Interview Ulysse Nardin, Girard-Perregaux CEO Patrick Pruniaux On The Brands' Departure From The Kering Group

Kering, which earned revenues of over €7 billion in 2020, said that the sale " … is in line with Kering's strategy, giving priority to the Houses with the potential to become sizable assets within the group, and to which it can provide decisive support over time."

Patrick Pruniaux, who will continue leading both brands moving forward, has held senior positions at TAG Heuer, and within LVMH. In 2014, he was hired by Apple to prepare the launch of the Apple Watch, as part of the Special Projects Team, and became managing director of Apple UK & Ireland in 2015.

In 2017, he joined Kering Group as CEO of Uysse Nardin, and became CEO of Girard-Perregaux in 2018. After the announcement of the sale (which is expected to be completed in the first half of this year) Pruniaux spoke to HODINKEE via Zoom, on the sale, on the future plans for both brands, and on recent industry trends.

HODINKEE: The sale has been announced as an amicable separation.

Patrick Pruniaux: The [Kering] Group has been my employer for several years so we are, yeah, definitely very amicable and it was a great partnership. The Kering Group has been extremely supportive of the the brand. Even recently, we've been able to invest significantly on our operations here, making sure that everything was more efficient and investing also in marketing.

Did the pandemic impose restrictions on production and shipping that set the stage for the sale?

Not really. It's a question of what's rational for Kering. As mentioned in the press release, there's the willingness to focus on brands that can have a critical size, a Kering level, being a multi-billion revenue company. We've mutualized some resources and in 2020, we had to lay off some employees. We really had to get the right size for the company, which is exactly the case now. As early as last year … we've been hiring again, including some people that we let go in the fall of 2020.

Kering is completely divested at this point, they don't retain any ownership?

No, they don't … we're completely independent.

Were there investors who took on some of the financial burden of the sale?

The way we put it together, this is really a management project led by me. With buying back the company, I invited the senior leadership team to be a part of it but the rationale is very economic, it's not finance-driven … the investors have a very long-term view. They don't want a high return on investment over a couple of years.

So the idea is to work for the long term and to work to develop the identities of Ulysse Nardin, and Girard-Perregaux, separate from the long shadow cast by the other Kering Group Brands?

To be fair, I wouldn't say the brands were in the shadow of the Kering group, because we had a fairly developed autonomy. The overall industry is doing well, but I think the investment and the work that was done by us, only part of it was visible. I mean by the end consumer, the press. But I think that work is repaid – we regain confidence from the year, from the retailers, from the end consumer. I mention the retailers because our strategy is very clear. We want to be almost 100 percent a wholesale company.

We have some mono-brand stores, mainly in China, but our intention needs to be partnering with the best retailers in the world, which is already happening. Four years ago we were only working with three or four of the top fifteen retailers; today we are working with all of them. They are looking for independent brands, they're happy with independent brands.

How do you see the interaction between the brands, moving forward? Will they be run on parallel but separate tracks as much as possible?

The organization is really good as it is, there is no intention to change anything. The way we work is, there is a UN team and a GP team, and very often the GP team discovers what the UN team is about to launch the day that the product is being launched, which is great. I think that's what we wanted because the two brands are very distinct.

They have very different histories, icons. That's why sometimes I don't like to talk about brands, the word sounds like marketing for these names that are centuries old. So it's very separate.

Both brands have completely different movements. We have manufacturing expertise and we have to nurture the difference. So apart from myself, and maybe the head of manufacturing or the CFO, everyone is specialized.

It's really a two-brand luxury watch group.

It is. And with different positions, different views. I'm never trying to enforce the strategy that would be effective for one brand, onto another. I give a lot of autonomy to the different teams.

I really think the brand to us is more important than us as individuals. We are privileged to be here today. We are fortunate to look after these brands, but our role is to make sure the brands are much bigger than we are.

Where do you see the two companies going from a product standpoint, and how is the product strategy going to change, if it's going to change?

What you should expect from us is more of the same of what has been done over the last couple of years. To answer your question about the different collections … I think you should not expect to see a big difference. We are now on a path to a mix of innovation and also paying tribute to what has been done here in the past.

Believe me, this year we have a lot coming up in the pipeline, but for me it's not about launching dozens of new watches. It's about making things that are consistent and make sense.

We're living in the era of the hype watch – the watch that is driven by inaccessibility, by Instagram, by waiting, by the fact that you probably can't afford it, and if you can afford it, you probably can't get it.

I'm going to be honest, I think most of the brands are very sincere, and there is not much they can do about it. Some of them cannot deliver because they cannot produce more, or they have no intention to produce more. The scarcity is not a strategy, it's the consequence of strong demand. And there is also the fact that there are a lot of new buyers, newcomers, which is fantastic.

Having said that, we have no intention to be in that game. I think there is a fair balance to strive for between the level of exclusivity we have, and how much we can produce and deliver, and what the customer expects. I'm a big believer of what is pleasurable, much more than investment. The brands that are being chosen as investments, they probably don't decide it, it's not like a strategy. I think it's just happening.

The very principle of high-end watchmaking is about stressing the quality of the product, the story behind it, the people putting together amazing watches. It's not about, 'buy this and it's gonna double in value in the next 12 months.' I don't think the best collectors do that. They invest because they have a passion, and they take risk, as well.

There are still many collectors who don't necessarily want to be out in public, or have their collections out in public.

It's almost regardless of income. It's interesting to see some of them taking risks. I am so pleased when I hear someone say, 'Hey, how about this work from GP, or UN – hey, this is not mainstream.' That is, 'I'm thinking by myself, I'm curious about the brand.' And often, I meet people who are not Instagram-driven – posting a watch that is only of interest because it's a watch they have been able to buy when others cannot.

One thing Ulysse Nardin and Girard-Perregaux have in common is that both brands have both accessibly priced watches, but also all the way up to high complications, very high-touch, hand-made pieces. Will we continue to see that mix?

Yes. The starting price point for both brands is around $8,000, so we're already in the luxury segment. It's okay for us to be around $8,000 to $10,000, because the way we make our movements, we cannot go below that. And I'm absolutely fine with that. It's a learning curve, it's rarely your first watch.

I think we are offering a first step into the world of a manufacture on the one hand and on the other end, we are also offering something for individuals who have an appetite for great innovations. And it's part of our ethos as a company to do both.

This interview has been edited for clarity.