Will Ever Not Be Number 1?

February 08, 2017

Switzerland is a monarchy. This might be news to you, but from a watchmaking perspective, the neutral Alp country is not a democracy run by many. is the one watch brand that rules them all. And its reign, which dates back many decades, doesnt show any signs of weakness. On the contrary, sales revenue numbers show that is becoming mightier and mightier. And that knowledge produced a provoking question: will ever be not number 1? This Fratello thought experiment will question the seemingly ironclad laws of watchmaking. What would it take to bring down the mighty Crown? Is always being in first place taking its toll on ?Lets not mess around: the answer to that question is a straightforward no. A constant stream of relevant new watches has sales booming. And with 2023 watches like the latest iteration of the GMT-Master II with its black and gray ceramic bezel or the revamped Daytona, why would sales go down? The clear-cut answer no is supported by the 2022 Morgan Stanley Swiss Watch Industry Report. The report shows that soars high above the competition when it comes to sales revenue. Lets take a closer look.Will ever not be number 1?Last year, generated approximately US$9.7 billion in sales revenue. The brand is leading the competition by a mile. The other two brands on the unofficial podium are Cartier in second place with an estimated US$3 billion in sales and Omega, just behind, with approximately US$2.7 billion. More numbers will make even clearer just how exceptional is. In 2022, Swiss watch exports soared to a record US$27 billion, and s part in that all-time high is 29.2 percent. That s up 1.5 percent from the year before, a year that broke the 2014 Swiss watch exports record.For to drop to second place, the two closest competitors right now need to do more than three times better, and needs to stop growing. If you put on a crown, somebody will try to take your head, novelist Lazlo Ferran once wrote, but the Crowns adversaries are so much smaller, they cant even reach the head. But will the undisputed number 1 of Swiss watchmaking ever slide down the rankings and become significantly smaller? What would it take for the Crown to topple?A faux pas without consequenceBad products can ruin a brand. But is even capable of making bad products? Well, the last Cellini collection that got axed and replaced by the Perpetual 1908 was hardly an overwhelming success. Also, controversial novelties like the 2022 Lefty GMT-Master II and the 2023 Day-Date Emoji were greeted with skepticism, caused quite a stir, and provoked heated debates. Brand experts believe that no brand is strong enough to carry a product that doesnt embody its core attributes. Well, in the case of the Lefty and the Emoji, it shows the experimental and playful DNA of . It also shows that being in first place all the time doesn t necessarily mean you become uninspired and predictable. Going out of style also doesnt seem to be a thing that could happen to . Yes, theres an overload of watches on Instagram, for instance, and theyre not always worn by the most inspirational people or for the right reasons. The fact that watches are now traded and treated like commodities doesnt sit well with watch purists, but that group is not the motor behind the brands steady rise. Its people who think when they think Swiss luxury watch, status, symbol of success, etcetera, etcetera.New Coke and New PepsiNone of the watches the brand has launched so far were comparable to New Coke, the improved Coca-Cola that no one asked for. Back in the 1980s, Coca-Cola got scared of Pepsi, so the brand changed its recipe in 1985. But New Coke was met with great adversity and therefore got renamed Coke II in 1990. It was eventually discontinued in 2002.Just like Coca-Cola, also updates its products without consulting the public. The Pepsi now has a ceramic bezel instead of an aluminum one. I dont think thats an aesthetic improvement, but it certainly makes sense from a technological and evolutionary standpoint. The material wont scratch easily, and the colors stay true. But we must not forget that the first GMT-Master II 126710BLRO models in 2018 had bezels that were more purple and pink than the Pepsi blue and red. had a hard time mastering the colors, but the brand got the hang of it, and after a while, real Pepsi bezels instead of New Pepsi bezels came off the production line.Steve McQueen s Submariner, a watch with questionable provenance - Image: PhillipsQuestionable provenanceAn oddball like a GMT-Master II with a crown on the wrong side or a New Pepsi bezel doesnt hurt the brand, but there are other dangers in the shape of watches that can damage its reputation. Vintage watches that come up for auction that are of doubtful origin are like ticking time bombs that can cause not just a stir but also reputational damage - the recently discovered Speedmaster CK2915 fraud case is a good example. Milgauss 6541, a watch with unquestionable provenance - Image: PhillipsIn 2018, when Phillips announced the auctioning of a vintage Submariner once owned by Steve McQueen, it had watch aficionados worldwide on their toes. Since Paul Newmans Daytona sold for more than US$10 million, Steve McQueens Sub would certainly do very well too. But the provenance of the announced watch proved to be very questionable. There was a stunt driver involved. There was also a house fire and the threat of legal action from the McQueen family estate. The watch was questioned online by experts. Because of all that, Phillips decided to not go through with the auction of the watch. Better safe than sorry. , of course, had nothing to do with the controversy. But being at the center of negative attention is not very pleasant. Still, I dont think anyone at lost sleep over Steve McQueens Sub.Tiger WoodsPeople doing damageSince were on the topic of legendary people, even living legends cant hurt the brand in the process of hurting themselves. Stating that golfer Tiger Woods is the GOAT is not very controversial. But Woods - who got his first watch sponsorship with Tudor back in 1997, signed with TAG Heuer in 2002, and moved to in 2011 - was at the center of controversy quite often. There was an infidelity scandal, a divorce that cost him US$750 million, a drunk-driving incident, and allegations of using performance-enhancing drugs to name a few. Did any of this affect ? Not at all. We live in an era where controversy leads to canceling easily and swiftly, and high-profile figures lose sponsorship deals from brands who dont want to take the heat and the negative publicity. For , though, it seems that controversy is like water off a ducks back.The Crown is building yet another castleTo fortify the Crowns position, the brand has invested something like US$1 billion in a new production site in Bulle, a town in the western canton of Fribourg between Lausanne and Bern. The future site will be populated by 2,000 new employees. This new manufacture will also allow to increase its production numbers to well over one million watches per year. That wont happen overnight, though. The inauguration of the brand s fifth production site is scheduled for 2029. And to be honest, even if manages to produce 1.2 million watches at the end of 2029, it still wont be enough to satisfy market demands.Doing what it does bestIn the new production facility, will continue to do what it does best - doing things the way. To me, it seems like that way is looking forward, staying focused on your values, and not allowing yourself to be distracted by other brands - brands you cant even see in the rearview mirror - and the whims of the people. The late Dominique Tadion, who worked for more than 20 years at in the communication department, once told me during Baselworld that could sell way more diamond watches than it made, but it wouldnt do so because all that bling would negatively impact the brand.Will ever not be number 1? - Only a perfect storm could make it soIf decided to stop producing icons like the Submariner, GMT-Master II, Day-Date, and Daytona - theres never enough of them to go around anyway - to put watches like the Perpetual 1908 in the spotlight, it would be a terrible move. But I believe that it could only turn truly disastrous if all the Testimonees (its ambassadors/spokespeople) get canceled simultaneously because of outrageously scandalous behavior - think Micheal Buble admitting to lip-syncing his whole career - and the world plummets into an unprecedented recession at the same time. It will take a perfect storm to bring down the Crown. So even if the forecast for the next few years is less sunny than the last two, the sunlight will shine on , making it look as untouchable as ever.Find and follow me at?Lex Stolk ? Instagram.