Unusually for a watch company and prior to introducing the brand’s latest ‘Anniversary’ collection, Alain Spinedi gave a blow-by-blow account of how Louis Erard came to position itself in the Haute Horlogerie sector with mechanical watches surprisingly priced in the 600 to 2500 Swiss francs price range.
Having found the finance for the development of the company, Spinedi prepared a business plan based upon the fact that Switzerland’s export of mechanical watches had increased regularly since the year 2000 (36% by 2005) with the average unit price also increasing during the same period and looking as if it would continue along the same curve. Although it was generally accepted to be a boom industry, not every segment of the Swiss watch industry was profitable and, as Spinedi believed, the overall situation of a loss of volume but with increased profit was not a healthy one.





Choosing a niche
Spinedi could see that the big groups – Swatch, Richemont and LVMH – and Rolex, were consolidating their position and the stronger brands were increasing their market share, this in a highly competitive market with more than 400 active brands. So in order for the retailers to accept taking on another new brand, he would have to identify a market niche that was either poorly served or neglected.
The answer was found in the mid-priced range of mechanical watches, i.e. 600 – 2000 francs (see diagram below). Having established that the current trend for watch brands was to try and be a part of the upper section of the price pyramid, Spinedi had no intention of either battling it out with the names in segment 1 or 2, nor in the segments 5 or 6 - large volume or the fashion brands. That left categories 3 and 4 as possibilities and with the realization that it would be difficult to obtain a significant market share in 3, Louis Erard was logically placed in the vacant segment 4.





Régulator
Stainless steel or 18 carat rose gold regulator watch (40.3 mm) equipped with a hand-wound Calibre Peseux 7001 modified by Louis Erard. Hour at 12 o’clock, central minute hand, small seconds at 6 o’clock. Sapphire crystal front and back.


The competition
Having identified the competition in this category as: Oris (well represented in Asia, but feeble in other markets and 20% more expensive than Louis Erard); Frederique Constant (large range of watches from 345 to 35,000 Swiss francs, 65% quartz and 20% more expensive than Louis Erard; Epos, Armand Nicolet, Glycine, Mido, Zeno, Hamilton etc. (no significant presence on the Swiss market, no real strategy for a worldwide distribution, generally positioned at higher prices than Louis Erard, not Haute Horlogerie designs.
The result, after further research into the various categories of retailers, was the successful launch in 2003 of the brand’s first collections: 1931 and Heritage; in 2004 La Carrée; 2005 La Sportive, and earlier this year (2006) L’Asymétrique. The result is a fine range of well-designed Haute Horlogerie mechanical watches for men at affordable prices – 600 to 2,500 Swiss francs. (Focussing on men’s watches was preferred since men are more product orientated, whereas the ladies tended to go for a name.)




Phase de Lune
Stainless steel or 18 carat rose old watch (40.5 mm) with hours, minutes, seconds, day, date and moon phase indications. Opaline or black skeleton dial with the steel model and black skeleton dial with the gold model. Moon phase at 6 o’clock and day and month indicators at 12 o’clock, sapphire crystals front and back.


The new 1931 Collection
This year being the 75th anniversary of the origins of the Louis Erard brand, it recently launch the appropriately named 75th Anniversary Collection. There are four different models: the Régulator, Petite Seconde, Phase de Lune and the GMT each available in either stainless steel or, for the first time, Limited Editions of 75 pieces in 18 carat rose gold.
Created with elegance and, of course, mechanical movements, the four timepieces illustrate just what can be achieved in the Haute Horlogerie sector at prices that almost anybody can afford.
The Régulator is equipped with a Calibre Peseux 7001 hand-wound movement modified by Louis Erard; the Petite Seconds is also equipped with a Calibre Peseux 7001 hand-wound movement modified by Louis Erard; the Phase de Lune (Moon-phase) has an automatic ETA 2824-2 movement with a Dubois Dépraz 9000 module; and the GMT has an automatic ETA 2892 movement with a TT651 module. The stainless steel models range from 1,393 to 2,395 Swiss francs and the 18 carat gold versions range from 4,750 to 5,950 Swiss francs.




Petite Seconde
Stainless steel or 18 carat rose gold watch (40.3 mm) equipped with a hand-wound Calibre Peseux 7001 modified by Louis Erard. Hours, minutes and seconds functions, opaline or black skeleton dial with the steel model and black skeleton dial with the gold model. Sapphire crystals front and back.

GMT
Stainless steel or 18 carat rose old watch (40.5 mm) with hours, minutes, seconds, large date and second time zone. Large date at 12 o’clock, second time zone at 6 o’clock, opaline or black skeleton dial with the steel model and black skeleton dial with the gold model, sapphire crystals front and back.


Although the success of the company has much to do with the meticulous research and planning of Alain Spinedi, the brand’s CEO, the true judgement of the brand must be in the excellent and varied complications of Louis Erard’s mechanical watches and their Esprit du Temps at highly affordable prices.


Source: Europa Star December-January 2007 Magazine Issue