IWC gives meaning to marketing

Interview

Young sales and marketing manager for Kraft Jacobs Suchard in Neuenburg, he was responsible for the distribution of foodstuffs. Followed in 1992 by his first job in the watch industry with TAG Heuer, where he coordinated the marketing and built up a worldwide distribution network during eight years, before being called, by the time Tag Heuer passed to LVMH, by Franco Cologni of the Richemont Group. Georges Kern, who was involved in the take over operation of Les Manufactures Horlogères worked, post merger, in the integration of IWC, Jaeger-LeCoultre and A Lange & Sohne. At the beginning of 2002 he was appointed CEO. Françoise Lafuma

Laureus Sport for Good Foundation

"Sport fits well with IWC’s masculine image," notes Georges Kern, the Schaffhouse company’s CEO. A Founding Partner of the Laureus Sport for Good Foundation since 2005, IWC is perfectly in line with the Foundation’s goals (see box). Indeed, the Laureus Foundation will open its Swiss branch next June under IWC’s aegis.

"We try to make meaningful marketing decisions," continues Georges Kern, who believes the brand’s staff, customers and partners understand and support this philosophy. Turning words into action, IWC invests in charitable projects, of which the Laureus Foundation in Switzerland will be a further example. The project, whose other partner is Mercedes, was developed at IWC’s initiative. "We believe there is huge potential for raising money in Switzerland, one of the world’s richest countries," he adds. The Laureus Foundation Board will implement schemes whose criteria match those already used to set up sports projects helping underprivileged youngsters around the world.

A budget of CHF 1 to 1.5 million

The future Swiss Laureus Foundation will finance one or two projects in Switzerland and a third international project, probably in Kenya, in its first financial year. Excluding donations and proceeds from events such as auctions, the Foundation will operate with a budget of between CHF 1 to 1.5 million.

"The different partners, including IWC, should contribute some CHF 250,000 to 300,000 to each of the chosen schemes." Georges Kern, who is very much committed to the project, is also directly involved in action to reduce greenhouse gases through the Earth Love Movement Foundation. "We are taking full measures to make production of IWC watches carbon-neutral within the next 18 months. Once again, investing in the environment is something which all our partners and all those who appreciate the brand can relate to."

A CHF 40 million investment

As clearly demonstrated over recent years, IWC’s development strategy is anchored towards increased market share. Says Georges Kern, "This solid growth must strengthen every aspect of the IWC brand. We aim to rank among the watch companies whose economic success is one of the most globally acknowledged. To become a key player."

IWC can count on a "strike force" of close to 700 staff worldwide, 450 of whom are based in Switzerland, to front this aggressive strategy. The company will have invested some CHF 40 million over five years to extend and modernise its Schaffhouse production facilities and machinery. A new facility manufacturing cases and movements has been operational since 2006, and work is currently under way on the assembly facility, scheduled for completion in 2008.

Creating jobs

Over 60 new jobs have been created at the production site, which will be fully renovated by 2008. "We’re recruiting at least 20 to 25 people a year at Schaffhouse. We could take on more but the labour market can’t match demand." The watchmakers - some 15 to 20 complete the three-year course each year - and sales staff trained at IWC’s in-house school aren’t enough to keep pace with the brand’s needs.

"All our creative work is done in Schaffhouse, except advertising which is handled by a German agency based in Hamburg." The creative studio, a key factor in the brand’s success, was set up at the production site immediately following Georges Kern’s appointment at the head of the company in 2002. "The brand oversees absolutely everything that concerns it, including design and visual identity, although our advertising campaigns, which spotlight the products, may be adapted locally."

Bigger and bigger

IWC, which produces an estimated 65,000 watches a year, makes half its sales in Europe with Italy as its main market. The brand is progressing well in Asia, which accounts for 30% of total revenues, including Japan. IWC has also made significant inroads into the North-American market and is extending its presence in the Middle East. A second store will soon be opening in Dubai, after footholds in Abu Dhabi, Kuwait City and Lebanon. "The Saudi Arabian market is more complex," Georges Kern observes.

IWC has added to its distribution network with own-name stores, mainly in the emerging markets "where specialised retailing hasn’t really developed yet", in particular Singapore, Bangkok and Hong Kong. In Shanghai, where the brand set up a subsidiary a few months ago, IWC can draw on sales and marketing and after-sales structures with which to take on the vast Chinese market, and on the Richemont Group which owns the brand.

Over in the US, after opening its first store in Las Vegas, IWC has its sights set on California. The brand also has two prestigious showcases in Switzerland, one on Bahnofstrasse in Zurich and another on Rue du Rhône in Geneva. "Ultimately we must be present in each of the world’s luxury capitals."

A 2008 Jubilee

Before celebrating its 140th anniversary in 2008, IWC is busy preparing for the Salon International de la Haute Horlogerie (SIHH), where it has all the time and resources to devote itself to customers and journalists. This year’s fair, held in Geneva from April 16th to 21st, will also be when IWC unveils the first-ever chronograph to be entirely made in-house. "We’re relaunching the Da Vinci line which, together with the Portuguese, accounts for our high-end range," notes Georges Kern who has every confidence in the new model’s success… no doubt the first of many.

"The SIHH and the Richemont Group have given IWC invaluable double leverage. We’ve swelled the ranks of managerial staff, still with a relatively young average age of 30 to 35," Georges Kern observes with pride. Not forgetting that the man who has steered the firm for the past five years is himself just 42 years old. ■

THE LAUREUS FOUNDATION HELPING UNDERPRIVILEGED YOUNGSTERS

The Laureus Sport for Good Foundation was created in 1999 by DaimlerChrysler and the Richemont Group. Each year it recognises and celebrates the achievements of world-class athletes who lend their support to projects to help underprivileged young people through sport. More than 150,000 children around the world benefit from the Foundation’s actions.

"Sport has the power to change the world," declared Nelson Mandela in 2000 at the inauguration of the annual Laureus World Sports Awards in Monaco. Football has helped young Bosnians from different ethnic backgrounds to renew dialogue after years of fratricidal fighting. Sport is also the medium through which thousands of young Africans are learning about health care and prevention.

Two brands in partnership

In cities such as New York, drug abuse and crime are driving growing numbers of young people onto the streets. The Laureus Foundation’s "After-School All-Stars" programme provides these at-risk youngsters with tutoring, food and most importantly gets them involved in basketball and volleyball games. Through sport, they renew with important values such as discipline, team spirit and perseverance. Similar examples have sprung up all around the world, with no less than 48 projects benefiting from the Laureus Foundation’s support.

The two founders have each appointed a brand to represent this partnership: Mercedes-Benz for DaimlerChrysler and IWC for Richemont, since 2005. Each year, IWC manufactures a special watch for the Foundation. Proceeds from sales, including at auction, are donated to the Laureus Foundation. In 2006 this was a Portuguese, 2,000 of which were made. In 2007 collectors will be given the chance to buy a limited-edition Spitfire. More projects will be implemented through the Swiss branch of the Foundation, which will be launched in Zurich in June by a dozen of the brand’s ambassadors, including several athletes. ■