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HODINKEE Podcasts
The Business of Watches [020] Doxa CEO Jan Edocs
01:13:09
The head of the storied Swiss dive watch brand prioritizes affordability even as much of the industry goes premium. Plus, Tim Jeffreys drops by to talk about Grand Seiko's new brand ambassador, Shohei Ohtani.
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- [00:01]
A
Welcome to the business of Watches, the Hodiki podcast, where horology meets high finance. We go behind the scenes to explore the economic drivers that make the industry tick. I'm your host, Andy Hoffman. This week we're in Biel or Bien, Switzerland, depending on your chosen language. And we're talking to the CEO of one of our favorite brands at Hodinkee, Doxa. Doxa has an extraordinary history and its revival as an approachably priced dive watch brand with distinctive and unique designs is a blueprint for the tsunami of brand returns that have followed. Jan Edox, an industry veteran, is the man in charge. He's got a lot to deal with other than churning out super cool dive watches. He's contending with tariffs, soaring input costs and the strong Swiss franc, all while trying to expand the brand to new markets such as Japan. He's taking a unique approach to the challenges and he tells us how. But first, we check in with Hodiki deputy editor Tim Jeffries to talk about some big news in the baseball world. With Grand Seiko signing superstar Shohei Ohtani as a global brand ambassador, a truly rare move from the Japan based brand. And we try and break down what it all means. So, Tim Jeffries, deputy editor of Hodinkee, welcome to the business of watches. This is your first appearance. Welcome.
- [01:49]
B
Longtime listener, first time caller. It's a pleasure to be here, Andy.
- [01:52]
A
Excellent. It's great to have you. So actually, first, Tim, let's introduce Vino. For those who don't know you, you're the deputy editor here at Hodinkee. Tell us what that means, what your job is every day, what kind of stuff you have to take care of. Everybody knows you through wrist check Wednesday, of course, this is your signature move on Instagram. But yeah, what do you do all day?
- [02:18]
B
Yeah, a lot working here. I've been here for a little bit over a year now. And I have to say every day is different, you know, many, many days. Obviously, I'm writing and reading the stories from our freelancers and from our incredible staff writers such as yourself, Andy. A big part of my job also is running the social media. So I'm on Instagram, not just running around frantically around the office asking people what they're wearing. But I'm also in charge of all the static posts, all the Instagram reels, all the Instagram stories that go up there. And, you know, one of my favorite things about, about the job is, you know, meeting folks from the industry and meeting, you know, readers of Hodinkee. I love going to events and talking to folks about what they're loving, what they're seeing, what they want to see more of. And so it's, I like to say it's a really good feedback loop where it's like, you know, I'm in the office all day, but I'm also outside of the office a lot as well. And so I think that's a nice healthy balance of, you know, it's easy to get caught up in here and just like typing away at your computer. But one of my favorite things about the industry in general is like everyone one is really nice and the people that love reading Codeinki are very passionate about it. And I love of engaging with all those folks.
- [03:27]
A
Yeah, no, for sure. That is one of the things that makes this industry unique and Hodinkee unique in that we get to interact with the community and all the companies that we cover and who make the watches that get us excited and that we write about. So it's great. Yeah, you don't want to stick in your silo and yeah, it's great to sort of have that feedback every day for sure. So one of the reasons, reasons you're on with us this week is to talk about quite an interesting sort of, you know, what business move from our friends at Grand Seiko. When we think of Grand Seiko, we don't necessarily think of, you know, them having ambassadors or what Rolex calls testimonies, most famously with Roger Federer. But Grand Seiko has just kind of changed that and shaken things up for them. Tell us about the story you wrote. I mean, they've brought on Shohei Ohtani, the LA Dodgers baseball player. I mean, already seen as one of the greatest ballplayers of all time. And yeah, he's going to be a Grand Seiko global ambassador. What does this mean, Tim?
- [04:42]
B
It's incredibly fascinating and when I saw this, I jumped on it because I'm a, first of all, I'm not a baseball fan. I'll preface everything I'm about to say as a non baseball fan. However, I did find myself watching the World Series last year, partly because maybe I was rooting for the with two Canadians on staff, you know, I was absolutely had a vested interest in the Blue Jays.
- [05:01]
A
But partly there's a heck of a run for the Jays.
- [05:04]
B
I gotta say, it was a heck of a run and probably they would have won and if they, if they weren't playing against one of the greatest baseball players of all time in Ohtani. And I watched it because obviously for those that, for those that don't know. Ohtani is a pitcher and a pitchers used to hit but they never hit first. They weren't the best hitter on the team. And so what's really interesting about Ohtani is he's a two way player hitter and pitcher and a starting pitcher in that. And so he's only been in the majors for I think he, he, he signed with the angels back in 2018.
- [05:40]
A
Right.
- [05:41]
B
And was in, was there for a couple years and then he moved on, I say most notably to Los Angeles Dodgers for literally the largest contract in professional sports history. $700 million, 10 years. And it's an interesting pay structure. We don't necessarily have to get into details there but I bring that up to say he's a very savvy businessman. And so when this came up and Grand Seiko sent us, sent us the press release, I was honestly excited. I think it's a great move for Grand Seiko. And two like to your original question, after I've rambled for, for 30 seconds here or a minute, it's like we don't really know how this is going to materialize. All we know it's going to start April 1. He did in that signing of the largest contract in sports history, he was wearing a Grand Seiko and that's perhaps foreshadowing a potential sponsorship down the road. But he's a transcendent baseball player that, that had me as a non baseball fan watching when he was pitching just to see what he would do.
- [06:45]
A
Yeah, no, that's really interesting. I didn't realize that he was wearing a Grand Seiko when he, when he signed that ginormous contract. So indeed that was a bit of foreshadowing. And for Grand Seiko, I mean, you know, this is a brand that's, you know, been around for decades of course and is sort of obviously, you know, the high end offering from Seiko Group, big in Japan until it went International in 2017 and obviously in the US market basically as a separate brand from Seiko. And so, you know, how might we expect this to play out for Grand Seiko itself? I mean, what is this, do you think this tells us about Grand Seiko's ambitions in terms of being a global brand and having higher recognition?
- [07:35]
B
I think it's a really smart and strategic move and I think it's really encouraging from the brand who as you mentioned earlier, they not only don't have any sports ambassadors, they don't have any ambassadors really at all. And so for them to sign one of the biggest, biggest athletes in the world is a, is a, is a big deal and for me that's potentially a sign that they're willing to take some risks. They're willing to kind of make some strategic bets out there to, to really get their name out there and use. I mean, obviously Ohtani had the interpreter gambling scandal a couple years ago.
- [08:09]
A
Right.
- [08:10]
B
And you know, that's been fixed now, but he's got a squeaky clean image. Grand Sicko joins a big slew of brands that he works with currently shoe sponsor New Balance, he works with Oakley, Porsche, Hugo Boss, Japan Airlines, the list goes on. He's reported to making $100 million annually on these, on these sponsorships. So Ohtani is doing quite well for himself in that respect. But I do believe that for me, Grand Seiko normally, you know, obviously a very high quality product, but normally kind of stays within their lane. This is, this is outside of that and outlier and I think it's a, maybe a foreshadowing of things to come for the brand.
- [08:49]
A
Yeah, no, I think it's quite interesting. I think there's no doubt. I mean this speaks. Well, you know, I guess Ohtani kind of personifies the perfect ambassador for Grand Seiko. Obviously a hero and a huge figure in Japan, but a true international athletic superstar via his success in World Series with the Dodgers. So yeah, I mean it makes perfect sense. But indeed, as you say, he's got lots of other endorsement deals and is doing quite well. So we'll see how much, you know, grand savior Seiko becomes part of his image and how closely associated he becomes with the brand. Tim, it was awesome to have you on the business of watches. Thank you for joining us today. That was great.
- [09:40]
B
Thanks for having me, Andy. Enjoyed it. Cool.
- [09:42]
A
Well, we will see you soon, no doubt. Welcome to Jan Idak, the CEO of Doxer Watches, also the CEO of Alko, which is a white label large scale manufacturer that we will talk about later in the podcast. But welcome, thank you for being here.
- [10:06]
C
So thank you also for being here at our HQ in Bien and looking forward to a wonderful discussion.
- [10:15]
A
Excellent, excellent, Jan. And so yes indeed we are in your HQ in Bien or Biel and you know Doxa is a watch company with lots of history. Tell us, you know, in Cole's notes as we say that the short history of Doxa as a watchmaker and as a company and how it got to where it is now.
- [10:42]
C
So well, it started very in over 100 years already with DOXA and I think there's two different sectors when we look at the brand of Doxa, the first part goes until 1900, where it started with pocket watches, classical watches at the time, wristwatches. Doxa became really very famous also in Eastern European markets, where still today people know Doxa for what it has been during those moments. And then the second chapter opened in 64, where we bridge now to who we are today, where the universe of water, the aspect of diving watches started to be followed with the first launch, then in 1967 with the first Doxa subwatch. And from there on we took it over to where we are today. Of course, still a long time since 67, since the first launch. But technically for the brand we have these two different life circles of the brand. Yeah.
- [11:49]
A
So pre1967 and after. And there's been various ownership scenarios for the brand since 1967.
- [11:58]
C
Yes.
- [11:59]
A
Can you just run us through quickly sort of, you know, those various owners and then how it came to be part of Walco and you being the CEO.
- [12:10]
C
Yeah. So first it started Short du Commain, that was really in Le Locle, was not in Biel. And then he started to develop the brand Doxa. And then also through the family was even a cousin of Ulysse Nardin, who was part of the Doxa company, who took over and then ownership changed to the family Aubry later on. Then this one was sold to a conglomerate of synchron.
- [12:37]
A
Right.
- [12:38]
C
And which ended then in 1997 with the family Eni, who is still the owner of Docs as of today, which is also, let me say, the most important step mark for the brand since then. And the family Yen is now the fourth generation in the watch industry. Later on we may talk about Walka. Yeah. And since then, since 97, let's say the docks are diving got into the market first, of course, in a much lower scale with the diving watches. The. The collectors were served. Doxa was only sold through an online platform in the beginning of 2000. DOXA started already when it was premature compared today.
- [13:21]
A
Yeah, it's interesting that Doxa was among the forerunners to selling watches direct to consumer. Why did it do that and how is it evolved now?
- [13:37]
C
I think it started in the late 60s, so 67 and 68, where Doxa launched the 300T the Conquistador with Helium Wolf and in the same year also became the official watch for the Swiss army for the divers. So from that moment that decade started to create a demand on the collector side. It was not yet ready to go large in retail. And the business model at the Time anyhow was different. It was a nice side business, let me say to the core business at the time which the family was running, which was Walka, the private label sector, where Walka was one of the leaders in the market. Since from that moment until today, walka produced over 10 million Swiss made watches, which is a large number. And then of course onwards, the end of the 90s, beginning of 2000, the business model start to change a little bit. And then also the online slowly came up. It was a nice formula also to serve end consumers globally, to make the brand to collectors recognizable. And still today it's a part we as a brand, as a company, we can still learn a lot. But the online business, that's a business which we really understand. Absolutely, yes.
- [15:05]
A
Yeah. And you were certainly a forerunner and first to it compared to many others. And we still see there are plenty of brands who don't sell online. What is the most important thing about selling watches online that other brands may not understand? What are the biggest challenges and what do you have to do differently than selling watches?
- [15:28]
C
Okay, so it's all about exclusivity online, doesn't mean online to go everywhere. What we do with Doxa, we just to the front side, what the end consumer can see. We carry many, many different websites which you as an end consumer can even not imagine. But we collect all the data here in Beale also legally that means we know our end consumers, we can analyze the market. But secondly, we never sold to any online platform. Third online platform, right. And it's not up to me to judge management strategies from other brands. But the factor is if you go on too many online platforms, this will bring your price down because every platform will start to battle on Google, put their ads on and this doesn't make the product more exclusive, it's diluting. And also the costs become more expensive. And at the same time, what we did now since 5 years is then to open up very wisely a very solid retail network, but also in an exclusive form, where at the end our online business will support their retail business. If I have too much online platforms, the retailer is not my friend anymore. And then if the online platforms hardly you can less control pricing, then it goes further, the retailer starts to give discounts and all this, so. So it's all one after the other. And what we did still today, we keep it clean. You can't find DOXA with 40%, 50% off in any market. So sometimes you say no to short term additional turnover, but on the mid to the long term, in our Strategy, it's wise to keep the brand value up.
- [17:18]
A
And so pretty much by controlling all the online sales yourself, with I think just a couple exceptions, you control pricing, you can make sure there's not discounting. That's the key for that.
- [17:36]
C
Yeah, it's also the key element. It's also when you see for example the larger retailer carrying several brands, how many clicks an end consumer needs to do to go to a brand. I mean you go first and you see he has jewelry, has watches, he has tableware, whatever he has. And then you go brand and then you select the brands and then you go down and with our platform, with two clicks, he's already into the collection, the end consumer and doesn't mean that he will buy all the time on our website, but he has a very easy way to get informed about a new product, about the history. And also in the online sector, what we feel it also has a limit in pricing. There's also a risk some. Sometimes as a high end brand, you can even not sell in my point of view online because you have a risk. The end consumer has a right of returns of 30 days. I don't see a watch for US$20,000. Sometimes the end consumer is wearing it over the weekend and I don't want it. It gets bad, it's scratched, technically, legally, you go after him, it costs a lot of money. It's annoying. So there's also price gap where an end consumer says okay, no, this is very nice but I want to wear it, I want to see it, I want to touch it. And this is then where your website drives audience to the retailer. So it is not that we all time take something away. We bring also business to the retailer. So it's a give and take.
- [19:07]
A
Understood. And then let's talk about price. I mean, you know specifically, you know what price segment that Doxa is in and how you are navigating that price segment. I mean I think from correct, correct me if I'm wrong, about US$1,000 up to four or five.
- [19:26]
C
Yeah, exactly. That's a core range. So we have to see, for example the online sector is 1000 to 3000. Whatever steps open 3000 the retailers fall into place already. For example our carbon piece, then you can read 44 grams. What means 44 grams online? You don't know. So rather go for that price to a retailer, test it and then you see how comfort the product is, is on your wrist. But also what 44 grams mean. And this you can never offer through an online platform. So but the Initial price ranges from 1,000, 5,000. Yes.
- [20:05]
A
Yeah. And what percentage of your sales now or your revenue is driven by online?
- [20:09]
C
It's still over 50%.
- [20:11]
A
Yeah, yeah, it's over 50%. Yeah. And what has that transition been like moving to more retail and moving into different markets? Talk about the markets that you're in and you the various challenges that each brings.
- [20:28]
C
So at the end we did something very simple. So when we. It's not. It was not a rebirth of doxa, but since five years in the 220, we started to approach the international markets on retail because the brand had a big risk, because the fan base was aging and aging and aging. And at the same time with social media for us, Jacques Yves Cousteau, Calypso. I remember when I was in school, you know, that was a reference. And all the time it's even not a joke. And my son is not happy because I'm telling the story time by time. But if you go to date a young kid and you talk about Jacques Yves Cousteau, their first answer will be probably more is this a new player with Paris Saint Germain? Than who it was. So for us it's normal. And the brand was an instrumental needs to bring that history, which is so rich and true, to the next generation. So then first we started in the Anglo Saxophonic markets because there was the biggest fan base of Doxa, especially the United States, also the United Kingdom and Austria. Australia later on had also to do with Clive Kussler. Maybe later on he was our biggest ambassador in the literary world.
- [21:49]
A
This is the author Clive Cussler.
- [21:52]
C
And then we started to open up. The first point of sale was in Glasgow, I remember then pretty much soon followed by watch of Switzerland in United States. Then we said, okay, this triangle we start first with and pretty much fast. After six months we could have opened one door in Singapore, one in Japan, whatever. I said, no, no, we really follow a clear strategy. And it was really go from the west to the east, technically.
- [22:19]
A
I see, yeah.
- [22:20]
C
And so we approached United States, England, still together. And from there we started to move into Europe, Germany, Italy. Then the year after we moved into the Middle East. After the Middle east, we moved to India. Then after India, we moved forward to Singapore, to the Philippines. Australia was opened us from the beginning. And for example, now this year we plan to open up Japan, which technically we could have done three years ago already. And in that process was also in knowing a little bit the watch industry. I knew with whom I will work one day.
- [23:00]
A
Right.
- [23:01]
C
But sometimes the problem was they didn't know yet. So it's also patient. It has to do with organic grow, learn your patterns. You need to understand the business and how the transition in regard of products and all this works for the next generation. And that was happening. One of the first watch we launched was the sub 200.
- [23:21]
A
Right.
- [23:21]
C
It's maybe not the classical diver's watch, but I called it a desk diver's watch. And the idea was a very aggressive retail price and that was a good product to go for the next generation in. Also for the retailer, easier to sell 1000 than as today. It's a bit different to sell a watch for 4,000.
- [23:42]
A
Yes.
- [23:43]
C
And there the entire process started and then also not to compromise. Even though per market we all the time said we stay in the water or stay around the water, not to go into different cultures or in this market, I'll do a pilot watch in this water, make it classical. They are making a watch for the car industry. No, we are loyal to our DNA which is the water.
- [24:07]
A
And I mean that is essentially what the brand is and has no intention to move from that idea and product. I mean, what is, you know, talk about, you know, the offerings and the dive watches that Doxa makes. I mean that is the core of the brand. It's really. You only make dive watches? I think.
- [24:32]
C
Yes. Listen, it's also for us being a long time, there's still a lot of people end consumer discovering Doxa. Don't make the mistake because you have seen it now for five years to run too fast. We can play with materials. It's a bit more limited because we need to fulfill salt water acceptance.
- [24:51]
A
Sure.
- [24:52]
C
And there's still a lot of people who are entering into the Doxa world were also followed. But it's not that an end consumer runs into a retail store first time he sees Doxa that everyone right away is buying and more and more like we increasing our business. Also despite now the difficult times of last year, certain other we still had the growth last year.
- [25:14]
A
What kind of growth did you experience? Last year was very difficult.
- [25:17]
C
But for us it's steadily also this year despite we still expect the growth 5 to 10%. So it's not big jumps we do. It also has to do that. We also said no, I could have maybe two years ago a much larger growth and then maybe I would have overflowed the market with products. Then maybe last year I would have a minus this year I would struggling with discount business because I have too much watches in the market which I can't control. So Step by step.
- [25:46]
A
Yeah. And can you give us a sort of ballpark figure as you say in terms of your production, how many watches you're making? And
- [25:56]
C
making watches is one question all the time. But how much do you sell? So last year we sold over 10,000 subwatches globally and also there in number of point of sales. I think by now we reached 200 point of sales last five years. Target is very clear and we want to further raise our presence globally. Also new markets will raise the business to 350 point of sales exclusively and then we stick to it.
- [26:28]
A
And by when do you hope to be at 350?
- [26:31]
C
So I think now after five years and a half, the next 150. This will not last another five years, right? I think in two, three years we will be there. And also in regard of the interest now economically especially the US for us as being one of our, one of our, our key market challenging times. But this will not stop our global development. Again step by step and then totally doxa. As a family owned business we can go up to 30,000 pieces and then also hey, this business we want to control and it's not to make the mistake then to become too large to become into challenges which then fashion brands have. Then it gets difficult to control. And I think today also in big cities it's not part of the strategy that we want to be on every corner. And this is very much appreciated by the retailers. Also some other brands, they just kill retail. They do it by their own or whatever. And I have a complete different view on that. I mean it needs retail business. I can never talk the local language globally. I mean even though in the US I think the people act differently in San Francisco than in Miami. The end consumer is different. Just imagine different cultures in India, in Japan and there's still a lot of end consumers staying loyal to family businesses. And family businesses doesn't mean just us as a brand owner, it's also the retailer as an owner and they trust these people. And if I would open up just my own boutiques then you have your own staff but they jump as employees.
- [28:19]
A
So yeah, that's not. You don't own any retail and that's not part of the.
- [28:25]
C
No. Maybe one day in a joint venture. First question. To open up a boutique in regard because the business is there. But I would never do that alone. Never.
- [28:37]
A
Absolutely. It's not your core competency.
- [28:39]
C
No.
- [28:40]
A
So I mean basically I should think though pretty much anywhere if I want to buy a docs or watch though I can buy One online, but in that retail space, where does the brand position itself within that showroom and how does it complement and work with the other brands?
- [28:57]
C
You know? So first of all, it's 70% of our retail to 200 is premium retailers, not mentioning brands, but the top brands. And Doxa is all the time more presented, more on retail onwards, where high end brands are sold. So we are in this category more. The first price range tend to be in a fashion brand store where dox is the most expensive. Our end consumer appreciates dogs because of the DNA factor with our cushion shape case, even though you like it or you don't like it. And the big brands call it the premium brands. Not everyone still, but some of them, they have also a strong DNA factor. They're much more costly. Sometimes the end consumer walks into that retail store, would like to purchase one of those watches. Then first he needs to know, is he allowed to get the watch? If he's allowed, then he needs to make a down payment and if he's lucky, gets a watch in one year's time or more. Maybe today it's changing a little bit, but still waiting time. So the end consumer is frustrated, he's not walking out with a watch. And on top of it then, even though they heard about dogs or not, the salesperson look, this is something very justified in our store as a brand unique, not trying to please everyone. And if the person, the end consumer, is open to beach, to water in many aspects, he reads, then he likes DNA factor, then he's asking how much? 1,500. The quality is there. This was all the time a key factor of Doxa. You get a lot of watch for a good decent retail price. And then what we learn now is that Doxa becomes effectively the watch for during the day. Because even though he would have walked out of expensive premium watch, he will never wear this in the afternoon. Going to the beach for some people, absolutely.
- [31:08]
A
It's a much more practical piece of wristwear. And yeah, at a price point that people can feel comfortable with. We've seen so many brands be revived. I mean, in a way Doxa was revived like many others. Why do you would you submit and argue that it stands out with all, you know, against all these other brand revivals that we've seen and we continue to see. I mean, do you think there's too many, too much of this? Do you think the market can absorb all this? And why Doxa?
- [31:39]
C
But I can, I cannot talk for the others, what is felt very fast, It's a real History. And it doesn't stop. Doxa made it proofs decades ago already. So for new brands, whatever their strategy is, but we have solid proofs and we have a DNA. In my point of view, not many brands you can recognize on the wrist when someone is sitting on the next table. Doxa you recognize immediately. With some brands you need to read the brand name before knowing which brand it is.
- [32:14]
A
It has that recognizability, which is a rare attribute and something that's quite valuable
- [32:20]
C
that not many brands have. And then again, to stay in a certain size, to stay exclusive, to stay warm, to stay colorful, to stay playful, not to increase prices, to go into a different price range, you make maybe a first proof of success. And now I'm here, now I start to have stainless steel watcher for 5,000, I go to seven, then to nine. That will not happen with Doxa. We stay just loyal to our DNA. Not just visually, also conceptually and still a long way to go. And then sometimes I have a saying, I rather prefer to be in the top three of the second league than to be the last in the first league. That's why our context there and we as a family, most probably or never, we will fly around with private jets and dollies, but you know, we don't meet to. We're happy and we're not in an investment period. Doxa already creates benefits and some people thought, oh, it is great where you go and all this, this is cost money. How long is your investment? Said no, no investment. And if you make a calculation with 50% before, when we started with 70% online, where we grab the full retail margin, if you would analyze commercially the company doc. So we must be one of the brands with that mix of online being fair, not over distributing. We're not so bad in the revenues at the end of the day.
- [33:51]
A
Right, right. And yeah, I mean obviously the margin selling direct to consumer, you get to keep whether it be that 30 to 40% margin that you'd be giving to the retailer. So it works when you can do it. But yes, as you say, the issue is, you know, people don't get to see the watches, try their watches. But that's why now you're expanding the retail side. And so we'll see, as you say, you'll get to, you expect to get to 350 points of sale within the next five years. How many people work for Doxa do you have, you know, do you have the traditional departments like other big watch brands? Do you have, you know, you have watchmakers here you have designers, do you have people in heritage that are, are finding those great stories like the Doxa army and those kind of things?
- [34:43]
C
This is all in house, as you can see, HQ totally. Now, globally we're at 50 people. But I include also the subsidiaries here, the classical departments, as I think every watch brand has. We have our own designers, the watchmaker, every sub is assembled in the house here sales department and it's all here nicely encountered by, as you can see, another brand which is really known and very happy to be here. And for me, Beale is one of the cradle of the Swiss watchmaking.
- [35:20]
A
We have a big neighbor next door.
- [35:22]
C
Yes, very close and historically very linked also. And so this is also a size of company which you can control.
- [35:32]
A
Absolutely, absolutely. What we've seen from even just over the last five years, there's been quite a cycle in the Swiss luxury watch industry. And what we've seen is the other brands have been raising prices, some have been innovating and creating new product, but generally the way to grow revenue has been to raise prices. Talk about your approach to that, that kind of strategy and what we've seen from docs on that front.
- [36:07]
C
I think our answer in the last five years we only made once a light price increase. Just once in five years, maybe another one will follow soon, but for other reasons in a certain market, this will also not be extensively because my point of view, everything, what you write down on paper, a paper is silent, everything runs on the paper. What you need to understand the market. And I think if you go and you raise your price on constant basis for a stainless steel watch, and you do this for five years, your watch is 50% more expensive and there's limits. And as a brand, whoever, you need to understand where you are. And people ask us about competitors. I don't see a direct competitor for docs, but I see the competition on the retail where the brand is positioned. I understand that from a certain moment, down from 5,000, 7, 10,000, you talk a different language of the end consumer and be respectful. Even though you have an end consumer paying, giving you $1,000 out of his pocket, be respectful. And that doesn't mean that in five years he's willing to spend 10,000 and for watches for 10,000, you need to justify it goes into the aspect of movement. It has to do with the marketing budget big brands have they participate. The dream factor becomes different. Doc still niche.
- [37:33]
A
Yes. And I mean comparatively, how do you do marketing? How much do you spend on marketing? I think it'd be fair to say you're taking a different approach than some of the big brands to that obviously as well.
- [37:48]
C
Oh, definitely. This we have. And then we go back to the online, how we analyze our sales, how we have in agreement with the end consumer. Of course we collect the databases there. Every market is different. And then we start to make a copy profiling. And it doesn't mean that you find all the time the end consumer. If you spend some money into a watch magazine, not at all talk about that.
- [38:11]
A
I mean, what are the most sort of diverse or surprising things you found from that data that you get through your customers and their purchases and the information that they share to you?
- [38:22]
C
So you need. That's why how we build up, we don't have one platform. You cannot have one platform because the data, it's different. You need to go into every single market. The one I cannot disclose everything, but it has to do that. The approach to water is completely different. In China, for example, where we're not in or in India compared to the people living in Miami. Of course, logical the approach. You can ask yourself certain people, certain nationalities, when you go on holidays, the moment they go to the beach, they jump into the water. But that's not the case everywhere.
- [38:58]
A
It's a different relationship.
- [38:59]
C
Different relationships. So their decision. When you approach a market with a dive watch, in certain markets, you turn this more into a sports watch. You turn it more into a direction of desk diving. Don't try to see that you communicate or where you invest your money. It has to do with direct diving because the people don't dive in certain markets. And there it starts. I don't think the global audience is the same.
- [39:34]
A
No, exactly. And in terms of your audience, the US is your biggest market. How big is the US for you? And then we can talk about how you're seeing and feeling the markets at the moment.
- [39:49]
C
So the US by its own represents over 35% percent. It's very open. Also the next generation, I think also in the US it's difficult to ask really the history, but sometimes they fill up. And still today, I think in the US every year we have over 50% first time buyers in Doxa.
- [40:10]
A
Interesting. So over half of the buyers of one of your watches, first time that they've bought a dock.
- [40:17]
C
And also in the US it's me personally, I appreciate the US it's colorful, it's playful, it's a consumer market. They're open to new. And in the US there's a lot of water.
- [40:31]
A
There certainly is. And various ways for people to interact with it. Absolutely. And so we are basically right in the middle of 2025. It has been a very volatile time for the market. I mean, tell me how you experience first of your brand dive watch focused entry level, priced between 1,000 and 5,000 francs. How did you experience the boom that came in the post Covid era and then the pullback that came a year and a half, two years later from that? Considering your positioning and your product and the way you distribute and sell, did you feel it more, did you feel it less? Talk about that.
- [41:18]
C
No at the end, that's what. Why until now, no pullback. Every year a growth, but again, a decent moderate growth, a planned growth. As I mentioned before, we could have two, three years ago, the boom. We said more no than yes. Not to render ourselves so important, but we knew some, some, some retailers, they were really annoyed. And who do you think you are? And to give you an example, also in the Middle east there was one very esteemed market who knew. Well, I told them no, you need to wait one more year. But the first of May, I think it was 223, we opened up Dubai, Kuwait, Saudi Arabia. Every market the same day. Oh, that's not a coincidence. So it's not that we wait and just everyone is welcome to walks in and to place an order. So that's why the growth was moderate. So no pullback now this year, of course, with the announcement of the changes, will there be a pullback and all this. What is different here is not in our hands. And it's still today where we expect further updates. That makes it of course much more difficult. But even though from now on in the US we didn't raise our pricing
- [42:36]
A
a penny, even after the tariff announcement,
- [42:39]
C
this one we swallow.
- [42:40]
A
So tell me how you did that. Did you change any terms with retailers or.
- [42:45]
C
No, nothing. Just no change.
- [42:47]
A
Interesting.
- [42:47]
C
No panic, which was very much appreciated. Of course this has limits. And I think the combination now it is not just a question of tariffs, it's what puts us now more under a need of move is the dollar. And so both together, I know that in the US there will be a price increase because both together it becomes now too substantial. We have the benefit that we never raise the price or just one light of, of I think 3, 4%.
- [43:18]
A
When did you do that?
- [43:19]
C
This was, I think two years ago. Yeah, in the middle. But it has more to do because suppliers, they raised the price here in Switzerland. So I said, listen, if my movement costs me 15% more, not that I raised 15, everyone understood it's still a very aggressive retail price for the watch you get. And now here we just wait. But in the first range, no pack panic followed the market. Because once you decide you can't go back, there's limits. And once you overstep limits. And the Swiss watch industry is very price proven. Very price proven.
- [43:59]
A
Talk about that. How the Swiss industry has dealt with many crises in the past and it will continue to do so. And why it's able to do that.
- [44:09]
C
Yeah, because at the end of the day, day it's. Let's assume the Swiss watch industry during the day were competitors from 8 to 5, but please believe me, if there's a need after 5 o', clock, the people sit together and then you're not competitors anymore.
- [44:28]
A
And so the viability of the industry is sort of paramount for everyone and you know, for everyone collectively. Indeed. And where does Doxa then fit into that collective idea of the Swiss industry? And how do you both benefit and contribute to that collective business project?
- [44:51]
C
So, the collective business project, first of all, what happened all the time already. I mean, despite when you look here in Beale with the suburbs, where up to 100,000 people People living here, many people live and make their money in the watch industry already before now all this we are connected. If we have an international customer, I can call a CEO from another brand to ask him, oh, listen, this customer wants to work with us, is he a good payer? The same we do rather I'll support my neighbor's business to be well together better than to support someone else who's not my neighbor. So of course we help. And what could this be? The shifting then still every brand by its own need to think how far they have the capability financially. But the people will stick together. We do already. It's not that everyone is waiting and then say, oh, let's stick together after
- [45:50]
A
it happened already it's well established and it's the way that it works. Indeed. And. And it was interesting you were talking about launching in the Middle east with retailers, but each market is different and you sort of created a few watches, I think, for that market that were somewhat different.
- [46:09]
C
Right.
- [46:09]
A
I mean, they had stones on them. Yeah. So, I mean, talk a bit about that. I mean, what you learned about that market and then why you would create a slightly different product that seemed perhaps maybe not within the DNA of Dachs.
- [46:26]
C
It's absolutely the DNA, but just in a different way. I had then when we launched the 200T with diamonds, which still fulfills the functionality of a diver's watch with the 13 stones. Technically you could. Then I said some collectors were. What is this? Why are you doing this? Listen, there's other brands right away in 71 very known brands and in the Middle east you find every kind of watch with diamonds. The market, market is different here because there you have end consumers, they love the brand, but they just don't buy a watch for 2000. So it is what it is. They don't buy a Fiat. The minimum they spend for a car is a certain price. Then also that aspect of. Don't want to call it show off, but the approach of luxury, even though in the sports team it's taken differently than maybe in other cultures. And then also when we launched two years ago, we made our analyzes for diving in the Middle east and then we shifted it into a boat of pearl diving. So it's in the water, but the meaning is different. It hasn't less to do with fishes, but the pearl diving is big, so pearls is shiny. So. And at the end of the day when you launch something for a local market, as long it sticks to the dni. For me this is by far justified when there's a certain demand from end consumers.
- [47:55]
A
Yeah. Are there any examples of other markets where you've done, you know, sort of special tweaks or additions or changes?
- [48:05]
C
So we knew at the time already when we started with the carbon that this was also for. Very much beloved in the Middle east, also for pricing and for innovation.
- [48:16]
A
So similar case with the, with your carbon case. It's certainly aiming at that market.
- [48:23]
C
Yeah. And this is also the carton by its own. Me personally, I also really, I admire it also wearing it during the day in the office. It's very light.
- [48:34]
A
Right.
- [48:35]
C
And it represents this fact that I told to play with material today what you couldn't do 50 years ago.
- [48:45]
A
Yes, yes.
- [48:46]
C
So that's an innovational part. Also this justifies for a diver's watch, it fulfills the duties all. But it's something more modern. So not just to open up history booklets, just to copy paste what has been done 50 years ago.
- [49:01]
A
Yeah. And how has your average selling price changed, if at all in the past, say three years? I mean obviously a carbon case watch is more expensive. Has that changed much?
- [49:14]
C
Oh, as I said, in the last five years, one light price increase, no changes technically.
- [49:19]
A
But I, I just wonder if product mix, you know, has, has changed a lot to that would then change that.
- [49:25]
C
I know, so, so what we started, we started to 1, I think the core range from 1000 to 3000 this is where Doxa came from. But then certain markets then they like the carton piece. Then we launched I mean The T graph limited edition 300 with a hind winding movement original movement from 71. This is you stick. But with this you can play this is in the water, around the water. It's still a diver's watch. And there's then certain collectors who appreciate that additional added value. As I said, innovation. And there you can play justified, right?
- [50:04]
A
For sure. And so the uncertainty of the tariffs aside, where do you see the luxury watch market going and your place in it, do you think generally we've evened out after that boom and that huge surge in demand and that you will continue to hopefully grow customers or do you see it as a more difficult time to sell a watch and then how do you intend to compete in that fight to sell somebody a new watch?
- [50:40]
C
So first of all, I don't consider that doc size in the real luxury luxury segment. Again, I'm a huge supporter of the Swiss watch industry by its own and we've seen it. We know now in so called crisis or where there's a lot of rain falling into your business segment. There's one saying it is not when the sun is shining for everyone that you can really prove how good you are. You need to prove yourself and right mining and this the most in the Swiss watch industry are capable. And we know that the first approach is to buy a new watch in a certain price segment. Even though in the luxury is maybe not the first desirable need to have item because people already have watches. So maybe the circle of where the business goes down that period may have a certain length. But if this period is over, it will come back over proportionally and has been all the time the same. Now here the question is for how long? One year, two years, four years, five years. And the commercial flow by its own was already the market maybe overheated because the people overloaded the market with watches in every segment. I think that was the main problem. There was too many merchandise out there. We as an each were too small to be part of a change of big numbers. We sneak through in our second league creating less attention. But what I see is now that the market gets cleaned up. You told me everywhere new brands are starting. My personal vision is we won't see many more new brands arriving. We see more now the new brands, they need to prove themselves during rain. Let's wait for this. I wish them good luck. Yeah, but technically a new watch is not now the item which you absolutely need when people feel uncertain in terms
- [52:53]
A
of your offering and putting yourself out there, do you intend to sort of double down on the value aspect of your product or do you intend to maybe raise prices and do less volume? I mean the segment that you're in is the most challenge for the industry as a whole. We see through statistics, obviously from the Swiss watch experts.
- [53:19]
C
It is, is challenged, it is challenged for the others. So first of all, we have no need to give any approach to downsize anything. And again, in the statistics. Yes, but exactly technically what Doxa is doing, the approach, we're on the price range, but our distribution network, we handle it as a high end price range brand. We're not acting like in that price range, right, in that price Range people have 2, 300 point of sales in the US only they have 2,000 point of sales globally in a price range. So that doesn't mean. Because in my price range I live the same because I don't have discounts. And if you downloaded the last two years and you sold to everyone. Yeah, of course you have now massive problems. Problems because you find online your watch with 40, 50% off. Then consumer walks to a retailer, shows an iPhone. I also want to have 40. The retailer loses his full margin, he needs to discount off, he's not selling. So this is a full circle which then again other brands at price range just overloaded the market. That's my opinion.
- [54:31]
A
Interesting. Yeah. So I mean that to me seems like such a key element of your business because you are, are very much online, but that is very controlled in terms of pricing and as you increase the number of retailers. But having control over that price and preventing discounting is key. Yeah.
- [54:55]
C
And that's again, it's again how you prove yourself when it's raining. And if you can as a brand keep your prices up, it's not so complex. Indeed.
- [55:06]
A
And when it comes to production and how, how much you produce, how flexible are you, how reactive are you to demand or orders or tell me how that works. And then I'm interested in what role Valke plays in the whole business.
- [55:27]
C
So first for Valka, the private label business is not the same what it used to be, of course, but we're still active and of course we're not disclosing for whom we still produce watches because it's like Walka's, like a private bank. You're not going out who is your customer. But one time I said, we know producing watches since what now? 50 years and we are very flexible.
- [55:52]
A
What does that mean to be. I Mean compare that to say some other big manufacturers and what it means to be flexible in watch production.
- [56:01]
C
Flexible means that you have very tied up strong relationships with suppliers. With suppliers. On the short term I have overestimated increase in a certain product line. They'll put me the machine in for us which maybe do not for everyone. And then of course I'm not ordering still the same quantity as the big ones. But our quantity is not so small either. Doesn't matter. We were there feeding them since over 40 years now. I think we're very good payers. You know, it's just that's the flexibility. It's a question of relationship of trust which I carry a lot on words as we mentioned before to retailers, but also to the suppliers.
- [56:47]
A
And can you talk about, I mean obviously there are lots of suppliers here in Switzerland who also have operations in Asia and parts of components of Swiss watches. We know the rules. So you know, in order to compete in this price segment, I mean give us a general idea of, you know, there are obviously components of the watch that are made in, that are made in Asia. You obviously qualify as Swiss made. So yeah, talk about, you know, has that changed a lot and what that sort of looks like.
- [57:22]
C
In the last five years you may had overall Switzerland and you had light price increases in regard of inflation, but it was moderate. It said again we go back to the Swiss watch industry. Not stupid to try to put too much again on paper to force your loyal customers also of our movement supplier. Very nice collaboration and everyone knows how to play the game on the supplier side. Now certain suppliers they may suffer. I think this is more in the luxury segmentation where now the demand goes down smaller companies. But there was no significant price increase general supplier side the last five years. And I don't, and I even don't expect it also for the future. I think it would not be the moment to do so.
- [58:19]
A
But have you figured, you know, I guess my question is, have you figured out ways to reduce the cost costs of your components and might that have been more utilizing components from other countries?
- [58:35]
C
It's not less a component, it's how you build up yourself logistically. When I see too much our metal bracelets, if you see I have different folding clasps, but in two, three lines I have the same metal bracelet.
- [58:50]
A
Bracelet, yeah.
- [58:52]
C
So it is how logistically you customize that one spare part is not just used for one product line.
- [59:01]
A
Of course. Yeah, exactly. But I mean what everyone has told me, bracelets are one of the sort of choke points in terms of Swiss production to do anything at all affordable. The capacity just isn't here anymore. So I would presume that your bracelets are made in Asian.
- [59:19]
C
I would not just quote now Asia. There's a very interesting, very interesting path to follow that I would call Europe. Maybe not Switzerland, but Europe is increasing and there's one counter increasing over rationally
- [59:35]
A
it's Portugal for the, for the watch industry.
- [59:38]
C
Yes. It starts when you go on support outside. I maybe this becomes the new Shenzhen in Europe in 5, 10 years to the watch industry. It's a lot of investment there.
- [59:46]
A
That's interesting. And, and, and so this is an area maybe there's some suppliers there that you're using more. And what kind of components are you able to source now from here in Europe?
- [59:59]
C
It's very open minded by itself. It's very close by to visit.
- [60:05]
A
It's a nice place to visit too.
- [60:07]
C
It's a nice place and it doesn't cost me potentially when the global work goes completely crazy, someone can close me a canal and my boat is not arriving anymore. I need to put everything on the planet plane which is very costly. Is the plane still allowed to land, to fly? We lived many things last five years. I think the industry, not only the Swiss watch industry, there's a way going
- [60:38]
A
back to Europe massively indeed in certain manufacturer sectors we've certainly things seen things come back to Europe, come back to the United States. And do you think that is a trend in some cases specifically what kind of things?
- [60:56]
C
Like you mentioned metal bracelets. Yeah, yeah, exactly there. Yeah. Interesting or marketing material. We think we have all our display. Nothing is done in Asia anymore, all in Portugal.
- [61:12]
A
That's very interesting. And as you say it's closer culture wise and they're developing the expertise and ability.
- [61:23]
C
It's important that the people are open to work and for us it's closer and I'm carrying much less risk. I can just send a truck and in 24 hours the merchandise is here.
- [61:37]
A
Right, right. Interesting. And is there anything more you could tell us about Vulca and what they do? I mean what does it mean to be a white label manufacturer? And that is that business as you said has certainly changed. Or I mean, you know, it's not the same kind of business. But is it an important part of the story of DOCSA and the way it can operate?
- [62:03]
C
I think in the family it was important because still today, now we're not making the first price range private lab. This is nothing we are not interested in anymore. And we don't even accept now the medium to the high end we we have and it's really we're taking it as not at all to be arrogant. But we choose our customers. We have a lot of dreamers outside they come just the one shot and most likely they sometimes have no clue about the watchmaking then we know anyhow. And when I smell a failure then why should I do. And in private label you're not generating the real income with a first order. That branch would work repetitively come back on the same styles. And all this in earlier days was really a question of volume because certain people didn't have any bridge to Asia. Now today everyone can go to Asia if he wants and it doesn't need to be to have someone in between in Switzerland to leave some additional margins. But on the same time the know how we saw some people coming back they tried they could do by their own with big big FAI sailors. And so this is just nice to have like a private bank. Okay. And sometimes we really ask please, please do so I will not allow them. Now we see an increase there because people would like to be linked to Doxa. This I will not allow. You cannot go out to such as we will not disclose that we produce. But you have also no rights. Yeah, it's both sideways. I will not help a partner to go on retail. I'm not supporting them. Everyone needs to have his own strategy. But it's a nice to have added business for sure. It's not as substantial by far not as substantial as it was in the earlier days.
- [63:56]
A
Exactly, exactly. But it produces more watches than Docs, obviously.
- [64:01]
C
No, no, no, no, no, no, no, no, no.
- [64:04]
A
Interesting. So Docs is the biggest part of the. That's interesting to know. So you talked about that, that continued growth on the retail side and so you hope to get to 350 points of retail sale in the next five years. What else are your business plans for Doxa over the next two to three to five years? Is it about product? Is it about innovation? Is it about how do you keep generating new customers and how do you keep established customers wanting to buy more product?
- [64:42]
C
First of all it's about product. So our idea is they, they go into 227, 228. I'm looking already forward for next year. It's very precise what we need to do. It's also to after five years to incentivate collaboration for our retailers more and more. We have also this opportunity to go into local markets with limited editions which are all the time support with a Retailer together not me as a brand which is very much like. And then to. To. To work closer to retailers to make the brand more known. It's not. You don't build a brand to a more larger or after five years this can go decades. It's just some people and so we are. We're not in phase one but maybe we're only in phase two or phase five. And be patient. Still a lot of people discover Doxa.
- [65:35]
A
Yeah. I mean it's a sort of legendary brand among the enthusiast community and the sort of Hodinkee community. But there's a lot of people don't know much about the brand. And you've got quite a story to tell.
- [65:48]
C
No, absolutely. And this has to do with the growth once that's why with the retail business once they touch it now we already more. Oh I heard about already which is already a compliment to us was not the case two, three years ago. You see and it's really the quality of distribution Docs has. I'm not mentioning brand names but on the website you can see who our retail partners are. And then suddenly now this can't be a coincidence that this premium retailers choosing to sell Doxa because they carry big much sometimes a big ego and the responsibility these retailers they can't take the brand just to test on their level. If they say yes and they give retail space to a brand they want to be sure in front of their end consumer that this brand is still around in 10 years because next two dogs are they sell more expensive watches. And if they would start to disappoint their premium customer with a much higher spending with a watch for 1,500 they may take the risk to lose that customer. So they know what they do.
- [66:57]
A
Absolutely. And is there anything that you think you may have pushed too far or that you've done that you regret in terms of product that you think may have risked that credibility that the brand has with customers as that entryway at the high end retail stores?
- [67:19]
C
Not really. No one is perfect.
- [67:22]
A
That's true.
- [67:23]
C
But big mistakes I think did not happen. It is just for the community and the community starts to get different and different. But in the beginning it was harsher to come up with with new models. The people also when we came up with a 39 oh this is too small and all this I said guys, I have Asia. Okay. I'm not wearing 45 so sometimes. But today is much better because the collectors more and more see now the global approach and the business sense now. But time by time also this Piece with the diamonds. People start to understand now. Now I get it logical and still they need to make money if they want to grow and. And we can be proud. And we left the stage where in the beginning that the hardcore collectors they expected that we stay still in a museum. They can talk about what do you want to sell watches and not to have. But no one is buying just to clap on your shoulders and just to talk about the history. And as a museum brand I can tell you commercially you're dead.
- [68:26]
A
Absolutely. I mean how did that smaller size 2200 do? Because I think it's a great watch. And it's also a great watch in terms of price point as well.
- [68:37]
C
Absolutely. The general tendons are also in other markets. It's downsizing to 41, 40, 39. Right move. But we need it. But the right moment was also now when we approach we go to Asia. I cannot tell the story with a 45 millimeter watch. It's different there. They love the story, but it's even not to adapt. You just follow local must haves. And if you think you're as good that you can just push 45 millimeters in that market then great. But then you didn't understand how the market runs.
- [69:17]
A
And what about female customers? I mean certainly that watch size wise certainly may appeal more to that audience. I mean you know, how are you. Do you. You have the data what percentage of your customers are male? You're not female.
- [69:36]
C
It's so as per the customer base it's now we start to approach maybe two digits.
- [69:43]
A
You're starting to approach two digits.
- [69:45]
C
Fair.
- [69:46]
A
Yeah. I mean this is you know there's
- [69:48]
C
domain is a much lower percentage logical. You have in certain markets the sports driven women of course and with the woman it's the one who buy dogs are very clear. They buy it because of functionality maybe less because of the cushion shape watch. There's that there you have a competition. Maybe it's less the watch for the evening. And when you analyze also that the woman this is now I call this my keyboard ninjas make all the analyzes. The competition is large. It's not only a man is more functional also. But if you give to a woman $1,000 to spend. It starts watch, jewelry, shoes, bags. It's a large spectrum. And for which moment the ones we sell is a sportive woman.
- [70:37]
A
And so it's not you know targeting that that demographic more. I mean it's not a high priority but it's nice to have. And as the some of the cases get smaller it's certainly.
- [70:49]
C
Yeah, but it's. It's not the main market. We're happy it's lightly growing as we see but it's instrumentally Doxa is not be seen from the women as being the exclusive watch to go out and a gala dinner in the evening. Now this is. Then maybe the functionality of the watch is less important and it's more the glance and the glamour.
- [71:16]
A
Absolute.
- [71:16]
C
Absolutely.
- [71:17]
A
And so to wrap things up, I mean what should we be looking for coming from Doxa in the next six months, year or so?
- [71:26]
C
Anything you can tell us about a new interpretation of which are looking very much forward of history.
- [71:36]
A
A new interpretation of history. What might that mean?
- [71:40]
C
That means that we reinterpretate in a product history.
- [71:45]
A
I see. So a historical product to be interpreted
- [71:50]
C
and looked at in 226.
- [71:52]
A
In 2026. Excellent. Looking very forward to that and continuing to watch Doxa and all the exciting things you do. Thank you Jan Edox for joining us today.
- [72:07]
C
Thank you very much, Andy. And to all the audience of Odinki, thank you all the time for your support support and very pleased to have this occasion to talk with you.
- [72:22]
A
And that's the business of watches for this episode. We hope you enjoyed. Please head on over to Hodinkee.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 question on a future episode. Thanks for listening and see you next time.