Jean-Claude Biver has painted a picture of muddled management and myriad small mistakes that added up to two years of losses and under-achievement at Zenith.
“The pure numbers are never the most important. Red numbers as such do not matter to me. But they are an expression of deeper problems. For me, it is important to know what the reasons for bad numbers are. Only then can I act accordingly,” Mr Biver said.
“There is not one reason, but an abundance of minor causes. Is it the product? Are there too many employees? Should the marketing be better? None of these factors is solely responsible. There are minor weaknesses here and there that add up. Bottom line, the whole company showed me too little dynamism. It was not fast enough. And I could not muster more patience. That is why I took the lead myself,” he said in an interview translated into English.
Immediate action was needed as sales fell below the level where a full blown manufacturer like Zenith could make profit. “Being a manufacturor is a strength but also a weakness because you have to produce a minimum number of pieces to be profitable. For a manufacturer with more than 200 employees, the profitability threshold is around 25,000 to 30,000 watches per year. If you do not reach these numbers, you will inevitably lose money,” Mr Biver described.
Mr Bucher asked how Mr Biver would like Zenith to be positioned within the LVMH stable that includes TAG Heuer and Hublot.
“Zenith stands for traditional watchmaking at affordable prices; achievable luxury, but with a more classic approach than TAG Heuer and with a price level between Hublot and TAG Heuer.
One of Mr Biver’s mantras at TAG Heuer has been to deliver greater value in each watch than a customer would expect for the price. Even at the higher price points that he hopes Zenith will carry, the tactic is the same. “This depends on the product. If I offer an ultra-flat watch with a manufactory for 4,000 euros, this is affordable. Because it is expected that such a watch costs around 9,000 euros. If it is a minute repetition, which would cost 200,000 euros, and I bring them for 60,000 euros, then also 60,000 euros is affordable.”
Probed in the Watchtime interview on how this will translate into products, Mr Biver revealed that he feels the time is right for Zenith to add a sports watch to its line up. “People’s lives are increasingly moving towards leisure and sports. We have the pilot series but these are not for me sports watches. A proper sport watch will be integrated into the collection by 2019/20,” he disclosed.