The rise and fall of one of the most illustrious watch companies
I could be biased, but I still cringe somehow when I think about Zenith and its current fate of being a sort of troubled child lost in the stable of LVMH, with watches felt just as undeservedly “expensive”.
So many changes, so little focus
The recent history of Zenith follows closely the one of several other important brands of horology. After a troubled period during the Quartz Crisis, the company had a comeback, and in 1999, it entered into the orbit of the LVMH luxury group. Which put different CEOs at its helm – all eventually ineffective.
As per the New York Times in 2019:
Over the last 20 years, Zenith has been reborn a number of times. In the 2000s, under Thierry Nataf, it embraced the excesses of the years before the 2008 global downturn. Then, under Jean-Frédéric Dufour (now leading Rolex), it became more conservative.
In 2016, a breakthrough. Enter Jean-Claude Biver, the genius marketer that made the fortune of a brand like Blancpain and Hublot, amidst great expectations of a relaunch of the iconic Zenith brand.
Yet, the cheers lasted only for one year. In 2017 Biver leaves Zenith for “health reasons”.
And then the current CEO becomes Julien Tornare, coming from a career inside one of the most irriverent and forward-thinking companies there is, Vacheron Constantin. I am being sarcastic here, as much as I love the brand (and I love The Old King much). Anyways, Tornare has ideas. Great ideas. But maybe, not the right ones for the company.
The launch of the amazing caliber 9100
Right after his debut, Tornare – who was heading the Asian operations of Vacheron Constantin – keeps busy with the preparation of the innovative (and I am meaning it, extremely forward-thinking) caliber 9100, with its groundbreaking silicon oscillator.
The watch is launched in 2019, and takes the market by storm. It is critically acclaimed by the industry and the media. The movement has awe-inspiring stats: its innovative design is based on a huge vibrating oscillator that beats at 129,600 vph (18 Hz). Almost mind-boggling for a mechanical movement.
Remember that the El Primero, possibly the best-known modern chronographic movement made by the same Maison, beats at 36,000 bph – almost 4 times slower than this.
Yet, what happens? Enter the COVID in 2020. Zenith production came to a screeching stop – and the lucrative markets that Tornare knew so well immediately dried up, also thanks to the Hong Kong revolts. The exports of Swiss timepieces went down like lead balloons – and Zenith’s numbers with them.
As of late, the company sells around 21,000 timepieces per year – which Tornare, in an interview, says that should grow to 25,000, and has an annual sales figure of around 100 million CHF. Unfortunately, the other members of the LVMH group like TAG Heuer and Hublot are six times bigger than Zenith.
Are Zenith watches expensive? In Mr. Tornare’s point of view, not enough. His “sweet spot” for watches is 10,000 CHF from the 5,000 CHF the company enjoys now (which is already considered expensive by the public). It is desirable? Yes, for him. Is it possible? I am highly doubtful.
The real issue? Lack of coherence
While the movement, mounted inside the Defy line, is extremely promising, the rest of Zenith’s production looks like it has been abandoned, marketing-wise. The traditional production of models for which Zenith is famous, the vintage-inspired pilot’s watches that fight squarely against IWC’s.
How can you put together something like the Defy and a Pilot’s watch? It seems a bit far off, and not only to me.
So, despite the good intentions – and great technical achievements – fostered by Mr. Tornare, I am not seeing the launch of the Defy as a solution to the company’s ailments. Possibly, it is even something that is going to put more strain into a brand that has not a clear view of its future, tactically and strategically.
And if I can make an educated suggestion to Mr. Tornare, he should start from the basics. Please revise the current production lines and models, and reorganize. Divide it into coherent lines, and match them against the competitors, product-wise and price-wise. Most of all, take a long, hard look at prices. My readers say that Zenith prices are way out of the watches’ technical merits, and I tend to agree.
You cannot build up a brand if you have weak foundations – and the first is price. Get back to the four “P’s” of marketing, please: Product, Place, Price, Promotion.
Price. “Zenith watches are expensive” should not be heard from its would-be clients anymore.
You can find much more about horology and its fascinating history in The Watch Manual. It is a thorough e-book that explains all the basics about watchmaking and its protagonists.