A fresh crop of British brands are trying to break into the notoriously old-fashioned world of watchmaking. How will they tackle criticisms of heritage mining and new protectionist measures from the Swiss watch industry – not to mention the impact of an updated offering from Apple?
8 Apr 2016
The world’s watch industry gathered recently in Switzerland for Baselworld, where hot topics included the slowdown in China (sales in Asia are down more than 20%) and the rise of smart watches. But darting around the various showrooms were a bunch of Brits with none of the nervousness of the other attendees. Instead they were talking up their startup watch businesses.
The past decade has witnessed a reawakening of British watchmaking. At both high and low ends of the market, new British firms are making an impact in an industry that has been incredibly hard to break into.
Global watch production might be dominated by the Swiss but the UK’s spot among the world’s top 10 producing nations has been enhanced by British firms posting double-digit growth and a tangible, growing presence everywhere from the international watch fairs to shop floors.
Design, branding and pricing that appears to have connected better with contemporary culture, tastes and a younger generation alienated by traditional watch brands seems to be driving these British startups. Advertising campaigns replete with Land Rover Defenders, rolling countryside and notions of Britain’s craft heritage have also made an impression on foreign consumers.
Britain has plenty to be proud about when it comes to horology. A world leader during the 18th century, the UK has been behind some of the industry’s greatest advancements including Robert Hooke’s balance spring, Thomas Mudge’s lever escapement and, more recently, the game-changing co-axial escapement perfected by George Daniels and later acquired by Omega.
But the country came unstuck by failing to modernise when the Swiss and the US applied mass production techniques, leaving the UK for dead. And then some. In 1800 the UK led the industry, making in the region of 200,000 watches a year. A century later the output had halved while the Swiss tally was in the millions showing just how vast the divide had become. Now the production of watch movements – the key component in any mechanical watch – is dominated by the Swiss.
British? Who cares?
New British-designed and branded watches have set about changing that in the past five years. But a criticism that confronts this new surge of startups is that the vast majority of the watches, although headquartered and designed in the UK, still use Swiss expertise and parts.
So to what extent exactly does provenance matter? According to studies by St Gallen University, consumers are prepared to pay up to 20% more – depending on the market segment – for a watch of Swiss origin. In 2014, Switzerland exported 29 million watches, representing 1.7% of the number of watches sold worldwide but a massive 58% of the value of global watch sales. Swiss expertise and heavyweight brands have made this stamp the gold standard in watch production and companies worldwide are quick to put the Swiss Made stamp on their watches to tap into that added value.
But a new wave of British brands flying the flag overseas – some with great success – is helping the notion of British Made become highly marketable. The question remains, what is this label worth and can UK firms really mix it with the Swiss?
The new brigade
‘People still want Swiss watches,’ says Giles English, co-founder of Henley-on-Thames-based watch brand Bremont. ‘But there is a growing number of people who want something a bit different.’ Pairing Swiss movements with British design and a large proportion of domestic manufacture, Bremont launched in 2002 and now rubs shoulders with the world’s leading luxury brands. Convincing retailers to invest in British-made luxury watches priced in excess of £4,000 and produced by a very young brand hasn’t been easy. But the watches are now stocked by the likes of Selfridges and US luxury-watch specialist Tourneau in 138 stores across the world. The past three years have seen sales grow at more than 25% per year.
Taking a different tack, Christopher Ward has become another UK success story by cutting out the middle men. The first company to sell its Swiss-made mechanical watches direct to consumers online, the London-based company has used this disintermediation to offer lower prices to its high-end products; a method since adopted by other British brands. And with international sales of more than £2.1m in 2014 – representing a three-fold increase in just three years – the model seems to be working. ‘Christopher Ward, Bremont and Robert Loomes have helped set a trend for developing British watch brands,’ says Mike France, who co-founded Christopher Ward in 2004, explaining the changes in recent years. ‘And seeing what was possible, others have realised that you could reach audiences and there has been a flood of brands since.’
The quartz revolution
Meanwhile at the more affordable end of the market there’s been a quartz boom – epitomised by small startup brands such as Uniform Wares, which launched in 2009 and, by introducing minimal style at affordable prices has effectively invented a whole new sector. Alongside the likes of Instrmnt, Farer and Shore Projects, these new brands are headquartered in the UK and all boast various degrees of Swiss parts and British designs. They’re taking on the big boys with tiny teams by applying design sensibility to quartz watches and selling them to a willing group of consumers unwilling to stretch to the price of a luxury mechanical watch.
One brand upping the ante further is London-based Sekford. ‘We’ve applied a level of artisanship that’s rare for quartz watches,’ says co-founder Kuchar Swara, who teamed up with skilled partners, including typeface foundry Commercial Type, and chose high-end components to differentiate the brand from competitors. He admits that the proposition hasn’t been an easy sell. ‘Quartz is the ugly sister that no one wants to dance with but Swatch taught us that you can make quartz cool,’ says Swara. ‘People are starting to overcome this idea of quartz and the £500 to £1,000 market has increased 18% in the past year.’ The brand has since sold a third of its debut collection, helped by presence on e-commerce site Mr Porter.
Rise of the mid market
Sekford’s brand positioning is indicative of an emerging middle market that opens up an opportunity to British brands. The emergence of affordably priced watches is forming a counterpoint to the out-of-reach prices and values associated with luxury watches.
An eccentric wave of new brands emphasising design appear to be capitalising on a shift away from flashy watches and reliance on established brands. There are those consumers who can’t afford luxury pieces but there are also those who, even if they could afford them, prefer the idea of a smaller, quirkier brand. Which, again, is where the Britishness steps in.
‘What this country can offer is a certain savviness that means it is now cooler to own a lesser-known brand,’ says France, pointing to a step away from big-brand consumerism and a growing worldwide hunger for discovery and provenance – even including the traditionally label-hungry Chinese middle classes. ‘This has seen the rise of more indie brands as a result. The sweet spot for pricing is moving south and is about $2,000 (£1,300) less than five years ago’
Aesthetics have also played a major part in this. ‘As a society we’ve learnt so much from the Scandinavians,’ says Swara, who has seen the emergence of a new zeitgeist that stretches from fine dining to fashion. ‘They’ve had a huge influence on how design is perceived and our taste has improved in the past 10 years.’ He points to the likes of Uniform Wares as helping to legitimise a lower price with good looks, indicative of a democratisation in design (Read more: Will new generations wear watches?).
Smoke and mirrors
Yet the watch industry is fiercely competitive and despite Made in Britain seeming in better shape than ever, not everyone’s happy. At the centre of the debate is the idea of provenance. An open letter published in 2014 by artisan watchmaker Roger W Smith – former apprentice of George Daniels, regarded as one of the world’s greatest ever watchmakers – has accused some of the new breed of endangering British Made by heritage mining and marketing inferior goods under false claims of provenance.
‘The so-called renaissance is a lot of PR puff’ agrees France. ‘There is not one British watch “brand” making its own movements.’ He concedes that there are a tiny number of artisan watchmakers, most notably RW Smith’s Isle of Man workshop that produces 100 per cent British pieces, but their output is on a tiny scale. On the one hand you have British brands using Swiss-made movements to add value and legitimise British-designed products. At the same time there’s a growing desire to establish British Made as a mark of excellence in its own right. Both France and English assert that it’s very hard to police some of these claims and if British Made is going to become a globally renowned mark, better quality controls are needed.
Events overseas are set to have an impact on British brands regardless of sector. Switzerland’s industry has taken a recent battering with a strong franc and China’s corruption clampdown – halting the previously commonplace gifting of luxury watches within the country’s upper echelons – taking its toll. New ‘Swissness’ measures come into play at the start of 2017 and are designed to protect the Swiss industry, which employs 60,000 people, by making it even harder to get the sought-after Swiss Made tag.
From January 1, watches must contain a minimum of 60% Swiss value, calculated on the parts and production costs – to qualify; an increase on the current 50%. It might not sound much but the impact on margins will force brands using cheap components to up their game or lose the Swiss stamp and face going out of business.
Witness the Swissness
Deloitte’s 2015 Swiss Watch Industry Study pointed to uncertain times in the face of a strong Swiss franc, weaker foreign demand and the threat of wearable tech. New measures set to come into play in 2017, though, may help protect the domestic industry.
From January next year the words Swiss Made can only be used if a watch meets the following criteria:
- The watch must have a minimum of 60% Swiss value.
- The movement is Swiss.
- The movement is cased in Switzerland.
- The manufacturer carries out the final inspection in Switzerland.
On top of that, the Swiss movement has its own set of regulations and must comply with the following:
- The movement was assembled in Switzerland.
- It has undergone inspection by the manufacturer in Switzerland.
‘The Swiss can’t let every Tom, Dick and Harry put Swiss Made on every watch,’ says English. ‘They need to protect their business. The same goes with Made in England but it’s been hard to police.’ With his own company Bremont at the forefront of home-grown watch brands, English aims to bring more and more production back to the UK – not for merely marketing terms but because it makes good business sense. Following The Swatch Group’s decision in 2007 to stop selling its Swiss movements to rival brands – which had previously levelled the playing field, allowing many new brands access to the mechanical watch market – those that plan to make advances in future will have to adapt and find other movements. ‘If you can be masters of your own destiny you can run your business properly,’ he says. ‘If you’re too dependent on others, it can come back and bite you.’
Facing the same challenge, Christopher Ward has spent years developing its own British-owned, Swiss-made movement, which it launched in 2014. It gives the firm an element of vertical integration and is indicative of a new way of looking at the role of British watch brands within the global industry. ‘Let’s focus on innovation and adding value at the top of the chain,’ says France, who – doubtful of the UK producing its own movements for many years – sees the role the country should instead be playing as more akin to that of Formula One. ‘This can then be utilised and sold into other industries while training and educating the bright watchmakers for the future.’
This story is taken from Courier Apr/May 2016.