The Business of Watches [023] Raymond Weil CEO Elie Bernheim (Plus: Ben Clymer On The New RRCHF)

0:00Welcome to the Business of Watches, the Hodiki podcast where horology meets high finance. We go behind the scenes to talk to the business leaders making things tick. This week, we stay in Geneva to visit the headquarters of family-owned independent brand Raymond Vial. It's the 50th anniversary of the company this year, and Raymond Vial is launching new models powered by historic calibers, showing off some gems from its past and opening a new boutique in the Old Town in Geneva to celebrate. Chief Executive Officer Ellie Bernheim tells us how the company has stayed relevant with accessible-priced Swiss-made watches since 1976.

0:45But first, a very special guest. I'm joined by Ben Clymer, the founder and executive chairman of Hodinkee. We are going to talk about a very special watch that launched this week that's likely to shift the market for high-end Swiss-made chronographs.

1:08Ben, welcome. How are you today, sir? I'm doing very well, Andy. It's a real treat to be here, as always. Excellent. So, obviously, what we're talking about is the watch that landed with a big splash on the weekend, the Rekhseppi chronograph flyback, the RRCHF. I got a chance to see it and talk to the watchmaker about it, and you wrote a fantastic in-depth piece about Rekshep, Accrivia, and the new watch. What does this piece signal, do you think, and what does it mean for independent watchmaking, Ben? Yeah, first of all, thank you for having me, and thank you for the question. I think, if I may say, the most kind of salient point or the most kind of important point that I made in those 6 ,000 words of, you know, kind of blabber about this watch is that this sends an incredibly strong signal to everyone else in the market.

2:00By everyone else, I don't mean necessarily protect Philippe and Lange and Baffron or whatever, but I'm talking about the Simon Bretts, the Kari Voutilainen's, the Dufour's, the Roger Smith's, the Group of Forzee's, the Debitun's, the whoever, you know, insert any hot brand here, right? And I think what Redchap has been able to do is build, as I said in the story, a in-house integrated chronograph that happens to be quite beautiful. There's technically very little innovation from, you know, from the functionality standpoint right there. There's no patents on this watch as far as I know, but that doesn't matter.

2:33He constructed and executed, and I believe will deliver in June, the first of this completely in-house made chronograph in a matter of effectively three years. And that is just remarkable when you look back at how long the likes of Vacheron and AP and Patek even, were using these e-bash chronographs. And granted, there was no precedent for going in-house back then. So it's a little bit of apples to oranges. But I think the message that Recep is sending to everyone else is like, this is really laying down the flag or that was some sort of mixed analogy there. This is really drawing a line in the sand, I should say, for everyone else to say, hey, I'm going to do this stuff and you guys got to keep up.

3:13And on top of that, you know, look, you know, I think the the pricing question, which I somewhat unfairly said, hey, it's a lot of money in USD that has nothing to do with retro, right? Like that's USD conversion. That's our friend Donald Trump adding 15 percent on everything that comes in. One hundred and fifty thousand bucks and not too long ago, CHF was basically one to one to USD. One hundred and fifty thousand bucks for this watch with the amount of handwork that goes in is just incredible. So, you know, really an incredibly strong showing from obviously, you know, one of my favorites, one of the favorites of the collective, you know, collector world out there.

3:46I mean, indeed. And Rekhsev told us that, you know, he wants to make the best watch for the best possible price. And obviously we've seen some of his pieces, you know, go for over a million francs at auction. And indeed, I think, you know, price was part of the equation here. Finally, in the piece that you did, which was so well received and had such excellent comments on the site, I mean, you put the RRCHF up against the Lange 1815 and the Patek Philippe 5172G. You know, talk about how you, you know, why you did that and how you think it ends up comparing. Yeah, look, I think everything I do in Houdinki, to be honest with you, is selfish, right?

4:34I think about the world from my point of view. And even in the early days of Nodinke, I started for me, not for everyone else, contrary to what people probably believe. But the two chronographs that define high-end chronography, if that's a word, chronography, are Patek and Longa. There are other wonderful chronographs out there. There's a Debathoon that's very nice. There's a group of Forzy. Carrie made that masterpiece many years ago. There are some spectacular kind of hand-down chronographs out there. But for me, I've owned, probably the Longa I've owned the longest was an 1815 flyback, and now I have a 5170p.

5:06Those are the defining classical chronographs. And I think what Recep did here is like, he didn't make any weird variant, right? This is not a split, this is not a central minute, this is not a, you know, kind of crazy thing that a Devathun or a Grupo Forzi did. This is a classical chronograph. And I think it only makes sense for it to be compared against the other two classical chronographs, which by that I mean hand-wound, without a date, right? That's why we didn't do the datagraph. And, you know, kind of lateral clutch and kind of the traditional sense chronograph. And to me, you know, it's 1463, it's 4178 from Bacheron back in the day.

5:39You know, it only made sense to compare him to those two. And I think it's a credit to both Patekin Langa and Retschep that they would be in the same group. And, you know, some years ago, I was recording a video before the SIHH or Watches and Wonders, rather, with Wilhelm Schmidt, who's, you know, quite an astute watch collector himself, and was wearing the Retschep. He said, you know, that's a watch I'd like to have, And I think that shows so much respect for an independent watchmaker. And to be clear, it's not often you get the CEO of Langa saying, I think RecShop is doing great things and vice versa.

6:11But I think it only made sense to compare three classical chronographs in sub, well, I guess the 5172 is now above 40 millimeters, but in between that 40 and 41 millimeter size. And it just made sense to me. Does it make sense in the grand scheme of things? I don't know. But again, the beauty of Odinke is I can write whatever I want. Well, that's great, Ben. Thanks so much for that. And thanks for the great article. Let's leave it there. We'll see you at Watches and Wonders in just a few days. Can't wait. See you soon. And here's our interview with Ellie Bernheim, the CEO of Raymond Weill.

6:51Eli Bernheim, the Chief Executive Officer of Raymond Weill. I'm here at your headquarters in Geneva today. You've been kind enough to welcome us here on the occasion of your 50th anniversary of the brand. Thank you very much for joining us on the Business of Watches. Thank you, Andy, for coming to us. And we are all very happy to welcoming you for this special interaction, I would say. Well, thank you again. And so, you know, we're here. Raymond Vial is 50 years old this year. Let's talk about the history of the brand and how it started and, you know, how you ended up in this CEO role. It started back in 1976.

7:40Yes, it started in 1976 in the middle of the quartz crisis when my grandfather took the decision to create, to found his own watch company under his own name, Raymond Weil. Not an easy decision knowing that he was at that time 50 years old. Wow. So he was 50 years, Raymond Weil was 50 years old. His entrepreneurship, his character and motivation was that important high that he took the risk at the end of the day to create his own company and to develop it. And what was his history with the watchmaking industry? Was he a watchmaker? He was absolutely not a watchmaker. He worked for many years for another brand, Kami Watch.

8:42He was the brand director of this brand. And for some reasons, he quit his job and he took the decision to create his own company from scratch. And we think of Raymond Weill, I mean, you know, it exists in the approachably priced space for Swiss watches. But it's quite unusual in that it's an independent, family-owned brand. I mean, talk about the Bernheim family and Raymond Weill and how this company is structured and how it came to be like this. Yeah, I represent today the third generation at the end of the company since 2014, so 12 years already. So as we just mentioned, my grandfather was the founder.

9:33My father joined him in 1992 as the second generation. But was it a true second generation or not? I don't know because at the end of the day, they worked together for so many years until 1996 when my father became the CEO. and I joined my father in 2006. He came one day to me and said, okay, do you expect one day to work closely with me or it's not part of your plan? And I said, no, man, you have no idea. It's part of my DNA, my blood. I mean, I felt that I grew up with the watch industry, with the watchers and so on. So it was for me obvious that at some point I would join the family business and with pride.

10:27And I said, yes, but at some point, I need to make my personal experiences in parallel. So if you are open to that idea, give me like a sort of wild card to develop other things. But you can be sure that I will join you for sure. He was pleased. and then we managed to work together in a sort of special way to the point where I fully joined him, I hope, for the best, but I'm happy about this chance. And at the same time, it's a responsibility, but I like that very much. And yes, you're right. I mean, we are celebrating this year the 50th anniversary of our family and independent company. It's something, I would say, special to remain independent and family operated.

11:30But I enjoy that every day. Absolutely. And, you know, we think of Raymond Weil, as I say, as, you know, approachably priced Swiss-made watches with considered design, sort of distinct design that we see in various retailers around the world. Has it always been in that price point? I mean, has anything radically changed with the focus over the years? Neither my father nor myself have ever changed that, I would say, goal or mission. That was my grandfather's idea to offer refined timepieces at accessible price. So since the day one until today, it's always something I keep in my mind. developing the best timepieces ever at accessible or competitive price.

12:27Swiss made, as you just mentioned, very important for me, for my team, obviously. And so on, yeah. Yes, and this is your 50th anniversary. Talk about how you are, you know, celebrating and marking that occasion. What kind of, you know, pieces are you doing? what kind of events and things are you doing to mark this occasion? I mean, working for a family company like Ramovel is working with the idea that the human being is at the center of any interaction or connection or success of our brand, which means that for us, it's a big milestone this year, but it's milestone as well for our suppliers that have been very loyal and partner with us for years and years, our distributors, our retailers.

13:21So I think that it's a big celebration, not just for the company itself, but for all the different, I would say, parties that are around the company. Yeah. I mean, you know, watches are, you know, no watchmaker really makes everything in their watches. And that's the reality of our situation. I mean, we know that we can develop only the best watches thanks to the very good suppliers, partners we have. I mean, from A to Z. I mean, we are well known for designing and engineering the best watches, but it's not a secret that we are outsourcing every single component of our watch until the final assembling part of them.

14:11So we need and we count on them. So it's a celebration for everyone that we started a few weeks ago with a legacy tour that we initiated to Asia with the first stop in Hong Kong, the second stop in Tokyo a few days ago. And just last week, I went to Ivory Coast for a third stop and it's only the beginning of this legacy tour this year. The occasion for me to meet with everyone, partners, distributors, retailers, watch enthusiasts, the media as well. So yes, and it's also for us the opportunity and for me particularly to introduce the special limited edition that we did create It's called the 50.

15:08It's called the 50. It's very original now, the 50 for the 50th. But I like that name very much. Yeah, so it's a chronograph, Valjoux 23.6. It's a historical movement. Yeah, and that was the idea behind this development, to look after the past, but to foresee the future as well. And for me, it was the perfect combination to find and to manage to get 50 Valjoux movements from the 70s. How did you do that? Late 70s, thanks to the very good relationship that we have with some key Swiss movement suppliers. I mean, and it makes a lot of sense for me to get them because the last production year was for them, 1976.

16:03So you're of creation of our company and restoring them, renovating them, customizing them was for me interesting in the sense that we managed to develop this chronograph timepiece in the Millizim collection, which is for us one of the most important launch we had over the last past years. And for those who don't know, I mean, the Milizim is sort of classic design, certainly, you know, a throwback to eras of the past and certainly an extremely interesting watch for enthusiasts and people like Hodinkee readers. Talk about what the, you know, you've done the 50 within the Milizim, you know, case and design.

16:52Talk about the Milizim and what it's meant for the brand lately. If not our best seller collection, but we launched that collection three years ago with great success. We won the GPHG awards thanks to this collection. And I think that we managed to penetrate some key markets of that world and particularly Asian markets without mentioning European markets as well. So it was for me a way to enlarge, I would say, our market shares across the world. And this collection was that successful that we feel that it should be the piece that we pick for the 50th anniversary timepiece. Again, thinking about the past with the movement, but forcing the future with a successful collection of the current range, Millism was obviously, for me, the right pick.

17:51Yes. And also, in addition to the 50 launch, as you say, you're doing this tour with these heritage pieces. For those who may not know or be able to call to mind the history of Raymond Weil pieces, I mean, you know, these are, I looked at the first one and it is quite reminiscent of your Takata, which is a new piece. So talk about, you know, the design history and what kind of watches that Raymond Weil has made over the last 50 years. I think that we have been well known for, I would say, the elegance, the classical look of our watches. And it was not an easy job for the team and for myself to select 50 timepieces that would represent the best the last 50 years of creation.

18:48I mean, you can imagine that we have produced large quantities of models, collections over the 50 years. So the idea to only pick 50 was not so easy. But we managed to select a few of them with in mind the idea that they were our best seller for sure. No matter if they were today a bit old-fashioned at some point or not anymore the Korean taste, but we did select them because of that. And the second, I would say, axis of reflection was the thinking was the fact that some of those models, vintage pieces from the late 70s or early 80s, are for me an important source of inspiration for the future.

19:38and that was for me again the approach of this year. I mean, yes, we are very proud of the last 50 years, but I would like to consider now the next at least 25 years, which is my generation, with a lot of inspiration from the heritage of our creation pieces. So this year is all about what you're doing this year, but looking forward, should we expect then, as I said, You know, that Toccata piece that you debuted last year, that very thin, rounded, sort of elliptical dress watch was certainly reminiscent of that piece I saw from 1976. So should we expect new models and new designs, but taking inspiration from that heritage going forward?

20:28That for sure. That for sure. And within a few hours, a few days, we will be launching a new model that belongs to the Toccata collection for which we took a big inspiration from an old model of Rameville from the late 70s. So I think that it's our privilege, you know, having 50 years of creation allowed me to take inspiration from them. Definitely, definitely. Now, yeah, we talked a bit about it, about, you know, sort of establishage sort of process and working with suppliers. We're here at the headquarters here. Now, am I right to think, you know, how many people do you have here in Geneva? And are all the watches then assembled here?

21:20Is that the way it works? And I think you do about 80 ,000 watches per year. Is that right? It's the non-official number, but it's not so far away from the official number. Yes, we are more or less producing 80 ,000 timepiece per year. Happy about that level of production again and happy to say that. We have in total more than 120 employees. And you just mentioned the assembling division. There are something like 10 people here working on our models. And it's interesting to me. I mean, obviously, you know, the trend that we've seen in the industry over the past decade certainly is for brands, you know, to move up in price, produce less watches.

22:19You know, why has Raymond Weill, you know, remained a producer of approachably priced watches and, you know, still chasing that mainstream consumer? I'm very clear with that. I mean, I think that we know who we are. We know what is the brand legitimacy or credibility in the different markets. We know we can sell the best watches or timepieces at, again, a price point which is in between$1 ,000 and$5 ,000 Swiss francs at the really maximum. And I strongly believe in consistency, coherence in terms of strategy. And I don't think that the end consumer can follow or can embrace a brand strategy that goes up one day, goes down the other day, depending on the economy and color situation of the world or political.

23:17I think that we need to have a certain direction and vision and we need to strictly follow that. Absolutely. Absolutely. But it's not easy, especially with the sort of economic upheaval and uncertainty that we've seen across the markets. What's your outlook for, you know, watch demand in the short and medium term and in your price point? How do you think, you know, the watch consumer, the interest is in pieces like Raymond Weill? And how is that going to look over the next six months, year, do you think? I think that more than ever before, I think that the end consumers are over well informed and they're really looking for a value for money timepieces.

24:13And I think that when you think about Raymond Vale, no one can predict better than offering a very, very good value for a certain amount of money. So I think that at the end of the day, I am optimistic, but cautious. We need to be cautious as a family company. I mean, I need to operate the level of investment with big care. I mean, every single dollar or three-shrank spend should be well allocated. So at the end of the day, we need to protect the sustainability of our business and to make sure that by developing or launching models, we will definitely meet the end consumers we have in mind. And so at the end of the day, yeah, I'm confident that the market will be resilient.

25:13We are also looking for new emerging markets to develop our brands. I just mentioned to you the Ivory Coast. Yeah, that's interesting. Talk about Africa, yeah, as a market and what, you know, because I don't hear a lot of watchmakers talking about that market. to be transparent with you. I don't hear so much watchmakers looking after the African market. And I think that it's a pity because at the end of the day, I think that we all know that those markets will emerge pretty soon. So it's never too late, but I think it's now that we need to invest as a family company into those specific markets to one day to take the benefit of this early introduction of our brand over there.

26:10And I think that it can be very, very interesting for the watch industry to look after them, for sure. That's interesting. No, I mean, it's certainly unusual. And, you know, when I think of emerging markets, obviously the ones that we hear more about are, you know, I mean, China has at times been the biggest market, still a developing economy. And India, you know, tell us about, you know, what Raymond Wiles' presence is in China, in India, in those, you know, other emerging markets in Asia. I do remember that when I joined the company in 2006, every single person I could meet asked about the break, Brazil, Russia, India, and China.

27:02And we are 20 years later. Brazil is not so much an easy market for the watch industry. Russia, no words. India is really moving up. I think that at least for a while, it's becoming an important market. And since the very beginning, but I would say like the last 10 years, proved us that it's a high potential market for the watch industry and particularly for a while. And China, we missed the train. We missed the train 20, 25 years ago. It was one of our biggest regrets into the family. But we have, at the time we had, not at that time, the financial means to support the brand growth or brand development in China because it was very expensive.

27:58Big market means big investment that we had not. And we took the decision in family because I was part of this strategy to allocate our investment more into our key markets, to protect our market shares instead of scattering our resources into too many different things and in China for maybe no returns. And then the COVID happened and we all know that what happened in Asia and particularly in China with the big, big slowdown. that at the end of the day did not affect us because we had almost nothing there. So when we said, I'm still saying that, that we are having, and cross my fingers, but having very positive years, no matter what is happening in this industry, and in the last three, four years, it was the reality of our business.

29:00one of the main reasons was the fact that we lost nothing in Asia, lost nothing in China. And at the opposite, we managed to open slowly but surely, one door after another door, one retailer after another retailer. So it's more, for me, a growing market when for some other ones, it's a full downturn. So that's the situation. So, I mean, if there is no market in China right now and not so big anymore, we need to look after other potential market in this world. And we all know that talking about the Chinese, they are heavily investing in Africa as some other people, obviously. but that means that at some point not just because of the Chinese but because of the global investment in Africa right now I think that at the end of the day being there it's a good thing.

30:08Absolutely. No it sounds like certainly a viable strategy to put that foothold there as the economies emerge and should we think though you just let us know quickly I mean is the US your biggest market? What are your biggest markets? The US market is by far our biggest market. It's more or less 30 % of our global turnover. We have a subsidiary company based in New York. No, it's for sure a key market for the brand since day one. So when we think about the last 50 years, one of the first distributors that knocked the door to my grandfather was the U.S. distributor. And they worked very hard closely for many years until we took over the distribution ourselves to make sure that we would have a full alignment of strategy.

31:08I think it was very important for us to have a good control on our number one marketer. For obvious reasons, I would say, but yeah. For sure. For sure. And then how should we think about the rest of your markets? Japan is a big market for you as well. The second biggest market is the UK, historically. Japan, no. I think that Japanese is becoming one of the key markets of our brand. But I would say that until 2020 and the COVID, our distribution was very, very limited. And thanks to some good collections, because at the end of the day, we can have the best strategy in the world. marketing speaking.

31:54I think that it's only the product that play the number one factor of success. And I think that since we launched a collection that appealed the Japanese and consumers, we are doing extremely well. Millésime, we talked about Millésime before, I think that was probably the best collection for this market. but as well as the Takata Heritage. So those two collections create an opportunity. They create an opportunity for the brand in Japan and we have now something like over 60 point of sales, which is not nothing. So it's becoming, yes, for sure, a key market of the brand. The Indian market we just talked about is for sure another one.

32:45I mean, when you produce 80 ,000 pieces per year, let you imagine that we have, for sure, an exclusive distribution, but a distribution which is really worldwide, for sure. Yes. And also, how challenging and difficult has it been to remain independent and stay, you know, this family-owned independent Swiss brand here? To remain a family independent company is not so easy every day in the sense that we cannot be supported by anyone else than ourselves, which means that every single decision that we are taking should be, I would say, carefully analyzed, taken in the sense to protect, I would say, the sustainability of our business.