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“Panerai is a brand for pioneers”

“Panerai is a brand for pioneers”

Tuesday, 07 July 2020
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Christophe Roulet
Editor-in-chief, HH Journal

“The desire to learn is the key to understanding.”

“Thirty years in journalism are a powerful stimulant for curiosity”.

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9 min read

In its latest annual report, Richemont singles out Panerai for its strong performance during the financial year to end March. Since then, Covid-19 has stopped luxury brands in their tracks. We look at the state of play with Panerai Chief Executive, Jean-Marc Pontroué.

In some twenty years, Panerai has carved out a name for itself in the luxury watch sector, with production estimated at 70,000 watches a year. The brand owes a large part of this success to products with a distinct identity that tell “real stories”. The details from Jean-Marc Pontroué, CEO of this Swiss-powered Italian brand.

Richemont's annual report indicates that two of its watch brands performed well over the financial year to end March 2020. A. Lange & Söhne is one, Panerai is the other. Why is that?

Jean-Marc Pontroué, CEO, Panerai: I can answer that in one word: Submersible, a model that had been somewhat overshadowed by Luminor and Radiomir, and which since last year has become a separate line in Panerai’s collections. We gave it the Manufacture’s full focus with a clear message, and sales took off. From an exotic watch, the Submersible now represents a complete assortment in 42, 44 and 47mm diameters. It’s thanks to this option taken on the Submersible that Panerai had a very good year. At least until February. Despite the shutdown due to coronavirus which penalised business in February and March, we stayed positive for the year overall.

What is the situation today?

Each new day isn’t quite as bad as the day before. But it’s still a difficult and complicated situation. In all the years I’ve been doing this job, I have never experienced a crisis that appeared so suddenly and on such a scale. And with no real visibility, either. 2020 is a year to forget. The real question is how long before we get back to 2019 levels. It’s hard to form an opinion at this stage, although the luxury sector could pick up sooner than hoped, partly thanks to plans to restart the economy. Yes, our industry has been hard hit but we are seeing a glimmer of light at the end of the tunnel, which brings some degree of comfort when you compare with other sectors. But this doesn’t alter the fact we are no longer fuelled by growth. The equation has changed.

Jean-Marc Pontroué, CEO of Panerai
Jean-Marc Pontroué, CEO of Panerai
You have a lot of new products but no fairs to show them at this year. That must be quite frustrating.

I did miss not having Salon International de la Haute Horlogerie (SIHH) this year. If I had to make a comparison, I’d say it’s like being a politician who can’t get out on the campaign trail. The five days of SIHH are a whirlwind of meetings and contacts that enable us to take the brand’s pulse, in vivo. You can’t do that through a computer screen. I personally love this period, when you know pretty much straight away if you have the right dose of products. A successful fair also means that the year is, to a large extent, already mapped out. Watches & Wonders, the online fair that replaced SIHH this year, gave us a lot of exposure but the perception isn’t the same. It’s a placebo for a year we’d do well to forget.

Some of your customers would have been joining Panerai ambassadors for a once-in-a-lifetime experience. What's the situation there?

We’re doing everything we can to reschedule rather than cancel. The expedition with Mike Horn, for example, has been put back a year. It’s a similar situation for Luna Rossa, the challenger for the next America’s Cup which is scheduled to take place in March 2021 – except New Zealand has closed its borders until the end of the year which doesn’t bode well. That said, we’ll be offering more experiences, seven next year compared to three in 2019, both locally and internationally. This concept means a lot to me and is working extremely well. Every single one so far has sold out.

2019 was the year of the Submersible. 2020 is the year of the Luminor. Do you plan to introduce a new "theme" each year?

I do like the idea. It means teams can concentrate on a single objective. We’re focusing our energies and delivering a clear message that’s identifiable with the brand and is easier to get across to the communities we’re addressing. So, yes, we will continue in that vein except that rather than a product, in 2021 we’ll be focusing on a concept.

You've shown that you have an environmental streak, particularly with the Submersible EcoPangaea Mike Horn Edition. Is this just the beginning?

We started out in this direction 18 months ago, largely thanks to Mike Horn who has always spoken up for the environment. More globally, we can’t ignore issues relating to the state of the planet and natural resources. For Panerai, it’s about staying true to the spirit of the brand. Panerai has led the way in many different domains, whether military watches, oversized diameters, bronze cases, etc. By combining a limited edition with an “out-of-this-world” experience alongside our ambassadors, we’re again introducing a completely novel formula. The environment is no different: Panerai aims to be a pioneer throughout its organisation. The same applies to our products. We’ve already produced recycled straps, cases and packaging materials. We currently have a dozen watchmakers working on the movement. Our objective for next year is to present a 100% recycled watch. Don’t forget that Panerai’s natural home is the sea. How can we keep the dream alive if the sea’s full of garbage? It’s about who we are, hence why we are taking action on our own small scale, with the hope the entire industry will join in and that we’ll be able to establish new standards.

Pangaea Expedition, Antarctica 2008 © Panerai
Pangaea Expedition, Antarctica 2008 © Panerai
The Laboratorio di Idee has gained in importance these past years. Is innovation now a pillar of the brand?

It is. I’d even say the Laboratorio di Idee defines Panerai in the same way as its Italianess. It symbolises innovation at the brand, which applies as much to movements as to materials and service. For example, we were the first to propose an eight-year warranty across all our ranges. Now we’ve extended that warranty to 70 years on ten references. Creativity at Panerai includes a notion of service, a way of life.

Do Panerai's ambassadors - the likes of adventurer Mike Horn, film-maker and climber Jimmy Chin, free diver Guillaume Néry, even the Italian Navy's special forces - genuinely add something to the brand?

I’m a big believer in Panerai’s ambassadors provided they make sense for the brand and all the ones you name do. They were already living their lives with a Panerai watch before we met them. I’ve personally never asked them to adopt this or that attitude towards the brand. They recount their own experiences and talk about Panerai in a way I never could.

Speaking of ambassadors, what projects have you lined up for the America's Cup with Luna Rossa?

As I mentioned, dates still have to be confirmed. The partnership is particularly important to me: Panerai, Prada and Pirelli, three Italian brands united by the very best in racing boats. The America’s Cup has been described as the Formula One of sailing and, beyond the human aspect and the skill of the crews, research into materials, resistance and endurance for the boats opens up a parallel universe and real perspectives for Panerai. This will definitely be a long-term collaboration.

Over the past two to three years, the average price of a Panerai watch has increased by around 30%. At a time of pandemic and global upheaval, isn't that courting danger?

This question relates to the brand’s exclusive nature and its pricing power, meaning its capacity to increase prices without demand suffering. For that to happen, customers must want the product which is where certain ideological criteria come into play. Take the example of the three experiences we’ve offered so far. All were linked to a limited edition not exceeding 35 pieces. All were an immense success. Would it be the same for a thousand candidates, if such a thing were possible? Certainly not. The same is true of our Submersible Bronzo of which we make a thousand a year. They get offered on social media at 30% above our selling price and people are snapping them up, such is demand. It’s a matter of desirability, and the capacity to innovate and surprise. This means restricting volumes, hence why we put a limit on production with a more exclusive distribution network of 500 points of sale worldwide.

Submersible Bronzo - (PAM968) © Panerai
Submersible Bronzo - (PAM968) © Panerai
Where does e-commerce fit in?

This is a key trend that is gaining traction including among watch brands, who were relative latecomers. Online retail clearly won’t replace direct sales, but it will contribute to business. It’s something we at Panerai believe in. In fact we just launched Pamcast, an online platform for editorial content inspired by broadcast networks. We have so many stories to tell, genuine stories about the brand, its military past, its connection to the sea, interactions with its ambassadors, and so much more, that we’ve hired a programming manager to put all this together.

What is Panerai's strategy for the short term?

To use a metaphor, I’d say we’ve turned off autopilot and are using manual controls to best navigate an environment with very little visibility. We also have the good fortune to be part of a large group with a powerful identity. Panerai is a brand for sailors that knows how to steer its way through a storm. Unlike some others, we have every chance of coming out on top!

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