The Business of Watches [011] The Head Of Montblanc's Timepieces Division Laurent Lecamp On Minerva, Hairsprings, And What's Next For The Brand

0:00Welcome to the Business of Watches, the Hodinkee podcast that explores the intersection of commerce and timekeeping. I'm your host, Senior Business Editor at Hodinkee, Andy Hoffman. This week, we sit down with Laurent Lecombe, Managing Director of Timepieces at Montblanc and Minerva. It's an interesting and challenging moment for Montblanc and Minerva. It won't be participating at Watches and Wonders this year. That's a big change for the Richemont-owned brand. We talked to Lecombe in September before this was revealed. but it was becoming clear that Montblanc, the watch brand, aligned with the famous Germany-based writing instrument maker, was doing things differently.

0:47We were at the Minerva manufacturer in Villaray to get a close-up look at the facilities of the story brand that serves as the jewel in the Montblanc watchmaking crown. Le Camp lays out the product and business philosophy behind Minerva and its current state and how the business runs. We also talk about his habit of extreme long-distance running in extreme conditions. He's a unique executive in the watch world. But first, we're going to start things a little differently this week. Mark Koslerich, the senior editor at Hodinkee in New York, and I are going to talk about some of the latest headlines in the watch world.

1:36Mark, good morning to you. Welcome. How are you? Good morning. Thanks for having me. I'm doing great. Excellent. Excellent. So it is a Monday morning there for you in New York. It's Monday afternoon here in Geneva. Now, we had some interesting reporting to start off the year from a publication here in Switzerland called Business Montreux, which is headed and run by a gentleman by the name of Gregory Ponce here in Switzerland. And he reported that Antoine Pint, the CEO of Tag Heuer, looks like will be stepping down or leaving that post. Now, I reached out to both Tag Heuer and Mr. Pan for comment and reaction.

2:25There's been no comment from Tag Heuer and I haven't heard back from Antoine. But I've done a bit of reporting and indeed it seems like there are some changes likely to happen at Tag Heuer. Now, this comes at a pretty crucial time for LVMH watches and the Tag Heuer brand. It's just ahead of the LVMH Watch Week, which is about to happen in Milan. And I believe this is the seventh, you know, if this change takes place, that means there's been like seven CEOs at Tag Heuer in the last 12 years. It's a rather unstable position. Mark, you've been following this news as well. What's your take on what's going on with Tag and the executive suite?

3:09Yeah, I think it's an interesting time for LVMH watches in general. And I think you're seeing a lot of that play out with Tag Heuer. But we see turnover throughout LVMH in general quite frequently. I think the person that comes to mind first when I think about Tag Heuer, possibly one of the longer run CEOs and who was there when I started at Hodinkee was Frederic Arnault. Obviously one of the sons of Bernard Arnault and now heading to L 'Orupiano. L 'Orupiano, yeah. Which I think is interesting because you've got Frédéric Arnault who was CEO of Tag Heuer and then later LVMH watches. And you also have Jean Arnault who's in charge of the LV brand watch department.

3:59And you could easily say, well, this is a job that turns over frequently because it's a good stepping stone for people like this. But Pan was not that kind of CEO, to my view. And so I think the question is, what does a watch CEO need to be for the brand to be successful, for the CEO to need to stand around? because we as enthusiasts, myself included, like to think of watch brands as led by people that love watches deeply. But at the end of the day, it's a business, and you need people with business acumen. I think the ones that do the best are ones that can kind of balance the two. I don't know him personally.

4:44I haven't interacted with him. But I kind of wonder if CEO positions, especially at LVMH Watches, are things that people are more comfortable with turning over maybe like head coaches and NFL football I mean if you have a down year it's easy to replace you with the next person up but we also saw some changes at Bulgari recently and I think that speaks to the fact that right now we're going through a difficult time I think in the watch world in general and it's possible. We're just seeing that play out where brands are looking for somebody that can provide a little more stability than they've been seeing.

5:28Interesting. Yeah. I mean, we saw Jean-Christophe Babin will be stepping down as the CEO of Bulgari. I believe that's in July or June, perhaps. And his replacement has been named. There'll be a new person in that role. But as far as we know, Jean-Christophe Babin remains the head of the LVMH watches unit, that watches division, which, as you say, you know, Tag Heuer, Zenith, Hublot all report into. And yeah, I mean, you know, I think there's no doubt that we've seen those sort of mainstream traditional Swiss brands of which Zenith, Tag, and Hublot all are, although Hublot is obviously much younger than the other to, yeah, it's a difficult market right now.

6:14And, you know, that executive role needs to have that mix, as you say, of that product passion, understanding, but also some business acumen here and to get sales moving in the right directions. I think the other thing that is worth keeping in mind, I think actually the Baban and his current role is probably the more important role to watch just because I think LVMage in general seems to have this perspective of indexing themselves against the big brands like Rolex and Omega and if you look back at the pre-COVID days that wasn't necessarily the case for a brand like Zenith or Hublot you did have these top end pieces that came out Zenith had their Defy Lab and And Hublot was always doing some experimental high-end pieces.

7:06But I think what you need to think about is who is LVMH watches trying to make these brands to become and where should they sit in the product line? I think no matter who is the CEO at Tag Heuer, it will all depend on who is leading the ship at LVMH watches and what they're telling the brands that they need to be. if they are continuing to push into the ten thousand dollar price range for their entry level models you're going to have a lot harder of a time in the upcoming market that we're seeing where everything's going to get a little more tight it's a question of whether or not all the ovmh brands need to be in that sort of mid to high tier luxury or if some can play in that more accessible space which is where we've seen tag hoyer be the most productive in the past few years.

7:53But I don't think that the CEO of Tag Heuer or any of the LVMH brands can make the decision on their own. I think you need somebody at the top who is willing to say, look, everybody has their niche and we should be okay with selling a$5 ,000 Zenith,$5 ,000 Tag Heuer and making that our bread and butter and not necessarily playing in the$20 ,000,$30 ,000,$40 ,000 range. Yeah. Well, I mean, look, we've seen Tag Heuer trying to play in the$150 ,000 range with the Racheopan chronographs and things like that. So, you know, they've got a wide price range in terms of their SKUs, but obviously brands like Omega do that as well.

8:34But all I'll say is it's not an easy job being the CEO of an LVMH watch brand these days. Let's move on. We've got this week coming out a new Speedmaster professional, speaking of Omega, with a Panda dial layout. It's got a ceramic bezel. It's the first Speedmaster in steel, I think, with a price tag over 10 ,000 US dollars. Mark, you've been hands-on with this watch. What's your take on it? And what's the strategy here from Omega? I mean, is this a direct shot at the Rolex Daytona? Well, it's hard to not compare the two. I think the two brands in general are so much closer to each other. And I think that goes back to what we were saying before is everybody wants to be a Rolex except for Omega and Omega is yet probably positioned the closest in terms of quality value.

9:31yeah it's it's a hefty price tag but it's also about five thousand us dollars less than a rolex daytona so the question is is that a shot at the rolex daytona it's hard to say anything other than yes just because of the aesthetics of the reverse panda dial and it's got this lacquered dial with sunken white lacquered sub-dials, which immediately looks actually more like a vintage Daytona than a modern Daytona does. You know, we have on a modern steel Daytona, we have these ringed sub-dials and it's more metallic accents on these dials. And this feels more vintage, which does well for Omega. I mean, this is a space that Omega has done their best is when they play on the sort of vintage aesthetics maybe it's close to the aesthetics of a lamont daytona but again i think the interesting thing is even though this is immediately something that i think people are going to cross shop with the daytona or even consider if they can't get a daytona it's interesting because one i don't think that omega would ever admit that that's part of their thought process i think they would just prefer to assume that rolex doesn't exist and they definitely benefit from the fact that they have put so much more into producing steel watches and making even their most coveted steel watches more widely available than Rolex has.

11:06And if they can just ignore Rolex altogether, they don't have to feel like they're a part of this debate. Whereas other brands, I mean, we'll, we'll sit in on meetings together and other brands will openly admit that they're trying to come after a portion of Rolex's market. And it's just funny to me that the brand that is most well-equipped to do that would rather not admit that Rolex exists at all. Yeah, they don't certainly like to acknowledge, but I would say that much of what Omega has been doing with its premium offerings, obviously the Speedmaster, and then we saw the most recent Planet Ocean, which you wrote up in a great piece as well.

11:44I mean, price-wise, quality-wise, components-wise, you know, with the Planet Ocean against the Submariner and certainly the Speedmaster against the Daytona. But yeah, you're right. In conversations, you know, Omega executives tend to not acknowledge their biggest competitor and the biggest competitor for everyone in the dominant company in the Swiss watch industry. I do wonder, though, So if a release like this seeds a little bit of the value market to someone else, I mean. Tudor, you mean maybe? Yeah, we were discussing in the office that, you know, I wasn't around necessarily for the$6 ,500 Speedmaster days.

12:26I definitely, I said, you know, a Speedmaster feels like an amazing buy at about$7 ,000 or$7 ,500. And that feels about the edge of what it should be. and we've long past left those days. Now you're talking about, I think, around$8 ,900. But the problem is the more that you move up, and I imagine that the margin gets better. I don't see anything here. Yeah, a lacquered dial is a little bit harder to do, I would imagine, but I don't see anything here that shows me that a massive price increase in the last few years to a watch like this is really necessary for Omega. So I'm sure that... But at the same time, their costs have increased greatly due to the appreciation of the Swiss franc, price of gold.

13:17But indeed, I agree that shifts in the product itself haven't necessarily justified that. No, and that's true. And the other thing that I have mentioned in a story that will have come out by the time this podcast comes out is our sort of internal reference pricing is so strong, even from a year or two ago, that it's hard to get rid of those ideas that a watch should be a$7 ,500 or an$8 ,000 watch when really, again, a lot has changed in the last few years. But that being said, I think it is hard to swallow that price tag over$10 ,000 no matter how good the product is. That's just something that Omega can't control necessarily is how$10 ,000 feel.

14:05And so it's a question of whether or not could they have come in a little bit under and then it feels like more of a value. I still think the product is great. Obviously, the movement is a tried and true movement that they've had for a number of years, the 3861 coaxial movement. So there is a lot of value there. The fit and finish feels really great. It's exactly what you would expect. It's just an interesting time, I think, for watches in general. And I don't necessarily see anybody criticizing Rolex for raising their prices recently just by virtue of the fact that you really can't get the watches anyway.

14:38So I think for all my criticism of that price tag, Omega is maybe unfairly getting a little bit of that just because you could walk into a store in the next few weeks and likely pick up one of these watches. And they are great watches. Great. Cool, Mark. Well, thanks for joining me today. This was fun. Really appreciate it. Yeah, thanks for having me. I appreciate it. Now, here's our conversation with Laurent Lecombe, Managing Director of the Watchmaking Division at Montblanc and Minerva. We hope you enjoy.

15:15Welcome, Laurent Lecombe, the CEO or Managing Director of the Time Pieces Division of Montblanc and Minerva. Today, we're in Villaray. which is the home of Minerva. It has been the home of Minerva since 1858, and you were kind enough to show us around and to give us a tour of the manufacturer. But we want to talk about you, and we want to talk about business, and the business of Montblanc and Minerva timepieces. So you have been in the role as managing director for about five years. Tell us what you did before that and what your professional career has been like and what brought you to Montblanc and Minerva.

16:09Bonjour, Andy. Bonjour. Pleasure, first of all, to be with you today. So thank you for visiting us and taking time here at the Manufacturing Villaray. As you can see, it's beautiful, nice weather, beautiful nature. So everything was successful this day. So shortly, how to introduce myself? I would say that I'm Swiss and French, but now I'm only Swiss since only a few days. Oh, congratulations. So you recently got your Swiss citizenship. How was that process? It's not easy. It's a long process. It's a long process. Yeah, it's a long process. But I like it because it means it's a process during which you have to learn about Switzerland.

16:55I bought and write a lot of books about Switzerland before being Swiss. Be sure I know the geography. I know the brands. I know the legal aspects as well. I like it. It's a process and you have to go through different steps to get it. Indeed. And so tell us the steps of your career before you ended up in this place. I studied in a class preparatoire, or grandes écoles, preparatory classes. Then I entered into business school. I studied in Germany as well. And I was very interested in jewelry and watchmaking, but I had no connection at that time. And I decided to start learning about it. So GIA in the US, for example, to learn about precious metals, diamonds, stones, and so on.

17:45At the same time, I started working for the LVMH Group. So in Switzerland first. After very shortly, I was by, after four years approximately, I decided to go to Porsche in Germany. Then I was back here in Switzerland. I was working for Independence Watchmaker. Name was Michel Jordi. When he relaunched the brand in the very high end, in luxury. A few years later, I was working for a brand to distribute luxury products in Eastern European countries and Russia. So that's when I decided to start learning Russian. Right. So yeah, luckily today I speak French and Russian, so I learned. Amazing. I learned.

18:29Not as useful given the current political and business environment at the moment, but things can change. As you have mentioned, it's a process, meaning that I remember when I was learning Russian, I bought a book and the book was Method Assimil. And for the first year, every evening, every evening, I was walking 20 minutes, within 20 minutes, I was walking with this book. And I just told to myself, if you want to speak this language, but you have no other choice than walking every day. And my father is a German teacher. And he told me it's better to learn 5, 10, or 15 minutes a day all year long.

19:11And then, believe me, you will speak really good, really well. And I didn't believe this because I say if it would be so easy, everybody would do it. But I tell you something. Nobody will do it every day during one year. It's very rare. It's quite impossible. It's about putting in the time consistently. I gave my words to my father. So I did it. and that's how I started learning Russian and it was very interesting to understand the Russian culture. Absolutely. And so it was at the time and I decided to launch my own watch brand named Cyrus which was the case and it was very successful. Very, very successful in terms of development, in terms of growth, in terms of manufacturing.

19:55Then I entered into the Burr group which is quite famous here in Switzerland and after Boora was working for Richemont and now for almost five years, I'm in charge of Montblanc watchmaking and as we have mentioned previously, Minerva watchmaking as well. Exactly. And what have been your specific goals that you wanted to bring and things you wanted to change about Montblanc and Minerva? I mean, I think you talked about basically three categories, three specific things that you've focused on since you've been here. Tell us about that. So that's an interesting point. I think that when you join a company, the first thing you have to do, according to me, it's clearly doing nothing the first few months you are here.

20:44Because you cannot enter into this company and expecting to do something quick. So, you know, when I was working in Japan, they told me something very interesting. I spent five years in Japan. And they said, so one of my customers explained to me that, Laurent, if you want to do something quick, always start with the longest path. I hope the translation is correct. Very interesting. It means quick should not exist. And it doesn't exist for luxury. That's why for me, I spend time here learning, reading books. So I love reading. So here I read a lot of books about Montblanc, about Minerva, to understand the culture, to understand the philosophy.

21:27and to have humility because when you arrive, you want to do a lot of things, but at the end, you don't know the brand. You know from external point of view, but you have to understand what the teams we share with you, what the customers are expecting from the brand and so on. And then, in that case for Minerva, I found something very interesting in a book. And this book was in English. Yes. It was 365 pages and the information was at the end of the book. And once the book was over, one of my colleagues told me, oh, but by the way, we have the same in French. That would have been easier for you.

22:06But it was good. And in this book, I found something interesting. In 1927, Minerva developed something really interesting for pilots. It was a bezel. And when you move this bezel, you have the possibility to add a function to your watch. and this bezel was a really big inspiration for me. I said, wow, Minerva developed it for the pilots. What about bringing it back, but back now in terms of using it and putting this bezel on each timepiece we're developing so that we have a real signature. You recognize at the first sight, but this signature is not by chance. this is something I would say connected with what we did in the past so it was the first idea so the idea was I found this bezel in the book I just wanted to use it because I felt it was my instinct that I felt we have to use it to develop a new signature for the Minerva timepieces and now if you observe our new Minerva timepieces all of them do have this bezel and this bezel is inspired by the one developed in the 20s and this bezel is a strong sign of recognition and we have many collectors loving this and we are even recruiting new collectors because Minerva is recognizable now.

23:34That's the point. It's a signature element to almost all your timepieces. Clear signature. Minerva was always recognizable in the past but only if you paid attention on the other side of your watch. The side you never see. Yes. Because the movement you recognize at the first sight, the caliber, a Minerva caliber is easy to recognize. You just turn the right around, you observe everything, say, okay, that's Minerva. It's unique. But on Dial's side, it was not the case. So this bezel made it possible to transform the perception of the brand. And that's exactly what was needed at the time. The first point was clearly identity.

24:17The second point was, okay, we have a lot of key calibers, but it's impossible to see them because they're always hidden. So I proposed to the team that we just turn around the calibers for the chronograph Monopusha, which is a signature by Minerva. And then we revealed the beauty of our calibers to the world. And this product became a bestseller. Indeed. And how much of a technical challenge was that for the watchmakers here and your engineers? Because it is an unusual way to bring forward the elements, the unique elements of Minerva calibers. It's a big challenge. It's a big challenge because when you say I just want to turn around, then you have to think about it that all the hands will be working anticlockwise.

25:13clockwise. It's been done before on some watches, but it's not for a regular line of watches to run the wrong way. Yeah, absolutely. Absolutely. And it seems that in the past, there are no watch companies in this world that came to the idea to reverse, to turn around a chronograph monopusher. On top of it, the caliber we are working with was about 100 years old, meaning that this caliber was never thought to be developed with complications or with additional elements coming on top of it. Because when you create a new caliber, you can think about the next steps. But 100 years ago, you created a chronograph for being a chronograph, not for having a moon phase or whatever.

25:59So it means we had to add components on top of this caliber that was never thought for having new components. and we hope it will be working. Yes. But I'm lucky because internally we have an incredible team, engineers, and they manage it. And I just want to get back to that bezel for a moment. The signature bezel that you've added to the Minerva line of Montblanc watches, you know, it's a fluted bezel. And what you discovered or what was discovered in the archives, In fact, you claim that back in 1927, this was a patented fluted bezel that had functionality, and that's how you're using it in the chronograph as well.

26:50Obviously, there's another company that's well-known for a fluted bezel. So, I mean, what gave you the confidence to make that claim and to make that design element a key part of your identity? I felt it. I really felt it. It's like sometimes it's very difficult to explain things with words when it's something emotional. and when I discovered this fluted bezel in the archives, I immediately felt we have to do it. That's the point. And for me, differentiation is a key element to be successful in the watchmaking industry. If you are like the others, why would you be the first choice for your end customers?

27:42And I say here end customers, generally speaking, because I'm absolutely not looking for customers. sorry to say this but with my team together we're looking for fence which makes a huge difference and Minerva it's only fence it's not customers and this fence they really appreciate the flooded bezel the flooded bezel clearly had a strong connection with what we have done in the past the flooded bezel is a distinguishing element that we have it means you can recognize the Minerva temp piece at the first sight and this is something we can use for future complications as well. Imagine that Minara comes to the idea creating a chronograph with no pushers at all.

28:31And imagine that Minara is coming to the idea putting a flooded bezel on top of the timepiece and this bezel has a function. The chronograph wants. That's what we have developed. And it's patented. So you see how an idea taken from the past, from 1927, to be very precise, can have an influence on the future developments. Now we have launched a chronograph with no pushers, no start, stop, reset functions with pushers, but we only use the bezel on the right to make these three functions. This is patented at just the beginning of the story. Sometimes the flooded bezel will be used as a function, Sometimes it will be used as a visual signature, and sometimes it will be used to replace something.

29:24But that's for the next step. We should discuss about it next year. Well, we look forward to all of your novelties and new releases. But you talked about you're not interested in customers, you're interested in fans. How does someone become a fan of your watch brand and this manufacturer? What is it that people need to become fans and to become deeply, in their mind and in their emotions, invested in a brand? For me, there are two elements. The first one is the language. You have now, we have 7 ,000 languages in this world. There is a new one, the one developed in Villeray, the Minerva language.

30:15The Minerva language is a specific one. And when we use this language to the end customers, they transform themselves into fans. Having own language, it means that we are bringing something new, like a new language, in terms of complication, in terms of watchmaking approach. But at the same time, we have to elevate the brand and we elevate the brand while being companion culturel, a cultural companion, meaning that on top of everything, each timepiece is bringing a story that could be connected to different themes and it will help to connect much more with the cultural world And that's exactly where we want to be with Minerva.

31:05So Minerva has, on one hand, its own language. And on the other hand, Minerva is a companion cultural. And when you mix together these two elements, you have the new Minerva. That's my point. Again, I think that if you want to be successful, you have to be different. and differentiation is something that should be developed in accordance with the roots and the innovation. And that's what this language, this new language is bringing to, as an example. One of the things that we've been looking at today is the packaging that the Minerva line of watches from Montblanc come in. I mean, that's something that you started on fairly early, not quick right away, but it's a change that you made.

31:57What I hear from a lot of brands, what I see from a lot of brands is them reducing the size of the packaging, not focusing on the boxes that their watches come in. You're doing the opposite. Tell me why. Tell me how and tell me why. I don't know the way to success, but the way to failure is trying to please to everybody. That's for sure. And that's exactly what we will never do here by Menara. So luxury lies in details. Imagine you are at home and you have a beautiful packaging from Minerva and all your friends coming home say, wow, what's this? And then you start explaining the packaging. Packaging is so important because it's part of the product.