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HODINKEE Podcasts
The Business of Watches [025] Seiko Watch Corporation President Akio Naito
00:33:23
We talk about Credor's debut at Watches and Wonders and innovation at Grand Seiko. Plus, Mark Kauzlarich stops by to talk about the latest auction results.
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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 talk to the executives driving the global watch industry. This week in Geneva, we sit down with Akio Naito, the president of Seiko Watch Corporation. We talk about Seiko's ultra high end brand Credor, its international launch and its debut at Watches and Wonders. But first I'm joined by my colleague, senior Hodinkee editor Mark Kozleric, to talk about the spring auction sales that are actually still going on here in Geneva. Mark, thanks for joining us. Great to speak with you. How are you?
- [00:41]
B
I'm great, thanks for having me. It's an exciting auction season so I'm excited to be here and chat about it.
- [00:45]
C
Great.
- [00:46]
A
Yeah, no, it's been quite interesting. I was at some of the auctions on the weekend and yeah, some really compelling results. I mean, I think certainly we can say things are strong. Yeah. What's standing out for you so far? I mean, you know, just to be clear, we're on Monday here, Monday evening in June, Geneva. And so Christie's just wrapped up its first day. We've had Phillips, we've had Antiquorum and we had Sotheby's on Sunday. But yeah, tell me what's standing out for you, Mark.
- [01:16]
B
Yeah, I think we're seeing a pretty significant market shift which frankly started a little while ago and it's slowly been ramping up. But I think back to the sort of Neo vintage sale that happened a couple years ago at Philips and the interest in things like the Derek Pratt Urban Jurgensen oval pocket watch. And that was a massive result. And I started to pay attention. There were more and more really strange rare pocket watches coming to market which is, you know, everybody says I have this pocket watch agenda, but I was watching the market shift there and then the Indies, the FP Journe shift. We're seeing a little bit of fall off from four digit Rolex, which used to be a blue chip. And so there is, I think a massive market shift with some truly incredible results. Stuff that's hard to understand but I'm curious to see how long this lasts. I actually do think that this is going to be a long term shift in what we're seeing in the market.
- [02:14]
A
Yeah, no, it's interesting. I mean we talked to Earl bax and saw Dr. Helmut Kraut who's obviously this is his kind of market and just some regular dealers as well. And certainly, yeah, everyone's noting that there has been a shift to more Interest. And we've certainly seen some of the big houses start putting up a lot, a lot more significant and important pocket watches. And indeed, yeah, we, we saw sort of not things fall apart, but certainly not the level of enthusiasm or interest in some of the, the, you know, the classic Rolex pieces. I mean, among those pocket watches. Anything for you that you think's really important to highlight that we saw?
- [02:59]
B
I mean, I, I'll say this, I think, you know, I'm working on a story right now that'll be out by the time this podcast comes out, so you can check out our recap. But the first thing that happened was in a group chat that I was in, Ben sent a screenshot of the result of an Equivia AK06, which was 3 million Swiss francs all in, which was truly incredible. But then maybe 70 lots later, there was a pocket watch from a watchmaker that probably, I would say 99.9% of our audience had never heard of. Louis Richard. That went for almost 4 million Swiss francs. And that is, I mean, that's truly incredible. And it's an important watch. We'll dig into that later. But you have the Louis Richard watch you had at a small auction house. There was a jump hour tourbillon pocket watch made, I believe, in the 80s by a watchmaker who didn't do that many watches. His name was Miklos, and it sold for €900,000. I mean, this, I think the estimate on that was maybe 20 to €40,000. You had things from Frodsham and other brands that really were way outstripping even the expectations of the people that were collecting these watches. And I spoke to a lot of them over the weekend who shared with me what was going on with the battles in between them. But the general consensus is these have always been important. You did have an era of some of the big collectors who unfortunately passed away, their families are slowly getting rid of their watches, etc. But these were always important. Now they're coming back to the market and prices are going crazy because a handful of people understood how important they are and they have pockets that are deep enough to bid on them.
- [04:49]
A
Interesting. Yeah. And we also obviously saw The Patek Philippe 25, 23. I mean, that basically hit a record for the reference. I think you'd agree that, you know, certainly on the Patek side, things remain.
- [05:04]
B
I would say that everybody was looking at things like Paul Newman Daytonas and stuff for a long time because they were flashy, recognizable. I think the general population after the sale of Paul Newman's. Paul Newman was more likely to know what a Paul Newman was. And so if you wanted to flex, for lack of a better word, you could wear that. But there were hundreds, if not thousands of these things made. Whereas Patek actually continues to be and has always been the blue chip that will, I think, largely not fall off. Right. Like you're not getting immediate returns of, you know, a market that's growing by 100%, 200% every year. But the value of these things, the truly extraordinary Patek references will continue to slowly tick up, and I don't see that falling off. Whereas I think it was time for things like Paul Newman Daytonas and Mill subs to go by the wayside. I think the other big question mark is Cartier. There was Cartier sort of an, I would say, abnormal auction in Hong Kong with Sotheby's, where some of the prices just were astronomical, beyond anybody's belief, even Cartier collectors, and sort of not seemingly grounded in reality. They were grounded in someone's reality or at least two people who drove the price up. And so I'm curious to see how Cartier will either be on a roller coaster or will it kind of take after Patek in the long run and just be a slow increase from here.
- [06:34]
A
Yeah, no, it's interesting. I mean, we certainly still saw some strength in Cartier crash Sotheby's, with more of its Shapes of Cartier collection coming out less than was in Hong Kong, but still generally doing well over low estimates. Yeah, I mean, there still was some strength there. Not the level of enthusiasm, exuberance that we saw in Hong Kong. And the last thing, I mean, at Christie's today, there was that Audemars Piguet tortue from the 1930s, one of three that are known. It did very well, I believe, all in something around 2.3 million francs. Certainly a record by some measures. This was a watch with a great story and in the same collection since the 1940s, but obviously had been restored by Audemars Piguet. I mean, should we take much away from that result? Marcus?
- [07:32]
B
I think there's a couple of things that you could try to draw conclusions on, but I think it's hard. Right. This is something that there's one example in an AP's museum. So you don't really have a choice if you want to buy this. I don't think the other one is known. I don't think it's been seen by anybody that I've heard from. So, you know, you either buy this or you don't. From a restoration standpoint, there's not another option. The price is certainly really impressive for an AP wristwatch. What I am kind of curious is I don't think you can draw a lot of conclusion on the market because if you go back and look at what happened with Philips, they. They had this incredibly rare calendar chronograph as well, and that only went for only 1 million Swiss. I think it's.
- [08:24]
A
It was a beautiful watch.
- [08:25]
B
It was a beautiful watch. Really interesting. But the problem with any of these from ap, when you compare them to something like a patek, even the 2 2, 3, which is really rare, is there is enough of a lineage in scholarship that you have data points that you can compare against. You understand what is on the market, what your options are. You can see trends, you can see what other people were willing to pay. You can study them, fall in love with them, hunt for them. Ap, they just, in that era they did not make as many serially produced watches. And so you can't really get yourself super excited. You can't hunt for something. You can't say, oh, I found this really great 25, 23, but there's one that I want more. It's either you take it or you leave it. And the market is then just not going to be as robust. It's not going to have as many examples of what you can find on the market or other examples that can reassure you that spending two or three or $10 million on a watch is worthwhile. It's you alone in a sea of nothingness around you and you have to really love it. And I think that support that scholarship really does make a difference in terms of pushing the prices up. So to me, I can't draw any market trends from a massive result like that for an AP because unless somebody sells it again next year, there's no trend, right?
- [09:50]
A
Yeah, no, it's certainly when we're talking Audemars Piguet, especially from that era, we're talking much, much less volume and examples. A much more bespoke watchmaker at the time. So ye, we're going to throw it to our chat with Akio Naito from Seiko. But you saw what both Grand Seiko and then Credor we saw at Watches and Wonders for the first time this year. I mean, any thoughts on what Seiko as a corporation is doing with that brand? I guess trying to sort of do something similar to what they did with Grand Seiko back in. I think it's 2017 sort of making a distinction for that and bringing that brand more international.
- [10:32]
B
Yeah, I think it's an interesting time for Credor. I think there's been a lot of interest, and it hasn't been completely out of the market. I know that having gone to the Grand Seiko boutique in New York, they had some Creedor watches sort of squirreled away in the back for people that ask. It was. I guess you could kind of say it was a shibboleth for people that really cared about Japanese. Watchmaking is. Okay, you say the word and then you're led to see some of the Credors, whether it's the. They're complicated watches or the Gold Feather or the Loco Locomotive, the masterpiece collection, the Ichi 2 like these things, and they have been slowly rolling out the locomotive. I think the one thing that I'll be interested to see for the market is Grand Seiko has core pillars of design that lead it to be something that's easily digestible for a commercial audience. You know that a Grand Seiko is going to always operate visually in a certain realm, and you know what you're getting when you walk in the door. And if you want to address your option, there's one that's not too far afield from the sportier options. And Credor doesn't have those same restrictions. They can do a lot more, which opens up a lot of doors, and it could get a lot more people in. But at the same time, you just don't know what you're. What you're asking for. It's like going to a restaurant in some ways, without having a sense of what the cuisine is that you're. You're going to be looking at. So I think it will maybe take some time to pick up steam in the United States in a way that Grand Seiko did not. But it is an interesting opportunity for the brand and a very broad opportunity because it covers a lot of the financial spectrum. You can have very, very expensive Credors, and then you can have much more affordable ones.
- [12:20]
A
Yeah, absolutely. No, there's almost limitless possibilities in terms of what they can do with watchmaking and finishing and technique with this brand. And, yeah, we will hear from Mr. Nait on that shortly. But Mark wanted to say thank you. Always a pleasure to hear from you, and we appreciate your insights.
- [12:44]
B
Thanks for having me.
- [12:45]
A
And now here's our conversation with Akio Naito, the president of Seiko Watch Corporation. Welcome Akio Naito, the president of Seiko Watch Corporation. We are here at Watches and Wonders, 2026. Welcome to the Business of Watches.
- [13:09]
C
Thank you very much for having me.
- [13:10]
A
Thank you for being with us. So, I mean, let's start. The news here is that Krador is at Watches and Wonders for the first time, the high level brand from Seiko. Tell us why Krator has decided to join this year.
- [13:26]
C
Okay, if I can start with our history. Credo brand was born in Japan in 1974 and became an independent of Seiko before Grand Seiko became independent, which was 2017. And when the company was contemplating to go into the global market with the luxury segment of our brand portfolio, the discussion was whether to choose CREDO or Grand Seiko. That was around 2008, 2009. And in the end, finally we decided to choose Grand Seiko as opposed to Credo at that time. The reason being we thought the name Seiko was well known among all the consumers all around the world. In comparison, Credol name was not known outside of Japan. And also, Grand Seiko has a functional value, meaning legibility, accuracy, which we thought could be appealing more compared to Credol, which the aesthetic part of the brand may be cultural or regional and may not have a universal appeal. That was the decision internally within the organization at the time. Yes. So we started with Grand Seiko for the global luxury segment. After several years, we had difficult time in promoting Grand Seiko because the image of Seiko was not that of luxury. And luxury watch distribution was totally different from the main Seiko distribution. So we decided to make Grand Seiko an independent brand in 2017 and established Grand Seiko America in 2018, making Grand Seiko strategy totally different and independent of Seiko strategy. And that point we started exploding the Grand Seiko business outside of Japan. Actually, in the last 10 years, the grand Seiko sales outside of Japan have grown more than 15 times.
- [15:52]
A
Wow.
- [15:53]
C
Very significant growth. And most notably in the US market. And as the brand has become better known in the luxury segment, we thought the time was right for us to launch CREDO in a global market. Because many people associate CREDO with Grand Seiko, the high level watchmaking, and from a totally different identity compared to that of Grand Seiko. And we can meet the demand of different consumers with Grand Seiko.
- [16:29]
A
Yes, and it's interesting that the decision was made here with the belief that the launch of Grand Seiko had succeeded obviously with the sales that you spoke of. And so that meant it was the time for CREDOR to have a entry into the global market. Am I thinking about that correctly?
- [16:53]
C
Well, historically in Japan, Credo was a lot bigger as a brand compared to Grand Seiko. Grand Seiko filled a very niche space within the Seiko umbrella. Seik and Credor was actually the luxury watch brand in Japan.
- [17:11]
A
Yes. And so how are Credor watches produced? How should we think about them in relation to the other marques and how do they stand out and what's the message we want to send?
- [17:25]
C
So even though we were able to achieve this international debut at Waches Vandos this year, our biggest challenge is to increase the production capacity for Credol because with Credol there is a lot more hand craftsmanship, even more so than Grand Seiko, and making it very difficult for us to raise the production capacity. So although we are now making this international debut, initially in the first at least few years, the points of sales, very, very limited.
- [18:05]
A
And when you say international launch, what markets are we talking about and what kind of distribution should we expect at this early, initial launch stage?
- [18:16]
C
So obviously the same as in the case of Grand Seiko, US market is our most important strategic market. And our success with Grand Seiko, especially our flagship boutique in Madison Avenue, New York, that is a point where we can make use of to communicate to the consumers how Credo is different from Grand Seiko.
- [18:45]
A
I see. And so will we see the two brands then in the same boutiques?
- [18:50]
C
How much physical boutique? Yes, yes. So the details are yet to be determined, but we would like to create a space or area where we can showcase Credo as a different brand.
- [19:05]
A
And when we talk about, and when we try and make the point of the differential between these two brands and that, you know, Credor was long considered a more prestigious, more craftsmanship, higher end brand. Yeah. What's the messaging on the difference here, considering that the brands will be side by side in some places?
- [19:30]
C
In a simple word, I think we as a brand Credol has more freedom compared to Grand Seiko. Grand Seiko has a very unique group and the designs are inherited from the vintage models and those representative models are like icons of the brand. And many of our fans associate Grand Seiko with some of these representative designs. And of course the Japanese craftsmanship and the nature of time brand philosophy, these are the elements from Grand Seiko. In comparison, Credol, what we call the, the creativity of artisans, has more universal appeal in terms of elegance and beauty, not so much as chasing the ultimate functionality like Grand Seiko. So of course we don't ignore the accuracy or legibility for Credo, but from a different angle, we put more emphasis on the universal Appeal of elegance and beauty and making use of the talented artisans. That's the key term for credo. Take Locomotive for example, which was designed in 1970s by Mr. Gerald Genta. Not even the Japanese creator, but something in his creation there is beauty or elegance which appealed to the consumers worldwide. So for credo, once again, I think there is much more freedom to pursue the elegance and beauty.
- [21:21]
A
And obviously you are the president of a massive watch manufacturer. And so should we think about this international debut and launch at all in any kind of response or how does it fit into the trend? Would you agree that watch consumers are becoming more interested in design forward and more elegant kind of dress watches?
- [21:47]
C
So it's been a long time since watch became not just as a utility tool, but expression of one's identity or social prestige. And this has been our long term strategy as watch manufacturer to come up with his first Grand Seiko. And as the fame of Grand Seiko, the level of brand awareness has increased. Now is the time for us to launch CREDO and thereby capture different needs of luxury consumers.
- [22:24]
A
And how should we think about materials used? I mean, is there more precious metals? How long does it take on average to make a credor watch? How many people work on it? Can you talk about how big the production is? You say that that is one of the constraints in terms of the international.
- [22:43]
C
Exactly. Well, we right now have two manufacturing sites for credo. One in Shizuku Ishi in northern part of Japan. The other is Shiojiri, west of Tokyo. And where these artisans and watchmakers specializing in CREDO are working. In each of the representative models like HE2 or Gold Feather. There is certain handcrafting elements that are very unique to Credo and takes at least 10 years for watchmakers to be able to create piece like H2, the porcelain dial and characteristic handwritten indexes and brand logo.
- [23:34]
A
Yes, I mean, and that's an extraordinary amount of craftsmanship and speciality. Why watches and wonders 26 though? I mean, how do you see this venue as the launch pad or what role does it play in that international launch?
- [23:53]
C
Well, with Seiko, we used to exhibit at Baselworld and then Watches and Wonders. I was approached by the organizer back in 2021, I think, and then we started discussing with them how we could exhibit Grand Seiko at Watches and Wonders. And after starting Seiko at Watches and Wonders, we increasingly felt the big success and feedback from all over the world, especially in the European market. So this Watches and Wonders as a luxury watch platform has been extremely important for the brand and how does CREDOR
- [24:38]
A
compare in price range to Grand Seiko? And who do we think, you know, who your customers are, are in Japan? Who do we think they will be Internationally?
- [24:49]
C
The history of CREDO in Japan extends over 50 years. And actually as a luxury brand, we used to have a very wide range of products under CREDO which we decided to streamline and be focused more on the high end. So that transformation took place last five, six years. And still we are in the process of in Japan, you know, changing the distribution and changing the product portfolio. The collections we are showing at Watches and Wonders this year are just a part of the existing collections in Japan. And we carefully chose the collection which we could appeal to the global consumers. So as an average, the unit price is higher for CREDO compared to Grand Seiko?
- [25:43]
A
Definitely. Can we talk about how much or what kind of different, you know.
- [25:48]
C
So I don't really have the exact figure in mind, but because for CREDO we use a lot of precious metals, platinum, gold. And that of course the material price is increasing.
- [26:04]
A
Yes, definitely. And I'm sure that the price of precious metals is something that you're paying particular close attention to these days. Should we also talk about though Grand Seiko and how that brand has evolved and you know, the international presence. What are we seeing with the product on the Grand Seiko side? We're seeing, you know, different sizes for some of the divers. We're seeing finally some micro adjustment in the clasps. What kind of more innovation and changes should we look for in Grand Seiko in the future?
- [26:40]
C
So Grand Seiko, we decided to go to the global market in 2010 and, and first four, five years, the percentage of our overseas sales within the total grand cycle sales was roughly 5%, 6%. Very, very small. And the growth each year was like 10%, 15%. Gradual increase, but not the significant development. And as the brand became independent of Seiko, we started really drastically increasing the sales for Grand Seiko first, which took place in US market. And with the establishment of Grand Seiko America and changing the distribution strategy to penetrate into the high end retailers and of course in partnership with Holding Key, the communication is totally different. Changed certainly.
- [27:42]
B
Yeah.
- [27:43]
C
And then last 10 years the brand has grown, as I said, more than 15 times outside of Japan. Now this year we are launching new Ushio Diver Watch. And with Seiko brand we have a very long history with Diver Watch. We created Japan's first Diver watch back in 1965 and Seiko was associated with lots of sport models, especially Diver Watch. And when we Considered how we could create Grand Seiko Diver which must be different from that of Seiko with the brand philosophy nature of time, the inspiration of dial expression taken from Ushio, which is tide in the ocean. And also as Grand Seiko's DNA is to pursue the accuracy which is an important functional element of WristWatch, we adopted UFA Ultra Fine Accuracy Spring Drive Movement which deviates only 20 seconds per year. So this new release and also it has a compact case size. So it meets demand of global consumers. As a Grand Seiko evolved from the historical Seiko Divers watch.
- [29:16]
A
The last thing I want to ask you about is a personal interest of mine. I mean I'm wearing a Grand Seiko Quartz 9F watch here. And Seiko and Grand Seiko are pioneers and leaders in quartz technology. How should we think about the future of the use of quartz? Obviously with Spring Drive as well, which is a different operation. But how should we think about the future of quartz within the brands?
- [29:41]
C
So in. In 1969, Seiko created the world's first quartz watch, Seiko Quartz Astron. And with an enormous success of our quartz technology which has become more commoditized in the industry. So lots of low priced quartz watches with mass production have spread out throughout the world and the image of the quartz has decreased as a result. That I think is a reality. But our 9F movement for grand Seiko quartz is totally different. We have an in house capability of developing quartz crystal and then fine adjustment and tuning of quartz oscillator and with the thermal compensated mechanism makes our quartz movement for Grand Seik very different from a conventional quartz watch at an affordable price range. So with the consumers knowledge level increases and many people have become aware of the existence of a Grand Seiko brand. People come to our boutiques and looking for different models and they find our quartz models which are more affordably priced compared with 9S mechanical movement or 9R spring drive movement. This plays an important entry level model for the brand. And we are seeing increasingly the popularity of 9F movement in the US market where we have become able to establish the brand awareness of Grand Seiko. So Japan and US are two markets where we see very popular 9F purchases.
- [31:39]
A
And have you seen the economic challenges, the industry's challenges, the volatility in the global. Has that impacted the interest and popularity in courts for you?
- [31:51]
C
Yeah, well, I think it's a matter of communication and education among our consumers. As I said, Our 9F courts movement is different from the conventional courts. And there is a certain merit, unique merit for Grand Seiko Courts model to offer to the consumers, and then we keep making efforts to make it better known among our consumers.
- [32:18]
A
Very good. Well, I think we'll leave it there. Thank you so much for your time. Mr. Naito, the President of Seiko Watch Corporation, thank you for joining the business of watches.
- [32:31]
C
Thank you very much.
- [32:36]
A
And that's the business of watches for this episode. We hope you enjoy. 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. Sa.