The Business of Watches [033] Guido Terreni (Chief Executive Officer, Parmigiani Fleurier)

A

Welcome to the Business of Watches, the Hodinkee podcast, where we go behind the scenes to talk to the executives and the players who are making things tick. Today we are speaking to Guido Tureni, who is the CEO of Parmigiani Fleurier, one of the storied and great independent brands in the Swiss watchmaking industry. Guido, thank you for joining us. Good morning. How are you, sir?

B

Good morning, Andy. It's a pleasure to be with you.

A

Excellent, excellent. So, thanks for doing this. And so Parmigiani you joined, I believe it was around. It was 2021. Let's talk about, you know, the vision that you had for this brand and its history and, you know, the kind of philosophy and design changes and, you know, basically overhauled the business since you've been. Tell us the story.

B

Well, it was a specific historical moment in which I joined the company. It was January 21st. We were still stuck in the pandemic. And it was before transformational changes in lottery that happened, continue to happen after that historical moment. And it was extremely interesting because I felt that usually after a crisis, having lived the Lehman brothers won 15, 16, 15 years before, there is always a recentering on the values that are core. And there is also a quest for reassurance in the audience. And this, I felt it before what people were talking now about quiet luxury and what we had to restate because we talk about private luxury, which is a bit more specific. We might enter into that distinction later because I think it's important. So the company asked me to clarify the positioning and to bring the brand to its prestige that it's known for. And this was the work that we did with a lot of discipline and with a lot of creativity and innovation. But the first thing that we did was really use that great exceptional moment that was the pandemic to do an introspective work. And I think it was the most well invested time where you could really do anything about such an important external factor. And it was a moment in which we ask ourselves, how do we get back to that client that made the brand so prestigious at its origins, and what does the brand need to stand for? And for sure, the values of Michel, of deep knowledge and understatement that comes from restoration, were the founding pillars of this trajectory that had to be externalized through an offer on the product, which is a physical offer object that has to translate these values into reality, but also on the communication, on distribution, and most of all go back to interest that client that was a connoisseur, that was Somebody who had discerning taste and was not following the flow that made the brand so interesting at the beginning of its trajectory. So this is what we worked on and was really fascinating.

A

Yeah, I mean, it's really been quite a transformation. And we should talk for those who aren't aware of the history of Parmigiani, founded and led originally by Michel Parmigiani, a great watchmaker who sort of honed his skills and came to be known for his restoration of vintage pieces. And let's talk about. I guess that was in the 90s when the brand was founded and has always been part of the Sandoz foundation, the Sandoz family, in terms of its backing. And it's quite interesting in that, in some ways, you know, Parmigiani Fleurier is part of an integrated manufacturer. There are other watchmaking companies within the group who obviously supply components, movements. Most specifically Vacher, the great movement manufacturer, which supplies many of the top brands in the industry. But, yeah, talk about the structure of the company and, you know, Parmigiani, the watchmaker's role within it.

B

Yeah, right. Michel is a living legend of restoration. Restoration is a very interesting art. And I think I synthesize restoration as the black belt of watchmaking. I mean, you're really talking to a knowledge which is extremely deep, not only technically, but also culturally speaking. So the different eras of watchmaking in the last 500 years has passed through the fingers of Michel. And when I say through the fingers fingers is you really understand by what the great creators of our industry have left, and you talk to them through their work. And I think that's very noble as an approach, because before launching your brand, he understood the rules of watchmaking very deeply. And another thing that is exceptionally interesting from a human point of view is that this man started to restore watches in 1975, and it was the core crisis of the quartz, where all this industry was thinking that mechanical watches were at risk and probably were not the future. No, everybody was going quartz as the new technology, to be accurate. And he felt that there was a cultural patrimony that was going to be lost. And he went the other way. And I think going the other way shows a great independence in the mindset of this person. So he looks at the reality with different eyes. He doesn't look with the eyes of the flow of the mainstream. He looks with the eyes of who is cultivated and who believes that there is worth in what watchmaking has brought to society. And it's an artistic patrimony, it's a cultural Patrimony. But it also has always accompanied society in its evolution, until the technology have transformed its meaning from a mere keeper to something else. And in 22, I think 21 or 22, I don't remember exactly the year UNESCO named this art as a human patrimony of the world. So without people like this, you probably would have been difficult. And then building his name through his restoration work, because he worked on the Patek Philippe Museum, accredited as a restorer of the ancient pieces. He worked with the Santos family collection, which is a beautiful private collection of ancient clocks. Very, very beautiful and important. He made a name about himself and he understood what to do. And the family asked him if they wanted to do a brand together and they would have backed him up financially. And Michel in 1996 agreed and presented in 29 May of 1996 at the Borivage Hotel in Lausanne 52 unique pieces and stated a mission that was an educational mission before being a commercial one. Also his intent was to, at the end of the course crisis, to restate what true traditional horology is about. And this before the relaunch of Breguet by Swatch group or by Mr. Ahyek Sinner, who understood this very quickly. Michel was a lover of Breguet. Like can be Dani Roth. Like can be many other watchmakers who see in Breguet a mantra through his work. But his work was never something to be replicated. So Michel never looked at the past as something to duplicate and to copy. He always looked at the past as a source of knowledge to innovate and bring forward the art of mechanic. One of the most famous pieces might be the Bugatti watches. The first Bugatti that was transversely put on the wrist and played with the designing through the mechanics, putting transversely the movement, as you would see in an ancient bugatti of the 30s, the engine. Also. It was really a question of using the mechanical art to give emotions that are different, deep and with a meaning, with a why. And like every watchmaker or restorer, he wanted to master his craft. So will started to work on his own movements, started to have his own cases, his own dials up to the regulating orders with the assortment and the spiral. So there's a vertical integration that is incredible. In the Sandoz, Roger of the Sandoz foundation, that was impossible to keep alive through the capacity that was absorbed by the brand. So very quickly it was decided to open it up to very prestigious brands that could profit from this extraordinary craft and also keep it alive. Because thanks to our partners, business partners, we are able to continue to have these beautiful know how at the service of the brand and also about the brands.

A

Exactly. And you know, let's go over some of the partners that you have within the same ownership group. Voucher the movement makers, certainly the most well known. But basically, I mean, you know, Parmigiani timepieces are almost, you know, an in house, single manufacturer piece, which is kind of rare for the industry. But yeah, talk a bit more about that and how that's, you know, sort of part of the business.

B

Well, Voce is a spin off of Parmigiani from the movement side. So early 2000, this company was created with the technical platform and sheets of the movements that Michel was developing. And a specialized company on high end movements was born. And I must say that Bosher has a quality which is really incredible because from that imprinting that Michel gave then the means and the evolution of the industrialization and the developments are really very, very, very, very important. Also the quality of these movements is really extraordinary. And then assist the company that is specialized in sub components of movement like Atocalpa and Elwin, that do does decolletage and I don't know how to say decolletage in English, but when you do pivots, wheels, so you do all these components and you also do the spirals and the escapements for the regulating organ, which is a strategic component for the whole industry. Because there are very few companies that are able to provide this to third parties. And then with cadillance, this is a dial maker, which is not very big, but very specialized in exceptional crafts. We do our Grenima, which is the toric dials done by brush by hand that Michel taught, like it was done back in the days from the restoration work to give a sort of sophisticated finishing to our dress watch, which is the toric. And then you have the lab, which is Les Artisans Boitier, which is doing cases. So I think the strategic components are uncovered. This doesn't mean that 100% of the production is done in house. We use also partners that are best in class certain times for finishings that are, how to say, not worthwhile to introduce internally. Because you cannot verticalize at 100% of your work. It's better to for a phase you can use something externally in a dial or in the movement. Sometimes you use external support to do certain functions, but at the end it's a cultural and industrial power that is backing up the brand. For sure.

A

Yeah. And to be clear, your role as the CEO of Parmigiani Fleurier. So obviously you're in charge of the brand and all that comes with that. And then those components, makers, suppliers that are all under the ownership, same ownership structure, they're operated separately or should we think. Do you have any management or executive role with those entities as well?

B

No, no, we are companies that are managed as a pole, as a group, but we are organized as independent companies that serve each other. But we are part of the.

A

So let's talk about when you joined and your vision for Parmigiani. I mean you quite quickly had an impact around the time when I started covering the watch industry and you were sort of the great turnaround success story. Had really done something with the brand and changed its product and changed its trajectory. Talk about, about what you did in terms of, you know, sort of really focusing on, on certain models. I guess the Tondo was, was sort of first and now we have the toric models as well on the, on the dressier side. But yeah, talk about your sort of, you know, vision and, and focus in terms of, you know, the brand and since you've been leading it.

B

Well, it was clear that the offer was the first thing to tackle because we needed a star product, a product that we were recog for. And the predecessor of the Tonda PF, that was the Tonda GT that had been launched earlier in 2020 had shown signs of traction on the appeal of a clientele that was coming back to the brand. And we evolved it into a high watchmaking content and less sporty, but more sport chic integrated bracelet segment, which was really the first watch that we wanted to tackle because it's a more Versat, this was easier to wear and it's a master and it was ready to be evolved. So I think what was extraordinary in that historical moment was first of all that we had the clarity of what to do because from a design point I really pushed my design team and the people in the company to have clear the aesthetic codes that we wanted to work on that were in the brand. So we did this introspective work based on how can we externalize a refined, elegant, contemporary style, extremely pure, because we are not an ostentatious serving ostentatious client. We are serving a client which is knowledgeable and has already done that evolution in this maturity of buying luxury which is not following what society is obliging you to buy. But he's already into that, pleasing himself. So Parmigiano is for the owner, it's not for the others. So from that philosophy you start working on the branding, the logo, PF logo without the writing was the first most evident element that talks about private luxury. But all the elements that are in the ton WPF were in the brand before. So the grandeur, the corly bay motif of the guilloche on the dial, which is done by hand, is something that was in the brand. But guilloche is a technique which is quite old fashioned. It brings you back to a classicism that on a sport chic watch wasn't suited for. So we wanted to go to minimalizing it in the size up to almost become invisible. But you can mistake it as a clean dial from distance. But in reality when you look at it, when you have it on your wrist, you see that richness of the finishing which is not invasive to the reading. The neural bezel in platinum, the comfort of this watch, the finishing that it has, are making it an experience which is extremely high in luxury and was appealing to a client who knew the brand, its prestige. And when he saw a product so well made and so in line with today's need for such a collection, the purchase was without any issue. It really took us by surprise. And then, and I didn't want that the relaunch was just a style relaunch. It had to be also leveraging on our innovation capacity to respect the philosophy of Michel that I told you before. So we started working on functions that are important in the industry, but reinterpreting in a way that they were never done before. So when you are doing something that is unprecedented in a history of 500 years, it's a right exception and you have to do it in link with this philosophy of restrained style, which is not a way to fade or to be mimetizing yourself in society. On the contrary, who is understated, who is not showy, has a bold choice of going his own path. So it's really pleasing people who are independent in their mind, like Michel is. And this happened with the Gymtrapante which was the first innovation that we did in 2022, which really took us by surprise.

A

I mean it. And then obviously the latest iteration is the Chronograph Mysterieux of this sort of philosophy and idea. But you know, talk about that GMT Rattrapant, which was, you know, really did have an impact in terms of, you know, enthusiasts and collectors, in terms of waking up and taking another look at the brand and the offering. You know, it was a new way to do a gmt. I mean, you know, talk about that whole sort of aesthetic and philosop philosophy that we've seen with the pieces and I guess right through to the chronograph Mysterio.

B

Well, that to me, the Gemtera Trapante holds in him the essence of the philosophy of private luxury that we are applying to the brand. Because everything is thought for a reason and is there to give a flawless experience. First of all, you start from the client not having an ostentatious client where the ultimate status is not to show your status. You are giving to a person something that they is only he knows what he has. So you're not a client who when he's not traveling, needs to brag that he's traveler or needs to brag that he has an international life ruling all the time zones of the world. So when you're at home, we wanted to provide a beautiful two hander. But when you are traveling, you want a flawless experience. So a pusher moving the hour hand was a must because the minute hand should move when you're changing a time zone. And then just by saying in the brainstorm that we had at the third day of my arrival in the company, I wanted a watch post Covid. So everybody wanted to go back to traveling and do it in a way that was never done before, extremely refined and discreet, like the brand is. And by saying the sentence I want to go back when I'm traveling, I want to go back as quickly as possible because I want to be reunited with home. In French, reunited the same say ratrape means to catch up. And this gave the idea doing well. Why don't we use a ratapante function to the traveler hand? And it seems this intuition is very powerful. But it's an intuition that is breaking the rules of 195 years of history. Because the patent of a split second function was patented in the late 1820s and it took almost 200 years to the industry to apply to another hand of the movement instead of the second half of a chronic to attract travel hour hand. Now this gives you also the rigidity of our industry. It's quite conservative, it's quite. Thinking out of the box is not always frequent. And this gave a beautiful sensation to the owner because the owner first of all has something interesting on his wrist and something playful, something that has a magic moment where in the blink of an eye that hand reunites with your home time. And it's done the shorter way, because when you are beyond seven hours, it goes back clockwise. When you go under seven hours, it goes back anticlockwise. And that's due to the mechanic of the retrapante function, which has an iconic component, which is a sort of heart component that makes the lever switch back from the shortest way. And this is always beautiful to see how wheels, pivots, levers, mechanics at the end are able to transfer an emotion to a client which is perfect with what he wants to show. So it's something for him. It's not something to show off, but when you're having it, it's exciting, it's something that you are proud of. But everything is under the hood, nothing is in your face.

A

And that is, you know, it's sort of. That thought philosophy is at the heart of this sort of slogan or idea that you talk about, which is private luxury. And this is opposed to quiet luxury, which is an ide, a sort of style that certainly has come about in the past few years. I mean, you know, talk more about what exactly private luxury is and how it is expressed in the offering and the product.

B

At Parmigiani, the difference between quiet luxury and private luxury is that quiet luxury has become a trend. And when a trend is in fashion, it is the opposite of being quiet. So people who are quiet today because it is fashionable to be quiet are basically the opposite values of what quiet is about. So we had to rename it into private luxury. Because private luxury has always been there and will always be there. And it interests a client who is not following the flow, is not following what designer is obliging you to wear is not somebody who, who is somebody who is building his own way of consuming whatever it is consuming. Because it can be luxury, it can be the restaurants you choose to go to. It can be how you live in society. If you're looking for more deep relationships and less superficial ones, you get no, it's a way of behaving before, of purchasing. So it usually comes with education. And you can be private at 20 years old. And you can never get to private luxury if you are driven by other values. And for sure, it's taking the luxury experience to a next level or a different level of the first degree, because first degree is given you by the wealth that you have built, which is beautiful to have built a successful wealth during your life. And it's meritocratic, it's beautiful. But usually if you think that luxury is an expression that shows your wealth, you have not understood what luxury is about. Luxury is much more than that. So the first floor is the access that is given to you by wealth. And then especially when the access to wealth has been more and more accessible in society because unfortunately society is going to a polarization many more rich people and probably less averagery. Or the medium class income inequality. Yeah, exactly. If you think of my father's generation, everybody could buy a luxury watch once in a lifetime. Now today, not everybody can do that. So luxury has moved up into the price, but also into the offer. And if money is the differentiation point to be expressing luxury to who doesn't have access to that, that is the first degree. But within the commod community of luxury experience, money is the floor. What private luxury is about is differentiating yourself with other things which is education, refinement, discernment, Making choices that are. You can be much more cool at 50,000 rather than a million. Depends how you are spending your money. So it's much more important to educated and say private luxury kind of experience what you do with the money that you have and not how much money you spend. And this is very important to me.

A

Is it just simply taste though? Or I mean, you know, refinement taste. But it's more than that.

B

It's discernment. It's knowledge. But not knowledge as a walk geek. You know what levers goes in a movement. No, that's nomenclature. I don't know how to say it. It's not sufficiently. It's what you are conveying now you understand what you're conveying. Certain is probably. I can summarize it in the opposite of hype, where hype is what society watch can be hype and can be bought very expensively beyond the price list because of its scarcity that is artificially stated or because of the desire which is a fashion victim approach. If you want to luxury. And if clients get to that behavior where they accept to do purchase journeys before getting to the watch that you really want. I mean they are responsible also for this kind of behavior that luxury is having to certain customers. But private luxury customers usually are pulled off by these dynamics and they start to be looking elsewhere because they don't want to play the game and they prefer to differentiate themselves what everybody wants by going to things that are in the know to know. So it's less. Less awareness. But those who know are part of a. Of a more interesting community. If you want to say nobody. If people don't recognize that you have a Parmesan on your wrist, the owner doesn't care. But the, the reward, the social reward is if you have somebody who compliments you oh what a beautiful watch you have, you start talking watchmaking like buddies immediately, because you know you have somebody in front of you who has a knowledge of the industry, and it's not just looking at what is obvious. So this private luxury is about going beyond the first degree of understanding, aesthetics, brand heritage, watchmaking, content that you have on the watches, style that you're conveying through your choices. Because at the end, there are people who understand that a watch does not define you. A watch is an accessory. It is a part of you. It is something that is saying much about you because it's an intimate choice. But you're not the watch that you carry. And this is part of a more sophisticated audience that is looking at consuming whatever luxury or holidays or cars or whatever you want in a way which is thoughtful, which is personal, which is knowledgeable and confident. Because at the end, you're not following a dogma that is imposed to you.

A

Yeah, no, that is incredibly well articulated. And I think it makes clear the sort of distinct nature of this idea. How does creating products in the vein of private luxury, how does that work as a business, though? I mean, I think early on you had great success in terms of, I think, tripling sales with the brand. Yeah. I mean, where are you now in terms of average price and talk about those kind of metrics, if you can, and how that is been achieved through this vision of private luxury?

B

Well, for sure. Developing a brand into this philosophy demands a lot of creativity, but demands a lot of discipline, because the why of things is extremely important as well as the how, because the finishings and the execution of your ideas have to be flawless and have to be uncompromising. So it's a very high bar to move. And every year we are moving it. Very importantly, you spoke about our third world first, the Chronograph Mysterio. It's a trilogy now, and this trilogy started in 22, and now we're in 20, 26. So in four years, three movements, which are major functions of the industry, because at gmt, we spoke about it. The second was looking at the rotating bezel of a diver's watch and saying, can we as watchmaker do that function through the movement instead of using the case? And something completely different comes out. And it's a watch helps you be on time in anything you're doing. And the variety of using it is crazy. Up to the Chronograph Mysterio, which is basically having a chronograph that is not seen and invisible until you need it. And it's a monopusher. It's flawless in the way that you use it. You have these two magic moments in which it appears and it disappears when you finish reading the measurement of the time. And these are things that are easily to. They're not easy to imagine, imagine, but the. The idea to come up with the idea. Idea is imagination. But then to make it become reality and making it work becomes a hell of a different story. Because you need courage, you need persistence in your ideas and you. You need to believe in them and you need to make them happen. But this philosophy of simplifying the complication up to the moment that it disappears, it's really part of the philosophy of automatic is saying you saw it also with the QP of last year, the perpetual calendar of the Toric, where the calendars usually are very busy dials. We streamline the functions into two coaxial counters in a way that lovers of Perpetual Calendar said, I've never seen such a pure calendar in my life. So you're always pushing the aesthetic through the technique. Because to quote Michel, technique is beautiful. And beautiful means that you're designing with technique. And I totally agree. The movement and the way you place a function before even knowing on what watch you will design it in, is already a design constraint and a design statement. So that philosophy is building up and each episode makes it understood. For instance, the third episode of the Invisible Complications this year is making even more traction on the GMT of 2022 and on the minute rattrapante. So we are selling through this gives you traction because the important thing is to state your values in a way that they are not cannibalizing yourself. It's not that you do a function and you sell that function and you stop selling the one before. All the developments are building up. And a first watch, the GMT was just a watch. A second is a couple. It's not yet the story, it's when you get the third that people get it. And it's a bit like what happened with the palette of colors that we're using, which are extremely fresh and very pleasant, serene. There's nothing aggressive our brand now everything has to be pleasant, everything has to be long lasting in the appeal, the choice of colors, how specific. But they're easy to match with your outfit. But they also, they will never worn you out because they're not flashy, they're not loud. So you have all the philosophy which is aesthetic. And last year, through the morning blue of the perpetual calendar and the golden hour, people understood that we had a palette, but it was four years that we were building in North. So business wise, going back to your question, it's like an Netflix story. You're building each episode and your narrative builds on and people are continually attracted to what we're doing because we are basically making them interested in us. Because people come to watch us and wonders looking at what we're doing because they feel that we are interested. And this here to give you a number that can give you an idea in the public days two years ago we welcomed 180 people who had a touch and feel session. Last year was 270. This year we had 585. So this is another statement of and the Chronograph Mysterio was the talk of the fair. Everybody was saying did you go and see Parmigiani? Did you see that watch? It's crazy what they came up with. But it's not just that watch, it's also the artisanal finishing that we put on the Toric, the Hannebert dials, the finishings on our movement. I had a beautiful experience with a client who was very, very discreet, a person that was extremely refined. And when I showed him the anniversary piece of the perpetual clan of the Toric with hammer dials and the Guillotine movement, when he turned the movement, he didn't say it to me, he said it to himself and he said welcome back. That is a compliment that tells you you don't need to shout your emotions. But it was a very private experience and, and I was in a room with him, so I heard it but he wasn't saying it to me. So that's kind of the pleasure that is intimate that we are building on this beautiful brand.

A

And just for my knowledge, I mean what was the most challenging of those invisible function pieces, whether it be the GMT or the Chronograph Mysterio, what was the most challenging in terms of technical and or design?

B

Well, the GMT was a first, so probably we learned a lot through that function. That was easily was the most simple to do because just over 50 components for the function. But we learned a lot because to catch up with the hour had to be perfectly aligned. So technically speaking it was more of a fine tuning of the idea so going to a perfect execution and having it work correctly and perfectly. So this was probably the discovery. Then the Minitra Trapante, the people don't know, but it's a triple of the component. So we couldn't. So the value for money for the miniature is higher than the GMT because we couldn't put a price that was in correspondence with the cost of the movement, because to the customer, well, you're moving a minute hand instead of an hour hand. Okay, you have a push or more. You don't. So we put 1,000 Swiss francs more to state that it was more complicated. Complicated, but it doesn't reflect the complication. And the third is the chronograph. Now, the chronograph is a little bit more expensive, but we wanted to keep it extremely competitive in the offer because 36, 900 Swiss francs, I think it's just over. It's around $44,000. It was surprisingly competitive to the audience. So you put all this complexity into that? Yes, because I think what's important is that people live our watches. We don't build watches to keep them in the saf, and we want them to be enjoyed. And so the price point has to be sufficiently important to make our living. But it's also something that goes into the direction of putting watches on the wrist of people. But on the chronograph, it was probably the dimension that was the most challenging, because I gave a very strict technical sheet that the watch couldn't be bigger than 40 mm, and initially I had given 12 mm of height. And then we had to concede one more millimeter for the height because a wider diameter would have been much less commercial. So I prefer to have a millimeter more in height than a couple in width. So it was the concession that we gave. And then also the other thing was the fact that the chronograph was extremely difficult to conceive because it's not a traditional chronograph. You have a flyback start, you have a double retropantive function to cover the hands when you reset it. So it's not a traditional way of building a chronograph. So it was really an intellectual work that was very complex to come up with. And this reflects when I had the idea, it was September 2021, and I had to say it to Michel, and he was in the office a couple of days later. So I said, michel, I had a great idea. What do you think about this chronograph? And I described it, the function. And he looked at me like grandfather willing that you succeed, looks at a nephew or whatever. And he said, it's complicated. And he didn't say anything else. And so he left me hanging there. But I could see his question mark in his technical mind that was already thinking, how on earth could we respond to that brief. So that gives you the idea of how revolutionary is an approach of redesigning a chronograph outside the counters, outside and making it something flawless as an experience.

A

And yeah, I mean, can you give us any. I mean, my understanding, I think you make anywhere between three and five thousand watches a year. And I mean, what have you done with average price? I mean, these have become more complicated, more sophisticated, you know, truly embodying private luxury, the. These pieces. And so, yeah, what can you tell us in terms of what you've done with average price? And then I want to talk about your distribution tactics too.

B

Well, the price. Well, since the arrival Tonopia, the price has grown. So I think now we're around 40,000, between 35 and 40,000 Swiss francs retail, which is quite important as a brand. Now then. And you can go up to millionaire pieces with the restoration work that we do on unique pieces for the celebration of the heritage of Michel that we do every year. The enterprise is 20,000 Swiss francs. So that's where we stand in terms of distribution in the relaunch. Clearly, we had the opportunity to have a very strong demand with a very low production in 21 and 22. And this allows us to prioritize the allocation and not disperse the watches everywhere, every. And the distribution that the brand had touched in his life was way too important towards what was necessary. So we had cut more or less two thirds of the distribution in 21 and 22 especially, and a bit in 23. So now we are more or less around just around 100, 110 doors point of sales with 1995 clients, because some have multiple doors. But that to me is sufficient. So I don't see a growth through distribution. Clearly we have some areas where we are stronger than others. So there might be some markets that are still to exploit. But one thing at a time, we have to really build the narrative and the positioning and make it understood to more people. And then this is working especially very well in the US which has become our first market. And. And we are at the highest ever since the relaunch. Highest ever since ever. I think

A

in terms of sales, good stuff. And you know, what is. I mean, you know, it's a business. What is the plan for growth and is that an objective? I mean, whether it be growing sales or volume or, you know, positioning the

B

sales is a result, it's not an objective. To me, the sales is organic. The growth and has to come from being interesting and being. Continuing to make clientele know the brand. But it's not that we. We are going to become 10 thousands of thousands of watches to be produced I think private luxury is always about a confidential business that can grow because it will be for sure something that will be more interesting for more people. The more there is an homologation in trend, the more you have a counter tre of the emulgation. So the demolition trend, which is probably today very small percentage of the industry will probably remain a small percentage of that industry, but it will continue to grow. And because luckily there are more people who have access to luxury and this is positive, but the first degree of luxury is not what we're interested in. You don't come to Parmigiano as a first watch.

A

Yeah, no doubt, no doubt. At what's your sense, you know, of your ability to gauge the market right now? I mean, it remains uncertain. Geopolitical risks and challenges all over the place. The US market, which is your biggest market now, continues to appear strong. What's your sense of the outlook overall in the short and medium term for luxury and and watches?

B

Well, I was in the States a few weeks ago and we were in New York, New Jersey, Connecticut. So I met with clients, I met with press, I met with partners. And I felt an excitement of what we're doing, which grows every year. So what I start to hear is that our audience returns their emotions with the words that they have because it's their emotions, but they're very consistent with what we hope they return to us. So it was very inspiring for us because it gives confidence and it gives ideas. So we had really beautiful week in understanding this excitement. And the excitement goes to people who are living their lives, trying to accompany themselves with something pleasant. And yes, the geopolitical world is not in a shape that is. I mean, we all would love to go back to a world that is more peaceful and more serene and less greedy and more respectful. I think this is something that everybody hopes. But at the end, people also continue to live. You can be conditioned in your private life. You have your birthdays to celebrate, you have success to celebrate, you have birth to celebrate. So you're trying to do it in a more intimate way and a more personal way. So this is what moves us. I was in Singapore and Malaysia last week. I feel the same. I know people were traveling from Hong Kong, from Shanghai, from Philippines to meet me in Singapore because we were presenting the chronograph, we were presenting the brand and they were eager with the same values, probably with a different level of maturity. Because in Asia, probably the status driven purchase is still very important. But it's also educational to make them understand the values of Private luxury that we share, then they were extremely interested and eager to learn and to express themselves even better. So I think everybody asks me, which is your customer? I never talk about customer nationalities. The customer is the value of the customer that is transversal. In every country you have this private luxury quest for private luxury and for differentiating yourself beyond money. And this is something that is growing.

A

Last thing, as I say, you've certainly had a huge impact and managed to surprise and delight people with some of your pieces. Are you going to be able to give us more and to do it again and to come up with something as delightful as the GMT or the chronograph? Can you keep it coming?

B

Well, for sure, the functions that you are tackling have to be economically valuable. So the more you go niche in the function, the less business you will be able to have. So it will be a question of trade off between the cost and the investment that you need to do and the result that you will have from that. But it's clearly we're not abandoning the idea of innovation because that's part of the philosophy that Michel has to the brand carries his name and innovation through knowledge is his mantra. And also this we are willing to continue. But you cannot imagine that the rhythm will be the same as. As the frequent rhythm that we have built up to now. Also because what we have built, we want to continue that itself. So it's a question also of the discipline that you will put into the collection. But there's not only the technical innovation, there's also the discovery of ancient finishings like the hammer dials that we saw before on Thorek and other things that are playing with the culture of watchmaking. Imagine using a dial technique to decorate a gold movement like the guillotine man done on the special editions that we did for the anniversary. These are things that are cross fertilizing, if you want know hows on different components. And you're playing with the ingredients of watchmaking in a way which becomes fresh. And this is another way of being unique, another being, another way of being deep and interesting. And. And if you do this with taste and you do this with a consistent style, you are understood. And more you're understood, more people come to you, because that's what really is important in, in our job 30th anniversary of the brand.

A

How are we marking that?

B

Well beyond the innovation of the chronograph Mysterio, which was really, we wanted really to make it for the 30s as a big technical moment, we have the Toric collection, which is the collection with which Michel started its brand. So 30 years of the brand coincide with the 30 years of the collection. And we did on the three movements that the collection is built on. The petite second, the perpetual calendar, and the chronograph split second chronograph. Three anniversary limited editions, which in exalt the artisanal finishing on the watch. And every component of these editions has been sublimated. If you want to celebrate Michel's heritage, but also to celebrate the art of wolfmaking in all its manners. Starting from the Guerche hand Guerche finishing on a gold movements on the Petit Sicund and the Petois calendar, where you. You are expanding a technique on a dial on a gold movement on the bridges. And by doing so, you're asking a gear shirt to work on a different scale. Because on a dial, the finesse of the dial gets you to a certain deepness, while on the bridges there is almost a double of the deepness that the gear shore had to do. The pattern that we chose, which is a very beautiful and rich finishing that is done through a double hand gearshoot technique. And the guillot was extremely clever in surpassing himself because the first prototype we saw in July last year, which was the submission to say, okay, we go in production wasn't satisfactory. And we were a bit shaky because we said, oh, God, we have such a beautiful creativity. And the tool leaves at its passage a line that shines very brilliantly, but not in a rough way, the light. So this was taking away the sense of refinement to the craft in a dial. It doesn't matter, because you have other techniques that you can fade this brilliance through protections and through coloring. Here the work of the glucheur is naked. So it's just gold and his passage. And he was really a hero to me. The real heroes are in the making of our industry. And he said, please give me some time. I don't want to be the one who drops such creativity. And he came back three months later with the execution that you see on the watch now, which made us very pleased because we were thinking of plan B, but luckily we didn't get. We didn't need to upgrade the plan B. And those 60 movements were made on time, and they are basically all delivered in July. So I'm really proud of what that happened. The hammer dial is another technique. You're basically playing with the gold and you're reflecting the light in a different way. And every dial is unique because it's not done by a mole but it's done by an artisan that hammers a gold surface to make it imperfect and to make it wobbly a bit like the water of a lake that reflects the light in a very delicate way and so that you elevate that emotion. And I'm very pleased that we have played with that. And up to the last which was unveiled on the exact day of the 30th anniversary was 29th of May. We unveiled the Carrion Tourbillon which chiming watch four hammers with a tourbillon. 12 odd days of power reserve. Something extraordinary is really the ultimate development that Mitchell started 10 years ago that when I joined I found in the works and it was put aside and we said, well, let's finish it because it's interesting and it saw the light for the 30th anniversary. And five pieces will be made this year.

A

Amazing. Yeah. And remind us the price on that piece.

B

That piece is 490,000 Swiss francs and that at the exchange rate internationally.

A

Excellent. Well, Guido Toreni, the CEO of Parmigiani Fleurier, thank you for joining us on the business of watches.

B

Thank you, Andy. It's been a pleasure.

A

And that's the business of watches for this episode. We hope you enjoyed. Please head on over to Hodinky.com where you can join the discord discussion and leave any comments or questions about this episode or the business of watches in general. Who knows, we might even answer your question on a future episode. Thanks for listening and see you next time.

B

Sam.