Russia 2018 is the third consecutive World Cup with Hublot as official timekeeper. The company has invested millions into the promotion since South Africa in 2010 and Brazil in 2014 in an effort to break into the ranks of the world’s top 10 watch brands. How close has Hublot come to achieving that status, and what is next for the youngest of LVMH’s watch brands? 20 days ahead of the current tournament, WatchPro’s Rob Corder spoke to Hublot CEO Ricardo Guadalupe to find out.
Hublot loves football,” the watchmaker declared in 2010 when it was revealed as the official timekeeper of the FIFA World Cup for two consecutive tournaments: first in South Africa, then four years later when the carnival rolled into Brazil. As this article is published (on July 2) hopes for England to progress through the knock-out stages are sky high, so Hublot, which is raising its profile to millions of fans as the official timekeeper for a third time, could reap an optimism dividend in this country for a little longer.
The deal this year sees Hublot supplying smartwatches for all match officials, its brand appearing on the timekeeping boards held up by fourth officials and flashing around the perimeter of every pitch on the digital hoardings.
The 2018 official timekeeper deal is less surprising than it was back in 2010, but it is still notable from a brand with sales of half a billion Swiss francs; around half the turnover of Tissot, which sponsors events such as the Tour de France and Rugby World Cup, neither of which comes close to the global reach of the Football World Cup.
With 20 days to go before the start of the World Cup, WatchPro caught up with Hublot CEO Ricardo Guadalupe at one of the many events held by the company in the lead up to the tournament in Russia. We spoke at Harrods, home to a Hublot boutique, where he was launching an advertising campaign called Champion Advice in which brand ambassadors and footballing friends give hints on how to win at life, business and sport. The mainly digital campaign includes messages from Pele, Maradona, Jose Mourinho, Usain Bolt; and even England manager Gareth Southgate.
There is no definitive research on which of the world’s biggest watch brands spends most on sporting sponsorship, but Hublot will certainly be in the top 10. It is likely only Rolex, Omega and TAG Heuer spend more. With Hublot now partnering its third consecutive World Cup, the question is whether it is it working and is it worth it?
“Yes, because to be on the fourth referee’s board gives us huge brand awareness. We have more than 20 minutes of visibility during each match to a global audience of billions who will see the brand Hublot. The fourth referee’s board in the shape of a watch will help people make the deduction that the word Hublot is a watch brand. Of course not all of those billions of people can afford to buy a Hublot watch, but we believe that people knowing that Hublot is a watch brand is enough; maybe one day people will be able to afford to buy one,” Mr Guadalupe replies.
Hublot is a good deal younger than most rival Swiss watchmakers. It was founded in 1980, hired Jean-Claude Biver as CEO in 2004 (who subsequently recruited Mr Guadalupe), and was bought by LVMH in 2008. Becoming the official timekeeper of the South African World Cup in 2010 was vital to introduce the Hublot name to a world that had no idea it was a watch brand. “If I go back to 2004 when Mr Biver took the brand, not even my friends in Switzerland knew what Hublot was. I would say we have made some progress in 14 years to make the name known, but it is true that there is still work to go. It takes years and years,” admits Mr Guadalupe.
“If I take only watch brands at the higher price point of CHF 5000 and above at retail, we are number five.”
Swiss investment bank Vontobel places Hublot as the 11th biggest Swiss watch brand with sales of CHF 550 million in 2017. All of the top six brands have sales of over CHF 1 billion, but Mr Guadalupe aims to challenge these market leaders, at least in terms of brand recognition. “The objective we have is to be among the top five that people name when asked to come up with five watch brands,” reveals. “We are not far away. “If you look at the Vontobel report for 2017, Hublot was 11th in a list including all price points such as Longines and Tissot. If I take only watch brands at the higher price point of CHF 5000 and above at retail, we are number five. That does not include Rolex. If I include Rolex we are number six. Rolex is another world.”
Getting the Hublot name known is one challenge, another is to define what it stands for. Hublot is described by some luxury watch retailers, including its own authorised dealers in the UK, as a footballers’ brand. And before Mr Guadalupe makes the mistake of taking this as a complement, WatchPro clarifies that in the UK footballers are considered men with more money than taste.
Mr Guadalupe concedes the brand has work to do to widen its appeal. “We are a young brand, and of course our consumer is somebody who is younger, it is a person that has succeeded in life, it is new money from people that might have started with nothing. It is also the type of consumer who is buying a lot of products,” he suggests. “We are trying to attract new consumers to Hublot who might not be ready for a Big Bang, but our Classic Fusion collection is more accessible,” he adds.
A fringe benefit to high profile partnerships like the World Cup deal is that retail partners are attracted to work with brands that invest so heavily in marketing. The global channel for Hublot is well-developed now, but that was not the case when Mr Guadalupe and Mr Biver first took over the business. In the United States and the rapidly growing Chinese market, retail partners were reluctant to take on such an unknown brand, so Hublot had to set up its own shops.
“Starting from nothing in 2004, the US was difficult to find the right partners who would get behind the brand and believe in Hublot. I can understand their point of view. The US a Rolex country; or Patek Philippe and TAG Heuer at another level. If we really wanted to show strength, we knew we had to go retail there. It would have taken too much time to find the right partners so we had to do it ourselves. Today, in North America, we do 60% of our sales through our own retail shops. China has been the same. When we started from nothing the partners would not believe in us because there were so many brands selling like crazy, in this case Omega, other Swatch Group brands and Rolex of course. We decided to operate all our own boutiques in China and we are becoming more successful,” Mr Guadalupe describes.
The UK has been more welcoming in recent years, thanks mainly to the strength of multi-brand luxury watch retailers including Harrods, Selfridges, Watches of Switzerland, Berry’s and Rox.
Hublot does not currently have its own mono-brand boutique in the UK. It used to have a shop on New Bond Street in London, run by Time Products Luxury, Hublot’s former distributor. That shop closed last year, but a new flagship will open this summer at the Southern end of Bond Street where all the most upmarket brands are clustered.
“It is under construction. We took a store in a building on Old Bond Street where we had to keep the façade but dismantle the inside. This kind of work is difficult. We are one year late, but we are confident we will open in August this year. The idea in London is to have our flagship boutique on Old Bond Street, between Patek Philippe and Graff; with De Grisogono and Blancpain around us. It is an incredible location,” says Mr Guadalupe.
“It is so expensive for a location like this that you cannot do it with a partner because they will not make money.”
The flagship is not expected to make a profit for Hublot, but it will elevate the brand’s status and position it among the rivals it hopes to reel in. “It is so expensive for a location like this that you cannot do it with a partner because they will not make money. But if you invest in this at a brand level we can afford it because part of the investment is from a marketing perspective. It is a billboard. To have a billboard like this in London would cost a lot of money. We choose instead to put that money into the flagship store,” Mr Guadalupe explains.
The flagship will also boost sales for other Hublot retailers. “It helps everybody. We see this every time we open a strong store, all of our partners around us benefit,” Mr Guadalupe suggests.
The Bond Street boutique will open at a time when the UK market for luxury watches is cooling down after the post-Brexit splurge from overseas customers. “The famous weak pound after Brexit was incredible for London. This year there is more equilibrium and I think Paris is really picking up and we see other destinations like Milan picking up. But London is still great for us, and globally we are doing really well,” Mr Guadalupe explains.
“Sales have been so high recently that they had to come down at some point. It is like the Swiss watch industry; when I joined the business exports of Swiss watches were worth CHF 5 billion. We went up to almost CHF 22 billion in 2015 then went down to CHF 19 billion and everybody thought it was a disaster. My view is that CHF 19 billion is still four times higher than 30 years ago, which is not so bad,” he suggests.