Ticking All the Boxes

Walter von Kanel: an old China hand and the numbers man of Longines

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Watch veteran Walter von Kanel knows many figures by heart. But there are two numbers that he is particularly proud of.

The first, four. Longines, the label which the Swiss German manages, is the world’s fourth best-selling brand after Rolex, Omega and Cartier.

The second is number six. Longines is one of only six watch companies – the other two are Tissot and Patek Philippe – whose annual sales exceed a billion Swiss francs (HK$7.69 billion). Von Kanel helped Longines achieved that feat in 2012.

Currently, the 185-year-old Swiss label, the oldest registered trademark for a watchmaker, produces more than a million watches a year, raking in almost 1.5 billion Swiss francs in sales.

“Omega and Tissot are from my group so I know their figures,” said the president of Longines and a member of Swatch’s group management board. “We are getting very close to overtaking Cartier to become No 3. Very close.”

Longines appeals to its customers not with a forward-looking visage, but with consistency, continuity and focus. Two of its heritage collections – Lindbergh and Flagship, first produced in 1930 and 1957, respectively – are still in production without many alterations.

However, von Kanel revealed that Longines would spring surprises at Baselworld next week. Expect a new quartz movement to mark the return of the Conquest VHP collection and a family of mechanical watches with additional features.

Whichever watches von Kanel decides to make, they are likely to become gold. “The name of the game is price segment,” he explained. Longines dominates the price bracket between 1,500 and 3,000 Swiss francs. And an entry-level piece can cost as little as 700 Swiss francs.

The pricing strategy has helped the label to buck the trend in 2008 and 2014. “It was the US shock in 2008. But thanks to our strong position in Asia, and the booming period in China, I did not lose anything,” von Kanel said.

“From 2014 onward, globally, we had a plus. China, a slight plus. Hong Kong, we lost due to the Umbrella Protest but we now do okay. Macau is improving. The disaster is Taiwan because madame le president [Tsai Ing-wen] is not kissing China. So no group tourists, no sales.”

Destiny dictated von Kanel’s career. His childhood was spent in the Saint-Imier Valley, site of Longines’ headquarters. He has worked for the company for 48 years and been president for almost two-thirds of that time.

A strong market sense and an inquisitive personality play a big part to his career longevity. He once visited the Umbrella protesters in Admiralty at 5am out of curiosity. “The tents reminded me of my military days. I wanted to see how they were organized,” he said.

The watch executive is an old China hand. When he talks about the mainland, he is akin to a professor giving a history lesson.

He can tell you about the competition between the Japanese label Citizen and Swatch’s subsidiary ETA during the quartz crisis, how he used to buy parts from a factory next to Kai Tak Airport, and about CP Wong, the Hong Kong businessman who took control of the American label Bulova in 1976.

“When I arrived at Beijing airport in 1971, an immigration officer greeted me in Swiss German. He had spent five years in the Chinese embassy in Bern. Switzerland was the first occidental country to recognize China,” he said.

“The government sent me a car. Back then, there were almost no cars on the streets, but millions of bicycles.”

At 75, von Kanel still travels to China six or seven times a year. With the business there growing over the past decade, he has all the more reason to visit a country that fascinates him. “In China, we are attractive to the workers and the common people,” he said. “I am convinced that, in my price segment, there is no saturation. There will still be big growth.”

Is he not worried about the rising sales of smart timepieces? “I didn’t lose any sales. And you have to remember I am an old schmuck in the industry. In this case, I will let you dream about those figures,” he said.

“This territory belongs to Apple and Samsung, and all those new manufacturers in China. It’s not my territory. I will not go into this business. If our group decides to do so, I think it should be Swatch and Tissot.”

The article first appeared in the Standard on March 17, 2017.

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