Zenith

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Geneva Week 2018: Interview with Zenith CEO Julien Tornare and Jean-Claude Biver on Zenith's Future, and the Challenges of Implementing Innovation!

Since about the last 12 months Zenith seems changed forever. The former CEO, Aldo Magada, is out, with Jean-Claude Biver as Head of the Watch Division at LVMH taking over direct control, later joined by Julien Tornare, ex-Vacheron Constantin, as new CEO.

The swaps at the top had immediate consequences for the brand: JCB developed a vision that set the somewhat stagnant brand onto a forward-looking path following the ‘tradition of innovation’, a moniker that means nothing less than a steadfast focus on chronometric performance and more contemporary aesthetics. JT brought in extremely useful market intelligence from his many years on the ground.

The results showed quickly: already at BaselWorld 2017, Zenith presented the Defy Collection with the inaugurational model, the Defy El Primero 21, with a groundbreaking all new in-house movement Cal. 9004, which combines the traditional El Primero escapement for the Watch (36,000 VpH - 5 Hz) with a separate escapement for the chronograph (360,000 VpH - 50Hz). Just 6 months later, the Le Locle brand shook watchmaking world with the revolutionary new Defy Lab watch which sports a completely novel regulation system that rests on compliant mechanics and combines a great number of usually separate components into a single, multifunction entity.

Time for us PuristS to learn from the two gentlemen more on their refined view on the immediate future for Zenith, their changed customer base as well as the unavoidable teething problems which come when one tries to push boundaries. So I seized the chance to sit down with both Julien Tornare (JT) as well as Jean-Claude Biver (JCB) for an intensive Q&A session during the just concluded Geneva Week:


(From left: Julien Tornare, CEO Zenith; Jean-Claude Biver, Head of the Watch Division, LVMH; and yours truly)

PPro: What was your first impression when you joined Zenith?
JT: I saw a company with signs of having lost a bit of focus, e.g. with too many references offered at too many point of sales (POS) at too low an average price point to allow this to continue. You have to keep in mind that a retailer needs to invest into its workforce in terms of training on the brands it carries. We sold about 18.000 watches a year spread across more than 800 references offered at equally more than 800 POS at an average price of about CHF 8000. You can imagine how low the incentive for a retailer was to train its salespeople on the Zenith collection… The return would be considerable low.

PPro: Those are many angles to tackle…
JT: We are actually working along three lines: (i) streamline the collection; (ii) reinforce the partnership with the retailers; (iii) develop products which attracts a new group of clientele.
In respect to the collection, we are, as noted above, a relatively small player in the industry, but with too large a Collection of references. Watch by watch we analysed the sales performance of our products. To give you some numbers, Zenith went down from 860 references to now only 170, and will still consider some work to be done, as our goal is about 100 active references.
As far as our POS are concerned, one puzzling insight from my years with Vacheron Constantin is that in recent years, with the slowdown of the watch industry, top management of watch brands did no longer take the time to visit their retailers. In other words, brands were foregoing the ‘grassroots’ feedback from the ground. At Zenith, however, we value the retailers as our core partners despite the current frenzy about e-commerce. We appreciate the benefit of a multi-brand store to a collector, being able to appreciate several brands conveniently at once. We want to grow together with our retailers, and this can only happen if Zenith watches become relatively more important for them. This is very much in line with our objective to gain more visibility for Zenith at each POS. So, like with our references, we will streamline the number of POS from about 840 down to 600, with the ultimate goal being about 500 POS, in combination with reinforced partnerships to our retailers and an even more attractive product range.
This brings me to the last point, our watches. Now here comes the feedback from the markets and the customers into play: During my first 8 months as Zenith CEO, I travelled the world intensely to seek direct contact with our retailers and clients. The overarching lesson I learned was that we need to create an answer to the tastes and preferences of a newer, younger generation of watch lovers, who are affluent, already very well versed in terms of horological knowledge (thanks to Instagram, blogs, but also resources like PuristSPro) and ready to spend their money, but who do not want the same watch as their parents.

JCB: Our answer to this was the Defy line: a modern, 21^st century Zenith rooted deeply in the heritage of Zenith, but with an innovative image and a high value for the money, a watch that will play well its role as the technical pacemaker.


(The Zenith Defy El Primero 21: Zenith's path to a new, younger, clientele - with considerable success!)

PPro: From this year’s novelties it appears that the focus is firmly on the Defy line…
JT: There are two reasons for this: (i) Defy needs to develop into a full collection, which is more than the current two models, the Defy El Primero 21 and the Defy Lab (hint: expect more for BaselWorld 2018!). (ii), we need to balance, in terms of sales, between the collections.

JCB: … in this context, the Defy El Primero 21 has far exceeded our expectations. The turn-over time of this watch with the retailers is extremely low, we are very glad to learn that this timepiece is so highly desired by the collectors! And this is a business reality which we happily take into account.

PPro: With both of the current Defy watches Zenith had to face some technical challenges.
JCB: Yes. The El Primero 21 should originally feature a balance spring made of a carbon nanotube carbon composite. This has not being implemented on the pieces that came to market. The reason for this is that we defined and advertised the watch as being anti-thermic. And the carbon nanotube material indeed is, but in the current construction it interacts critically with a steel component, and steel is subject to thermal influences. Thus, there was a discrepancy, we had to revise the construction and implement silicon for this steel component as well. The modified movement is currently undergoing the usual reliability and performance tests and should be ready to hit the market in summer.


(Zenith Defy Lab Oscillator: really groundbreaking innovations don't come easy. Even Zenith had to experience this first hand!)

As for the Defy Lab, you have to understand that this is certainly a practical watch (in the sense of its daily wearing qualities), however, in essence the collectors bought a ‘research result’ (see also here for more indepth information from Guy Sémon). Late during prototyping we noted that if we slightly increased the frequency of the oscillator from 15 to 18 Hz we would obtain even more stable results. What follows now is almost funny: We were ready with the revised watches by early December last year, but we could not get the watches shipped to the Observatory of Besançon in time before their Christmas closure between 18 December and 07 January (keep in mind that customs procedures take about 1 week in every direction). As much as we begged them and even tried to incentivise Besançon (someone would just have to come every day to turn the watches), they stated firmly that as an agency of the French government there way no way around the Christmas break, and thus watch certification had to wait until January! This takes three weeks, plus the customs procedure at the end. So the watches will be ready soon!

PPro: How does the Academy Collection still fit into the new vision?
JCB: The Academy Collection is no longer there. This does not mean that we will abandon the higher complications, but all this will be realised in the Defy Collection, with innovative solutions and a great price-performance ratio!


(Good-bye Academia: Zenith will focus on more accessible pieces. The complications, however, are not forgeotten, they will find their place still in the remaining collections.)

PPro: And a Zenith Connected Watch?
JCB: … is not in Zenith’s DNA, full stop!

PPro: Did the up and downs and the frequent changes in direction in the last two decades inflict damage on the brand image of Zenith?
JT: I would not go as far and say that Zenith as a brand name is severely damaged, but it is a problem we will have to manage somehow. One thing that is for sure is that the lack of recognition for example certainly had an influence on the morale of the workforce. If a watchmaker is permanently told that the watches he/she produces do not sell, if management seeks not contact to the workforce, then how should our employees get the motivation needed to go the extra mile and apply special care with the products? It is almost common knowledge nowadays that employee satisfaction is a key (and comparatively cost efficient) instrument to improve company performance. I am destined to work in this. So every month now we organise a breakfast with 30 people from different specialisations within Zenith, together with me and, if time allows, also with JCB. We discuss all things related to Zenith, and what I learn is indeed very valuable insights into the inner workings of our firm. At the same time, our employees feel heard and taken seriously, so this clearly created a win-win situation for all of us here!

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As a concluding remark, I would like to thank both Julien Tornare as well as Jean-Claude Biver for their generous allotment of time to us PuristS, and furthermore, for their open and candid discussion on all issues I wanted to cover. Moreover, I had finally the chance to spend some real quality time with Julien, and I have increasingly the feeling that Zenith is in good, very good indeed, hands.

Cheers and thanks for reading,
Magnus