Georges Kern is a force of nature. His bullish, no-nonsense approach to the world of watches has seen him rise through the ranks at Tag Heuer, transform IWC’s fortunes as CEO at the age of 36, and become one of the most respected figures in the industry.
In a world that so often revolves around quiet conservative evolution, Kern is intent on breaking the mould – daring to shift the goal posts on how we define a watch brand in the modern age.
For the last five years, he’s been doing just that at Breitling. As CEO and 5% shareholder in the independent watchmaker, he’s brought about a period of rapid change since his reign began.
Gone are the oversized and overly masculine pilots watches of the last few decades, and in are a series of more elegant ‘modern retro’ collections circulating around the themes of air, land, and sea. Boutiques have been transformed, sustainability is front and centre of the company’s ethos, and a stream of exciting ambassadors have come on board as part of the ‘Breitling Squad’.
The result? Business has never been better. Morgan Stanley reported that Breitling’s annual revenues rocketed to an estimated CHF680m in 2021 – an increase of a whopping 55% over the previous two years – with market share also rising by 0.4%. It's compelling proof as to why Kern finds himself among this year's winners at the Square Mile Watch Awards 2022.
We sit down with Kern to learn what makes one of the sharpest minds in watches tick…
The recently released Breitling Superocean is inspired by a 1960s model that Kern first viewed through a meeting with watch collector Fred Mandelbaum.
Square Mile: Let’s start with your earlier experiences of the industry. I believe your father was a jeweller in Düsseldorf?
Georges Kern: Yes, that’s right. I was raised with jewellery, with art, and, hopefully, with taste. So it’s in the genes if you will, or the culture, but it was never planned as a career. My brother went into finance and I was first at Kraft Jacobs Suchard, so in fast-moving consumer goods. And then the rest was destiny. But watches and jewellery have always been a part of my life since childhood. It certainly helped because you have a feeling for these kinds of objects and products.
SM: Growing up around it, were you always interested in horology or was it something that subconsciously had its influence on you?
GK: No, I think to be honest, it was subconscious, because it was clear for both my brother and myself that we would go to business school, not design school. My father always wanted us to have a broad business-oriented education. And then as I said, it was destiny because Kraft at that time was in Neuchâtel and so was TAG Heuer. So people knew me and this is how I joined the industry.
I was 28, and I said to myself, ‘OK, if I fail, I can always do something else.’ I’d been at Kraft for three years and then joined the watch industry. I was not at all ready to stay there my whole life. I thought it was just another step in my development. The team was great, and I saw an opportunity to learn something before I moved on in two or three years. But then I stayed there for eight years before joining Richemont for another 15 years!
I was always attracted to people, smart people – and there were brilliant people along the way. I think I can say I was more attracted by the management team than by the brand or the industry. The love for the industry came later during the work.
Watches were in the genes if you will, or the culture, but it was never planned as a career
SM: What did you learn during those years?
GK: I started at the bottom of the hierarchy at TAG Heuer. I was doing catalogue displays and things like that, very operational tasks, but working with great agencies. This was when I learnt how to build brands, how to make them compact, coherent, how to create strong storytelling, et cetera.
After that first experience in marketing, I went into sales until I was TAG Heuer’s managing director in Germany.
When TAG Heuer was sold to LVMH after seven, eight years I decided to do something else. Then the opportunity at Richemont came along where I could work alongside another huge personality who influenced me a lot, Franco Cologni, who had, for many years, built Cartier. This was an amazing time. And then we acquired LMH (Les Manufactures Horologères): Lange & Söhne, Jaeger-Le Coultre and IWC. The latter at that time was a very small brand and I said, “Guys, give it to me.” Since I guess I was the only one in the whole group who spoke German, they did. I was very young. I was 36 when I joined IWC, probably the youngest CEO in the industry. And it became extremely successful.
SM: Did that feel like a daunting task or were you ready enough and hungry enough to come in and do the job?
GK: I was always very hungry. I remember I went to see Nicolas Hayek Sr [co-founder of The Swatch Group] and Jean-Claude Biver, at the time I think I was 35, and I said to Hayek, “Give me Omega.” He said no – and I still don’t understand why, by the way! – but actually he was the one who called Cologni to introduce me at Richemont.
I told Cologni, “Listen, I would like to become CEO of a brand, even if it’s a tiny little brand, just give it to me.” And, as I said, probably because nobody else wanted to go to Schaffhausen and because none of the colleagues within the group spoke German, I got the chance.
It was an amazing experience because first of all, the welcome they gave me was extremely frosty: ‘Who is this guy?’ The people were afraid of the integration into a group, and then you have this 36-year-old coming in as CEO, who has no experience in running a watch company. I mean, the biggest entity I had been in charge of before was TAG Heuer Germany. Coming from a very marketing-driven company into a manufacturer who was instrumental in re-establishing A Lange & Söhne in the beginning of the 1990s. So their reaction was, “My God, this guy’s going to screw it up.”
Mr Breit-side
Georges Kern is one of the most respected industry figureheads in watches. In 2017, he joined Breitling as both CEO and shareholder. Five years on and Kern’s bullish changes have been justified – business has never been better.
The first six to 12 months were extremely tough from a personal point of view. At that time, we had no social media channels, so it was a much longer process in building and repositioning the brand, reworking the designs, and modernising the company. It’s always the same story, you have to modernise the brands and make them relevant.
SM: Did you have a mentor in those days, somebody who had your back and would reassure you that you’re doing the right thing?
GK: Well, obviously my boss Franco Cologni was very supportive at that time, and I worked with Günter Blümlein [industry legend and boss of LMH] for a couple of months before he unfortunately passed away. But, as I said, this time was very difficult. When there’s scepticism, it’s always the same thing: you have to prove yourself by delivering results.
You have a coach in soccer who might have a weird philosophy of the game. If he wins, nobody will question what he’s doing. The only thing you have to do in such a situation is perform and deliver. And if you deliver, you soon become the hero.
I was 35, and I said to Hayek, “Give me Omega.” He said no – and I still don’t understand why!
SM: I know you’ve said IWC was like a divorce in the end…
GK: I mean, when I left the brand to be head of watchmaking at Richemont, it was obviously a promotion. I was now in charge of all the watch brands, but it was emotional because I’d been with the brand for 15 years.
I remember when I invited everybody to the theatre in Schaffhausen, there were hundreds and hundreds of people, I introduced the new CEO and announced that I was leaving. And it was total silence. It was a shock. I walked out probably 10 minutes later to my office, and then the receptionist called me and said, “Mr Kern, you should open your window and look down.” I was on the third floor and you had all these people applauding. So that was a very emotional moment.
SM: I know you’ve been quoted in the past as being inspired by the likes of Warren Buffett. Did you try and draw on his philosophy as well?
GK: For me, it’s a question of attitude. There are three things I like with Warren Buffet. He’s incredibly bright. He’s incredibly humble and modest. But he’s also got incredible common sense. When you listen – I like to watch all his features on YouTube – he speaks so much of common sense and I love his quotes. They’re as funny as Winston Churchill’s quotes. I’d love to meet him one day to say thank you.
All of these geniuses, like Elon Musk and Jeff Bezos, it’s between craziness and brilliance. Look at Elon Musk, with SpaceX; everyone at NASA told him that he would never be able to vertically land a rocket – which shows again, the private sector always wins compared to the public sector for the reason of entrepreneurship in combination with brilliant minds like these people.
At my much smaller scale, people said and maybe hoped that I would fail at Breitling. But Breitling’s probably the biggest success of the last five to ten years in the watch industry.
SM: I think what took people by surprise was how quickly you completely transformed the company because you came in and you went, “We’re changing everything.”
GK: This is probably owing to the financial model. As you know, I invested a lot of my own money in this company. And when you have skin in the game, you play offence. When you are an employee in a group, you play defence to avoid losing your job. When you have your own money at stake, your management’s money at stake and your investors’ money at stake, you just try to do the best possible job based on your conviction and your experience. It totally changes your mindset.
The Breitling Chronomat collection sports the old-school Rouleaux or 'bullet' bracelet, which dates back to the 1980s.
SM: Could you tell us a little bit more about how you ended up taking the job at Breitling, because I think it might surprise a few people.
GK: Well, Breitling had a new CEO, they’d just announced him, and by chance I met one of the founders of CVC Capital Partners [majority shareholder in Breitling since 2017] who is a colleague of my brother, who’s also been in private equity. I was having dinner with him and he asked me, “What do you think?” So I told him what I would do and it was 180 degrees opposite from what they had in the plans. I said, “This is a typical growth company. You need to grow the top line.” And then he said, “OK, why don’t you do it?” And then we started the discussions.
When a train passes and you feel it’s the right one to jump on… I always wanted to be more entrepreneurial, to be totally free in what I’m doing. I mean, you’re never free when you’re in a group, you have hundreds of people influencing you. When you are entrepreneurial, you have a bank – or in my case, I have private equity – so you’re never independent in life in a way, but still, where can you do the most with your knowledge? And this was certainly Breitling. When we discussed this strategy, they immediately endorsed it, knowing the risks and chances. That was very liberating.
SM: Take me back to 2017 when you joined Breitling. You’ve talked about the risks, but what did you see when you first stepped through those doors as CEO and shareholder?
GK: First of all, you have to change the culture of the company. Breitling was a family-owned company, with a totally different business model. You produce to sell to distribution agents in your markets, you make your margins, and you have a team in place that conforms to this model – which is perfectly the right thing to do when you’re in a family business. But if you want to build a global brand and control distribution with your own subsidiaries, you have to change the organisational culture and management. To put that into perspective, today we have 1,500 Breitling employees, while at that time we had approximately 380. So the first thing was to build a team: who will be the five, six, seven, eight people who will work with me on the brand. That was priority number one.
The second thing I knew – like everybody else – was that Breitling, at least in the last 40 years, was big, bold, macho, and all about pilot’s watches. Very early on in my research, I met Fred Mandelbaum, a collector from Vienna with an exceptional knowledge on the history of Breitling. He had the biggest collection of vintage Breitlings from the 1920s to the 1980s. He couldn’t believe that I called him because nobody from Breitling had ever contacted him before. I saw 200 watches on the table. At that moment, I knew we would be successful because the incredible heritage was right there in front of me.
I saw 200 Breitling watches on the table. At that moment, I knew we would be successful
Breitling has one of the biggest and most fascinating back catalogues in the industry. I saw the Premier; I’d never heard about the Premier. I saw the Top Time; I’d never heard about the Top Time. I saw the old Superocean and the Superocean Slow Motion, which we relaunched late this summer. And the beautiful Navitimer models of the 1950s and 1960s with the flat bezel. I saw all these treasures and I just thought, “My God, everything is here. I don’t have to reinvent anything.” It didn’t make any sense that Breitling was doing only big pilot’s watches when this brand had created so much more.
So at that time came the idea of the segmentation into air, land and sea, and a couple of months later, I discovered that there was an old ad of the 1950s saying “air, land and sea,” which showed that it was all there already. This was also the moment when our modern retro design style materialised. Modern retro means: our modern watches are anchored in their past by faithful design elements. This is how the idea of the Chronomat came along with the “Rouleaux” or “bullet” bracelet, which was a product of the 1980s. These are just a couple of ideas, which emerged very quickly after analysing these vintage products. Our strategy and roadmap became very clear.
Breitling’s new boutique concept, inspired by an industrial loft, is one of many recent changes to the day-to-day operations of the independent Swiss brand.
Breitling Townhouse, located on Regent Street, is central to the buyer experience Kern is so passionate about.
SM: This idea of the historic reissue ‘modern retro’ as you say, is a very popular trope in the industry, but few have done it as successfully as you have. How do you balance history and heritage with modernity?
GK: We are successful because we’ve been doing the right things. The difference between us and many others is that we are a compact and concise brand. Everything fits: our advertising, our Squad concept, our ‘industrial loft’ style boutiques, our products and the lifestyle we want to express with the product. It works. This is where others fall down, they’re not compact as a brand. You cannot take a checklist of – “OK, I take a celebrity, I do a Hollywood movie, I do a little bit of racing, and a little bit of this and that because everybody else is doing it…” You cannot build a brand like this, it doesn’t work.
In the luxury industry, you need to have an intuitive approach. It’s like cooking: you don’t take one milligram of salt, one milligram of pepper, no. The chef is in the kitchen, he’s tasting it as he goes along: it’s the chef’s intuition when the balance is right. This is exactly what we have been doing. We’re probably one of the most copied brands in the industry, but it’s difficult to imitate, because success comes from within, from intuition.
When you’re constantly changing your strategy or tactic, it shows that something is fundamentally wrong with your brand. Today, everything we do plugs in or around the Breitling universe, everything fits. That’s how we know we’re on the right track.
Breitling is difficult to imitate, because success comes from within, from intuition
SM: One of the most successful elements that you’ve integrated into your business model over the last few years is sustainability…
GK: You cannot run a company without a proper environmental, social, governance policy. I’m a big believer in this conviction, not because of regulations, but because it’s necessary. For example, we’ve recently launched the Super Chronomat Origins, our first “traceable watch”, which transparently informs and engages owners about the origins of its precious materials. It comes with a provenance record on the owner’s blockchain-backed NFT, which details the responsible measures taken along the supply chain for the watch’s artisanal gold and lab-grown diamonds, with all the information independently verified. By 2025, our entire product portfolio will feature what we call better gold and better diamonds: artisanal gold and lab-grown diamonds, responsibly sourced from accredited suppliers.
I don’t want to buy raw material where I don’t know the source – not even recycled, because I don’t know where it comes from initially. We want to know that the precious materials used in our products are free from association with conflict or human rights abuses. By the way, lab-grown diamonds offer the same, if not even better quality than naturally grown diamonds – and we source them from carbon-neutral suppliers. All of this will be the standard in the next ten to 15 years. We’ve also introduced a sustainable and foldable packaging made from 100% upcycled plastic bottles, and of course, we offset our CO2 emissions and so on, but I think with these kinds of products, we will really make a difference and a statement.
SM: What’s your projection for the broader watch world in the next five to ten years?
GK: The market has never been booming like this, even considering factors which might be counterintuitive, but with wealth growing in India, Indonesia, China, the market will continue to expand. I’m not sure that all the brands will be successful; I think there will be a concentration of a few successful brands. There will be six, seven, maybe eight, commercially relevant brands. No more. Like in the car industry, how many car companies are really relevant? Very few. We all have the same taste, we all buy the same fashion, and we all buy the same type of watches. So I think these brands will be highly successful over the next decade.
As for Breitling, I’m very confident that if we continue to be smart in what we are doing, if we don’t lose track versus innovation, not technical innovation, but in how the consumer is changing. Covid was an accelerator of this phenomenon. At Breitling, we talk about neo-luxury, we don’t talk about excessive luxury, we talk about inclusive or approachable luxury. We’re not in tennis or golf or Formula 1; we sponsor Six Nations Rugby, we do surfing, we do triathlon because we want to be approachable.
And the final point is sustainability. These three elements, casual, inclusive and sustainable, are core values that define neo-luxury. If you represent that, and you execute your strategy correctly, I think you’re fine.
For us, it’s really about further scaling the business now rather than changing strategy. We have a proven concept, it works. We will just nurture it more and more and more.
The Premier collection typifies the new-look Breitling under Kern’s mindful stewardship.
SM: Is there one facet of Breitling that you are particularly proud of?
GK: At the end of the day, when you cook, you have a starter, you have a main course, you have a dessert. You don’t want to be proud of your dessert. You want to be proud of your experience. And I think the Breitling experience today is phenomenal when you go to our Townhouse boutique on Regent Street and you see the whole world of Breitling.
Our only problem is that still too few people know that we’ve changed so much in a positive way. I still have people messaging me asking how [former ambassador] John Travolta is doing! I mean, we are growing like crazy, so we are very happy.
SM: Well, this is it, isn’t it? The famous phrase: “If you build it, they will come.”
GK: Exactly. I would love them to run instead of walk, but it’s fine [he laughs].
See more at bretiling.com
