Interview with Rolf W. Schnyder
By Su JiaXian
© November 2008
Rolf Willy Schnyder first came to Asia in 1958, when he got a job with Swiss trading firm Diethelm in Bangkok. After a two month journey by ship from Genoa, he arrived in Bangkok and was appointed director of Diethelm’s timepiece division. That was followed by a stint at Philip Morris back in Switzerland before he returned to Thailand to head a dial-manufacturing joint venture partially backed by a Swiss dial manufacturing syndicate which consisted of all the big dial makers of the day including Metalem and Cadran Stern.
In 1974 he sold his interest in the dial making enterprise and formed Precima Sdn Bhd in Kuala Lumpur, Malaysia. His firm eventually made a broad range of components for timepieces, ranging from dials to whole movements. Eventually he came into ownership of Ulysse Nardin, which at the time was a failing business amidst the quartz crisis. Over the next two decades Rolf proceeded to make Ulysse Nardin one of the most important companies in the industry, noted for its innovation and quirky products which reflected the remarkable personality driving the company.
Rolf Schnyder’s experience in the watch industry spans almost the entire post-war period of the 20th century. Today, well into the 21st century, Rolf is vibrant and shows no sign of slowing down. As recognition of his achievements, Rolf was awarded the inaugural lifetime achievement award at the first Asia edition of the Grand Prix d'Horlogerie de Geneve held in Singapore two months ago.
We caught up with Rolf at his hotel a few hours before the awards dinner where he would receive the award. In the interview, he talks expansively about a whole range of issues ranging from the grey market to the watch business in Russia. Rolf is a pleasure to converse with because he offers frank opinions backed up by a wealth of knowledge, and his experience means that he has an incredible number of interesting stories to tell.
Many thanks to Ching Wyin, Jacqueline and Roslinda at The Hour Glass for arranging this interview.
Su JiaXian (SJX): How does it feel to have been picked for the lifetime achievement award?
Rolf W. Schnyder (RWS) : It feels very good. It feels very rewarding! Nice that all the people share and appreciate one’s work.
SJX: Congratulations on the award!
RWS: Thank you.
SJX: How did you end up owning and running UN? How long ago was that?
RWS: 25 years ago. I’ve been in the watch business all my life. I’ve been working in the industry for so long and for all sides, [in] manufacturing, sales. But owning a watch brand is different; if you sell the canvas, the paint, the frame, you can paint.
SJX: You’ve had a long and successful career, what are the highlights?
RWS: Building up Ulysse Nardin, to have brought back Ulysse Nardin to the peak where it once was in the past. It has now found recognition as one of the brands who contributed most in terms of innovation: mechanical, aesthetic, material.
SJX: Now that UN is so successful, where do you want it to go? Where do you see it in fifty, a hundred years?
RWS: We don’t know what the economic conditions in the future will be. What’s happening now will certainly affect business in general. But Ulysse Nardin, where it will be in 50 years, nobody knows. (laughs)
SJX: Where do you want it to be?
RWS: Where it is now is fine, but it can expand to some extent in this price category, but afterwards it has to stabilise. Of course you still have new countries like China, India.
In the developed world, more or less, now we have reached the distribution which we want. We have been refining, we eliminate some retailers rather than add. We want to keep it to better ones. In Italy we have taken back distribution ourselves.
When you have an agent they think only short term. You have sales people working on commission, they’re not so selective. They don’t do enough for image; that is important, you have to have image, the environment in the shop, so on. We have that in the States. The US has been the showpiece of a market, where we have about 45 shop-in-shops. In all the major cities where we are we have shop-in-shops.
We do that now in Russia where we are already at the top. But Russia is a market which is still growing. There are more people who can spend. A few years back people would say “You are selling to the mafia!” (laughs) Of course when they changed from a Socialist state to private enterprise some of these people got the companies quite cheap. Now you have middle class.
In March I went to Egypt on holiday with my family, in Sharm el-Sheik, and 80% were Russians. Not the type of Russians who buy watches, but Russians who just go for the sun. Only Patek once had a shop there, in the Four Seasons, but now they closed. But it was not just the type of tourists that went there, it’s not the same as those which go to Dubai in the five-star hotels. Now you have Russians who travel, but on a different level. So obviously there is a middle class forming, people who have achieved in business, not mafia business. And of course in raw materials.
You go to St Petersburg, you have tourists, the hotels are full. You have lots of conferences in Moscow which makes very difficult to fly to Moscow, all the hotels are full. Like F1 [race here in Singapore], the rates jump, but they still get it because people have to go.
SJX: You are obviously familiar with the Russian market, do you think the Russian market is influential? Do they have an impact on the products created?
RWS: No, no, not really.
SJX: Do you see them becoming influential? They have buying power obviously.
RWS: Buying power, but Russians don’t go so much for like Rolex and other big watches. For them that’s déjà vu. Patek is always successful. But I have to say Ulysse Nardin is more successful in Russia, our models are really in demand. We have 9 sales points in Moscow and in every one we are the number one brand. There is of course [the luxury retailer] Mercury where we are not present.
SJX: What makes Ulysse Nardin successful in a market like Russia?
RWS: I think we move fast. It’s a new market which only opened up about 10 years ago. It’s in a new market if you’re there at the right time, it’s easier to get yourself in with the right product, but of course the product has to be acceptable. You try to get a new product into Europe, very difficult. Europe the space is taken up.
It’s easier in the States, Americans are always open. If they see they can make a profit out of a product, they take it, if it doesn’t sell, they’ll drop it. But for a European retailer, even if a line or a brand is not very strong any more, they are reluctant to give it up because they feel bad. They sold this to some people three, four years ago and now they don’t have it any more. And customers ask why? It doesn’t sell. They’re far more sentimental about it, but not Americans. Like right now, [it’s] financially tough, they clear what they can’t sell and turn it into cash very quickly.
SJX: Speaking of retailers, what do you think of the grey market?
RWS: We fight the grey market.
SJX: Do you think it’s important to have a grey market?
RWS: No. I’m probably the strictest of them all. We check all the websites. Most of the dealers which offer such goods, they just copy our catalogues and when they have orders they frantically search retailers to find the goods. They don’t really have it in stock.
You know it’s a grey market, they don’t have the overhead, they don’t have to pay rental, advertising. It’s living off the food of others. No investment. If you are too exposed on the grey market retailers will also complain, and will not be willing to invest money and space to sell your brand.
I’ve issued yellow cards and a few red cards. You have to do it. Most retailers appreciate this, in the end we protect retailers. The retailers doesn’t just have one watch for which he got an order, he has a whole collection there so money is tied down. He may sell some of them this month and others in other months, but still a lot of capital is tied down.
This grey market, they copy your website, and once they get an order they just have to go to three stores. With the grey market, I can do it myself. I don’t need you to do that, I can do my own grey market. You see, selling through websites, like in the States [where] companies like where Tiffany do that, but it’s their own thing and it’s not sold at a cheaper price. If you are in the States and you are a brand like Tiffany, you sell yourself on the website. [Customers are] maybe 100 miles from the next dealer, so you actually do a service to people who don’t have to drive 100 or 200 miles to the dealer. That’s fine.
We at Ulysse Nardin we never compete against retailers. Even in the monobrand boutiques, we let retailers run it. When we run it ourselves, we let retailers borrow the watch from the boutique [to show customers], just like in Hong Kong. And of course in the boutique we have a very strict discount, [customers] normally get more from the retailer. I have a different philosophy, for me retailers are my partners. So we protect them, but also I expect from retailers they play the game by the same rules.
SJX: You were speaking of monobrand boutiques, many brands are setting up their own boutiques, even where they have retailers. What do you think of that trend?
RWS: The monobrand boutique has advantages. If you have a monobrand boutique like we have in Hong Kong, it was a simple consideration. Do I pay $200,000 for a billboard here? Or do I use this $200,000 and have a nice boutique where I have goods to be seen? They cost about the same. The boutique in Hong Kong, it’s not to make money. It’s a good image. Like I said, retailers, especially the ones that are [located] very close, they run over there to get some of the good pieces. We don’t mind that. We just have to be partners.
SJX: So for Ulysse Nardin a monobrand boutique is cooperation with retailers, rather than competition?
RWS: Maybe it’s different for people like Chopard and maybe Cartier, where they sell certain pieces in the boutique that they don’t sell outside. A bit different. Cartier is of course a much bigger organisation than we are. Also with Chopard it’s a bit different because mainly in the boutiques it is female oriented, where models changes very quickly. I know Chopard changes very quickly, every year in Basel they have to have so many new models; we don’t have to do that. When you have something new, something becomes old. (laughs) I think for Chopard it’s worked very well. They still work with retailers as well. And I think Chopard in their boutiques they have a good price policy.
SJX: Earlier you were talking about the economy, the credit crunch, how do you think this will affect the watch industry?
RWS: Well there’s’ certainly less money going around, that’s for sure. We will see. You can already see all these people in the banks, lose their jobs. These are normally the yuppies with easy money to spend who will buy little Porsches and so on. The bonuses they got was outrageous compared to other people who did equal work. (laughs) But other people still have money. There was this sale of this British painter in Sotheby’s…
SJX: Damien Hirst?
RWS: Yes. The prices paid was quite incredible. There are now people who will think where do I invest my money? Do I buy some collectibles? I would say those who bought rare and good watches they certainly lost less money in the last year than the ones who put it in the stockmarket. (laughs) You also have some people going into gold, but gold you have to keep it in the bank, you don’t enjoy it.
SJX: Back to your career, over your long career is there anything you’d have done differently?
RWS: No, no.
SJX: Maybe bought another watch company?
RWS: No. Many times I get approached whether I would like to take over this company or that company, and frankly I have one wife now, I have one watch company. No favouritism. (laughs) I am fully occupied with Ulysse Nardin and I don’t need another. I see some of my colleagues who have two and they don’t know which one gets the new development; should I put it there or there? For me, it’s one family, one company, that’s it.
But no, I don’t regret. Not everything worked out everytime but I always say I would have loved to go through my life one more time. (laughs) No regrets.
SJX: In the watch industry, you are a pioneer, along with people like Nicolas Hayek, Gunther Blumlein. Who do you see as the emerging leaders of the industry? The next generation?
RWS: Difficult to say. There is always some independent brains but some of them are only creative, but you also need marketing. It’s a combination, you have to have people around you who are strong in sides which you are not so strong.
SJX: Are there any other brands or watchmakers you like or admire?
RWS: Yes there are. Especially Greubel Forsey, I think it’s grat. Also Renaud Papi, he’s excellent. I also like Michel Parmigiani, he’s a great watchmaker. Among the fraternity, we are jealous about each other. These are creative talents which I also admire. They have come up with ideas. Even Max Busser, how he rebuilt Harry Winston with his Opus. Opus gave the brand some status of a watchmaker, though they were really not watchmakers. It was a great idea to put them on the map. Now his brand is more or less continuation of what he did before, but it was the first part which was very interesting. Of course eventually you run out of independent watchmakers. You make up to Opus 20 and it’s going to be difficult. (laughs) Especially to always top it, because people expect whatever comes next should be even more or better or more attractive.
SJX: You mentioned Greubel Forsey, Richemont bought part of it…
RWS: Greubel Forsey for them is where the ideas come from. It’s a bit like Renaud Papi for AP. How that became [part of] AP is a different story. I remember it very well because we were involved to some extent. I had made my sonnerie en passant, [it was] a Renaud Papi product. At the very beginning, Claret was still part of it.
Any of these new projects, they always take much long than you expect, much longer. When you are small, you don’t have the reserves, the money, because there’s no income coming in. IWC had some work with [Renaud Papi], and I was the second one I think.
Then came Audemars Piguet with the grande et petit sonnerie, so they had to make a big advance [payment to Renaud Papi]. My advance for the sonnerie en passant was small, which I had paid already. AP had given them the grande et petit sonnerie to develop, and they spent a lot of money and when they started to run out of cash, AP wanted to protect its investment. But it became a smart move, in the end it was a great investment.
Like now they rescue this, in the States, they put in the $700 billion, probably in the end the money comes back. But if they don’t save it now, then it thing will go down, that’s for sure. In Renaud Papi in the end, that really paid dividends. They rescued it, became partners, let [Giulio Papi] work on his own. Giulio Papi is also an artist you know, they don’t like to be told too much how to do this, do that. They need certain guidance but artist need creativity. It was very well handled.
I see now Greubel Forsey is also building a new factory; I think the money must come from somewhere. (laughs) But they are very good people, I admire their work. We sold them a license to make their parts in diamond; this was our idea but we gave them a sublicense for it.
SJX: UN is your own company, you own it. What are the advantages of that as opposed to being part of Richemont or Swatch Group for example?
RWS: You don’t have to work for shareholders, you can do what you like. You can invest when you like, take risk when you like. In the big groups, when you decide to make something in new materials, they managers – they have so many levels of managers – very few are willing to stick out their head because if it doesn’t work they get the blame. So the top managers depend on the lower management or the knowhow of individual people. We can move much faster.
Our diamond investment so far has not paid back, but we learned a lot. Not everyone takes this sort of risk but we don’t have to answer to shareholders. I’ve never taken dividends out of the company. If you have shareholders they want to see dividends, they want to see reports. You have to waste a lot of time explaining to other people what you are doing.
Click here to read Part II.
This message has been edited by SJX on 2008-11-30 05:20:18This message has been edited by MTF on 2008-12-03 22:41:51