As the watch industry deals with the struggles brought about by the coronavirus pandemic, we at WatchTime welcome insights from industry leaders on how they’re coping and planning for the future as dormant world economies begin to reopen. Recently, Hublot North America President Jean-Francois Sberro kindly consented to a candid, wide-ranging conversation about how his brand is steering through the crisis.
MB: Hublot shut down production at its manufacture on March 17. Some watch brands have shut down and partially re-started production since then. Where is Hublot right now in terms of both resuming manufacturing and launching new products to the market the rest of this year?
JFS: Obviously, the current crisis is unprecedented, because of the extreme suddenness and also because of the scale of the economic consequences we are facing. It has required everybody in the company to be very flexible, to be very reactive, and to keep lucidity in making the right business decisions while also keeping the interests of our employees as high a priority as possible at all times. The health of our employees is vital because without the Hublot employee, there is no Hublot. That’s why the manufacture closed on March 17, and that’s why, in the U.S., it was almost a week before that we shut down our entire network in North America — first our corporate offices in Florida, both in Miami and Fort Lauderdale, as well as all of our boutiques. So that’s where we stand right now. Now we are trying to look to the future, knowing this crisis will not last. Soon, we should slowly be getting back to some form of normalcy. China entered the crisis almost three months before [the U.S.], and the situation there appears to have stabilized. Hopefully where they are now is where we will be in several weeks. Probably at the end of April or the beginning of May we could start to re-open the manufacture, maybe with small team or alternating teams; it’s not a proper re-opening but the idea is to have some people at the manufacture to handle the most pressing issues. In the U.S., all that’s up and running is our sales center in Miami, one person half a day to fulfill e-commerce orders. So that’s where we stand right now.
MB: As far as new product launches for the rest of 2020, we know that Patek Philippe, for example, has pushed them all to 2021, and Rolex and Tudor have indefinitely postponed them. Does Hublot have a strategy on that yet, since there obviously products that were planned for a launch at Baselworld?
JFS: We do, but we don’t know exactly the duration of the crisis. While we hope to be able to resume some kind of activity around June, we don’t know how strong the economy recovery will be, for the country and for our specific industry, so we want to remain cautious. The key element to keep in mind when it comes to high-end timepieces is the laws of supply and demand. To remain exclusive, Hublot has always wanted to have as few products on the market as demand allows. We were barely matching the demand before this. Before making a final statement on the launch of additional pieces before the end of the year, we need to see a little bit how the recovery is going to be. However, what sets us apart compared to many other brands is that we’ve already done a fair in mid-January [LVMH Watch Week in Dubai], so roughly 15 new references have already been launched. We were able to mobilize some awareness around those launches, and we’ve taken a lot of deposits on those pieces. Now we’ve got to fulfill those orders because they are going to help us get through the crisis. Certainly, our business has been tremendously impacted, and some of our launches set for late in the year have been pushed to 2021, but we’ll have some launches here and there, including a big one coming in late May or early June.
MB: Pivoting to some of those new products introduced in Dubai, there appears to be an increased focus, for example, on the Spirit of Big Bang model, which has arguably been somewhat underrated in the collection in recent years. Why did you feel this was the right year to bring more people’s attention to that model?
JFS: While the Big Bang Integral was truly the highlight of the fair, there was indeed an emphasis on the Spirit of Big Bang collection. It is honestly the collection that probably has the most momentum at Hublot. Excluding the Masterpieces and the Complications, we have basically three families, with the Big Bang, the Classic Fusion, and the Spirit of Big Bang. Of the three, the Spirit collection is still the smallest, but we see it picking up a lot of momentum, especially in the Chinese market, where it’s become a big part of the product mix. In the rest of the world, this collection is roughly 15 percent of the sales; in China it’s close to 30 percent. Internally, we see that this trend in China could be carried over into some other countries. We’re a big believer in the Spirit of Big Bang, so I expect it to be a bigger share of the sales in other countries, including the U.S.
MB: Regarding the Big Bang Integral, last year there seemed to be a wave of brands putting out integrated-bracelet, luxury-sports pieces — Chopard, Bell & Ross, and Lange, for example. Hublot’s product is different because of its use of materials other than steel, but how long was this idea in development? It seems many brands had similar ideas all around the same time.
JFS: There was definitely a huge influx of products with a similar vibe throughout the last few months, from brands trying to capture this market, or attempting in some manner to turn around their brand identities. For Hublot, even if the timing is similar, I can say that the thought process was a bit different. First off, we know we are not a brand for everybody. We are a brand that has always been divisive in some ways. Mr. Biver always said that if you’re starting a watch collection, you don’t start with a Hublot. There is a truth to that. However we have quite a young demographic; a good chunk of our clients — about half, actually — are between 25 and 45 years old. We are divisive because our designs are striking and our universe is sometimes provocative. But people who do buy the brand tend to get hooked: when they purchase one Hublot it’s very likely that it won’t be their last Hublot. The integrated bracelet design was in part a response to the appetite of Hublot collectors, who tend to want multiple products from our brand, and also want that popular style without going to another brand that might be a bit more famous for those type of products.
MB: Hublot also had big plans around the European Soccer Championships, which are now cancelled for 2020. Will the products associated with that event be postponed?
JFS: The tournament has been moved to 2021, so the release of the pieces had to be adjusted, and I think that will be the best, because it will allow us to give the full stage to those products, which are going to be exceptional. Hopefully, by July 2021, we’ll be able to have big sporting events, to travel again, and people will be drawn together in soccer stadiums like they used to be in the past.
MB: Hublot’s digital boutique started in 2018 and is certainly serving an important role now. Describe how the process works. How does someone who’s under a stay-at-home order, and whose brick-and-mortar retailer isn’t open, shop for and buy a Hublot watch, and what elevates the experience over that of another online retailer?
JFS: It’s operationally pretty straightforward. Basically, it is exactly as if you were in the store, minus the physical contact. You first have to set an appointment by reaching out to a sales attaché at the telephone number of the digital boutique. You establish a connection with the boutique, and thanks to technical tools that were developed by the brand, you can have full digital interaction from computer to computer allowing you to not only interact with the sales attaché but to discover products that the sales attaché can manipulate. The attaché has access to the full inventory of our Fifth Avenue Boutique, where the mini-studio for this operation is based. It requires only one person at a time in the boutique and appointments are grouped. We’ve developed tools to play product videos, enhanced displays of technical features like the Unico movements, and other ways to immerse clients in our world. By contrast, standard e-commerce websites are a useful tool, but they are impersonal and lack the human component. This is important because the average price of one of our watches is around $20,000. It’s not a spontaneous purchase, like buying a book on Amazon or a pair of earbuds on Apple. At that price point, you need two things. First, you need a strong emotional connection with the product, and for that you need to be able to see it, to manipulate it, to almost touch it, whether physically or through the screen of a digital boutique where someone can manipulate it for you. Secondly, you need human interaction, because the purchase of certain objects requires some form of guidance, of reference, of education and explanation. That’s why I think the digital boutique for us is a great compromise until our physical boutiques reopen.
MB: Hublot, like other brands, has offered several boutique-exclusive pieces for various markets. Has there ever been a thought of doing a digital-boutique exclusive, a watch that can only be purchased on that platform?
JFS: That’s not impossible at all, and definitely would be in line with something Hublot would do. I won’t say anything more about it, but it seems you know our brand pretty well.