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The Business of Watches [016] Gerald Charles CEO Federico Ziviani Makes The Case For Another Genta-Linked Brand
00:52:18
Federico Ziviani on why Gerald Charles is producing pricey Swiss-made watches based on designs from the latter end of the master designer's career.
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- [00:01]
A
Welcome to the business of Watches, the Hodinkee podcast where horology meets high finance. And we go behind the scenes to discover what pays the bills in the watch industry. I'm your host Andy Hoffman. This week we're in Geneva to talk to Federico Ziviani, the CEO of Gerald Charles. Now, Gerald Charles is a smaller brand in the sector. The they've got plenty of history recently and a direct link to one of the most revered names, Gerald Genta. It's a family owned brand that requires a bit of explanation. What is this brand? How does it relate to Genta and the other Gerald Genta brand we might know that's been revived by lvmh. Ziviani gives us the backstory how his family worked with Genta in the latter stage of his career and how and why they took the brand back to consumers in retail beginning in 2019. He also answers our questions about the Gerald Charles pricing strategy and what he says the brand and its watchmaking bring to the table. But first, let's discuss some recent business related headlines in the world of watches. It's just me this week. I promise we'll return to our guest host format next week. So Swiss bank Von Tobel published an in depth report on the Swiss watch industry that estimated that Rolex, the top brand, trimmed its production or allocation to dealers in 2025 for the second year in a row. At the same time, the Swiss bank estimates that Rolex strengthened its dominance and leading position in the sector, accounting for about 61% of the sales for Swiss watch priced above 3000 francs. Now this is the kind of report that I love and I love to get into and it was quite interesting to sort of comb through what Von Tobel, which is an important but smaller bank here in Switzerland had to say about the industry. Now it certainly shows and underscores the sort of bifurcation that's happening in Swiss watches. Right. Rolex remains the dominant brand with sales of about 10.4 to almost 10.5 billion francs in 2025. And von Tobel does suggest that Rolex either sort of trimmed production or potentially held back some allocation to its authorized dealer network. And that makes sense. You know, what we're seeing there is Rolex responding to the sort of shifts in market Sentimen. There's been obviously a bit of a downturn for the past two years and Rolex is managing its production and allocation just, you know, to sort of best meet its consumer base and best meet the market. Now at the same time when it did that, it's actually increased its market share in watches priced above 3,000 francs to about 61%. That's up from about 57% in 2019, 2023. So it really underscores the dominant position that Rolex, based here in Geneva, that they have in the industry. Cartier, according to Vontobel, is the second biggest brand or watch brand by sales. And obviously Cartier watches are part of the Cartier jewelry brand and manufacturer and part of Richemont, of course. They estimate that Cartier sales were about 3.3 billion Swiss francs in 2025. And that puts them in second place, up from third back in 2019 when they had sales of about 1.8 billion francs. Audemars Piguet comes number three with about 2.4 billion francs. That's a big jump from 2019 when it was in sixth place with 1.2 billion. I think what we're seeing there is sort of the consolidation of Audemars Piguet moving to a mostly direct to consumer model through its own boutiques and AP houses that we see across the world here in Europe and in the US Patek Philippe comes in at number four, about 2.3 billion in sales, up from number five back in 2019 with 1.5 billion sales. Back then, Omega way back in 2019, it was the number two brand with about 2.28, 2.3 billion in sales, according to Vontobel. Now it's slipped down to number five, 1.6 billion in sales. That is the obviously the top brand for the Swatch Group. And it is their first sort of placing on the list, according to Von Tobel. So, you know, what we're seeing here? ROLEX Absolutely dominating 61% of watch sales over 3,000 francs. I mean, really, you put the next four or five watch brands together and only then do they add up to sort of the same size as Rolex. So it underscores, you know, the fact that these brands are continuing to do well and thrive in the Swiss watch world at a time when much of the rest of the industry is struggling. And obviously we've, you know, pricing pressures, cost pressures remain the significant issue for Swiss watch brands. We've seen the price of gold increase something like, you know, 67% last year. And Von Tobel points out that precious metal watches, those prices only rose on average by about 9% over the same period. And that's obviously a significant delta there. Obviously, a gold watch or precious metals watch is not all completely made of gold, but it does underscore the pricing pressures and the difficulties that all of the industry is facing, not to mention the strong Swiss franc. And so indeed, what we're seeing is that bifurcation that, you know, those few brands in the top five or top ten are doing okay and everybody else is really feeling it. So next up is a story about Kosk, the certification institute organization. Now they have a new higher tier for chronometer certification. It's called Excellence Chronometre or Excellence Chronometer. And it is something that we've been expecting for a long time. We wrote about a year ago after an interview with the principal there, that they were going to move this way. But it's still quite interesting to see how they are doing it. Now, basically this will be a new higher tier that Swiss watch brands that participate in the COSC certification can participate in. And it adds some more steps to the already somewhat rigorous Kosk process. Now what will happen is that they will go through the normal certified chronometer standard testing over 15 days and that includes accuracy to within -4 to 6 seconds per day. Then the movements which have been sent to COSC will return to the manufacturer, they will be cased, and then if they want the Excellence chronometer certification, they will journey back to cost and they'll be subjected to an additional five days of testing. This will include sort of robots simulating wearing the watch for 24 hours. And then they will be tested for accuracy. And in this new higher standard, the average daily rate will have to fall between minus two and four seconds a day. So that is six seconds. Then the watch will be exposed to high levels of magnetic fields. Maintain that accuracy performance, and then the power reserve will be checked to confirm the manufacturer's stated specifications. Now, obviously this comes in in the face of other standards that exist within the industry. Think about Metas, which is already utilized by Omega and Tudor, and that is slightly higher standard at five seconds per day in terms of accuracy. It also tests for water resistance, which the new KOSK higher tier standard does not. Obviously, Rolex, which does use cosc, has its own superlative chronometer classification and that requires accuracy to within four seconds a day, minus two to plus two seconds. Now, you know, COSC is the original and the major chronometer certification institute or body here in Switzerland. It tests more than 2 million movements annually from some 60 Swiss brands and that includes Rolex. And it's funded by fees paid by the brand, which it says are less than 10 francs per tested movement. So, you know what, what Kosk is doing here is basically Getting up to standard and reflecting sort of, you know, the changes and shifts that we've seen in the industry over time and the improvement in watches and in movements accuracy over that and, you know, simply to become more relevant. It's interesting, I think, to note that they are continuing the original standard, and so that will give brands the choice whether or not to try and achieve the new standard. You know, it's a political decision and organization in many ways. It's got a lot of clients and stakeholders and they have to work with everyone in the industry, not just those who are already producing movements and watches to that high standard. So it's going to start pilot testing later this year.
- [11:43]
B
We're going to hear more about it.
- [11:45]
A
And watches and wonders. And then I think it's In October of 2026, the new Excellence Chronometer certification will come into operation and will start to see that designation for some brands. It'll be interesting to see who and which brands opt to try and achieve this. It's certainly not the most rigorous certification for Chronometer, but it is certainly a step up a higher tier from their original certification and it sort of gets cost, you know, back to a more, much more relevant position within the industry in terms of, you know, that certification standard. Okay, so that's it for the big business headlines this week. Now let's have a listen to our interview with Federico Ziviani, the CEO of Gerald Charles.
- [13:01]
B
I am in Geneva at Gerald Charles at the atelier here basically in downtown Geneva. I'm with Federico Ziviani, who is the chief executive officer of Gerald Charles and has been in that role Basically since 2019, when you kind of relaunched the brand in its current form. Thank you for joining me today, Federico.
- [13:29]
C
Andy, it's a pleasure to welcome you to our home here in Geneva in Rue de Mont Blanc iii. And I look forward to taking you through the history, the rich history of this family brand where I've been involved since I was very young, thanks to my father and my uncle.
- [13:46]
B
Excellent. Well, yeah, let's start with that. So, I mean, you know, this company, the brand is called Gerald Charles, that comes from Gerald Genta, the, you know, arguably the, the most famous watch designer in history. Obviously, there is the Gerald Genta brand. Gerald Genta designed watches for many, many brands. Patek Philippe, Audemars Piguet, obviously. Tell me about the Gerald Charles brand. Gerald Genta's involvement with it and you and your family's involvement and how you came to be the owners and proprietors and executives of this brand.
- [14:33]
C
I Believe we need to start from the beginning of the history, of course. Gerald Charles Genta Charles was his middle name, was born in Geneva in 1931, and then in 1969, he founded his first brand, Gerald Genta, which he then sold to the Hourglass, and then Bulgari acquired it. And this was about 1999. In 2000, Gerald Charles Genta decided to create his second brand using his first and middle name.
- [15:05]
B
Because he couldn't use his name because he had sold that brand name.
- [15:09]
C
Exactly. Sold a trademark, Gerald Genta. So he made an agreement back in the days to call the brand Gerald Charles on the dial designed by Mr. Gerald Gento with reference to the person and not to the brand, obviously. And Gerald was a good friend of my father, in particular since the 80s. They met during the Montre Bijoux exhibition, which my father was organizing from a marketing and events standpoint. So my father Franco got to know Gerald in 82, and then he started to work in marketing for the Gerald Genta brand in Italy, helping Gerald launching, back in the days, the Gefica Safari with an iconic model. And then in the 90s, he took over the distribution of Audemars Piguet in Italy, founding the first subsidiary, First Audemars Piguet SpA Co. In Italy, which he owned. And he had his whole career watch career in one brand. It's very rare today to see such a loyal connection with one brand for executives. And my dad started with AP in the 90s when the brand was much smaller in size than it is today. And he contributed actively to the growth of the brand until 2023 when he left the brand to join our family company, Gerald Charles.
- [16:32]
A
Gerald Charles.
- [16:33]
B
Exactly. And then. So let's go back to that beginning. So Gerald Genta then had sold his Gerald Genta brand to the Hourglass and then Bulgari and had restarted a different brand, his second brand, Gerald Charles. So tell us where your family comes into things.
- [16:53]
C
Exactly. So because of the friendship relationship between my father and Gerald, Gerald came to my father when he created the brand in the beginning, asking him to help him. My father was involved in Audemars Piguet back in the days. He didn't have so much time, spare time, it was quite busy. But my uncle Gian Paulo, which is the brother of Franco, decided to join, becoming the general manager of Gerald Charles. And a few years after, the family proposed us to acquire the Gerald Charles brand with the stock, the rights over the drawings, and all the intellectual property of the brand. And then my dad asked Gerald, what are you going to do then if you sell me the brand. And Gerald decided to stay as a designer, as creative director under a contract that lasted until 2011 when he passed away. Meaning that Gerald Charles, my family owns the last 11 years of Gerald Charles Genta's designs and creations made for Gerald Charles in this time period. Like all the big artists, the heritage is always split across different entities. Like you said, he designed for many brands and he had his own brand. And what we own is the last 11 years, the last period of his creation.
- [18:18]
B
And can you tell me, I mean, what was the reason that General Genta decided or needed to sell the brand? You know, he. He potentially, I guess, needed some help business wise. The brand perhaps wasn't doing as well as it. As it could have at that time.
- [18:36]
C
Absolutely, absolutely. These I know from the stories of my dad how it was back then. And Gerald came seeking help and as well the family because it was of course not very profitable in terms of business. There were financial struggle from a business standpoint, the brand was not doing so well. There was probably not a clear strategy. There were a lot of creations, a lot of free flow of creativity from the artist. And my father and my family had experience in company building and management and this is why they prefer to sell the company and as we took over to manage it.
- [19:17]
B
Right. And Gerald Genta passed away in 2011 and I believe he was still involved with the company, but obviously was in ill health for those couple of years. So then what became of Gerald Charles the company from say 2011 to 2019? And that's when you came in and stepped in the role that you're in now. But what was the company doing then? What kind of production, what kind of watches were they making, that kind of thing.
- [19:51]
C
So we had a vast archive from which to pick the right watches for bespoke custom orders. So the brand even before Genta passed away was heavily oriented on bespoke small series. So many different case shapes. Today most are familiar with the maestro shape, but there are so many shapes that for example, you saw today in the museum and many more that were made bespoke. And from 2011 until I joined the company, the main business model was bespoke, meaning no retailers really not marketing more special orders to global collectors.
- [20:34]
B
Right. So these were people who knew either Gerald Genta or his designs and you know, probably had existing relationships. These are expensive, one off, generally made to order pieces. And that was the size of the business. So very small production. But the company continued. And so tell me what happened in 2019 and what you were doing and how you came to be in this role to lead the company into its next phase and stage and what your plan was at that time.
- [21:11]
C
I grew up in the watch world. I was really the school of the sidewalk, the real school, life school. Because when I was born in 1995, my father just founded Audemars Piguet Italy. And the only opportunity to see him really as busy as he was, was to spend time with him when he was maybe in Switzerland with clients, at dinners, at the manufacturer, at office. I remember having my chair in his office, you know, as a kid. So I always have liked to listen. And I listened. I absorbed so many information. I learned French before English. Because of that, I didn't learn the school. I learned it by spending time with some of the greatest figures watchmaking world back then, including Gerald, who I met a few times. I had the privilege to do so. But of course I was very connected to the Audemars Piguet world management and shareholding, which I had the honor to meet at a personal level for quite a while when I was young. And in this way I built my taste for watches. I learned a lot. That was the best school because I was never forced to learn. And then, then my father always told me, choose your own path. You don't need to come in watches, you just need to do what you like. And I really loved technology, I really love it now as well. And so I was first in finance in London. I went to London to study there and then I graduated at UCL University College London in computer science. So now I'm a software engineer. And my work experience have been mainly in software development, operations, Salesforce and all these kind of great softwares which by the way helped me a lot as a young CEO to manage the operations of a company because I gained that operational understanding. And then I knew that Gerald Charles was always in the family and I loved it. And I wanted to make like the perfect watch. Like, I was never 1000% happy with the watches that I could find in the market. I wanted something extremely elegant. Elegant, but extremely wearable, lightweight and tough. I could only find tough, sporty watches or delicate, elegant watches. I could never find elegant, tough watches. And this was, I would say, my interpretation of the brand. What then I developed in the years you could see now to get into the engineering. Yes, the legacy of Gerald is important, but our interpretation is also as important in terms of product. And I think that my IT background helped me a lot in wanting to push the boundaries a Little bit further.
- [24:01]
B
Interesting. And so what was the catalyst for your decision to take over the brand and take it in this new direction? I mean, was there, as you say, you had a desire to, you know, bring to the market a different kind of watch, an elegant but robust, lasting piece. So, you know what, how did you do that with Gerald Charles and how did you know, I presume you started very small because this was a brand that was really only selling bespoke pieces to private clients.
- [24:39]
C
If I look back now, we went through a very steep run and was quite fast as well. In six years. What I think we achieved in the beginning, I wanted to do this. Gerald Charles was very young. I was in my early 20s. I was the youngest CEO in the industry back then. And I really wanted to explore, expressed my passion. I was passionate about watches and I had my ideas and I felt also responsibility because my family was entrusted by this responsibility, by purchasing the brand and just keeping the last 11 years of the Picasso of watches in a safe. I felt that was kind of a pity for the watch collectors globally. We had a responsibility to show creativity and to push this to a wider audience. And this is what I did. So I started launching one edition, the 20th anniversary edition, back in 2019, beginning of 2020. And I wanted to release an entry level watch to make it accessible at slightly above 10,000, very accessible to a wide audience of collectors. And this was a very big differentiation from the previous bespoke model where pieces were extremely complicated and very high, high priced. So I went on a strong digital communication, I built digital campaigns, I built a strong website and that community, the digital community, which I really believe could have delivered the message, the true message of the watch, the passion and the brand. And this worked. And since then I feel I've never worked a single day because I'm having a lot of fun, especially for the product development is the part I enjoy the most. The most challenging is on the other side to manage the people and the team. That's the challenge.
- [26:39]
B
How many people are you now?
- [26:41]
C
Yeah, we're 40 people.
- [26:42]
B
40 people.
- [26:43]
C
We went on a 10x growth, we were four, we moved to 40. So it was a big growth.
- [26:47]
B
And talk about, you know, the operations, the sort of organization. We're here in Geneva at the atelier. You know, I got to see one of your watchmakers here and see some of the pieces. But yeah, what is the, what is, you know, what does the infrastructure look like? Where are their locations and where are those 40 people?
- [27:09]
C
The infrastructure is fast moving, as you can imagine. Moving from four to 40 people in six years is not nothing with the COVID pandemic in the middle especially.
- [27:19]
B
Right.
- [27:20]
C
So the company back in the days is location in Ticino, near Lugano, in the Italian part of Switzerland. My family is originally from Milan, so this is where we decided to incorporate with Gerald to have a certain link with the Italian also sour fare, which is great. Having never less always kept the production artisanal production, always in the French speaking part of Switzerland. Talking about Jura, Geneva, of course. So a strong part of the operations from a legacy standpoint being in Ticino. And now we're slowly moving to Geneva. Two years ago was inaugurated the atelier taught for being the hub for complications development, where we have some engineers and very high level complications and the assembly and the finishing of decomplications. While the other products are very much linked to Lugano for the time being. But of course in the dynamic growth of the brand, we have strong plans for production ramp up in terms of internalizing a lot of metedar, a lot of artisans techniques which we are doing now for the complications that we will soon release. So I would say that Geneva will become more and more important as we introduce new complications in the product mix.
- [28:43]
B
Right. And I think, you know, you were saying before that first year you were basically a digital only company, but then all of a sudden Covid happened and everybody was a digital only company, which put you on a nice sort of even ground with everybody else in terms of getting your message out. But you said you did about 200 watches that year, sold about 200 watches. Where are you now in production? And in terms of how that production happen, how should I think about it? I mean, is there an actual Gerald Charles manufacturer at this point? Or do you source components through suppliers and assemble them and finish them and do things like that? What does it look like?
- [29:29]
C
So to answer the first question, 200 watches that we sold online, it was a great milestone for us because for a different case shape that very few people were familiar with selling it online. We sold in Singapore, we sold in China, we sold in the US we sold in Italy, we sold in the Middle east, we sold in Latin America, we really sold globally. And this gave us a lot of boost to go to the next step and to reinvest everything. Like we take zero dividends, we reinvest everything in the company since then and that's the only way to grow. And we love that. But for sure, in terms of production now we're at different stages. Stage we grew from the 200 watches a year to 1500 that we make today, mechanical watches. And every year we have a plan to introduce one complication, at least as an add on, on the top. And this of course will add up, add a new layer in the production. So this year we could do probably 200 more watches from the 1500 that we keep in the core collection. And the progression in this way will be organ would be healthy because we will never want to produce more of the same reference that is already in the market. Some will get discontinued. It's not the first time. Last year that we discontinued three references. They became quite collectible. Talking about our tennis watch, the Clay court one, when sold out and discontinued. But the plan is for sure to grow in terms of technology, techniques, watchmaking, complication, innovation, our interpretation of complications and not in volumes. This is not interesting for us. We want to keep the level at a very high point.
- [31:21]
B
So it sounds to me then. So you're looking to move upscale in terms of complication, in terms of haute horology, but not necessarily in volume at first. You were all online back in 2019, 2020. What does your distribution look like? Where do you sell your watches and which markets are you in and where do you want to be?
- [31:48]
C
The distribution that we see today was built only in the last six years, which was great. We had zero doors when I joined the company because it was bespoke. And now we have, I believe, the best 110 doors with 70 partners globally. So we are very evenly distributed across the world. Europe, meaning Italy and Switzerland, were the first markets where we entered. And today Italy still represents 8 to 9% of the global market, which is a lot for a country of only 60 million people in a tiny country. And then we scaled up in Europe. France, we're now in Paris in Place Vendome, Champs Elysees. Germany, the UK was another market. Where we entered then the Middle east was a market that requested very loudly the brand. I have to say, have received a lot of calls in the 2021, 2022 from very important retailers in the Middle east talking about Siddiqui. And that became friends now. And then we built our American subsidiary two years ago only, and it was a virgin market for us. And with our office in New York, we now have, I believe, the best 11 doors in the States that cover from the east coast to the west coast and the southern states, including a door in Canada as well, and a couple of doors in the Caribbean and Mexico, if we want to consider the American continent, which is responding super well to the brand, it's a very enthusiastic collector's audience there. And Asia, we left it for last because, of course, growing organically, we couldn't be well built everywhere at the same time. So Japan was the first market in Asia that we built and now represents 10% of our global sales. There is a waiting list for the MasterLink watching in Japan, and it is mainly, let's say, allowed for who already owns, is already familiar with the brand. And just recently, because of the rising demand for the MasterLink, we had also to control now the allocation for this particular reference, which is very special in the current situation. So now Hong Kong, we have recently opened Singapore. And step by step, we will grow in other countries. But everything needs to be extremely organic because we don't have enough product.
- [34:23]
A
Right.
- [34:23]
B
And so is Italy. Should I think of Italy as your biggest market or is North America, the U.S. become your biggest market? Where does the Middle east sit in that?
- [34:33]
C
So Italy is about 8, 9%. The US is about 12%, so it's higher. And the North America together is close to the 18%. So it's quite an important part. The Middle east is very important for us, especially, especially the UAE in Dubai, where we have several doors. And now it's really a platform we sell in Dubai to international tourists. It's become an app for watchmaking. So it's for sure very strong market for us. Japan is 10%, Hong Kong is 4 to 5%, Germany is 4%, France is 4%. So I have to say that we're not concentrated. We are quite well diversified in our markets.
- [35:17]
B
Yeah, no, it sounds like it's actually quite well diversified and not overly dependent on any one market. And obviously there's been plenty of brands in the past little while who have been overly dependent either on China or the us and obviously there have been great fluctuations in those markets lately.
- [35:37]
A
Talk to me about where you sit.
- [35:39]
B
In the price range of luxury watches and what you're trying to do. I mean, what's your average price and what kind of customer are you targeting? And is a typical client of Gerald Charles.
- [35:55]
C
Our price is based on the cost, and we are the masters of shape watchmaking. That's how we would like to define ourselves. Why? Because everything that we make, we like to make it shaped. And this is, of course, unique and collectible, but costly and complicated. If you think all our sapphire crystals are not round that you can find off the shelf, but they are bespokely made with our tooling, which we had to develop. And all our watches are waterproof. So making shapes waterproof is very complicated. The case itself is made out of 35 components which are individually carved by CNC machines. And the movements as well go to match the overall design and our own interpretation. So everything that we release at Gerald Chars is never off the shelf. And this of course involves some cost which we nevertheless try to keep reasonable because we are growing in the market. So what we want to make is the future vintage, something that today is appealing for tomorrow's value retention at least. So we start at about 16,000 for the entry level three hands and then we move in the mid-20s for the chronic chronographs. Our jumping hour is in the mid-40s and our skeleton is in the mid-50s. And then our tourbillon goes in the 100,000 price range with few outliers with gem set and baguette pieces that get into the between 100 and 200,000. This is the collection today.
- [37:39]
B
And would you be able to help us think about average price? Just average.
- [37:45]
C
2720.
- [37:46]
B
Okay. That's very specific. And that helps us for sure. And so yeah. What kind of person is a Gerald Charles client at this point? What is your typical customer like? Or do you have a typical customer?
- [38:02]
C
We do have a broad range of typical customers. Our customer is not somebody that is saving to buy a Gerald Charles is not somebody that is buying a Gerald Charles to show off. Our customer is a seasoned watch collector. Or if he's new to the watch collector, he is for sure a person that has made a difference in his career. For example, one of our clients for the Skeleton is the number one Fortnite player in Germany. An 18 years old Fortnite.
- [38:34]
B
The video game?
- [38:35]
C
Yeah, the video game. 18 years old kid doing the Fortnite live with the Skeleton watch as one of his first watches. He's an outlier, he's a great guy that stands out. Other are collectors that own multimillion collections. And after having all the other Genta designs, they want to add the last one to the, to the collection. So I would say that overall we have sophisticated clients that are very demanding and with a very strong character.
- [39:03]
B
Interesting, interesting. And do you see that? You know, as you say, I think part of the strategy I think is sort of moving up in complication, moving up in finishing and in the quality of the product. And I guess that means higher prices. I mean, do you see that market as large enough for your brand? And I mean, who do you see as your competitors?
- [39:30]
C
We are declining every day demands for eye complications, minute repeaters to Mention one, we already have clients that are saying, when do you make that? We have clients that are, that see museum pieces. We got very special VIP customers coming over the Geneva museum and they saw this very high clock complication, the chrono monopusher integrated openwork that you saw before, which is an in house, incredible development which we own. And they ask, okay, can you make it again? I want to buy it. So there is demand for it. Nevertheless, we don't want to burn stuff Steps, we want to go step by step because we don't want to buy things off the shelf. We want to make our own and better than we used to do 20 years ago. So it takes time, but for sure Complications is the direction and there is definitely a demand for it even now that we don't make them. So going up in the prices is just a consequence of going up in the quality. While we want to keep the entry level price, price very fair in relationship to the quality. But we don't necessarily want to increase and be exclusive, be off putting to some people. We want to welcome with the entry level all the new enthusiasts about the brand below 20,000 is a good price tag for an independent brand that has some very important technical qualities. So Complications will be a complicated supplement to the core collection that we have today.
- [41:05]
B
Interesting. I mean, you know, there has been some criticism of the brand in some sort of circles and online in terms of, you know, price versus, you know, the product that they're, that people are getting in terms, you know, an open work, a skeleton piece, you know, you can compare it to some other larger brands at lower price points, similar finishing, maybe similar movement, similar quality. What's your response to that? And you know, why do you think Gerald Charles is in the price position that it is as compared to those competitors?
- [41:38]
C
I really love art, I'm an art collector and maybe there will be some interesting collaboration with very high level art. To give you a hint, I never give to anyone before, but this is important to address your question. So how much is the cost of a canvas and some paint? The cost for Picasso for canvas and paint is the same as the cost for myself if I buy a canvas and paint. But why my painting cost much less than Picasso's one. And this is the answer. Because of the quality, because of the idea, because of the historical value, because of the scarcity. All these things add up to the value to the price and to the retention on the long term. So our quality, our history, our decision design, our costs, they all play a role into the price of the watch which we really want to defend and for us, this is for all the collectors. I'm young, I'm 30 years old. I will be around for a while. My face is here. I cannot change company because it's my company. So it is my face. What I want to build, what we are building is the tomorrow vintage. So our interest is to build long term value for the collectors.
- [43:04]
B
Interesting. Yeah, no, and you know, obviously Gerald Genta's first brand, Gerald Genta is being revived by lvmh. I mean, what does that mean? And we've seen, you know, several pieces from now. What does that mean for Gerald Charles and you know, how, how do you want people to sort of see those two different products in the market? LVMH is the world's biggest luxury conglomerate and their watch division is part of that. But yeah, how should the market be thinking about those two brands and Gerald Genta in general in the marketplace today?
- [43:44]
C
This is a great question to address and it's very positive. The growth of Gerald Genta in parallel because he has helps to make more known to the wider audience where a lot of billion people in the world about who Gerald Genta is, what he created. And again, let's go back to art. Picasso. If the MOMA gets Picasso and the Museo del Prado gets Picasso and another great museum in the world get Picasso, are they competing or are they helping each other to make Picasso more known? I believe the second, especially if the quality is, is kept to the high value. And I really appreciate the work that Jean Arnault is doing. He's also young, like me, a bit younger. I have the pleasure to know him personally and he's a great watch enthusiast like me. I think the number one thing we have in common is the passion for the product. Of course we have our own interpretation of the product, our own DNA. But we both like not to make mass market things. We like to make quality. We like to put our vision into to the product and to be different and to innovate. And this is great because both in parallel, independently, but we work to make something new, something nice. And we talk about this with Jean a few times, the market is big enough for everybody, especially for two niche brands that make only a few thousand pieces altogether, right?
- [45:12]
A
Absolutely.
- [45:13]
B
And then when we think about the brand and the product, you've kept it to the maestro case so far, that's basically the only case. And you do iterations on that, various complications, various designs. Is that, you know, why did you decide to do that? Because obviously there were other case shapes and designs within Gerald Charles and its history. So, yeah, why are we doing that and will we see that change?
- [45:39]
C
This goes back to our initial conversation, why the brand was eventually sold and didn't go well in the beginning because it was not a brand. It was a free flow flow of uncontrolled creativity, which is great now because puts us in the position to have a huge archive, a huge valuable ap, but was complicated back in the days. So when you have too many shapes, too much diversity, it complicates everything from the production to the supply chain to the quality management and the communication and identity of the brand. And the people struggle to recognize the brand in all these designs if enough time is not given to each design to get its pace, its DNA and so on. So I see now some of the most successful brands that sell thousands of watches every year at a very high price, they're focused on their specific case design over and over again, improving it and playing with complications, playing with materials, playing with variations, but always keep the recognizable DNA.
- [46:55]
B
Yeah, we've seen many brands focus on those specifics for sure, and that has proven a recipe for success. So you've been in charge of the brand for about five or six years. I mean, last thing, every watchmaker in Switzerland is feeling the same pressures right now. Strong Swiss franc, higher input costs with the price of gold, the tariffs in the U.S. how are you dealing with those pressures? What's it doing to your margin and are you changing things or doing things differently to respond to these pressures?
- [47:36]
C
I would say in one sentence, now is the best time for a collector to buy a watch because it has the best asymmetric value for buying a watch. The best. Because our margins have been squeezed, because Swiss franc became strong, we couldn't increase prices enough as if we should have increased to compensate the increase of costs. Cost of raw materials has spiked, but we didn't increase to compensate for it. Tariffs in the United States, but we're absorbing them. We didn't increase to compensate. So we, we are, from our standpoint, we're solid. We know that there is turmoil in the market. We get calls every day from suppliers or maybe other players in the industry that are struggling and maybe want to find solutions. Luckily, we are with my family, in a very good position because as I said, we have been able to save in the good years. We have always reinvested 100% in the company, distributed 0% dividends since I joined joined the company. It's important to say, and now we're in a very good position to continue. Of course, we expect growth this year won't be as big as it should be for the effort that we're putting. Honestly, we're seeing a really headwind blowing into our faces. But our 40 people team across the US we have people in Asia with people in Switzerland. They are all doing a great job to, to fight and to still keep reasonable prices and to make it a good value for the customers. And we hope that just wait and see and things will get better and the quality always pays off. So we believe that if we focus on the quality, on the uniqueness, on the innovation, there will always be people willing to embrace it.
- [49:34]
B
Good. Yeah. No, it's a challenging time, but this industry has proven resilient for centuries. Last thing, so 2026 for Gerald Charles. I mean, we may have gotten a hint of what's to come from you. We're not there yet in terms of your releases. But if you want to give the message of what people should think about with the brand and its plan this year, what would you tell them?
- [50:02]
C
Sometimes I receive on my Instagram collectors that send me sketches and they say, you should do this watch. You should make that. Which is great, is the community now that we're building. So we have been strengthening our manufacturing capabilities. We have been hiring some higher level engineers, some higher level artisans with over 30 years experience in the construction of movements. Because for us, the watch is movement. Everything that comes around, it is the abiashi is the dress, the French term? No, abiage, dress up. So movement for us is the core now is the focus. For the next five years at least. We have a strong plan to roll out some very good creations. And probably this year at Watches and Wonders, there will be one of the first innovations that was never seen before, I would say, in the way it is going to be presented in the last 400 years of watchmaking. So I'm super excited to present that and to contribute in the Swiss watchmaking innovation. I think that my generation needs to innovate in the industry, not keep doing what our fathers used to do.
- [51:15]
B
Excellent. Well, Federico Ziviani, the chief executive officer of Gerald Charles, excellent to speak to you and thank you for joining us.
- [51:25]
C
Thank you, Andy, and see you next time.
- [51:31]
A
And that's the business of watches for.
- [51:33]
B
This episode we hope you enjoyed.
- [51:36]
A
Please head on over to Hodinky.com where you can join the discussion and leave any comments or questions about this episode or the business of watches in general. Who knows, we might even answer your.
- [51:49]
B
Question on a future episode. Thanks for listening and see you next time, Sam.