The Business of Watches [013] Norqain CEO Ben Küffer On The NHL Partnership And The Challenge Of Standing Out In A Crowded Market

27:27Like we, I remember the board meeting where we looked at, we had a whole budget just for Wild One. And I showed, and I said on the long-term, and that's what we're doing, the long-term investment, this is 100 % the right direction. And, and I stand a hundred percent behind this decision to do it. And not one person, you know, didn't agree. Everybody was happy. And they said, that's what we're going to do. and we understand the risks, but we're going to go with this development. So I think that was really the moment for Norcam where a lot that I had in me, I think, and in 2018 already when I started, I think you need a lot of courage to start a new watch brand.

28:08But then it's normal. You start and the first fair, I always talk about that, but the first fair was awful, right? We went to Basel. Everybody told us who needs a new watch brand and you guys are going to have a tough time, which I knew, but of course it's tough when you hear it from the retailers and from the trade and even some media, you know, that said then, you know, really, I don't think it's the right time to launch a new brand. But then things develop. And at the end, I think the version that we brought out in 29 was still a solid, good offering. And I think that's what we needed at that time also.

28:41Sure. But you have to develop. And I'm just very happy to see where Norcan is now standing in 2025. I think the brand has developed a lot. I think we've we've we've have a lot of new edges. We have a strong character, both in brand and product. And I think people are starting to notice it. And I'm starting to get a lot more messages also on Instagram and, you know, people saying, hey, really respect the direction you guys are taking because they see it's different. And that NHL deal, obviously, was certainly going to raise the profile with that major sports league. But what I find these days, if people in 2018 were saying to you, who needs another watch brand?

29:23We've got too many. Well, it's a very different situation today because there are even more watch brands. So, you know, how much of your thinking and your strategy is about standing out and getting that attention for your product? And yeah, having people pay attention to Narcane and what you're doing. I think it's very important because there's, you're right, a large, large offering of brands. And you're also, it's true, even more today. I think it's very important to have a strong character. I don't think nobody needs another brand that doesn't stand for something unique and different. And I believe that Norkane, we really managed to develop ourselves into a brand that we are in a space.

30:06We're in the sports watch space and we have our position there. And we're also in the space of a challenger brand. that's innovating. And I think what we're also doing is because we're family owned and because we can sometimes break rules when we feel like it, we can also have fun and launch an ice cream watch like we did this summer. Which was a very colorful sort of pastel version of, you know, it's somewhat traditional looking chronograph, but certainly the feel of that watch and the sense of it was new and different and quite fun. Yeah, I think, you know, there's a lot happening on this planet and last year we were working on the new developments for 2025 and I told the team I want something fun, not yet clear in what, but I said we need to bring some fun into it.

30:56I think there's a lot happening and I think it's good sometimes when you remind people of positive messages and I just more or less gave that slogan, enjoy life. That was like, imagine enjoy life, what would happen then? And then it developed and at the end we had the ice cream and the ice cream was of course we started with a lot of colors and eventually one of those color codes that looks exactly like an ice cream and I said hey that's a message because if you look at childhood and happiness and when I see my three kids you know how happy they mostly are it's also because they are free they are thinking and I just felt like that ice cream moment when you're a kid how happy are you then and how much does that symbolize enjoy life and also just being positive and I spoke to two three parents and friends as I usually do not telling them what I'm doing but trying to find out a bit how they feel about that that's oh it's so cool ice cream is so positive and that was it I said okay this year we're launching the enjoy life ice cream edition a fun part of it is as usual I presented it to our markets in February so it's freezing cold in Switzerland not the time for ice cream necessarily not at all it's freezing we're in Zurich and I have this screen and I'm putting you know all the novelties and suddenly this ice cream watch comes up and I could just see the room like what is this but the great part of it is there was no campaign you know not yet um it's winter and the feedback was good on the way it looks but not really on what's the meaning of the ice cream and the enjoy life story was not there so I was it had the logo on the back but and then we of course worked on the story till june and in june we launched it and yeah biggest success this year is the enjoy life edition that we launched this summer it's been a huge huge hit and i'm super happy to see that you know people understood the the twink of the eye that we're giving yes because it's really about i wanted something positive i wanted something to be and i think as as nor came we're a young brand we can do some things that are fun.

33:02And to collectors mean more than, you know, just the watch. It also meant, hey, this is different. This is fun. And we had collectors in New York or in other cities in the United States that told me, hey, my usual collection is, you know, in the highest price range. And I bought your Enjoy Life because I just think it's super cool. I'm going to keep it for my kids. And I think that's fantastic. And it's what we should do. And it's, yeah, I mean, you know, it's not easy to emote and transmit an emotion through a mechanical object. But of course, that is the, you know, I think you would agree that's the secret to sort of standing out and connecting with clients and customers.

33:41Yeah, I think every second executive interview says it, right? It's about emotions on the wrist, of course. But you said it even better. I find it's very difficult to create that because at the end, yeah, it's true. A mechanical watch can stay with you with generations. It can tell a story, but yeah, it's about you to write that story with it. Now, if a brand wants to be relevant in a very, very crowded market, I think it's their responsibility to carve out spaces where they can emotionally connect with their customers and find a way, because in my opinion, you can reduce the list to five brands if you just want to keep it simple.

34:23There is a reason for the other brands for being there, and it's an emotional reason. Yeah. That's 100 % sure. Absolutely. And so, you know, you talked about the development and the creation and the risk sort of taking you were doing with the wild one. How has that particular model, you know, developed then since launch? And what are you trying to do with that? I mean, and how, you know, much of your business is the wild one? I mean, you know, tell me about how you're sort of organizing your product in terms of, you know, what you want to sell or what you think you could sell to customers. Yeah, it's a great question.

35:01So in 2019, I said the independence was one model limited once a year. And today we completely switched that around. And the independence is 60 % of our business as a collection. the independence includes the wild one so the independence is actually the the base collection and the wild one is the wild independence it's the same case shape for those who don't know the norcane collection that well yet so we did not want to make a completely new k-shape we said we want to keep the independence dna because uh john clove really liked the k-shape um but of course rebuild it totally innovative and uh and ultra robust and ultra light so the wild one in that collection of course is very relevant but we also launched last year in new york we launched the new independent scouts and chrono 8k our first flyback chronograph movement where we developed the movement with amt so it's a it's a really really nice movement the flyback chronograph at a very exciting price i think we managed to really price it aggressively in the market and it's a big success we really are selling a lot of the titanium watches both titanium and steel So that's definitely a collection also to keep an eye on.

36:13It's becoming more and more relevant also in terms of part of the cake. And then, you know, looking forward and based on what you hear from clients and customers, I mean, we hear a lot from people about pricing and about inflation and about they think that the prices for luxury watches or premium watches, whatever you want to call them, have gone too high. And how have you dealt with, because obviously we're here in Switzerland, there's a strong Swiss franc, the price of materials has increased, the price of labor has increased, and you have marketed yourself and created yourself as a value-focused premium product brand, basically under 10 ,000 francs.

37:00So how have you dealt with those pressures and should we still think about Narcane in that price segment going forward? Is that where you want to be and stay? It's a very good question. And obviously, I think it's the biggest danger for the Swiss watch industry at the moment. If you look at the volumes, we went from 26 million watches exported to now 15 million. So yes, you can say we're also doing record results on value because the value is going up. I always prefer wrist. I always prefer more people being passionate. And I think it's our role, the brands that are below$10 ,000 to really make sure that we can get in contact with the customers, continue to spread the passion for mechanical watches.

37:49Luckily, Instagram is helping a lot. I think it's never been so visible. so the decrease in volumes does not reflect actually what's happening in social media so it's really important to have attractive offerings in a price range where and there are some beautiful brands already and very clearly positioned in that price segment and we nor came we will also stay there and i think that's our role it's to innovate to bring fun pieces in in that price segment and i will leave it to to my friends at at moser and mvnf and wherever. Those are the pens to do the higher priced collections. And how do you manage that though?

38:28Because as I say, inflation is real and there are competitors in this space from other countries now who are getting better and better at producing high quality watches. How does Switzerland keep its place as a producer of, you know, reasonably priced premium watches? What does Switzerland as a producer and manufacturer have to do to remain competitive? We think in Switzerland, the Swiss mechanical watch is part of our culture. And we have a very strong supplier, Jura, and other places where, of course, this has to function. And for them to keep prices competitive, that's the start. For that, they need volumes.

39:16If they don't have volumes, and that's what's happening now, those prices go up because they need to put the price up to be able to pay the people working at the factories. And then this reflects in a second contra productive situation where, of course, the end consumer finds higher prices while actually there are less end consumers in the market. Not ideal. So what we need to do is we need to continue to push and really make sure that we are competitive, that we can have watches priced in this price segment. So I said it in 2019 that it's our mission to, you know, be in the entry price segment and activate.

39:56Our mission has become, would be much bigger today because I think that the brands like Norcane, like Tudor, Oris, great brands like that, we need to make sure that we can get to the young customers. And I think that's something that's key. And I think that's something that could help the volumes. We will play a small part in that, of course. Sure. You know how I mean it, but I think that's really key. And I'm a bit worried that we have a second problem that is, of course, the Swiss franc when it then gets exported, because I've had really good discussions with the suppliers and I feel like they're ready and they're willing to support and they understand the situation that prices can't go up.

40:38That's my speech the whole year now in every meeting. But the problem is when you look at the US dollar versus the Swiss franc, especially, yeah it's difficult to to imagine what else can you do then to increase the prices right and i think that's really a second key problem where hopefully the situation will stabilize and yeah hopefully also the u.s economy will somehow be so performing so well that maybe hopefully that inflation that's real now and we haven't even spoken about tariffs can somehow be absorbed Absolutely. And, you know, are you, and as you say, I mean, when I think of Narcane, I think of, you know, your major markets being the U.S.

41:19Obviously, you're big here in Switzerland. You're in the U.K. in some places. Japan is a big market for you with this situation with the tariffs. And obviously, the U.S. economy continues to do well, and it seems like people are still buying watches, but there's a lot of uncertainty. We are where we are with tariffs at the moment. Who knows? It might change tomorrow. But are you rethinking the markets that you're targeting and trying to be less exposed to the U.S.? Obviously, the NHL deal would suggest otherwise. And so, yeah, are you rethinking your regional and geographic targets for the product?

41:55Not rethinking, but of course, you know, Norcan is still developing. So this year we had a big moment where we finally really entered the UK market. We hired a great director, Martin Jenkins, who has a lot of market experience, who will be now running the UK. We found great partners like Beaverbrooks and some independent family owned companies, Fraser Hart, and we're building that market. So that's a normal, I would say that has nothing to do with the situation in the US. I think the NHL deal shows clearly how much we believe in the US. And I also have to say for me personally, how thankful I am to the US market.

42:32Because when I started the NeurKeym brand, I remember the first moments being quite tough, of course. Before going to the watch fair in Basel already, I had like seven retailers in Switzerland. But then I decided to go to the US because I know in the US, startups, dreaming, it's part of the culture. and I got so much energy over there and also first retailers that just said, let's do it. Like a Ben Simon, Windsor Jewelers in Charlotte. I remember just talking to him and said, Ben, I'll give you a chance. You know, you deserve it, cool brand and let's try it. And that spirit, you find it in America.

43:10And I think that's from the beginning when we came with Norcane to the US, adventure, freedom, independence, it resonates. And so I feel like it's now our role, even if, you know, if this goes on and the next years will not be very profitable or probably worse, I will still support it. And with the NHL deal, it's a clear signal we will be there and I will not give the tariffs on to the end consumer because I think that's something that we will not be able to completely absorb, but you will not see us just putting the tariffs on the end consumer. I think that's now also something we're family-owned, independent.

43:47We're going to have to find solutions. We're a profitable company. So if we cannot help in a situation to pay back, then we're not in the right game. You know, it's interesting. You're a family owned company. Let's talk briefly, though, about, you know, the ownership structure of this company. And I'm quite interested in how you, you know, with your investors and spokespersons and ambassadors from the sporting world, what you are providing those sports figures with in terms of, you know, exposure to a business and them thinking about what they do next with their lives when they are no longer professional athletes.

44:29I mean, yes, Dan Marinka is near the end of his career. Sidney Crosby, I've, you know, in my entire life, he's been one of the greatest hockey players in the world. But yeah, he's not going to be able to do that forever. So talk about that relationship you have with them. I think it's really key for us because, as I said before, we really want to build partnerships. And in this moment, I ask myself also, what do we need? And Stan is a great example, Stan Marinka, because when we started to talk, we already talked about post-career. Not that it was close, but more like I said, what Mark was doing.

45:04And Stan said, you know, So for him, he's starting to now think about that, not for tomorrow. But of course, it's in his mind. And he wants to choose a couple of projects where he will really support. As soon as he said that, I knew that that was going to be a great, great guy who could join the brand. And I told him about a possibility of investing into the Nordkane company, which I didn't mention in any discussions before. And the deck came in like any deck for a sponsoring by his management. That was the start of it. but we knew Stan, Mark knew him quite well and Tommy's a great guy and huge challenge spirit, a fighter he would suit this brand a lot so when I spoke with Stan I really felt that spirit and I think that's what's fun about Norikane is it's from the outside you can say oh it looks like marketing it is, you're right we don't have the budgets so we had to be innovative and we said hey let's give this an extra level of when we have news we can boost it but at the same time it's fully authentic They are fully involved.

46:02They are helping. They are celebrating when I called them for a new partnership. And when we called Sid, said, hey, we have a surprise. Are you sitting? You know, then we tell him about the NHL that we got it. And he knew we were talking, of course. And what was his reaction? Well, he helped us get it. So, of course, he was also involved. That's the cool part. Everybody's pushing. But when we told him it's done, that's the cool moment. And you celebrate. And I think for athletes, it's probably nice also. and I can't speak for Sid, but I can talk about Mark or Stan. Mark told me it's tough when usually your highlight of a life is to score a goal in front of 20 ,000 spectators in overtime and everybody's jumping on you.

46:41And then you get into, you know, life after your career. And there are great moments. You become, maybe you're a founder. So there are moments that are even more rewarding, but that there's that adrenaline that you don't get. That, you know, that's, am I going to score? Am I going to miss? But he told me a nice thing. He said that with Norcan, he's had a few of those moments now, you know, both in negative and realizing, I mean, the news on Wednesday of the fair this year when the tariffs hit. Sure. I was with him at the fair. He looked like a guy who had just lost the Stanley Cup final. I did too.

47:20But also the next emotions, signing a deal now like the NHL. And for him, it's really, I'm so happy for Mark because he really worked hard on this deal. and for him I can feel it. It's like him going back, he's talking to the same people and it's such a rewarding moment for him after his career to now with Norcain and the brand where he's a partner since the beginning and it's a great, great moment. Yeah, indeed, and that's team and you get to share those victories but also those lows together and obviously working as a team is generally a better way to do it. And it wouldn't be possible without.

47:56I think that's also something that's super important. You know, for me, since the beginning, I'm hugely passionate about watches. I'm lucky my father was the entrepreneur in the company and my grandfather was also in the watch industry, but on the production side, he was in the Sapphire Crystals. So really producing and not yet an entrepreneur, but working in the industry. Then my father was working in the industry and in the quartz crisis became an entrepreneur because nobody believed in watches anymore. He did. so it was easy for him to take over a company with no sales at the time and he passed that on to me in I'm sure the love for the industry and the passion for the watches which I'm really thankful and also what he gave me is the team spirit and I think something that's for me really key is I could have never done Norcane by myself and I think I was always clear about that and when people ask me, but you know, what's the strategy?

48:51I said, we built a watch brand from zero. You can't do it alone. And I knew that you can't travel the world alone. You can't. So I, from the beginning had the strategy to surround myself with great people who have the same values and who will, we will lift each other up in bad moments and we will celebrate victories together, like you said. And I will never regret that, that we did it this way because it's a much more fun way. And I don't care if I I have 100 % or 35%. What I wanted was to build a brand that people will be, you know, one day proud of and say, this is a great, has turned into something great.

49:26Indeed, indeed. Looking forward, I mean, what is your biggest challenge at the moment? Is it keeping the brand in the public consciousness? Is it, you know, keeping costs in line? Is it maintaining relationships with retailers or finding new retailers? Or is it rethinking your retail strategy? What is your number one sort of goal and objective or pressure on the business side at the moment? For me, there's two things that started, you know, after the wild one. So you're running around the world and going to every country talking about the wild one in 2023. And we had great sales and it's end of 23.

50:07And I started to feel something that was making me a bit nervous, a bit unhappy. And I was trying to figure out what it is. And it's the problem when you grow quickly, there were two things at risk. One is the internal culture when you're hiring a lot of new people. And I was not there to see really what's going on because I'm traveling. And the second is the vision of the future. When you're only talking about a product that's now or even already a bit in the past, because it was one year later, I was still traveling talking about the wide one. I started to realize hey where's your vision what's coming next and in 24 I did something that I'm going to do every year now and I would recommend to everybody to do that once in a while I went one week by myself somewhere and I just thought about everything and I realized that I cannot do this alone again so I cannot travel and be in charge of looking at the culture and I came back from that week.

51:08I took my brother Toby for lunch and we spoke and I said, Toby, I'm going to really need you. He was already very important doing all the distribution as a sales, international sales director. But I told him I need you to move up to vice president and your family and you're the second spokesperson. And we're going to divide the work of, you know, traveling the world because it's family owned. I want that, but we need to be realistic. We also need to control our company and who we are hiring, what is our culture what are our values and it was a big decision uh of course at that time we did it it felt super logical within a week it was so so long but i had to take a week out to to realize that and then after that i spent more time again back in nidal and i've i really think that's key i'm spending much more time again on the product so i spent only time on product between 20 to 22.

52:01But after the launch, I would say the 23 year was pretty low product time on my end because I was traveling all the time. And now it's again, the way I love it. I'm doing a lot of product thinking about the future. So the two big risks were really losing your vision for the next thing when you do something big. And that's always dangerous because one day you have to make sure that you are again, innovating again, showing that you are the challenger brand and not you were once a challenger brand. And the second, the culture. And that I'm still working on. It's challenging. It's really challenging.

52:36I have a great team. We have great people, but it's growing quickly. We're now, if we take all our subsidiaries and the HQ, around 90 people. 90 people, that's wow. That's not insignificant. Yeah, I mean, talk briefly about that structure. And yeah, we're here in Nidau at the headquarters. Yeah, so 45 here at the HQ. and then we have about 40 people in the seven subs that we have around the world so us japan uk and then we have two boutiques um one in zurich one in zermatt and the singapore boutique so those of course are all and to make sure that everybody understands what are we doing yeah so i try to really make sure that that dna is is there and tell them hey we're the challenger brand We're positive when you have a challenge.

53:23Bring solutions. Don't, you know, just be negative behind the scenes. Go and proactively talk about it. I'm trying to keep that success formula that I think the first 20 people at Norikade we had when we launched the brand. And now we're working hard to make sure that when we're 100 people, that DNA stays in the company. So that's my biggest wish. And that's what would make me most proud is that if we can keep this culture in our company. But it sounds like, I mean, obviously it sounds like you delegated and assigned responsibility for certain things to others. And that's a big part of leadership and not trying to do everything yourself.

54:03Have you found a better work-life balance since then? Or is that still an ongoing challenge? Still an ongoing challenge. But hey, I'm still young. my wife supports me so it's it's really good i think the traveling definitely on that end i think that was also tough for me to not see the kids so that's something that i'm happy that we managed to change but yeah it's always busy but that's the way it should be and of course i you know at the end of the day i think if you're passionate about something you love doing it and that's what i still have i feel full of energy like in 18 sometimes even more to be honest because it's really tough when you're in that first and second year of a startup.

54:47I'm sure everybody knows who's been there. It's just tough. And just holding that face and trying to show everybody that you're strong and things are going well. It's really tough. But I think now I'm just in a happy place. I'm proud of what we've built. So it gives me a lot of energy and I'm really excited to everything that's going to come. And last thing, I mean, you know, tell me what you can just for our knowledge, where you are on production, if you can disclose how many watches you're making, generally how you're doing in sales, are you able to grow sales? This is a very challenging market right now, obviously, and how you're doing on the profitability side.

55:30We don't disclose the production numbers, but it's going well despite the market. We're growing double-digit growth this year, which I think in this market is a very, very, very good positive sign sellout also positive uh especially again us is very good switzerland very good a bit slower this year in in some markets in asia i think that's something that we read a lot but no very happy with with the development but also i think it's been a year where you all the brands had have to be a bit more careful so we also you know we redid our budget i think three times this year because the tariff impact because there are different uh impacts also in terms of marketing i think it's the year where you can really you know focus on on building the brand in healthy ways and hopefully our industry will come back strong i feel like it's it's not far away i feel like um 26 could be another you know not great year but i'm very positive that a lot of brands are innovating.

56:34I see a lot of new things coming. I think the brands are also realizing we really have to level up the game and yeah, we'll do the same. And hopefully people will love what we bring out in the next years. Yeah, very good. I mean, you said you redid the budget three times. I mean, I'm right to presume because certainly lots of brands that I've talked to, I mean, it's lower production this year. You've reduced production, I presume. Yeah, I mean, what generally when we started the year, you know, every year we're growing at, we had 50%, 40 % 30 % those were all the years lately so you you assume that for production we're not there so not in line with our budget but super positive happy I think that's what I mean we we then we're still a flexible company so we that's also strengths when you're a speedboat I always say we're not this big boat yet so that's a speedboat we it allowed us to adapt our costs a bit and will be a good year but of course we're really hoping for some good news in the US and if not we'll adapt.

57:32We'll see how we plan. And we're very excited because it's actually our 26 will be our last year before the anniversary. So we're going towards the 10 year anniversary. So yeah, we really have a great lineup for next year. And then of course, 27, 28 is where we're lighting the fireworks. With the product and news. Okay. Interesting. So you really are working towards that 10 year anniversary. 28 is planned. It's done. So yeah, that was also part of that vision game right when you realize you're not talking about the future i managed to really take myself out and we managed to do a whole plan till 28 and also you know with with uh with john claude who luckily said i'm staying till 28 at least so that's fantastic for us and there were some important discussions to be held and they were done in 24 and allowed us then really to carve out the vision for for 28 and there'll be some really exciting things coming from from Orkane.

58:30Fantastic. Well, thank you, Ben Koufer. And we wish you the best of luck. And we thank you for your time. Thank you, Andy. Great to be here. And thanks to all of you for your support. Appreciate it.

58:46And that's the business of watches for this episode. We hope you enjoyed. Please head on over to hodinky.com where you can join the discussion and leave any comments answer questions about this episode or the business of watches in general. Who knows? We might even answer your question on a future episode. Thanks for listening and see you next time.

59:28Thank you.