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An insightful interview with Montblanc CEO Lutz Bethge

Last week Montblanc opened its largest boutique in the world at Sanlitun Village in Beijing with a glamorous event complete with celebrities like Jessica Alba and Nicholas Cage in attendance. The event was also the launch of the Princesse Grace de Monaco collection of jewellery, watches and ladies accessories.

The Princesse Grace wristwatch - I saw this at SIHH and found it very elegantly shaped and attractive 

In this multi-part post I will cover the store as well as a lengthy and insightful interview with Montblanc CEO Lutz Bethge which is below. This interview was conducted along with Timmy Tan of TimeWerke and Eddy Koh of World of Watches, both Singapore-based watch magazines. 

On the Montblanc brand

Su Jia Xian (SJX): Jewellery is quite French, while Montblanc is a German brand with some technical products like watches and pens. Would you say Montblanc has evolved into an international brand?

Lutz Bethge (LB): We certainly have. I think Montblanc has evolved into a European brand, which is very important and very positive for us.

Yes, there is a German heritage, but I believe to be successful as an international brand there has to more than quality and precision – which is important for our brand – but it’s not all. The German passion for quality and love for the detail is very important because our customers trust our quality and the sustainable value of our products.

But at the same time, Montblanc needs the beauty and the lightness of certain things with the quality. Our design studio is not by chance in Paris, and not in Hamburg. We have it where maybe the people have a lighter way of looking at life and are creating things which then can be developed by craftsmen in Switzerland or Germany. These countries are well known for their precision and craftsmanship.

And not by chance we have our leather company in Florence, because this is where all the knowhow of the European leather making is concentrated today.

It helps us to be in these areas where there is a long tradition with these products, as it allows us to capture the best of it. So we are getting these elements from across Europe.

Lutz Bethge with his Meisterstuck 149 in hand 

Timmy Tan (TT): Can you share with us the significant milestones of Montblanc’s development as a luxury brand?

LB: We are no longer seen as a writing instruments brand, although writing instruments is still very important, it is our roots, our soul.

Handwriting is a luxury today. If I write you a handwritten note it means you are important to me, it means I love you, it means I appreciate you. You can send thousands of emails and it’ very impersonal, but you send one handwritten note and the person receives it says “wow”.

But still, today Montblanc is no longer seen as a writing instrument brand. We are seen as a brand for successful people, people who lead a refined lifestyle, or a purveyor of the lifetime companion that goes with all the important events in your life. That is what Montblanc is about and that fits in all the product categories.

In principle, [the diversification of the brand] started in the thirties when Montblanc started to create leather products. After World War II the leather production was lost and it was only in 1992 when we remembered that this was an important part of the brand. It was so easy to see: everybody who is using a writing instrument also needs an agenda and a briefcase. So it was very natural to start this. This is why we are so successful at leather goods, in fact I think we are the most successful male leather brand in the world.

We all use today the iPhone and iPad, which we all can’t live without, but to have something which is nicely crafted, where the touch and feel is nice, which you can keep even longer than the iPhone, it is something which is really attractive in today’s world.

For watches, of course it is the category with the largest growth. We are very happy that watches have been by far the most successful category for us. It shows that all we have been doing – the Rieussec, the TwinFly, the Exotourbillon, now the 1/1000^th second chronograph – has convinced a lot of people about the sincerity of what we do.

The TimeWalker TwinFly 

This has made our brand no longer a only writing instruments brand, but a purveyor of lifetime companions – which are our writing instruments and our watches. And even with the leather products in fact. Yes, they are made from natural materials, but if you have ever owned a Montblanc briefcase, and after ten years it is a little bit tarnished, you can send it back to us and we work on it, and you will still be able to carry it for many years to come. So these are all products you can really keep throughout your life.

And it’s the same with jewellery. With a piece of jewellery, most of the time you give it to your partner, and you want to say, “I love you, and I love you forever.” It is a product that has a sustainable value, a timeless design, so that the lady doesn’t throw it away after one year.

SJX: How do you balance the need to create an image of Montblanc as a technical brand for watches, while balancing the jewellery aspect, something delicate and feminine?

LB: In the end the platform for all products is craftsmanship, and the passion of our craftsmen. That goes into each of our products.

It’s more the question of, who is our customer? What do they enjoy of the Montblanc brand?

And I think what they enjoy is that we are creating lifetime companions. Our products capture important moments in the life of our customer. Because it’s very personal, very special, you want to keep the memories of this moment, and it should be a shame if the product would be gone in two or three years. Our customer will be proud of our products for ten, twenty, thirty years.

And when you own a Montblanc piece, it is something which makes you proud, because you feel it’s something that signifies you are successful in your life, but it’s also signifying you have a refined taste. You want something not just for the moment, but you look for refinement, you look for things which last.

On Montblanc watchmaking

TT: Can you quantify the growth in mechanical watches in the last few years?

LB: It’s huge. I don’t have it but it’s huge. Initially we have started with a number of quartz, male men’s watches, now we still have one or two models, but the vast majority of our business is mechanical.

TT: Is there any target for manufacture movements as a percentage of output?

LB: I cannot share with you a concrete percentage target but it’s growing. Last year it was the biggest share of growth.

TT: Your Le Locle facility has changed tremendously, it has been expanded yet you ran out of space.

LB: Yes, we rented the buildings next to it and we are still running out of space. So we have plans to enhance our building there, we still have to finalise that.

Eddy Koh (EK): With so many brands competing with watchmakers, what are you doing about recruitment and training?

LB: Certainly everybody in the watch industry has problems to get the quantities we want. So we all have in-house programmes [for training]. This is what we have to do; you cannot expect that others train for you the people, and then afterwards you hire them from the other brands.

TT: Can you give us an update on the Minerva facility and the watches?

LB: Well, we are working on it. I have been promised we will see some Metamorphosis watches this year. That was one of the real challenges, and if I would have known how long it would have taken, I would not have presented it. I was really surprised at how long it took. But now we have seen it working at the SIHH, and I have been promised a few pieces this year.

The Exotourbillon is out, and I’ve also been promised some of the Tourbillon Bicylindrique. And at least for this business year I’ve been promised some 1/1000^th second chronographs. So there’s a lot to come this year. We will see a number of products in the market, which I am very happy about.

The Villeret Bi-Frequence 1/1000th second chronograph 

TT: In terms of timepieces, has the mechanical range for ladies expanded? Or are there plans to?

LB: We still have a significant share of quartz watches in the ladies collection because there is still demand for them. But we are working on a number of products with mechanical movements. You will see them next year where we will have more mechanical watches. And that is something we will continue to do.

But that does not mean that the world is changing, because many ladies still appreciate design and style, and they want the convenience of a quartz watch.

I believe a lot of ladies want a quartz watch or two, and then they want a real mechanical watch just to show that they really have something special. So I believe if you want to get closer to the ladies in the watch business you have to develop more mechanical watches.

For example our TimeWalker in red gold with diamonds, a lot of ladies are wearing [that]. And a lot of ladies have told me they love [the Rieussec] but we have not done something with diamonds yet. So I think it is something we should try, to test the result.

SJX: Do you expect a slowdown in the watch industry this year?

LB: Good question. Last year was so incredibly good that you have to ask yourself is that going to continue? It cannot go up forever, that’s for sure. But I still believe for us the watch will be the fastest growing category for the years to come.

Of course we all don’t know what’s going to happen in Europe, what that means to Europe and the world economy. I wouldn’t try to have any estimate on this.

I think China will continue to be an important market and a strong market. Will it have ups and downs? Probably.

But what I’ve been saying throughout all the crises we have seen in the last ten years, is that overall our business – which is the business of differentiation and of showing your love to your loved ones – will always continue to grow. Because more and more people will be able to afford luxury product, and the more you are able to afford it, the more they will want to differentiate themselves from the others.  There will be some cyclical downturns, but we will continue to grow.

On the massive new Sanlitun concept store in Beijing and the Chinese market

EK: Tell us a bit about your new Sanlitun store.

LB: It’s the largest in the world and it’s not only a flagship store but it’s the first Montblanc concept store in the world.

Journalists always ask me the difference between Chinese and European customers. There are differences in watch sizes demanded, and bi-colour is much more of a Chinese than a European thing.

The bi-colour Star Classique 

But what I felt is more different is the request for more information, in China and also the rest of Asia. People want to know more behind the scenes, they want to understand what’s really behind the brand.

Since China has become the number one market a few years ago, we put now the concept store in China so we can allow our customers to have an interactive experience with the brand and really go into the details. And to make sure this is something special, we want to change [the theme of the store] every few months.

It’s basically four active floors, and on the fifth floor it will be a chocolatier.

We started in January with a Villeret time capsule where you can see how Villeret works, the history, how you can create your own bespoke pieces. And also Rieussec, the story of how Mr Rieussec invented the chronograph.

Now it is the theme of Princess Grace of Monaco, about the principality and the high society life. This is part of all four floors and the fourth floor in particular is dedicated to the Hollywood life of Princess Grace with famous films like How to Catch a Thief.

Also you can see the limited edition writing instruments and understand why the writing instruments look like that because they pay tribute to a certain personality. You can learn about the jewellery, about our events.

And on the third floor you can have a red carpet experience, so you can walk the red carpet and at the end you can take pictures with the writing instruments factory, with the watch manufacture, with the Montblanc mountain [in the background].

All of it is interactive. There are touch screens [throughout the store] so you can flip through things and when it’s enough you can go on to the next thing.

[Interactivity] is what we try to bring out in our concept store. When someone comes to Beijing this is a must see. Unless you come to Beijing every month, there’s a good chance you will experience something new at the store.

EK: Do you have a plan to change the exhibition, say every six months?

LB: It really depends; more than three times a year is difficult to do. It really takes a lot of time. We have such a huge team to create the concept. People from Asia, Hamburg, from an agency, and they all have to work together.

We are committed to do one more theme this year, so for 2012 we have another theme coming up but I can’t tell you what it is.

TT: Can I ask what was the investment for this store?

LB: You may ask but I can’t tell. (laughs)

EK: Any plans to replicate it in other cities in China?

LB: I wouldn’t replicate it in the same country. I think it should be unique. I’m not envisaging to build another concept store next year because it’s really a lot of effort. We still need to work on this and gain experience.

Once it’s really working it makes sense to have it in some other markets as well. Because if it the concept works as I believe it will, then it’s really something exciting. It’s really something where you go and have fun for one or two hours. People already stay there for three hours, or four hours, because it’s enough content there.

TT: A few years earlier you had your Shanghai boutique in CITIC Square. Can you shed more light on what was learnt from that experience?

LB: The CITIC boutique was at the time the biggest boutique in the world.

I think the learning we got from it was with this type of store we can really portray the lifestyle of the brand. That is something that has influence in the next stage of development which is the Sanlitun concept store.

The CITIC store was really about telling stories about the brand, the origins of the brand. I think we have now refined it even more with the concept store in Sanlitun. Here you not only show in the conventional way but now we show it with video, touch screens, all very interactive.

EK: Are you the largest retailer in China?

LB: I don’t know, I don’t think so. In China we have 100 stores. Half are opened by us, half are dealers. But we have been in China very early with our stores and we had some relatively early starts in the provinces, which has helped us get closer to the customers. I believe very much the reason for our big success in China.

Whenever markets are developing, when the economy is developing, the middle class there is immediately a demand for Montblanc.

On the Princess Grace de Monaco collection

TT: Historically did Prince Rainier and Grace Kelly own Montblanc products?

LB: They certainly did. I know that Prince Rainier III was an avid collector of Montblanc writing instruments. Prince Albert once said he still remembered that when they were kids, his sisters and himself, Prince Rainier took them along to buy a new fountain pen. He told us this when he was on the stage during our tribute to his father when we had a special writing instrument made for him in 2007.

We have a very good relationship with Prince Albert. I think it was in Monaco when I came with a mood board with this picture to show the Prince, [not knowing] this was the picture of his mother he loved the most.

When we designed the Princess Grace collection, we took two major elements from this picture. One is the neckline of this dress, because this is such a prominent visual element. You see this on the writing instruments, you look at the clip and it has the V-shaped neckline. And when you look at the watch we have it integrated at the 12, very subtly, and we have it in a more refined way in the case also.

And the second motif which we use was her love for roses. You can see this as well in the jewellery pieces here. You have what we call petals d’rose, which are rose petals, and also the interlinked rose petals.

SJX: This collection is largely feminine, do you have plans to create a masculine collection based on a famous man?

LB: We do have already male jewellery. But we have not yet exploited this and we are working very much on enhancing our male collection because the market is growing there.

I don’t think you should connect everything to a personality. I love the story of Princess Grace because she is an icon of timeless elegance. And in the end that is what Montblanc stands for; we are not overt luxury. We are timeless elegance.

EK: Do you have your in-house jewellery workshop?

LB: We have some atelier in-house and we are working with a number of ateliers in Paris and in other areas.