prospects for long-term value retention of their newly purchased Breguets. Owners, however, should be extremely mindful that sales, rather than aftermarket value, are the top priority at Swiss watch companies. "For the normal production pieces, I really make what I can sell," says Hayek. "I have no interest, for the time being, in selling Breguet as an ‘investment watch’ to rival other things like [stock] shares."

As the brand continues on an upward trajectory, production is likely to increase, making any forecast of the future rarity of the current production difficult. Despite this fact, some encouragement can be gleaned from the current product development strategy: "New watches become old," Hayek adds, "and in 10 years or 15 years, these watches will have a high value, because we’re doing new things and continuously renewing our models. Our limited editions will surely increase in value almost immediately, because we are very strict with the production of these pieces."

To own a Breguet, new or old, is to own a piece of watchmaking history. "Watch collectors are emotional about history," observes Hayek. "They have much more confidence in the brand today. It’s like a country with a long history that has been occupied by someone else. Now they are gone, and the culture is back."