A 2016 article in the Financial Times based on an interview with Linde Werdelin co-founder Jorn Werdelin caused a bit of a stir when he said that stalling sales in 2015 marked the start of significant correction that could take years to work through.
The luxury Swiss watch industry had grown from CHF 10 billion in 2000 to CHF 22 billion by 2014, according to export figures tracked by the Federation of the Swiss Watch Industry but, according to Mr Werdelin, this had little to do with innovation from the watchmakers, and was more to do with burgeoning new markets like China and the Middle East.
Not that Mr Werdelin was complaining too much at the time. Linde Werdelin, which released its first watch collection in 2006, had enjoyed rapid growth for its top end watches for mountaineers and divers and was selling almost 1000 watches per year before the market turned in 2015.
The watches were sold through the traditional wholesale route, and Linde Werdelin had dozens of retail partners around the world at its peak.
Today Linde Werdelin makes around 150 watches per year, and has moved from a distribution model to a direct to consumer sales strategy. This allows the company to keep a higher percentage of the sale price for each timepiece, and to build relationships directly with customers.
“We hop onto planes to personally deliver watches to customers all over Europe,” Mr Werdelin told WatchPro yesterday.
Linde Werdelin‘s Swiss-made watches range in price from around £5000 to over £20,000, mainly numbered limited editions, with most selling at around the £10,000 mark, according to Mr Werdelin.
Accounts file at Companies House for 2017 show turnover for the British-based business of £427,000. Tellingly, the company was sitting on stock worth almost £2 million.
The company confirmed 2018 net revenue was £500k, 20% up on 2017 and sold about 125 new watches.
Its stock in is around £1.5 million and consists mostly of parts (cases, movement, dials, straps, etc.) and spare parts.
Mr Werdelin waved the white flag in the battle to grab and hold space with retail partners because the big groups were squeezing out independents. His shift to personal service for a smaller number of clients is a more sustainable model, he concludes.