TimeZone Interviews January 10, 2011 admin
A TimeZone Interview with Jean-Frédéric Dufour, CEO of Zenith International SA
Interview conducted 2011
MS: MichaelSandler – TimeZone.com
MS: Thank you for taking the time to speakwith me today. Would you please tell us a little about yourself andyour background prior to taking the position with Zenith?
JFD: I am a man fromthe watch industry. I was actually with a Swiss bank in Hong Kong forsix months at the very beginning of my career, but since then I havebeen in the watch industry. I started in sales at $3,500 per month, andthen moved to the production side, and was in charge of developingproduction plans, then moved back to sales, then to marketing, and toproduct development. My whole life has been dedicated to trying toproduce beautiful watches. When people ask me what I do, I always saythat I’m trying to make the people happy.
MS: Based on what I’ve beenhearing, people are extremely happy with what Zenith has been doingsince you joined the company.
JFD: Thank you. It is importantfor me that when you spend money on a watch, the feeling that you getfrom the watch is a very pleasant feeling. Pure emotion and truepleasure.
MS: Since you took on the role at Zenithtwo years ago,what are some of the most significant changes you’ve made at thecompany?
JFD: Our first focus was onsmall things. Number onewas the product. We looked at the number of references, the quality,and the supply chain. We decreased the number of references from 850down to 120. Now after two years, the collection has experienced a 100%renewal for Zenith. For a brand like Zenith, with its history, productwas really key.
And then was marketing. Without the right marketing,you cannot spread the right message. So we really concentrated on themarketing. We wanted to have consistency, focusing on the right peopleand giving the right message. And the key message was that Zenith, withthe El Primero, was the inventor of the high frequency self windingchronograph. This means everything. It means knowledge. It meanscreativity. It means manufacture. If means collections with a future.
When I ask myself what made Zenith successful for a century and a half,it all began with Georges Favre-Jacot when he was 22 years old. He wasvery young, starting this company in the Swiss mountains. And he toldhimself that they were at the start of an industrial revolution, and hetold himself that the world needs reliability, accessibility andprecision. And with these few key things, he managed to develop thecollection for people who were entrepreneurs, politicians, scientists,etc. All these people were responsible for building the world that weare in now, and they needed precision. Before the industrialrevolution, precision was not an issue. During the time of the kings,you needed to queue up for the chance to meet important people, buttiming was not kept like this.
Favre-Jacot managed to be a key playerin that revolution, producing instruments that the people needed. So inthe ads showing the product, we explain these stories of the history ofZenith. So far, this has been very successful.
MS: It’s interesting that yousay this. The first verygood watch I bought for myself was a Zenith chronograph…an El PrimeroClass 4 with a black dial. It was this history and the pursuit ofprecision that first drew me to that watch. At the time I bought it,Zenith was not even selling watches in the United States, so I had toget the watch from a retailer in Europe.
JFD: What Idid when I joined the company was to make sure we were connecting theproduct to the roots and to the DNA of the company. I wanted to makesure we were producing the collections in line with who we are andwhere we come from.
I should also say that we have really been in theUnited States forever. We started in 1919, but then we stopped afterWorld War II because Zenith Appliance has the name, and so there was nochance for us to be there. But we had a very long history in the UnitedStates. So there was a gap in time, but Zenith is definitely not new inAmerica.
So to finish, without giving too many details, we have alsofocused on things like efficiency, direct reporting, risk management.This recipe is working pretty well. And the last but not least, thereis finance. We belong to the first luxury group in the world, and beingpart of that group means we need to be performing.
But now I know that Zenith is back on track, and the direction is theright direction. Whenyou give so much into the company, getting that feedback is veryimportant. We know that we’re moving in the right direction, and weknow where we want to go. I want Zenith to be the best offer between$5,000 and $10,000 US dollars.
If you look at Rolls Royce and Bentley….for a time, they were beingmade in the same place. You had Rolls Royce that everybody knew. Butthe insiders, the car people, they were not buying the Rolls Royce,they were buying Bentley. And today, Bentley is bigger than RollsRoyce. For me, this is like Zenith and Rolex. We have David againstGoliath. They are a big company and we are a small company. We cannotfight with the same tools. For me, it’s not good business to try tocompete with them in marketing, but I can compete in product and I cancompete in the history and the story and I can compete with my historyand his energy (gestures towards Alain Huy, Zenith Brand Director forNorth America). I really want to push Zenith in the direction where webecome a company for a buyer who knows. Who knows watches.
Michael Sandler: I cantell you for certain that on TimeZone, thefeedback on the company over the past year and a half has beenextremely positive. People strongly support the changes that are takingplace at Zenith.
JFD: At the end of the day, even with allour energy,our management….it’s about the product. When you look at our successworldwide, number one, it’s because of the product.
Michael Sandler: Can youtell us a bit more about the currentcollections and where the company may be headed?
JFD: We are now developing novelties atquite a highpace. We have a very real collection now (130 references in two years).We have the El Primero collection, which features watches fromchronograph to tourbillons…but always with the same hands, indices,etc. Now we also have a very strong collection called Captain. Theseare timeless watches which express a century and a half of knowledge atZenith. It is very respectful of the history, and therefore of you gofor Captain, you can’t really make any mistakes. We have severalmodels, from the simple, to the moonphase, to the annual calendar.
Andnow we have another new collection which we call the Pilot collection.Within this collection we are offering only one reference so far, butit will be a very good test for us. If you look back, Zenith is one ofthe companies with the strongest legacy in pilot’s watches. We werethere with these watches during the First World War, and the SecondWorld War. Again this is our legacy. Next year we will be coming withtwo additional models in this collection. Then we have anothercollection called Zenith Heritage. In this collection is the Vintage1965, the square watch like the one which was worn by JFK. We also havethe Ultrathin, which is a very classic watch with only hours andminutes and seconds. It is 40 millimeters, but still quite thin at 7.6millimeters. It is a very nice, elegant watch which looks like avintage piece, but it is very modern.
Another interesting piece of thehistory of the company is regarding Charles Vermot, who saved thecompany by hiding all the original tooling in the attic. In 1972, whenZenith was bought by Zenith Corporation (the American company). TheAmericans decided that they no longer wanted to produce mechanicalwatches, and they wanted to focus only on quartz. So they requestedthat the large building where movements were made was emptied, so itcould be used to produce quartz watches and electronic appliances.
There was a man there named Charles Vermot, and he told the companythat they should not do this because that tooling was all a key part ofthe company’s history and culture. So what he did was that at night,without notifying anyone, Charles and some others were able to movesome of the original equipment from the large building into the attichere [points to a building on a photo of the manufacture]. And now,after 40 years, we are overhauling that building and we will bestarting production there next summer. It will now be brand new andstate of the art.
So by doing this, he effectively saved the company. In 1981, when Rolexcame and they were looking for movements, they wanted to find themovement which was inside the first El Primero, the 3019. They werelooking for this movement for use in their Daytona. So Mr. Castella,the new owner, came to the manufacture to see if they could producethat movement. And it was because all the original tooling had beensaved that the company was able to do this.
And of course I must mention we have the Academy pieces, the very highend pieces like the Christophe Colomb. These pieces are, of course,very exclusive. In the El Primero collection you have an exclusivechronograph,in the Captain you have the exclusive annual calendar, in the Heritage,you have the exclusive Ultra-Thin.
Michael Sandler: Since you were with Chopard prior to joiningZenith,can you comment a bit on the contrast between the fact that Chopard didnot have a very long history of manufacture movements versus Zenith andits deeper history in this area?
JFD: I’m not sure how to begin to answerthatquestion, but it is obviously to very different situations. Chopard ismuch more about the marketing, the emotion. Zenith is much more aboutthe knowledge, the history, the legacy. Because Chopard had quite asmall history in developing manufacture watches, it was very difficult.In the end, it is very important to be who you are, knowing where youcome from, and where you want to go. At Chopard, when we weredeveloping the watches, we had to find a history, sometimes frompictures.
Michael Sandler: I thinkyou’ve already touched upon theanswer to my next question during the course of our discussion. Whatare the attributes that you feel really differentiate Zenith as acompany?
JFD: Firstly, there is the century and ahalf of theirhistory, in the same location. They have won over 2,330 differentprizes during their history. There are 297 patents received under thename of Zenith, which makes them perhaps one of the highest receivingbrands ever. There are over 500 different calibers developed over itshistory. And there is of course to loyalty and the love of the ownersof the watches. You don’t have many brands like this in the world.
Michael Sandler: As part of LVMH, Zenith is now within afamily ofother watch companies. Is there a lot of collaboration between Zenithand the other LVMH watch companies, or do you remain very independent?
JFD: We are not independent because wehave the sameshareholder, but we are 100 percent autonomous. We decide where we wantto go. We have to write the business plans, provide the reports, etc.But we can go in any direction as long as we are able to explain werewe are going. Basically, we must say what we will do, and we must dowhat we say we will. But each company within the group has freedom andcan behave as an entrepreneur, and this definitely makes a difference.
Michael Sandler: As you’ve alluded to previously, Zenithinvests asignificant amount in research and development. Are you sharing thisresearch and the outcomes with other companies within the group?
JFD: Everything is really separate, butof course I amspeaking with the other companies (for example Jean-Claude Biver). Buton an individual level, we don’t share.
Michael Sandler: Do youreleaseinformation on how many watches Zenith produces on an annual basis? Itwould be interesting to understand the numbers just to get a gauge ofthe size of the company.
JFD: We don’t really releasethese numbers publicly. But we are in the range of maybe fifty toseventy thousand pieces per year.
Michael Sandler: Whichare yourlargest markets today?
JFD: My number one exportmarket is Hong Kong. And then it’s Europe. We have to count Europe as asingle market and we don’t really see it country by country. Numberthree is China. Number four is Japan and number five is North America.Then number six is Taiwan and number seven is South America. As you cansee, we are quite global. I think we are quite well balanced. Of coursethe Asian market is pulling the whole industry forward. Not only forZenith. And I think America is progressing at a very good pace, so wecannot complain.
Michael Sandler: Asidefrom what you have alreadymentioned, are there any specific novelties from Basel this year thatyou would like to highlight for the collectors on TimeZone?
JFD: Well we have the Stratos,which has a connectionto the flyback which we were producing for the French army. It is 45millimeters, and has a ceramic bezel. It is made from alchron, which isa very light metal that is aluminum with titanium. It has been usedbefore in automobile racing engines. It is very strong, with hardnesslike steel, but it’s lightweight like aluminum.
Michael Sandler:Obviously, because this interview is for TimeZone, I’d like to ask youfor your views on the Internet, and how it is affecting the watchindustry today.
JFD: It is key, and it isincreasing month aftermonth. Why? Because you can connect directly with the people that youwant to touch. It is also key because it gives the consumer directaccess to the information. If you go back twenty years, most of theinformation you have was through advertising, or maybe from theretailer. Then the magazines arrived, but the magazines were limited aswell.
Now I can prepare information, and give it to anyone who wantsit. If I wanted to buy a watch, I would first go to the internet toresearch, to see the quality, the history, etc. And we see that. Everytime we come to the internet with information, we have better response.It is the media of the future.
Michael Sandler: OnTimeZone, we have atraditional closing question for our interviews. What watch are youwearing today?
JFD: It’s not one watch, but two. Thefirst is theStriking 10th. It was the first watch I really worked on when I joinedthe company. This was a very important piece for me, because obviouslyI did not want to make any mistakes. So this piece is obviously veryemotional for me.
On my other wrist I have the Christophe Colomb.Originally, this movement was inside a very heavy and bulky case, butwhen I arrived at the company, I saw the base movement, and howfascinating it was. So I thought to myself that I have to give the endconsumer this same feeling. So we had to make the watch with a minimumof material and a maximum of movement. So you can really see themovement of the balance. It’s like a marine chronometer, but inside awristwatch. I’ve been wearing this piece to test it since thebeginning, and so far it has been perfect. So in a way, these are mytwo lucky watches.
Michael Sandler: Thankyou so much for your time,and for sharing your thoughts with us.
Copyright 2011, Michael Sandler
All Rights Reserved