INDUSTRY DEBATE
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really done anything, yet the writing was on the wall way, way back,’ he says, bemused. ‘We actually think that what’s happened will
be a stimulus to the industry – a little bit of a wake up call,’ he continues. ‘Certainly, if necessity is the mother of invention, then something’s going to happen in Switzerland, otherwise some of the brands in the middle or lower tier will struggle and go under. Long term, the industry is going to have to operate in different ways and we see that as being largely positive.’ Ward is among those who accept the ruling. ‘Swatch were saying, “we would like to feed our own children at the table, as opposed to everybody else’s.” That seemed fairly logical to us,’ he reasons. ‘If we were in their shoes, we’d probably do the same.’ The immediate solution for independent brands like his, he goes on to explain, is to develop new partnerships. ‘Around 2008, we realised the sands were shifting, so we decided that we needed to rely on ourselves, with partners in Switzerland that are either going to have the ability to create movements on our behalf or create movements in conjunction with us and other third parties, or we need some sort of alternative supply. ‘We started doing that in early 2009, and got involved with Sellita. We’ve been utilising ETA and Sellita movements.’ Sellita, for the record, isn’t entirely happy with the ruling either. It also relies on ETA for parts and complete movements it then repackages. This is a known arrangement – ETA’s patents ran out years ago, and even those movements Sellita makes itself are largely ETA clones.
The longer-term solution for any watch brand is the holy grail of self-reliance. In recent years, some of the industry’s biggest players have invested hugely in developing their own calibres.
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The longer-term solution for any watch brand is the holy grail of self-reliance. In recent years, some of the industry’s biggest players have invested hugely in developing their own calibres. Rolex is now vertically integrated, Omega is going that way, IWC and Panerai use both outsourced and in-house movements, and Breitling and TAG Heuer have taken first steps with their own calibres. But doing this is hugely expensive.
Technically, the definition of an ‘in-house’ calibre is one that it is developed, produced and assembled by the brand claiming complete ownership of its provenance. Estimates as to how much this costs range from around €4-7 million per calibre, a vast sum that’s well beyond the reach of most independent watch brands. Breitling are thought to have spent as much as €20 million on developing its Calibre 01 and Calibre 04 movements. One shortcut is to buy a movement
manufacturer, as Cartier did when it bought the industrial arm of Roger Dubuis a decade ago to
According to Ward, the solution for a brand like his therefore, is to continue to rely on partnerships and build up a movement manufacturing arm over time. Plans to make an in-house calibre have already been initiated.
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build movements for its celebrated Fine Watchmaking collection – but again, deep pockets required. According to Ward, the solution for a brand like his therefore, is to continue to rely on partnerships and build up a movement manufacturing arm over time. Plans to make an in-house calibre have already been initiated. ‘Research and development has been progressing in-house for the last 18 months,’ he says. At present, he won’t be drawn on exactly when this work will come to fruition – there’s still a lot to do and the market is changing all the time, he says.
Investment in the movement project, designed with partner companies in Switzerland, has run to six rather than seven figures. Initially, the unit cost of each movement will be higher than that of the outsourced movements currently used in the collection, and this will be reflected in the cost of the watches that feature them, but says Ward, the brand’s value mantra will mean the prices remain uniquely competitive and the movements will also offer technical enhancements that are currently not available in the mainstream market. The ETA saga is far from over, but what is already clear is that long-term security lies in developing alternatives, a policy Ward has already adopted and one, he says, that leaves his company perfectly positioned for a long and successful future.
Leading watch expert Robin Swithinbank is the editor of the luxury watch magazine Calibre and writes for The Financial Times, The Daily Telegraph, Wired, Shortlist and QP.
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