It’s been 18 years since Richard Mille launched the brand under his name, with his partner Dominique Guenat.
They both shared a passion for watches, racing and cars, and both knew the inside-out of the luxury industry and the watch sector. Their watches meant a revolution for the industry. A design revolution from the movement to the case, with a strong drive for functionality, performance and experimentation. The watches left clients, and the industry, blown away.
Since then, only 38,000 pieces have been made. That’s just over 2,100 watches per year, with some editions limited to eight pieces. It’s a true luxury item, one of those products that are so rare and unique that they are set apart from mainstream luxury.
As a proud independent, Richard Mille has built a brand from scratch, gaining the respect and admiration from…well, everyone. We had the opportunity to sit down with Peter Harrison, CEO of Richard Mille EMEA, during which he gave us some insights on what the future holds for the brand and how the luxury industry is looking in 2019.
In 2019 Richard Mille presents a very playful side with the Bonbon collection.
It’s a great thing about having a brand that is 15 years old not 150 years old. If you are 150 years old with all the grandfathers looking over your shoulders then you have to make it round, you must have two hands, you can’t do this kind of thing. We are young, we have an average age between our clients of around late 30s. It is nice that there are 300 watches. There are around six or seven watches per boutique around the world. There’s a reasonable chance that a lady who buys one of these watches will never find another lady wearing one.
Is closing distributors and opening your own boutiques a global strategy?
In fact, what we are doing is that we went from the original classic manufacture business model of selling to multi-brand retailers, to opening boutiques and slowly closing the retailers and sometimes the boutiques were operated by a third party. And now almost everywhere, with the exception of one country, we own the boutiques or there’s a joint venture in place.
You still have a relationship with Ahmed Seddiqi & Sons in the region?
Yes, of course. We are just expanding the store with them, it’s our first stand-alone store. It’s reopening in August.
What about your Saudi presence?
We are in Riyadh and Jeddah and I don’t see any expansion beyond that. We will have more involvement in the Saudi market and I will personally spend much more time there. It’s pretty interesting, you can’t ignore a city of 8 million people with a ridiculously low average age and that has a lot of potential.
The watch fairs are evolving. Basel is way smaller now and some brands are pulling out of SIHH…
We are leaving SIHH too.
Will your product launch strategy this year be in different phases?
Yes, one of the reasons we left the SIHH is because apart from the fact that from a commercial point of view it is not that interesting anymore, we also noticed a lot of the website traffic throughout the year spiked evenly at SIHH, Formula 1, Roland Garros.
We had some clients (at the SIHH) one night for dinner. They were coming for the launch of the Bonbon, which they all loved and were happy, but the first 20 minutes we discussed how awful one particular brand’s new launch was and I said guys, it is interesting. Yes, I know you’ll all agree it’s a tragedy that they have done this stupid thing, but it’s a stupid thing – let’s not ignore 30 other brands who’ve done something great. And everyone was saying it was a shock. The tragedy is that you can come with the world’s best watch on Sunday night, but if someone produces the world’s worst watch or the watch least appropriate to the brand, people talk about that. The white noise of a trade fair is just not really something for us anymore.
You are still working with Giulio Papi for some movements?
Yes. We are making the most complicated tourbillon watches with Renaud&Papi and we started developing our own tourbillon movements too which is already available in some watches.
Are you exploring e-commerce?
We are a modern company but we are traditional luxury retailers and an element of luxury is that you want the whole experience. You want to start a relationship in the way some girls only wear couture. They go and you have a relationship with a couture house and it’s always the same lady that is doing the fitting. I’m a very traditional Englishman and I have a tailor that has made my suits since I was 15 years old. I’m still wearing them and he knows exactly how I liked them. The watch business is very similar.
It’s a very dangerous transition to go from a luxury product to commodity. We are not selling coffee or whatever it happens to be, we are selling a kind of dream – luxury watches – and people want that relationship, they want to talk to someone, they want that person to call them a month later and ask if everything is ok, if they are happy with the watch, invite them for dinner in the boutique to meet Richard Mille, to meet Peter Harrison, to meet one of our ambassadors and they can explain a little bit better how are they using the watch and what it means to them.
If you press a button on a computer screen, or go to a brick and mortar store, get a ticket, and then go home and putting that ticket number into the screen of your computer to get the watch six weeks later – whether it comes by Amazon or in a Rolls-Royce with a guy in white gloves, there’s still no connection. I think in our industry there has to be that connection.
What are your criteria to use digital communication?
It’s a huge part of our industry now. If you have an average age of 30 to 39, you can’t ignore it, it’s here to stay and it’s how everybody receives news, fashion, cookery, information about anything. Of course, I like to sit and read every weekend an English newspaper and it changes my life for about an hour and I love it. I know some of the journalists personally and I’m really interested and invested in all that. I can, and still do, read the same paper on my iPad.
How do you select your ambassadors?
First of all, there is normally a meeting of some kind to figure out whether that person is a nice guy, not too starry, someone that we can sit with like this and have a coffee and talk about watches. Felipe Massa was one of our first ambassadors and he’s the best person you can possibly want to spend an evening with. He is interesting, he is entertaining, he wants to know about you, what you do, where you live. First of all, there has to be that nice relationship with the person. Second thing, there has to be – and this is very important for us – a relationship with the person who’s wearing the watch and what the watch is doing for him as the watch is built for that person. Now a lot of athletes are wearing one particular design of our watches, but in the beginning we were making watches to be used in that person’s sport and then we were getting that watch back from them after one season or two years.
Bespoke or not bespoke?
We do some, it’s a part of what luxury is. Some of our private clients want to have that level of couture, they want something special. There are levels of bespoke, it’s an interesting process. There’s a lot of requests, 10 years ago one client wanted the Nadal watch but slightly smaller and round and we made it but there are some things we can do and some things we can’t.
What are your thoughts on the overall performance of the watch sector for 2019?
I love the fact that just this year we are going to make 5,200 watches. It’s not complicated for us to reach our goals, let’s say that we have 4,000 clients because some of them will buy more than one piece. We know a lot of them already so they are repeat clients. It’s a nice area to work in.
If I was working in a brand trying to sell 100,000 watches at 3,000 Swiss Francs each, it’s such a crowded marketplace and I can’t see anything really that makes me say, ‘wow! It’s a breath of fresh air, that’s interesting.’
I think in that crowded marketplace, even at 20,000 Swiss Francs, I wouldn’t know where to start. It’s not easy for traditional marketeers, employees of companies with boards and PLC’s that have shareholders to answer to.
At Richard Mille, we are lucky we don’t have that. If I were to have a 10 per cent drop in turnover the next year, all my staff still get their bonuses, we will still do everything and we will manage to keep everyone motivated. It wouldn’t change anything. The trouble is that a lot of luxury is driven by economics and we are not. This Bonbon collection is not the traditional image for a luxury Swiss watch – it’s nice and will make 300 girls really happy. In the bigger picture, that massive volume luxury market is a hard thing to do and everything is driven by a price point. We don’t have that problem.
From those 4,000 clients are you looking at a generational transition?
I don’t think we are one of those ‘for the next-generation’ brands. It’s a bit depressing. There are probably people that were with us from the beginning 18 years ago that have kids that are interested, but I think it depends. A lot of kids aren’t really ready to wear a watch. They have a Fitbit and an iPhone. I had a discussion with someone the other day about connected technology and they love having those ,and that can be a way to bring them into the watch business, once they realise that they don’t need an Apple Watch.
Which markets are still an opportunity for Richard Mille?
So many. I have an endless list. We don’t have a boutique in Spain. I’ve only just opened the Russian store. I have one nice boutique in Munich but nothing else in Germany. It’s a long list.
Do you follow auctions and do you track your pieces when they go to the pre-owned market?
Yes, sometimes. I mean, auctions are something close to my heart and I follow them quite closely. There are very few brands that have the records we have where the watches are selling for more than their original price. It makes people confident that what they are buying is an investment.
I think many people thought when we started 18 years ago that we were another small independent brand. But the demand now is quite strong. We are only covering about a third of what the demand is for Richard Mille watches.
We track the secondary market for a number of reasons. People lose their watches either through crime or just misadventure and we try to keep track of them and where these watches have been sold. Obviously, clients come to us and tell us that they have seen a watch on some website and a certain price and we check the documentation.
It’s almost impossible to counterfeit a Richard Mille…
We get a lot of it. Someone told me recently that there’s even a pen in China now. We haven’t released the pen. We did a prototype and we showed it during the fair two years ago, but we actually never produced it for commercial retail and some guy in China was already selling it. Some people say counterfeiting is the highest form of flattery for a brand.
Is there any independent brand that you consider is doing something interesting or that you would consider investing in?
Yes, there a lot of brands that are doing interesting things and lovely stuff that I would buy, for sure. As for investing, it is not something we would do at the moment in the watchmaking sector.
Have you ever been approached by the big groups with an intention to buy? Would that be attractive?
That will be Richard’s decision with his partner, Dominique. We’ve been circled a little bit because of course we are the dream for them. A nice vertical with good margins, we got a great brand, great recognition. I think some of those companies would struggle to keep the momentum that independence gives you. Independence means something like this: If I see a store in Dubai tomorrow in a nice place with nice neighbours and makes sense, I’ll go home, I’ll have a gin and tonic, call Richard and say, ‘I think I’m going to open a store in Dubai, this is the position, what do you think?’ And he will say, ‘Yeah, for sure.’ I’ll WhatsApp him the picture and it’s done. Luxury groups with the monolithic size they have, can’t operate like that.