Chinese boom drove Swiss watchmakers into ‘crazy’ pricing that hurt other world markets says Zenith CEO

Zenith CEO Julien Tornare.

Julien Tornare joined Zenith as chief executive one year ago in May 2017. He arrived with the CV of a global expert in luxury watches having spent over 20 years with Vacheron Constantin based in Europe, North America and Asia.

It is the six years he spent running the Asia Pacific region from the Vacheron office in Hong Kong that gives him the clearest insight into the way that the boom in Chinese luxury watch buying affected the entire global market.

He moved there in 2011 at the height of what now looks like collective madness; a time when Swiss watchmakers thought they could charge almost any price for their watches.

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“Over the past 10 years, most of the Swiss watch business was driven by China and by Chinese customers. Many brands ran very fast into that market, with consequences of increasing prices so that they lost connection with local clientele — British, French, American, wherever — because we could not see that the price was getting too crazy,” Mr Tornare tells WatchPro in an interview to mark his first anniversary as CEO for Zenith.

The more traditional watchmakers that hiked prices the most are now scrambling to bring entry level prices down, he suggests. “We are seeing many brands that raised their prices very high and kept their classic designs, are declining in China right now. Some of the more contemporary brands, such as Hublot, Richard Mille, AP, they are going up in China right now,” he adds.

LVMH, and particularly Zenith, were less caught up in the wave of collective insanity, which might have cost the watchmaker market share at the time, but is now seen as an opportunity to build a sustainable business from a lower base.  “Zenith was never huge in China. That is the bad news. But the good news is, because of that, we have kept very good prices and value for money,” he suggests.

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