Montblanc: Jerome Lambert on Strategy & Manufacture

KIH: Since you took the helm of Montblanc, we have been seeing the big gap filled – meaning, Le Locle products and Villeret products.  This is a welcome transition for the watch lovers, but how many are made in each factory today and how has the function of those two factories changed?

-       Jerome Lambert, “JL”: 30 to 40 Grand Complication + about 100 Chronographs in Villeret with 46 staff there.  90,000 watches from Le Locle.  Now the function of Villeret has become more like our R & D center + small number of grand complication watches manufacturing capability and Le Locle continues to be parts and movement manufacturing including case designing and such.

KIH: Watch industry in general is not doing as well as the last several years this year.  What are your thoughts about this?  What is your positioning in this chaotic situation?

-       JL: This industry has been always through the cycle of 5 to 7 years.  It’s a cyclical business.  Our industry is capable to re-invent, create and find new markets.  The cycle is more market or geographic-related taste driven than rationale or industry structure driven.  Every 5 or 7 years, the new things always come out.  Japan has been a very matured market since long, long time ago and for watch industry, a successful market. But as said, every 5 to 7 years new things come out and now Montblanc is the “new thing” and our watch will come out from this cycle.  The market is trying to find out how to escape this cycle but my bet is it is no longer the time when one market saves all.  We make the quantity that sells – meaning, we fill in the order from the boutiques and retailers all over the world and no more.  For the last two years, Montblanc’s contribution to Richemont Group is significant because our brand has been running a program to revamp our products to make them more competitive for the last three years.  While many other brands were making more watches, more expensive watches with less content, we have been making higher quality with lots of contents products in the appropriate quantity.  So, when it started to rain, we were already wearing a nice raincoat. 

KIH: How do you make “tourbillon watches” so affordable?  Are you trying to destroy the pricing system of the industry?  

-       JL: Hahaha.  With our market share, I don’t think we can destroy anything.  Montblanc has been trying to make products with superior functionality since the fountain pen only days.  Leather goods are the made with the same philosophy, too.  Why don’t we apply that philosophy to watches?  Tourbillon is a beautiful complication and we are capable of making such a nice tourbillon.  We try to create things with superior functionality with pleasure.

KIH: What about the cost?

-       JL: When we made these tourbillon movements, we did not think of 20 functions, but just one or two.  So, we have capability to make superior parts and design.  We simply could make such a beautiful tourbillon watch with true micro rotor, thus very slim, with that price range.  It is non-sense to increase the price 5%, 10% every year without any major innovation.  We should not evaluate ourselves by the sales number, but the number of the clients.  It’s easy to double the sales by increasing the price, but it does not lead to the future growth.  We need to be capable of inventing, creating and pleasing the clients.  We do what we do in the best way possible for the clients.

KIH: What is your take on the “smart watch”?

-       JL: I love new ideas.  The strap, 1^st generation was very successful.  That was very quick from the announcement to actual delivery.  That speed was really the key back then.  It was very interesting for me because it was the combination of the classic mechanical watch and the latest digital product.  We are working on the generation 2.  But so far, we have not found what would please you more.  And I hate to regret.  So, I have to keep on trying new ideas in the new age.  The products in the market out there today are really not fantastic – dial or screen perspective still with limited function.  Still 20^th century products, they look to me.  Below EUR500 with what it is today, it may be okay.  Over EUR500, my phone is much better.  Until we develop the superior product, by definition of Montblanc, we never say “never”.  Legibility and the target generation is one of the big elements to consider.  And the product cycle is extremely short while the development cost and period is considerable.  But the smart watch will be here to stay like quartz watches.

KIH: How do you manage this big brand today after a few years since you moved to here?

-       JL: I try to think that today is always more interesting than yesterday.  I am a pragmatic thinker.  I accept the risks and try not to be frustrated.  I use the resources to make things happen.  Also, I do not spend too much time to look back because time is of essence in this business.  Also, you don’t want to be the prisoner of your idea, own plan or conviction.  You have to be flexible and look forward to challenges.  I always tell the team to start anything now.  Sure, there are short term plans, medium term plans, and long term plans.  But you have to start all today, now, simultaneously.  You really have to.

KIH: Any teaser for SIHH 2017?

-       JL: 1858 with new material, new movement, same design.  Very cool ones.

-       There will be another big one… but will let you guess

KIH: Thank you very much for your time.

JL: Thank you, as always.