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HODINKEE Podcasts
The Business of Watches [018] Zenith CEO Benoit De Clerck
00:51:00
Zenith's CEO on maintaining production at the El Primero maker in line with retail sell-out, and that supplying movements to other LVMH brands will be a growth driver for the 160-year-old manufacturer.
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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 find what's driving the economic side of timekeeping. I'm your host, Andy Hoffman. This week we sit down with the chief executive officer of Zenith, one of Switzerland's most storied watch brands. Benoit de Klerq tells us how Zenith is throttling production to keep its sell in to retailers and sell out from retailers to consumers in line and balance amid an industry wide downturn and financial cost pressures. We also discuss Zenith's increasing role as a movement supplier within the LVMH group. And we ask him straight up about the rumors and stories that the Zenith brand is up for sale. But first, joined by a very special guest from Geneva, Logan Baker is the senior editorial manager at Philips, a former Hodinkee editor and a bit of a Zenith guy. Welcome, Logan.
- [01:15]
B
Thank you, Andy. Excited to be here. It's been, I think three or so years since my last appearance on Hodinkee Radio. I'm pleased to be back and with you.
- [01:26]
A
Yeah, well, welcome back and it's good to have you. So you live here in Geneva, as do I. We've known each other for quite a while and I think the first time we ever met was at the Zenith manufacturer in Leloc. You're a Zenith guy, right?
- [01:43]
B
I am, absolutely. And I think you're right. I remember having lunch in Leloc with you and Laurence. The Heritage manor at Zenith was directly across from us and we had a chat and that was definitely four or five years ago when I was working at Hodinkee. And you were at your previous role in Bloomberg.
- [02:00]
A
Indeed, indeed. And yes, you've taught me lots about watches over the years. And you own a bunch of Zenith. You know, Zenith is a great brand. I mean it's 160 years old. Amazing heritage. Once, you know, sort of one of the largest manufacturers and continue to manufacture out of the lock. I mean, what do you like about the brand and how do you think they're they're doing these days?
- [02:26]
B
Yeah, Zenith is to me, it is one of my favorite brands. Absolutely. And the heritage and the history is a big reason. Of course there's the El Primero automatic chronograph movements. But it's not just that, I mean it's their history and chronometry with the calibre 135 that they brought back last year, you know, working with Guillaume Balances and they were also one of, and I think this is really important often underrated about the brand, but they were one of the first vertically integrated manufacturers for watchmaking in Switzerland. The founder, Georges Favreau Jacot, I probably butchered that, sorry, to my Zenith friends. But he saw what the American brands, Waltham and Elgin, were doing in the 19th century in integrated manufacturing, assembly lines, and he took that idea and brought it to Switzerland. And that's what we see today at basically all major brands, is that kind of integrated assembly. And Zenith is at the forefront of that. And, you know, over the past 20, 25 years, they were bought by LVMH in 1998, I believe they've done quite a few interesting things. There's been a number of eras there, a number of leaders and CEOs. There's the Thierry Natof era, which notorious era. Yes. Which is always interesting to look back on. And, you know, at that time, they were trying to market to a different audience than what maybe they had been historically been. And then there was Jean Frederic Dufour, who kind of stabil things and brought his own eye and perspective of watchmaking to the brand. And he was, of course, rewarded by Rolex to become their CEO and leader for the past, what, 10, 12 years?
- [04:12]
A
Yeah, he's been there over a decade now, for sure.
- [04:15]
B
Then there was Aldo Magata and Jean Claude Bivert, who brought their own style and sensibility. And then Julien Tornard, who I thought did, you know, as long as I've been on watches, he was kind of the steadiest hand and the most thoughtful about bringing the brand's history to the forefront. And he worked hand in hand with Romain Marietta, who's still there. Who? Shout out Romain. He's a fantastic guy and has a really tight vision for what Zenith watches should be. And the current CEO, who's been there about two years, Benoit de Klerk, who's coming on after me, I think, But I haven't spent a ton of time with him, but he seems great and it's interesting.
- [04:57]
A
And usually we don't do risk checks on this show, but we're here at the Phillips office and you brought in some of your Zenith collection. I mean, I'm looking here, I guess. First of all, we'll start with this very simple time, only small seconds watch. I think this is from the 1960s, you know, beautiful sort of eggshell white dial.
- [05:20]
C
Yeah.
- [05:21]
A
Tell me about this one first. You've got three here today.
- [05:24]
B
Yes. So these are all the different Zeniths I've collected over the past few years. So this is a calibre 40T which was produced around the same time as the calibre 135.
- [05:35]
A
It's BAS famous calibre 135 which is now, you know, thought of as the observatory movement.
- [05:42]
B
Right, yeah. And Zenith, I mean in their history they won thousands over 2000 chronometer competitions. And that's really important history within Swiss watchmaking. So this is the calibre 40T which again is kind of one rung lower than the 135. But it's just a really handsome watch and it speaks to the brand's history in chronometry.
- [06:03]
A
And then let's move on to this one. This one is my favorite. I'm a big fan of all the weird, wonderful Zenith defies over the years. This is a square shaped case on a metal bracelet, a stainless steel bracelet. It's a defy, but it's quite an unusual, strange one. I mean. Yeah, talk about that one.
- [06:23]
B
Yeah. So this is the first Zenith I bought. It's from the 70s like you said. It has kind of this weird, almost like the Patek lobster bracelet, but it's an integrated bracelet, steel, very square, not even TV shaped I would say, but just speaks to the brand's kind of experimental nature. And again, this is the 70s so they're adapting to trends at the time and trying to fight against the quartz revolution. So making something kind of trendier and more interesting to people at the time. Stylish.
- [06:54]
A
Yeah, absolutely. That certainly is a nice example of that design, sort of driven era of Zenith, certainly in that time. And then this watch is in some ways my favorite because it is so unusual. It's a black dial Zenith Elite, but it is, is a GMT basically. And yeah, this is a wild unusual watch. Talk about this one.
- [07:19]
B
Yeah, absolutely. So this is a mid to late 90s elite GMT. Zenith came out with time and date automatic elite movement in 94. They got a lot of attention and press around it. And this was before they were acquired by LVMH in 99. And I just kind of like this era because it takes place between the late 70s when Zenith ownership returned to Switzerland. And a lot of people don't talk about this era because I mean they talk about it in the sense that Zenith was the supplier to EBEL and Rolex with the El Primero. But they don't necessarily focus on the watches that were produced. But Zenith continued to make watches in the 80s and 90s and it's just not something people talk about all the time. There's the Rainbow El Primero that people like. But the Elite is just a really nice, easy to use, automatic time and date movement. And with this GMT version, it has the pusher at 10 o' clock so you can advance the GMT hour hand.
- [08:23]
C
Yeah.
- [08:23]
A
And you know, last thing about Zenith, I mean, Zenith is certainly a favorite among watch enthusiasts and sort of watch people in the know. And I wonder from your perspective if you ever think that, you know, Zenith can sort of make that next move to be, you know, a truly mainstream brand. Because I'm going to ask you about Breitling after this, which has certainly, you know, sort of made that move to that mainstream. But you know, can Zenith ever get there to be a real mainstream brand like Breitling, like Rolex, et cetera?
- [08:54]
B
Yeah, it's a really good question. And I think when you look at every industrial large scale Swiss watch brand, there's always this idea that, oh, can they ever get big enough to compete with Rolex and Omega and Cartier and Patek and ap. But I don't necessarily know if that should be the goal. I mean, a more flexible manufacturer business that produces really high quality, interesting watches to a broader demographic is I think what Zenith should be. But I don't know if they need to be a billion dollar brand. The Morgan Stanley report that you talked about last week, I believe, I think it had them at around 98 million Swiss francs in turnover in the top 40 of Swiss watch brands. I think there's definitely room to grow and improve. But is the goal to become a top five Swiss watch brand? If you ask, you know, the employees at Zenith and LVMH leadership, it probably is, but I don't know if that's necessarily the best choice because what I really appreciate about the brand is the intellectual aspect of it, the history and how it all comes together in a industrial powerhouse that, you know, is looking toward becoming the manufacturing center for a lot of the LVMH watchmaking group.
- [10:23]
A
Yeah, I mean we're going to hear about that more in the interview with Benoit the clerk.
- [10:28]
C
But indeed.
- [10:28]
A
And speaking of mainstream brands, last thing we saw a report in the Financial Times this week when we're recording just about the valuation. So, you know, Breitling is owned by, basically controlled by private equity partners Partners Group now is the majority shareholder that is a Swiss private equity firm. The original private equity owner back when they bought out the brand from the Schneider family was CVC and they've reduced their stake. We've also had word though from the FT that CVC had reduced the valuation of that stake based on what they transacted it for previously in 2023. I mean, what does this tell us about where we are in the Breitling journey? And can that brand grow much more than it has? Because it certainly has grown significantly under George Kern.
- [11:25]
B
Yeah. So I read the Financial Times story that you're referring to and I think on one hand it makes sense for the valuation to have declined within the past year. I mean, it's no secret the Swiss watch industry over the past two years has been on a downturn. There's geopolitical reasons, tariff related reasons, all sorts of different reasons for that. So from a business people doing business idea. Yeah. I mean, when they're doing their due diligence, they have to lower the valuation. But I'm not personally worried about Breitling. I mean, they just signed a deal with NFL that's tens of millions of dollars a year. They just took over the Aston Martin sponsorship. Would they be doing those things if things were as negative as that FT article? Potentially portrait it? I don't think so. I mean, I think current is as solid as it gets as a brand leader in the Swiss watch industry. So I feel positive about their future. We have the Gallet launch coming later this year, the Universal Geneve launch. There's all sorts of positive headwind for the brand, or the potential group, if you want to call them that. So I still feel quite positive about their future and I view this valuation discussion as just solid business governance kind of idea.
- [12:45]
A
Indeed. Well, Logan, it was a pleasure to have you on. Thank you so much for joining us.
- [12:52]
B
Thank you, sir, I appreciate it.
- [12:53]
C
Excellent.
- [12:54]
A
And now we will have our conversation with Benoit de Klerk, the chief executive officer of Zenith.
- [13:07]
C
We are in, in Switzerland, near Nyon and also near Geneva. I'm with the chief executive officer of Zenith, Benoit de Klerc. Benoit, thank you for joining us on the business of watches.
- [13:23]
D
Hi Andy, happy to be here.
- [13:25]
C
Excellent, excellent. Good. So you know, Zenith is a brand that we at Hodinkee know quite well. It's a brand that we love and we've covered for many years. We've done collaborations, limited editions with Zenith in the past. But for those who don't know everything about the brand, talk about Zenith and its history and what sort of role you play in the market as a, as a well known storied watchmaker.
- [13:55]
D
Well, Zenit, you know, we celebrated 160 years of Zenit last year in 2025 and we had the tremendous success in the, in the anniversary per se because we created four, you know, limited pieces that were sold very quickly. 160 years is pretty unique. We're not the only one, of course, but it's pretty unique because at Zenit, we remain in the same location in Le Locle, the manufacturer, the manufacturer and the manufacturer remained there for uninterrupted years. And this is pretty unusual. A lot of, I mean, some brands have been there a bit older than us, but have moved manufacturer and all that, whereby we stayed in Le Locle. And this is where everything started.
- [14:38]
C
Indeed. And talk about, you know, the sort of lines, the model lines that Zenith has now. And it's fairly focused. You know, you have the Defy line, you have some other lines, but it's definitely, you know, sort of focused around, you know, the Chronomaster, et cetera. Talk about, you know, the kind of watches that Zenith makes and who your target audience is.
- [15:04]
D
So what we did in the last years is to streamline the collection. So, you know, we had quite a few references and we decided to streamline the collection. And we have four main pillars. We have the Defy, as correctly said. We have the Chronomaster, we have the pilot and the GFG that we launched last year in 2025 in celebration of 260 years. Those four pillars are pretty different because we use the Defy as a modern design and we use that model as well to launch complicated watches and to add on some complic to the movement. Then we have the Chronomaster, which is the epitome of the chronograph, you know, which is the highlight of the chronograph and El Primero in particular. And then we have the Pilot, which is the third pillar of the collection. And then we have the Georges Jaco, George Jacob being our founder, what we call gfg. And we decided to launch that line last year, and we did 160 years of that specific model with a very, very specific movement, the calibre 130. And that calibre 135 is exclusive for that model for now within that GFG collection.
- [16:17]
C
And talk about that special anniversary piece with the calibre 1 through 5. It has a great history, winning many observatory accuracy awards and sort of why the brand is focusing or has at least in part sort of focused on that line. And then talk about the price of that model, because it's a real collector's piece. It's a very special, special movement. And in terms of what you're trying to do with that kind of piece in the collection.
- [16:50]
D
Well, you know, the best testimony is last year we launched it. And the best testimony is that we won the Grand Prix of the Autorelogerie, you know, and this in Geneva. And that was great for the brand, but most importantly great for the team. I was very proud for the team, on behalf of the team and it was great for Zenit. And this calibre 135, as you said, has won many prizes. But the latest one is last year, which we're very proud of and this is a well known caliber. It has, you know, of course we improved it, we made it better and we decided to pay tribute to our founder and we will continue within that segment and that philosophy, using that George Jaco, the GFG in precious material, in limited quantities as well, intentionally, to make sure that it remains very exclusive. Quantities will be limited. The price that we launched last year was around 50,000 Swiss franc, a bit less than 50,000 Swiss franc. And we'll remain within that price range. Of course we can go up and we would probably increase as well. But this is where we're going to stay and focus on in a very limited quantity. The beauty is that the Georges Jaco that we launched last year are sold out. Which is the best thing that you can have is that those watches, they're finishing to come up now and they're already sold.
- [18:17]
C
When a lot of people think about Zenith, they think about the El Primero, which is the famous automatic chronograph movement once used by other brands, including Ebel and obviously Rolex. What role does the El Primero play in the brand and the model line these days? The outside criticism sometimes of Zenith is that it's the El Primero and that's it.
- [18:43]
D
Yeah, I mean, of course Zenith is more than El Primero, but definitely El Primero has played a very important role within the establishment of the brand itself, you know, as a brand, because the technicality, the advancement that the movement had at that time, 55, 56 years ago, 57 years ago, this is when we launched the El Primero. And this at that time was a revolution in terms of movements. And we were the first one to launch that integrated chronograph movement. And this is where it started and from there it developed. So this is. Del Primero is an integral part of the brand itself. It's not the only one, but it's definitely a strong pillar within the voice and the image and what Zenith aspires for.
- [19:27]
C
Yeah, absolutely. And then last year we saw sort of the coming Together of two great parts of the brand and its history. And that was within the Defy case, the Defy revival case. You did a limited edition, a sort of special collaboration with usa, the Swiss modular furniture system maker. And talk about what that piece was and bringing together that case with the El Primero and then what you were trying to achieve with a limited edition like that and how we might see it utilized in the future.
- [20:07]
D
Sure. I mean, for us it made sense. We are Swiss made and USM is Swiss made as well, you know. And for us it was very important to tie in with the Swiss company. We are in Le Locle, in the mountain of the Girard Suisse. They are within the mountains as well. And they represent what the brand is all about. And we quickly saw that potential, that symbiosis. And to be honest with you, I believe that partnership, if you have to work hard on it, it's not going to work. And that partnership came in very naturally. When we spoke to them, they were much interested and it came in very naturally. And obviously we created that watch that's as, you know, sold out as well. And why not continue to develop? You know, maybe not this year in 26, but maybe in 27, maybe 28.
- [20:57]
C
Absolutely. Yeah. There's lots of possibilities and many places that one can go with something like that. Talk about the business and how things have been going in terms of customer demand, in terms of activation. You know, we all experienced the great boom during the post Covid era and you know, everybody had a pretty easy time selling their watches. It's a different era now. How's Zenith doing in that?
- [21:25]
D
Well, you know, I mean, facts are facts. I mean, and your facts are correct. It's not a walk in the park. It is what it is. But at Zenith, it's what we call it more like normalization, you know, it's more like something that now it's becoming normal. It's very important, the beauty. And we're very lucky because at Zenit, we have have the manufacturer aspect and the movement aspect and you have everything integrated within our manufacturer. So we integrate design, we integrate technology and all that within the manufacturer and we are reproduce. 100% of our movements are made in Switzerland, in Le Locle, at Zenit. And this is very important. So that gives us more flexibility as well, and we can quickly adapt to the demand. And you know, I'll be very honest with you, when I started two years ago, for me, selling and sell out are a definition of the health of the brands.
- [22:25]
C
Exactly. And for those who don't understand. You know what sell in and sell out is maybe explain it, because it's a fundamental part of that.
- [22:33]
D
Very true, because this is my daily lingo. But what we managed to do at Zenith is that we managed to produce what we have sold, but not sold to the retailer, sold out to the rest of the customers.
- [22:48]
C
So, yeah, sell in is what goes to the retailer, but sell out is
- [22:52]
D
what goes to the rest of the people, the customer, the buyer. And this is a very. It's an easy equation, but it's a very complex equation to achieve, in the sense that because you have a lag time between production between. And then you have sell in, and then you have to sell out. So this takes a little bit of time, but we were very attentive to that. I paid a lot of attention last year and the year before to make sure that we don't produce more than the demand is capable of absorbing. And I'm very proud to say that in 24, we produced less than the demand was demanding. And in 25, we were finalizing the numbers. And even better, so 25, we produced less than what the demand has purchased or what customers have purchased. And this is definitely an important indicator. And how healthy is the brand? That means that we didn't have to push stock with our partners or in the market. We didn't have to do that. Of course, we could have done more turnover and all that, but this is where we define the quality of what we do. With the team at Zenit, we could have done more, but we wanted to really match the demand of the product. And that's where we have managed to produce less than what the demand wanted. And that was, I think, an achievement indeed.
- [24:12]
C
So if I'm hearing you right, I mean, we are talking about sort of throttling back production for those two years in order to have that right ratio or equation with sell in, sell out. I mean, how did you achieve that? Throttling or trimming production?
- [24:30]
D
There's a lot of analytical aspect to this, but for us, it's very important because we don't want to have oversupply and want too many watches all over the place and all that. It's not good for the brand, it's not good for our partners, it's not good for our customers. We have to remain true and honest to our customers as well. So doing that, having that equation in place, was a relief because we did it well. You see what I mean? And how we do that, we do that every week. We have a meeting with the sales department with the supply and production department to make sure that we adapt the. That you never know exactly because you always have a lag of a couple of weeks to know exactly. But we knew how to make it work.
- [25:15]
C
Indeed. And let's talk. I want to give you every opportunity to answer this question. There's been reports in some Swiss publications here that Zenith was up for sale and that lvmh, which is the parent company of the Watch brand, was looking to sell Zenith. The company has addressed this to a point. But what do you say to this suggestion that the brand is for sale?
- [25:42]
D
Well, you know, first of all, we don't comment much on rumors. Number one, however, that rumor came through and of course we heard about it. That newspaper happened to publish something that is completely erroneous and not correct. Unfortunately, it was taken back by other newspaper and other magazines, the like from that source. But the source was incorrect. So of course what's important is that the group LVMH has completely refuted that argument and as you say in French, demented information because that information was not correct. So we said it on the same day, on the same night. Unfortunately, you know, the news traveled fast and it created some questioning and all that. But at the end of the day we know what's going on and the brand is not for sale, you know, that Zenith is not for sale. We have an important role within the division. We continue to play that important role within the division amongst the brands of the group. So there is no intention to sell the brand and to sell Zenith.
- [26:52]
C
Excellent. Well, that makes it, I think absolutely crystal clear. But let's talk about that evolving role that Zenith is playing within LVMH Have a great history as a movement maker. You have various movements that you do produce in house in Le Lock, but you're more and more those movements are ending up at some of the other LVMH brands. We just saw Tiffany come out with a chronograph powered by an El Primero movement and you're showing up in some of the Gerald Genta pieces out of LVMH watches. Talk about what Zenith's role as a movement manufacturer is, how it's evolving and how it's going to look in the future as part of lvmh.
- [27:40]
D
Well, it's a good question, Andy. The thing is, the particularity of Zenith is we have the brand and everything's about the brand Zenith. But with the brand we have the manufacturer and the manufacturer is like a powerhouse of invention, of development and the like. And Today at Zenit we have the brand and the manufacture and the manufacturer provides movements to the other brands of the group, as you correctly said, Tiffany this year, and other brands as well, and more to come. Because we have a specific savoir faire, we have credibility as well. You know, having Dual Premier or having Zenit. Zenit is not a watch for everyone. It's definitely a watch for people in the who know what they're buying. And it's funny, we see it in our retail operation. People come in, they said, I want this watch and this model and this number and the history. So and so and so and so. Don't Forget we have 160 years, 160 years of credibility. And that translates into authenticity. And today we are very authentic. What you see in that manufacturer is what you get. And this is amazing. You just have to dust a little bit of a couple of paper here and there and you have everything available. And this is the structure, strength of the brand. To come back to your point, how do we develop that with the other brands? You know, it's part of the, part of the equation. Tiffany, as you correctly said, has launched during the Elven Schwatch week their model with Nel Primero movement. They decided to take that, that movement. Of course we improved it. It's the 400 model. And then, you know, we integrated as well a lot of savoir faire and craftsmanship. For example, the Balancier or the, the, the winding system is the bird, the famous bird of Tiffany. I don't know if you see the engravement and all that, which is pretty beautiful, but this is what we're all about. We have the movement, but it does not forbid us. On the contrary, we engage into improving it and making it looking different and having an add on as well to make it to have the signature of the brand we work with.
- [29:47]
C
Exactly. And so because this is a change, I mean you've been in the role for well over a year now, two years, I guess. How did this shift come about in terms of seeing Zenith supply movements to others within the group?
- [30:04]
D
It's a good question, Andy. Essentially, personally I love industry. This is something that I personally like the fact that you have a certain input and I love the output. Output, be it chemicals, be it manufacturing, be it mechanical and all that. And this is what I'm. This is kind of my passion as well. And we realized at that time, you know, with the management that we have a great thing there. The manufacturer is absolutely unbelievably great. And we have the capabilities, the know how and expertise to develop that further. And we've done it in the past, we continued, but we can improve and take it to the next level. And this is what we're doing now for the next couple of years to continue and to develop that segment with the other brands of the group.
- [30:56]
A
Right.
- [30:57]
C
And so can you be more specific about, you know, what movements we might see popping up with some of the other LVMH brands? Obviously the El Primero is well known, but you have the Elite movement, which is quite a well known, I guess, you know, three hand movement.
- [31:13]
D
Yeah, absolutely. You know, we have the Elite that, you know that it's a very strong, very good base as well that we develop and that we created that at Zenith and El Primero. And this is definitely, as I said, you know, it's part of the powerhouse that and the manufacturer that we have, Tiffany is a very good example. The recent one is the best one because it's no later than a month old actually.
- [31:35]
C
Indeed.
- [31:36]
D
And I can tell you this is only the beginning of one story and more to come. I can't tell you exactly because this is part of their development process and all that. But we are in extreme collaboration with them for the future. We have plans with other brands as well to continue to develop what has been developed as well. Be it for example, Hublot for that matter. And Hublot is a customer and we continue to develop and all that. The beauty of Zenith, we are in a permanent re engineering and improvement of our movements and there has been major improvement and there will be more even coming up. But you know, in the watch industry it takes a lot of time. This is the frustrating part because it takes time. You have to be patient, which is not my forte, but because I'm impatient. But it's definitely part of the process and patience is a virtue, you know, it's something that if you want it to work, you have to be patient. And this is part of Zenith as well. And that part of the industrialization or the buildup of that movement, manufacturers in it, the movement is definitely something that is part of the. It's an integral part of the strategy.
- [32:52]
C
Indeed, when I think about it and when you think about your business and you report how your business is doing within the group, I guess you are now looking certainly to grow sales to other brands within the group with your movements. That's part of your P and L. Is that the way you're looking at it? And we should think about it when you look to grow because obviously that is the mandate for a business.
- [33:21]
D
It's very true. And the beauty of it is that we have the brand itself, don't forget the brand. The brands in it is a strong brand and we're distributed all over the world and we have our own boutiques and all that. Then you have the manufacturer. The way I like to look at it is like having two legs. One leg being the brand and another leg being the manufacturer. And at the end of the day, they work in sync because if I have a strong manufacturer, I have a strong brand. If I have strong brand, I'll have a strong manufacturer. So they work hand in hand. And I get numerous requests from unknown brand or well known brand as well who are interested in the Zenith movement. And my reply is very clear, is let me cater or let me satisfy the demand of my cousins and brands, brothers, that is the brands of the group. And then I will eventually maybe look into expanding to other brands of the group, outside of the group as well. But there's enough to be done within the next couple of years within the brands of the group.
- [34:25]
C
Yeah, that's interesting because yeah, obviously in the past, famously the El Primero movement was supplied to other manufacturers to great effect and to great success.
- [34:37]
D
Yeah. Like Rolex for example.
- [34:38]
C
Like Rolex for example. Indeed, as we know. And so you're not ruling out that eventually that kind of return to supplying other brands outside the group could.
- [34:52]
D
Yeah, why not? Why not? But let's do our homework first. Let's stay within the family first and the big family being the brothers and sisters, the cousins, and then we will look into expanding. But we still have a lot of work to do within our family network.
- [35:09]
C
Do you think? I mean, you've not spent your whole career in the watch industry, but you've certainly been in the industry for a long time now. Do you think everything that happened with COVID and with suppliers and components and the shortages and the up and down that happened there, do you think it made Zenith and Watch groups look to that expertise, that manufacturing capacity and capability differently than they had?
- [35:41]
D
I would think so. I definitely would think so. You know, I'm grateful and blessed, you know, having worked for another big group for many, many, many years where I learned a lot of things as well and working today for another group and I learn, and I'm very grateful as well. Definitely, you know, what we saw during COVID was a little bit irrational, you know, but it definitely changed the paradigm of, of the watch industry. You know, the, the foundation, the, the formula has changed somehow somewhere. And Today it is definitely evident and clear that customers are definitely much more educated, number one. Number two, they're looking for something very authentic, whereby it has to be meaningful at the right price. For sure. Price is important, but it has to be meaningful in terms of, of content. And this is why when I joined in two years ago, Zenith, I changed the tagline, you know, I said, okay, the. And I changed it. The heart of watchmaking. Why the heart? The heart is what we have within the watch itself. The movement and the heart of people. I was flabbergasted by the human aspect of that manufacturer. You, you've been and visited our manufacturer numerous time or at least one time. And I'm sure that the human aspect is there and there are good vibes in this manufacturer. And authenticity plays a very, very big role within the demand of today. Today people want something authentic. They're not looking for fireworks and all that. Mind you, for the 160 years we decided not to create fireworks and all that. We decided to go back to the roots of the brand. And that's why we created four models in very small quantities, 160 pieces of that for the anniversary of the under 60 years. And trust me, it was the right thing. And all the collectors were very thankful. Instead of creating something intangible or something they liked the fact that it was very much spot on, celebrating the authenticity of the brand.
- [37:50]
C
You talk about that authenticity, that manufacturing capacity, that manufacturing history, the human touch, the savoir faire, the that the brand has at the manufacturer and the lock. I mean, where do you want Zenith to be positioned in the consumer mindset, in retail, in multi brand retailers? How do you want the customer when they walk into a multi brand retailer to think about Zenith? I think always a very popular and well respected and liked brand from enthusiasts and those who really know their watchmaking. But to the regular watch consumer, how are we trying to position Zenith now?
- [38:37]
D
Well, again, it's more or less the same for us in terms of strategy. Quality is very important. That's number one and I'm very severe on that. I mean quality and we improve our quality watches. Our watches are handmade, so, so they're prone to have sometimes some problem. But I can tell you in the last two years our numbers are getting down in terms of problem with quality. So quality is very important. Then authenticity is very important as well. And you know, the manufacturer is open to visit, you know, if you register and all that, you can visit the manufacturer because this is the, the best spokesperson we have or spoke. Authenticity is the manufacturer people come in and they get to, to know exactly how we do it. Today I'm not here to revolutionize what Zenith has been done. Julien has done a great job in the last couple of years.
- [39:28]
C
Julien Toner, who is your predecessor, Julian
- [39:30]
D
today, who's the CEO of Hublot, you know, he's done a great job. Now, you know, the way I like to look at it is like, you know, it's to take it to the next step, to the next level, but without revolutionizing the brand. Because the patrimoine, the history, the culture of that brand is there. So we just need to nourish it the right way to make sure it continues to walk the way like it's supposed to be, to be walking. We are not going to be a mega brand one day. We are definitely a brand for people in the know, for people who appreciate history, who appreciate Patri Moyn, but this is where we are. So the authenticity of the brand, the history of the brand is very important. But there's no revolution of the brand in the next coming years. However, what we tested and what we wanted to do is the Georges Jacquot. And this is, you know, the average price point is 50,000 Swiss franc, as I said. And it's going to continue to be limited, it's going to be in precious material and it's going to come with other flavors, if I may say. But still limited and in a high price point with special material.
- [40:46]
C
Interesting. So, yeah, remind us sort of if that's your high end price point for the brand, remind us of where the average price sits for Zenith pieces. Sort of where you start and where you get to and how have you, as a brand and as a CEO reacted to the cost pressures that we have in the industry here, which is precious metals. Obviously the price is exploded. The Swiss Franc continues to appreciate against the US Dollar. Talk about price and all those things almost every morning.
- [41:26]
D
I check the Swiss franc value almost every morning because it's definitely our biggest cost because we're manufacturing in Switzerland, our salaries are in Switzerland and our point of reference is Swiss Franc because the cost is Swiss Franc and the currency has appreciated so much compared to many currencies. And this is definitely something we look at. It's something very important. What I can tell you is that in the last two years our average price point has increased, obviously for many reasons, including the cost of the Swiss Franc and the cost of manufacturing as well. But we try to keep the equation, like I like to call It a lot of watch for the money and the kind of thing, you know, and this is what we managed to get. But at the same time, we intentionally have increased our price point as well with, for example, the Georges Jaco, which is a collection on its own, that's above 50,000 Swiss franc. And this is strategically what we wanted. You know, we have some models that were underpriced, that we managed to price at the right price today. But it's definitely something we look at. You cannot manufacture in Switzerland and export without keeping an eye on the major currency, be it the US dollar or the Japanese yen and the like. It's very important. So these are important parameters indeed.
- [42:55]
C
And can you give us a sense of within those current pressures, how do you see 2026? What are you budgeting for, aiming for growth, and what might that look like?
- [43:10]
D
What I like to say to my management is to be cautiously aggressive. I think they like my expression is to be aggressive but cautious at the same time, or being cautious but aggressive at the same time. I like that expression because it's very true. What I don't want to do, and I'm back to the topic of oversupplying and all that, I want to make sure that we match the supply and demand. This is very important, I ideally, is to supply a bit less than the demand. And that's what we managed to do in 24, that's what we managed to do in 25. And this is significant. And I think this is an achievement. It never happened in my career, to be honest with you. It's the first time at the helm of a brand. And I made it a point to make sure that this is how we're going to be able to keep the brand and continue to develop the brand for another 160 years. And this is very important, important for 2026. We are cautiously aggressive. We will continue to monitor very closely the supply and the demand, but most importantly the demand. We have three key markets that are between the top three. And then we look at these three markets. Then we have like five or six or maybe seven markets that are tier two. And then we have other markets in tier three. That's the way we define the demand.
- [44:25]
C
What are your top three markets?
- [44:26]
D
Our top Team two market is America doing well for the last couple of months and years. Japan, that did very well last year. This year 25 was a little bit more rocky. And then the Middle East. The Middle east as we have good traction in the Middle east as well. And then you have Europe as A whole Europe as a whole, which is, it's not, you know, it's not one country, but it's, it's numerous countries. But these are the, you know, these are the three, see, are Middle East, USA and Japan. These are the top tier. And then you have another segment of like seven or eight markets. And then we have another tier that are more of the other markets. And we monitor that very closely. We have monthly monitoring of our sellout, what do we sell, how many watches are sold, and all that. And we try to adjust that based on the sellout.
- [45:15]
C
Indeed. And so, so 2026, right now, in your mind, does it look like a growth year? Obviously lower production in 24 and 25, but sales wise, what are you aiming for?
- [45:28]
D
Listen, for 26, I can tell you January was our first month and our month was in the green, okay? So I'm happy to share that we're in the green. Was it dark green? No, but it was light green. But I'll take any green light or dark. So we'll take any green. And February looks okay for now. I mean, you still have another 10 days to go or 15 days to go. But so far so good, you know, so far so good. But again, it's not, you know, dark green, but it's. What's important is the momentum, you know, in markets and the fact that people are buying watches again, you know, that are more in the mood to buy and they get, they're happy, you know, buying a watch is a celebration. You know, it has a lot to do with celebration and it's something very personal as well. And this is where it's coming back. So, so far we are to answer a question, and we aim to finish 2026 in the green.
- [46:28]
C
Nice. Nice. And indeed, as you say, we're talking in, we're basically in the middle of February, watches and wonders only a couple of months away. I mean, we've already seen some product releases from you this, this year. A nice new version of the Defy Revival, which looked lovely with that new dial. What should we be thinking? I don't know how much you can say, but what are you trying to do with products this year and your slate of new releases, your novelties?
- [47:05]
D
The beauty of Zenith is because we have the luxury to be able to create, to design, design and to be an integral part of a manufacturer whereby you have the movement on one side, then the design and all that that comes along very, very naturally. So we can be very creative at the end of the day. And we decided strategically to Launch our novelties in the Defy during the lvmesh Watch week in Milan, which was a success, as you know, and for the watch and wonders will probably not be defy. So remember, we have four pillars. We had the Defy, the Chronomaster, the GFG and the Pilot. So guess one will probably not be the Defy because you did an advantage. So probably what will it be? Probably some novelties and something that we have not seen within one of or two of the three other pillars. But again, quality is important, focus is important, and what we are known for and best at is the savoir faire or the craftsmanship. And this is very important. We want to remain what we're known for or what we're notorious for.
- [48:12]
C
Indeed. And last thing, I mean, as you look out to this year, we're still early in the year. We've talked about all the pressures that the industry is facing. What indicators, signals are you looking for in the market, whether it's in the US or in some of your other markets? Markets. What is going to make you have the knowledge of where the market and that demand is going? Is there anything specifically that you're going to be looking out for?
- [48:42]
D
I wish I had a crystal ball, but what I know is that every month there is a new moon. But what's important is the fact of being close to the markets. I just came back from Seoul, I'm going to Paris next week, but then the week after to Japan is to be close to the markets. And when I'm in the market, I get very close to my team. But I speak to a lot of journalists, I speak to a lot of collectors. Collectors play an important role in the development of what we want to do, where we're going to get there and all that. And all those together, all those parameters together, I put them somewhere in my brain, sleep on it, and then try to get something out of it that makes sense, of course, which I share with my creative team, my marketing team, my sales department and the like to be able to do something that works. And this is very important. But it's not one parameter that will define success and not success. I don't have a crystal ball, but I read the newspaper like you. We know that there are wars a few thousands of kilometers from here, another one here, another one there. But there are good news as well. After the storm, there's always a beautiful sunny day. So I'm cautious, but I'm optimistic overall and I'm optimistic for this year.
- [49:57]
C
Optimistic for this year. Well, that's a good place to leave it. Benoit Declerc, the chief executive officer of Zenit, thank you very much for joining us.
- [50:06]
D
Thank you, Andy. Thank you very much.
- [50:13]
A
And that's the business of watches for this episode.
- [50:16]
C
We hope you enjoyed. Please head on over to hojdinky.com where you can join the discussion and leave
- [50:23]
A
any comments or questions about this episode
- [50:26]
C
or the business of watches in general. Who knows, we might even answer your
- [50:30]
A
question on a future episode.
- [50:33]
C
Thanks for listening and see you next time.
- [50:45]
B
Sam.