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background/report: Quo Vadis Girard-Perregaux?

My very first Girard-Perregaux watch I bought at the end of 1997, so I look back at more than T.W.O decades of passion for this brand. If you are passionate about something for such a long time, it becomes part of your life and it is something that is cherished as one of those little things that make life good. Naturally, I have a keen interest in the well-being of the brand and I never hold back sharing my passion and admiration with others, hence you can read this blog for now almost 10 months.

At the same time if you have something that is precious to you, you also want to protect it and see it succeed so it can prosper for a long time to come. Same holds true for Girard-Perregaux.

History and Heritage

A mechanical watch frankly is an anachronism and as such brings its value through superior craftsmanship and design. Looking back at a rich history and heritage of a brand provides an important factor that adds to the appeal of a watch. At the same time it is an obligation. While a brand needs to modernise and sometimes reinvent itself to remain relevant, valuing the past by providing a consistency in what a brand stands for and how things are executed is utterly important otherwise a brand just becomes indifferent and eventually irrelevant.

A rich heritage is both an asset and an obligation

Girard-Perregaux has a very rich history and a great heritage that lives on in modern times. Collections such as the 1966 or the Vintage 1945 are prime examples but also the Laureato is a classic sports watch design. It is always a thin line to not live in a full retro design or overdoing modernisation of a classic design. I also think it is difficult to focus on a single successful design only making a brand the proverbial “one-trick-pony”. GP has been quite good at combining heritage and classic designs into a diverse modern collection without providing mere vintage “copies”. This is what I mean when I say “obligation” and that’s where some challenges lie ahead of the brand.

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The Vintage 1945 and its heritage model

And it is important that you live and breath your heritage. Show your customers that you value their vintage watches by providing excellent vintage watch service, archives, museum material, books or a heritage section on the website. All this will reflect in the demand and subsequently prices of vintage watches, which in turn can ensure that also modern watches maintain their monetary value. Sadly, this has been quite neglected in recent years.

Disruptions and Changes

A business with a history of 229 years has been through significant disruptions and changes, that’s just a given. The death of Constant Girard was a first major disruption that many family business face. The next generation may have different interests, different talents and the Perregaux family was no different.

Being pretty much out of business in the 1920s, as often, a new ownership revived the brand and took it to new heights under the reign of the Graef family. The strength of a brand can be seen in such turn-arounds. Good examples from other industries are Mini under the ownership of BMW or even Apple Computers who were basically dead at the end of the 90s before Steve Jobs returned.

Girard-Perregaux went through this once again at the end the 1980s, early 90s, when Luigi Macaluso took ownership and revived the brand yet again. A remarkable era of success and horological creations was abruptly impacted by the much too early and sudden passing away of Luigi Macaluso in 2010. With ownership of the Sowind Group shifting to PPR, later Kering, some struggles lay ahead.

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Attention to detail as in the WW.TC from the Macaluso era

Struggles and Challenges

Leadership and execution is a key to success and under the new ownership, Girard-Perregaux saw frequent leadership changes and changing directions. However, problems were multiple, some made in-house but others also from external factors. The Luxury Goods segment was heavily impacted after the financial crisis in 2008, something that impacted the entire Swiss watch industry and in particular hitting GP at turbulent times.

However, GP has and is still facing other, in-house made problems that remain major inhibitors to the success of the brand.

  • Retail Strategy: in my view, the biggest weakness and vulnerability. GP is just not present in the shop windows of major retail chains. Many have kicked out the brand with frustration and getting back is hard to achieve. There was a time, when GP started to build brand boutiques, but those are incredible expensive to set-up and to maintain and for a smaller brand not economical. Stepping into online retailing has also been attempted but without much fortune. It is still not clear how GP wants to establish itself again as a major contender in the retail shelves.
  • Brand Awareness: it is a clear weakness that Girard-Perregaux as a brand is so under the radar, even watch enthusiast seldom know much about it if at all. You can have the best product in the world but if nobody knows about, it’s wasted effort. GP has been particular weak in promoting its brand and I still cannot see a coherent strategy to change that.
  • Market Values: now GP is not the only brand that struggles with this. Grey market dealers and second-hand watches plummet in price compared to retail prices, but GP is suffering particularly bad from it and seems not to have a strategy to counter it. It is closely linked to the other two points above of course but is also a result of supply and demand and some challenging price points. It is certainly an important factor that hurts a brand’s reputation among customers and business partners.

What is a brand’s DNA?

Besides all the struggles and challenges listed, Girard-Perregaux is a fascinating brand. It offers something that appeals to me personally and to a loyal customer base. A product that has intrinsic design qualities without trying to boast. Highest quality cases and dials that never look out of place whether in the office, in the pub or on the beach. Something that is appreciated by people who know what they do, that do not need to follow fashion or trends or a well-known name promoted by celebrities.

Value for money I need to mention, too. This is not for everyone. A friend of mine, for example, doesn’t want “value for money”, he just wants to have “the best”. A good strategy that proved for him to be ironically great value for money as he collects Pateks. For me on the other hand, it plays a role and I feel I did not have to make any compromises when going with GP.  Surely, movement finish and finesse are not quite up to the very best at least outside the Haute Horlogerie line.

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1966 Annual Calendar Equation of Time: full of DNA, innovation and complications

So a brand’s DNA is about consistency, valuing heritage and its customer base. Giving this up to follow trends or just because there is no better idea or strategy or is it even lack of knowledge, is a path to disaster. If we look at the recent years and which direction GP has taken, I feel that they have lost their way. An over-crowded Laureato collection while stronghold collections like the 1966 or the Vintage 1945 have been neglected. Complications and finely designed dials are rare to find in the collection today. Re-dressing models in black-coated cases or with fantasy themes is not very innovative and sustainable.

With fantasy themes, limited coloured and oversized black case Laureato’s and now candy-coloured Bamford watches, GP has lost its way

And recently under the new joint management with Ulysse Nardin, that trend has been accelerating at a frightening speed. Laureato Absolute comes across as a Hublot look-alike, sapphire cases or limited editions of fancy colour combinations are very much out of place with the GP heritage. And now, a cooperation with Bamford to candy-colour the Ladies Cat’s Eye watches? It’s going too far, way too far.

The Future???

As I said in the beginning, I’m very passionate and protective about Girard-Perregaux and I have never been before so concerned about the future. For once, I cannot see this being a path to commercial success, which of course is never good. Even leaving this aside, never sell your soul for short-term financial gains. It kills a brand, especially in a segment that nobody really needs, like luxury watches. Furthermore, the key issues I highlighted in the “Struggles and Challenges” section, are not being addressed, not even a strategy or worse awareness of those seem visible.

In the end, the truth will be in the numbers. Kering as the owner probably has enough cash to get through some bad years, but I would think that those years may have gone by already given the frequent management changes. However, at some point in time, too much damage will have been made and it will be a very long and costly process of recovery.

Is there a way out? I can only hope there are growing critical voices that reach the right people and corrective measures are taken before all is lost. There is an inner dynamic with these processes, you lose your best talents in the company and strangle motivation which further worsens the situation like a self-fulfilling prophecy. A turnaround can only be successful with a clear vision and strong leadership combined with patience and perseverance.

The GP Chronicles

Nobody can take away my passion but of course, I’m concerned and also disappointed. Girard-Perregaux will continue to be close to my heart, at least the GP I admire, the long heritage all the way back to Constant Girard, the watches of the 1950s, 60s and 70s of the Graef era and most of all the Macaluso years.

And I will continue to share my GP knowledge, photos and passion but may not cover all the latest news anymore until I see the direction changing. My collection will continue to revolve around Girard-Perregaux, however, I will be venturing out as well to other brands and probably will get more diversity into my collection. A watch collection is anyhow not something static and learning new things can never be wrong.

Stay strong GP and get back on the right path!

 

 

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