Albert Bensoussan Talks Kering Watch Strategy

Albert Bensoussan’s arrival at Kering signaled that, while it is a relatively modest player in hard luxury, the French group is serious about growing the category.

The former LVMH executive took over as chief executive officer of Kering’s newly created luxury watches and jewelry division in May 2014, just as growth in the segment was slowing because of a sharp reduction in demand from Asia and a drop in spending by Russian tourists.

Sales of hard luxury grew just 1 percent at constant exchange rates in 2014, according to an estimate by Bain & Co.

Bensoussan is in charge of seven brands, ranging from Place Vendôme jeweler Boucheron to more recent acquisitions such as Sowind Group, Qeelin and Pomellato. Ulysse Nardin joined the fold on Nov. 1, while Gucci Watches and Jewelry is operated separately under the responsibility of Gucci ceo Marco Bizzarri.

In his first year on the job, Bensoussan installed new management at several brands. Antonio Calce took over as ceo of Sowind Group, parent of Swiss luxury watch brands Girard-Perregaux and JeanRichard, succeeding Michele Sofisti. And Christophe Artaux was named ceo of Qeelin, the Chinese jewelry brand, after its cofounder, Guillaume Brochard, left to pursue other interests.

Though it does not break out detailed figures, the group said watches and jewelry — excluding Gucci — posted a mixed performance last year, with a drop in revenues at Sowind Group due to a shake-up of its distribution network in Asia for Girard-Perregaux and volatile tourist flows in Europe and the Middle East.

In an interview, Bensoussan discussed the challenging economy, cleaning house and fostering organic growth.

WWD: What was your assessment of the watch-and-jewelry division at Kering when you took over, and what were the initial measures you took?
Albert Bensoussan: Kering remains a medium-sized group in terms of watches and jewelry in light of the heavy sector consolidation that has taken place over the last 15 years. At the same time, inside this newly created division, there are seven brands with a distinct and separate identity that don’t cannibalize each other. They mostly have distinct business models and organizations, which facilitates the task of analysis and collaboration with each brand. This also makes it easier to develop different visions for strategic development of brands that range from those that one could qualify as being at the start-up stage, like Qeelin, to others that already boast a long history and many achievements, as is the case for Ulysse Nardin and Girard-Perregaux in watches, and Boucheron and Pomellato in jewelry.

At Kering, we favor the organic development and the independence of each brand. The principle of ‘One brand, one ceo’ made sense to us, [so] we streamlined the organization. An important part of my role is to be a sparring partner to the brands, an ambassador for their messages and needs at the group level, but also a challenger.

WWD: How did Kering’s watch and jewelry division perform in 2014 and what is the outlook for 2015?
A.B.: In 2014, watches and jewelry faced volatile market conditions. Performances of our brands were positive in jewelry, in particular at Boucheron, which delivered a more-than-satisfactory year. In watches, Sowind remained under pressure in a market climate still marked by caution of wholesalers. Regarding 2015, at this point there is still market volatility [in the watch industry] and distributors remain cautious.

WWD: Can you provide details about Ulysse Nardin’s decision to shorten working hours for its staff in response to slowing demand?
A.B.: This concerns only a limited [number] of the staff. Historically, Ulysse Nardin has been a very autonomous brand. The management is used to taking temporary measures to preserve the brand’s future when the market environment toughens. Several other brands in the industrial hub of La Chaux-de-Fonds announced similar measures in November and December. The measures implemented at Ulysse Nardin are not surprising, but rather reflect a commitment to sound management.

WWD: Kering chairman and ceo François-Henri Pinault recently referred to possible synergies between Girard-Perregaux and Ulysse Nardin. Can you provide specifics?
A.B.: We are very attached to preserving the identity and independence of each brand. It is not a question of being territorial or refusing to share resources. Each brand has techniques, know-how and product lines that are specific to them, but sometimes also similar manufacturing facilities. The brands have no plan to manufacture for each other or exchange parts. However, we do exchange information regarding know-how, industrial processes and resources such as suppliers.

We also stick to a simple principle of having a specific distribution network for each brand. With few exceptions, they don’t share sales teams. When we do share resources, it tends to be on the financial, accounting, administrative and logistics side.

WWD: There are reports that the marketing team at JeanRichard has been dismissed. What is the future of the brand?
A.B.: There has been a big repositioning at JeanRichard that is now nearing completion. We’ve revised the internal organization to reflect the fact that Girard-Perregaux accounts for the bulk of revenues at Sowind Group, so it’s natural for the focus to be on [that brand]. JeanRichard is what we would consider a start-up brand within the division, and, as such, we want to adapt its modus operandi and costs to its business model.

WWD: What are your strategic priorities for 2015?
A.B.: Our mission is to focus on the organic growth of our brands and to help them increase their global presence, develop new collections and hone their product pipeline. It’s a long-term process that does not require any changes or turnaround in the identity of each house, but rather an emphasis on quality of execution.