— Mr. Studer, in Russia there is a crisis, yet you are opening a company store in Moscow. Is this defiance?
— No, it’s calculation. As precise as our watches. First of all, ORIS isn’t afraid of anything: that’s not in our mind-set. We carefully consider the finer points of marketing our brand in any given country. Secondly, it is not a spontaneous move but rather one which we had deliberated.The project had beengerminating, not for one or two years, but a lot longer. ORIS has been on the Russian market for almost 20 years, and until now, our watches have been represented in 80% of multi-brand salons in Russia. Having compared sales with demand, we took the decision to open our own single-brand stores. And this is not a one-off. The company plans to open 3-4 single-brand salons in Russia’s big cities every year. We started, naturally, with Moscow where there is the greatest demand. In this, we are no different from our competitors. Incidentally, we decided on this a year and a half ago when there wasn’t any financial crisis. The crisis had no bearing on our plans, although Russians’ buying power has, of course, decreased. On the other hand, rent and advertising costs have gone down. ORIS is a brand which has been promoted successfully in a time of crisis, too. We offer good quality, interesting functions, and a fair price. The most important thing is to keep control of as many of the details which go along with this process as possible. And to move steadfastly towards our objective. It doesn’t matter whether this proves to be the height of the crisis, or not.
Furthermore, we are opening our boutiques not just to sell watches. Doing so demonstrates the brand’s status and allows us to display the whole ORIS collection under one roof. A single-brand boutique is, in its own way, the home of the brand. And to have a home in such a megalopolis as Moscow, we consider an absolute necessity. This is a very good start for us. After all, in the watch and other luxury goods industry, the strategy for opening boutiques is somewhat different. If we were trading infaster-selling goods, we would adopt another strategy. ORIS is aself-sustaining company, which funds its own expansion. Now is the time to expand in Russia. We came to this conclusion ourselves, and we think that it is the right decision.
ORIS was founded in 1904. Since the company was acquired by its management in 1982, it has been privately owned by the members of the Board of Directors. In 1985, long before a widespread advertising campaign for mechanical watches began, ORIS formulated a strategy in which it focused exclusively on the mechanical. And it continues with this strategy to this day.
— But watches, even the very best ones, are not a basic necessity. Is it not disconcerting that Russia is witnessing a fall in sales for goods in this category?
— No, it isn’t. At the time that the exchange rate for the Swiss franc almost doubled, the company, like the majority of European watchmakers represented on the Russian market, raised its prices here only by 50%. Prices for ORIS products in Russia were always close to those in Europe. But in 2015, due to the currency fluctuations, the company set prices which are substantially lower than in Europe. Considering that we operate without intermediaries, the best possible place to buy our watches at the moment is in Russia. By the way, not very many watchmakers have the exact same prices around the world. It is far more important to find the right approach towards the buyer. If you were to raise prices by 20% following the Swiss franc’s rise against the euro, demand would fall immediately. It is not the customer’s fault that the currency rates are so unstable at the moment. This is why in the Eurozone countries we raised prices by 7-8%. But currently, prices for ORIS are 10-15% lower in Russia than in Europe.
I think that such a pricing policy in an unstable financial situation will pay off. We actually expect a drop in sales in Russia of 25% until the end of the IVth quarter of 2015. But we are certain that this drop will berecovered as soon as the start of 2016.
— What do you base such certainty on?
— Technically, the opening of the ORIS boutique took place six months ago. During the whole time, we were testing the market. And imagine, even as the crisis was in full swing, in Moscow we sold all models of watch across vastly differing price ranges – from inexpensive models to the exclusive ones. The classic collections, the Aviation collection, Motor Sport, and Diving. We became convinced that there are a lot of ORIS watch collectors in Russia. After this, we decided to open the boutique officially and to develop our own chain here gradually.
— When you opened your boutique, you presented a new collection of watches issued to commemorate the 111th year of the company. Not only this, you did so before the official launching of the new collection at the global exhibition BASELWORLD 2015. Why was this?
— ORIS produces watches for those who have a passion for the mechanical and are looking for genuine contemporary values. The collection is being developed to meet the customers’ desires in each of ORIS’ four areas of activity: motor sport, diving, aviation, and culture, in accordance with the slogan “Real watches for real people”. But it is precisely in Russia, in my opinion, that such people live. They are the ones who buy our watches…
ORIS’ sales distribution looks like this: Europe - 35%, Asia - 51%, America - 11%, Oceania - 3%. I think that the economy in Russia will recover, and that it wouldn’t be a bad thing if Russia accounted for no less than 10% of ORIS’ turnover. This is entirely realistic insofar as the proportion of the population which is economically active is huge. They may have both premium class watches and less expensive ones with certain functions like measuring altitude or depth. It is normal for someone to have several watches for different occasions. ORIS very much belongs to one of the few Swiss watch brands which is capable of offering both one and the other. You can wear one whilst doing sport, and wear another when going to asociety function. We make different watches of a high quality at understandable prices.
To make big money in the watch business, you could produce one model and promote it aggressively in China. That is not our strategy. And anyway, business is not doing as well in China as before, and people’s taste is constantly changing.
— What taste do Russians have? What do they like to buy most of all?
— Strangely enough, watches for scuba diving. This is usually the case for countries lapped by warm seas: Thailand, Malaysia etc. 80% of sales there are precisely those underwater models. But the popularity of such watches in Russia is to do with the fact that there are a lot of divers here who love to explore the underwater beauty of the Red Sea over in Egypt. ORIS offers a varied range of watches which enjoy popularity all round the world. Watches with adepth gauge, helium valves etc. The company is fairly active amongst the diving community in Russia. We have been a partner of the “Golden Dolphin” exhibition in Moscow for the last four years. It is attended by thousands of divers who also show an interest in our watches.
Studying the Russian market has encouraged us to expand our range of ladies’ watches. ORIS was originally exclusively a male, conservative brand. Our philosophy is to produce mechanical watches just for men. But, having analysed the demand in Russia for womens’ mechanical watches made by other Swiss brands, we have launched a line of watches for ladies, some of them encrusted with diamonds.
— How many ORIS watches were sold in Moscow over the boutique’stest-run period?
— We are very Swiss when it comes to figures… It is not customary for us to talk about numbers of sales, or turnover of goods. I can only say that the amount of investment required to open one shop is between 300,000 and 500,000 Swiss francs. I think that currently in Russia it will be a little cheaper bearing in mind the depreciation in the value of the rouble.