The Business of Watches [003] Georges Kern: The Breitling CEO Talks Growth Despite Challenges Facing The Watch Industry

0:00Welcome to the Business of Watches, where horology meets high finance and each tick tells a story of markets, margins, mishaps, and mechanical mastery. I'm your host, Andy Hoffman, Senior Business Editor at Hodinkee. In this series, we dive deep into the global watch industry, a place where centuries-old craftsmanship intersects with billion-dollar valuations, executive brand strategy, and investor speculation. From Swiss Valleys to Silicon Valley, we trace the movements shaping this uniquely resilient sector. Just how big is the business of timekeeping? Well, some estimates place the entire watch industry, from ultra-luxury maisons to smart watches and micro brands at north of$100 billion globally.

0:51But behind that figure is a complex web of legacy, innovation and ever-shifting consumer taste and demand. This is the podcast for collectors, analysts, watch buyers and sellers and anyone who's fascinated by the intersection of wristwear and wealth. Because if time is money, then money is most certainly time. So let's get down to business.

1:20Among the varied world of Swiss watch brand executives, Georges Cairn is a constant force. He's been in the industry for more than three decades with stints at brands like Tag Heuer, IWC, and as the head of Richemont's watchmaker division before leaving to join Breitling under new private equity ownership in 2017. It's been a dynamic ride so far. The Breitling brand was purchased from Switzerland's Schneider family for less than a billion dollars. But by the time a stake was sold to a new majority owner, the Swiss private equity firm Partners Group, in 2022, the company was said to be valued at about$4.5 billion.

2:05dollars. As investors, private equity has earned a reputation for acquiring business and cutting costs and paring them down before selling at a profitable return. But that hasn't been the move for Breitling under Kern. He's taken on a mandate of growth. While volumes haven't gained significantly, model lines have been refined, and the brand's average price has risen quite sharply to well above 6 ,000 francs. Kern is also building a stable of brands within the company. He paid about 60 million francs for the largely dormant but legendary watch brand Universal Genève. To be relaunched next year, Universal Genève will be positioned as an ultra-high-end watch brand, with prices well above Breitling that will compete in the haute luxury and jewelry space.

3:00Prices for UG are expected to start at around 15 ,000 francs and head much, much higher. Reimagining and relaunching an historical brand like Universal Genève in a different price and retail segment is a massive challenge. And at that lower end of the price spectrum, Breitling is reviving another mark, Galet. It will also launch next year and will be priced in the below 5 ,000 franc range to compete with the likes of Tag Heuer, Oris, and Tudor. The move comes as this more price-sensitive area of the watch market is struggling as consumers turn cautious amid global economic uncertainty. Finally, with a deal to be the official timepiece partner of the NFL, the first luxury watch brand to do so, Breitling is doubling down on the United States at a time when that market is under immense pressure, thanks to the disruptive shifts in U.S.

4:05trade policy and economic policy by the Trump administration that is threatening Breitling's biggest growth engine. Dynamic, relentless, and demanding, Kern is very much the public face of the brand and is in many ways Breitling's biggest ambassador, despite having Hollywood stars like Austin Butler and Charlize Theron in its stable of representatives. Check out Kern's Instagram account. He's constantly on the move, a jet-setting evangelist for the brand in search of new converts. Recorded several months ago before the latest changes to the U.S. tear, policy on Swiss goods, and before the NFL deal was unveiled, here's our conversation with Breitling CEO, George Kern.

4:57Mr. George Kern, the CEO of Breitling. Welcome. Thank you for taking the time.

5:04Georges Kern:Thank you very much for the invitation. It's a pleasure. Excellent. So tell me, you have been the CEO at Breitling now since I think 2017. Yes. What do you think you've accomplished so far in that mission and the changes that you've made and what still needs to be done? I think Breitling today is a really established brand in the luxury segment. We came, I think, when I look at the Mongstead report from position, whatever, 25 to 9 or something. So we are one of the major players in the watch market. And of course, the aim is, it's like in soccer, you're playing second division, first division, then you play Champions League, then you want to win the Champions League.

5:49Georges Kern:And this is what the aim is. So we want to further grow and, yes, score more goals. And when you look back on your accomplishments so far, I mean, what do you see as the most significant things that you've done or changed? I think the first thing is we went the whole way. We weren't afraid of stopping in the middle of the bridge. We had a vision to establish Breitling as a journalist brand, which it was in the beginning of last century or then after the Second World War. So we relaunched many lines, which became very successful, like the Top Time or the Premier. And today we're offering everything from extremely elegant watches, like the Premier, for instance, to an instrument for professionals like the Emergency.

6:49Georges Kern:And yes, we're a truly journalist watch brand. We have three segments, air, land, and sea. The Air being, of course, the strongest one with three lines, the Navi Timer, the Classic Avi, and the Avenger. But we have another offering, which gives us an opportunity to talk to many, many more people than we did seven years ago. Right. And, you know, for this year, you've launched a couple of new things. Most recently, a new version, some new versions of the Top Time, and one of them in a smaller case. Talk about that and what that offering is trying to get at in the market right now. So we want to position the Top Time, the Premier and the Classic Avi as really our historic lines, our heritage lines, if you want.

7:38Georges Kern:And these heritage lines have or had a certain size. And we wanted to offer these products in the classic historic sizes. and as you know at that time it was I would say anything between 36 to 40 even though the classic AV Chrono at that time was even above 41 but it fits the positioning so that's one thing as a heritage watch or line and the second thing is there is a need for these type of products in the market. And by the way, not only in Asia, where you would intuitively believe they need smaller size, but it's a kind of trend all over the world. And when we took the decision many years back, because you don't launch a product like this overnight, we were hesitating.

8:37Georges Kern:And thank God we decided to go for the 38 millimeter nature, with obviously the introduction of our new in-house automatic movement, the B31. Would you be able to pinpoint, though, a trend in consumer tastes in terms of case size? And is that something you're moving to? Or is it more about expanding the offering to include all? I think it's a second. What is striking is whenever we launch a product, we are criticized by the size. When we launched a 46, everybody's criticizing and said, it's too big, why don't you have it at 40 or smaller? When we launched the 38, they said, okay, it's a baby size, it doesn't correspond to Breitling, come back to the big sizes.

9:23Georges Kern:I think you cannot run a brand like this. You need to do what is right for the brand, what fits to each individual line. And if it makes sense to make the top time in 38 millimeters, let's do it. And we will obviously not stop with big sizes because bigger sizes fit certain lines like the Avenger, for instance, or one of our best selling products is the NaviTimer 46 millimeter in particular in the US and in the UK. So why would we stop it? No, you have people who want that and some other people want smaller products. The beauty with Breitling is that everything we do has been there in the past.

10:10Georges Kern:I believe we are more truthful to the brand than we've ever been. And I think whatever we do is authentic and legitimate. So that product is legitimate and the success shows it. Yeah, you have great heritage to draw on and you're going to continue to do that, exploring those archives and exploring everything that the brand has. Moving forward to the present, I mean, this year it's been quite volatile and there's been lots of news that's changed things. But what is your number one priority this year? And do you think you can still grow the brand in this challenging environment? And is it a goal to be part of that billion franc revenue club?

10:57Georges Kern:So first of all, we need to concentrate on what we can influence. I cannot influence politics, wars. I wish, but I cannot. So I need to deal with the situation and tell my team, let's optimize what we have. Let's improve on issues we can improve and control. So this is what we're doing. We constantly improve our products. We constantly improve our distribution. We constantly improve quality movements. And we try, of course, to be innovative. And there will be great new products coming also now in summer and later on to gain market share. We need to gain market share. We've been stable last year, which I think in this environment has been a kind of, not a miracle, but has been quite a good performance.

11:48Georges Kern:We wish to do more. But when you have headwinds like we have in the industry, you have to concentrate to be better than competition. And I'm convinced that we are better than competition, that we gain market share. But of course, our ambition is to grow this brand, this maison far above one million in turnover, for sure. Do you have a goal of when you may be able to do that, timing-wise? No, I mean, this is impossible. I wish I had a crystal ball. I don't. We're confident that what we have as a brand in terms of history, roots, and we had our 140th anniversary last year, what we have in terms of diversity in design, in concepts, what we have in beautiful boutiques around the world and brilliant partners around the world, we will continue to outperform.

12:44Georges Kern:But we are now in a phase of search for excellence, again, to not only gain market share, but to be prepared when the market will come back again, because the market will come back again. I'm a cyclist. I know that sometimes you have to climb the mountain, which is painful, and sometimes you go down the mountain. And after any whatever period up and down, there's the reverse phenomenon coming. So the market will improve. You know, you talked about a major goal being gaining market share. You know, sum up for me how a brand like Breitling does that, how it takes market share or gains market share within a market and from competitors.

13:27What do you do?

13:27Georges Kern:You know, the interesting thing is everybody sees what we're doing. And it's easy to say, let's do better design, better technical content, better quality, better image, etc. Then you have to do it. You know, there's no checklist of performance or a book describing how to make a brand successful. I think as everything we've created, also the positioning of, I would say, more sustainable, relaxed brands with the style we have, this modern retro style. while the sports we engage with like surfing, triathlon, all of that fits the current social environment. In terms of design, you see it in our boutiques, people feel comfortable.

14:21Georges Kern:It has welcoming, I would say, decoration. People like to come in, like to stay, because it doesn't reflect the classic luxury, even though our products are as expensive as the ones from our competitors. but it gives the consumer a different experience, a more relaxed experience. So everything we've been doing in terms of positioning, in terms of implementation of our concepts, in terms of products we're launching works. And again, in my opinion, fits very well the needs of the consumers of today in our current difficult environment. And this is why I think we're winning market share. But also, when you talk about price, when you talk about consumer segment, you're going to be launching new brands or reviving a couple of old brands, Galet and Universal Genève, both in 2026.

15:25Talk about the strategy of having these correlated brands and the overall intention here. I mean, are you creating yet another watch group like Swatch or like Richemont? No, of course not.

15:40Georges Kern:We are still much, much, much smaller and we don't want to call ourselves a group. We want to call ourselves a house of brands, if you want. What happened with Brightling is that of the last seven years, we have introduced much more in-house movements. we have dramatically increased the production of our B01 movement. We have now 100 % coverage of basically all our chronographs with our in-house B01. And now it's the same thing for the B31, our automatic movement, meaning that our average price increased over the last seven years from roughly 4 ,500 to roughly 7 ,200. So we left a price point, which we want to cover with Galet, which will be positioned between two and a half and five thousand.

16:34And that is still a very promising segment.

16:39Georges Kern:I don't believe in these statements. And I read it sometimes that only the super high end is doing well. I can give you many, many top end brands which are totally underperforming and failing in what they're doing. and I can give you many entrance luxury brands which are doing very well. So it's not a question in which segment, price segment you are. The question is how good you are in implementing your strategy or the product. So the Galet will be positioned between, let's say, 2 ,500 and 5 ,000, Brightling between 5 ,000 and let's say 20 ,000. I'm talking about the 80 % of what we're doing. And then Universal between$15 ,000 and upwards to$200 ,000 or$300 ,000.

17:29Georges Kern:And the second aspect is that we would like to come with a complete offer to our retailers. As you know, many brands left the retailers to do vertical exclusively with their own boutiques. And I think there's a space which we can jump in. and we've now showed both lines, both Calais and Universal at Watch and Wonders in Geneva and people love it. So I'm very confident and it confirmed our feeling that we're doing the right thing. And yes, I cannot wait to present it to the wider public in 2026. And let's just talk about that, you know, sort of approachably priced entry level that you're trying to capture with Galay?

18:20I mean, as you say, there are many people who think that this price segment is, there's no opportunity here. People at that price level are not buying Swiss made watches. I mean, tell me what you see there in terms of the opportunity and the market for that kind of priced timepiece.

18:41Georges Kern:So first of all, it is a brand, which is another copy of Brightening. It has distinctive history with distinctive designs, like the flying officer, with distinctive heritage, like timing, the first flight, you know, of the Wright brothers, etc. That's an important point. When we looked into dormant brand, we were looking towards brands with a real heritage, number one. Number two, we will start distribution in our own boutiques. So there will be a small area in our boutiques. We have 300 boutiques around the world where you will find this line. Again, we will then have an offer including in our boutiques from two and a half to let's say 20 or 30 ,000.

19:30Georges Kern:And we will fill in that gap which we left with Breitling. The point is it will have the industrial seal of Breitling. So the consumer will know it is the same quality. It comes out of the same house, if you want. We give the same guarantee. So it's a kind of reassurance, in a way, to the consumer towards that line. And having it in, I would say, a controlled environment where we control the sale, I think will help that brand to grow. Of course, there are many retailers which will take that brand on board. retailers which are very close to us. But then I would like to see that product close to the Breitling corner so that people can make the link of both brands.

20:21Georges Kern:And if we build this slowly with the beautiful products we have, with the heritage we have, in particular with Gale, with the design codes we have under that control distribution, I'm very confident that this will add real value to the market. And then let's contrast that with Universal Genève, which is a different, I think, branding, marketing and retail strategy. I mean, you know, we've heard a lot about it so far. You know, it was quite a significant acquisition of a dormant brand, probably the best known dormant brand that was out there. How is it going to look different in the market? And give us the latest that you can on that.

21:08Well, I cannot tell you too much.

21:11Georges Kern:The point is, first of all, it will be matched in a separate way from Breitling. So we basically build different teams. We have a different general manager with Gregor Butin. We have developers. We have designers. We have marketing people, salespeople, etc. they will be moving to Geneva. So it will be a totally independent brand. Of course, we are still in the incubation phase and we help the child to grow. This line is positioned, as I mentioned earlier, at a totally different price point, but very much different in a different way than what you see and know about the classic high-end luxury market.

22:00Georges Kern:I'm not going to tell you more than that. I will talk about that and we'll talk about that next year, but it will be very different from what you have in that market today. It would have been useless for us to do something the others have. Nobody needs another one of these brands at that price point, etc. So we need to be different. And same thing, I was extremely encouraged by the presentations we gave to the retailers in Geneva. All the big retailers in the world saw it, love the line, and will take it on board. And actually, the response was enthusiastic. So I'm very confident. Now we have to make it happen, obviously, next year.

22:55Georges Kern:But this was a very encouraging week we had in Geneva. Can you tell us, were you showing prototype watches? No, we showed prototypes. We showed prototypes of, you know, all these lines. Because why would we buy a brand if we wouldn't relaunch some of these products? It doesn't make sense. With Universal, you have some iconic designs. You know, the Paul Routreau of Gerald Genta, the Compacts, the Cabriolet, and many others. And of course, we're going to relaunch these lines. And yeah, it will be fascinating to see how the reaction will be next year. Obviously, you know, the market and the outlook is changing by the day.

23:39But one of the things we have is a very strong Swiss franc. We also have a very high price of gold. Universal Genève, obviously there'll be a lot of precious metals in that high-end product. What can a company like Breitling and your other brands now do to mitigate or offset those pressures?

24:04Georges Kern:Again, we cannot influence the price of gold. What we can influence is the desirability of a brand. How much you want the brand. I mean, this is what luxury is all about. You don't respond to a need, you create a need. And you have this in the super luxury, it's exactly about that. No woman on that planet needs another Hermes bag, but everybody, they all want a new one. It's the same for all these luxury brands and groups, they create a need, also in jewelry in particular. and this is what we have to excel in to creating a need and to create that desirabilité, you know, how you say it, for the product and we have to deal with the rights.

24:52Georges Kern:We have to deal with the gold prize. We have to deal with the tariffs. We have to deal with everything. But, I mean, we're not only sunshine captains when running a watch company. No, exactly. But, I mean, do you ever consider hedging? We do this. Of course we do this. I mean, these are technicalities we, of course, do with like everybody else, I guess. Has it, does it, or could it impact your choices in, say, case material? Would you make less gold watches? No. No, no, no, no, no, no, no. We have to stick to our strategy. I think it's a mistake to only match short term because you would go left and right and left and right.

25:47Georges Kern:Now, you need to have a certain vision. You have to keep a certain direction. And then, of course, there are tactics, right? You have to deal with the situation on the short term. But I'm so convinced that the watch industry will further grow with new populations in Asia, in India, with growth of wealth around the world, of growth of new generations which are buying luxury goods and watches in particular. so you know when I look at the luxury market since the 1980s and to the capitalization of the luxury groups since the 1980s it has been going up up up up of course then here and there you have a dip but the trend is there and these brands and these groups are growing so the market is there because we're humans.

26:47Georges Kern:We are Epicureans. We want to enjoy life. It's about carpe diem. I think people also get tired about bad news. And at a certain stage, they want to reward themselves. And in a way, life continues for everybody. And therefore, yeah, I don't think that humankind will change. And I truly believe that there's a big future for us and for the whole luxury industry. Life goes on and people do indeed continue to make those choices. We are in basically in the middle of April, the tariffs were announced, then they were rolled back, tell me what you, if anything, you've done so far, how this has impacted your planning for the year and, you know, what, if any, insight you can give us into the U.S.

27:46market right now. Some CEOs have said everybody is all of a sudden in a wait and see place and isn't making any major big ticket decisions. What do you see?

27:56Georges Kern:So I'm confident that the historically good relationship between Switzerland and the US will help to mitigate or even abort these tariffs. We all work at our level to talk to the administration. I do it on my level, talking to people. The Swiss American Chamber of Commerce does it. The Fédération Horlogère is doing it. We all work into the same direction. I'm convinced in particular in the watch industry that, you know, I'm convinced that we'll find a solution because you cannot just, we don't take jobs away from the Americans because there's no Swiss watch industry in the West, right? And you cannot just transfer 250 years of watchmaking to the US.