Jérôme Lambert: Before I say anything else, I would like to state that the 'rumours' you refer to are false. If the market is now difficult for all of us, I can affirm to you that Jaeger-LeCoultre, with its new products, is doing quite well. And, contrary to what you have published, Jaeger-LeCoultre is no longer monoculture. The Reverso represents 65% of our sales today, and not 80%...

Europa Star: A number of our interlocutors have indicated a rise in the prices of your collections, a rise that contributes, according to them, to moving Jaeger-LeCoultre away from its excellent price/quality positioning.

J.L: Everything is relative. Our entry-level price is about 2200 euros. In relation to the entry-level prices of our competitive brands, it is, I believe, quite reasonable. Having said that, it is true that our prices have risen, but the entire market has moved upwards. It is to the market that you should ask this question. The entrance of peripheral but expensive brands into the race has distorted the data. Jaeger-LeCoultre is and remains a brand that offers true value for what it costs. Take, for example, the Master Compressor with all of its new technical aspects! At 5900 euros, it is a very good price, an excellent price/quality ratio. In fact, each of our products is very competitive in relation to comparable offers in the marketplace. With prices ranging between 2,500 and 20 to 30,000 euros, our positioning is perfect, in my opinion.

ES: Isn't it also because you want to enlarge your client base, up to now traditional and essentially masculine, that you are expanding your offer?

J.L: Our general client base has clearly increased in proportion to the increase in our offer. However, our production of ladies' watches was started a long time ago. You only have to look at our traditional jewellery lines. Yet, it is the Reverso Duetto, whose success is remarkable, that has anchored our presence in the feminine market. Women's watches represent today, and for the last three years, exactly half of our sales! The idea was to bring mechanical timekeeping to women. In all of our feminine products, we have never overlooked the purely watchmaking qualities of the piece.

ES: Historically, Jaeger-LeCoultre was a brand before becoming essentially a supplier, then went on to again become a brand over the last fifteen years. Don't you run the risk of seeing your development as a brand handicapped by the necessity of producing movements for other brands in the Richemont group?

J.L: We are continuing to deliver movements, of course, but this does not handicap us at all in developing our own brand. Each brand within the Richemont group has or will have its own distinct teams in place. It is up to each brand to develop its own means of production and to verticalize its operations. The potential of Jaeger-Lecoultre, not only in its capacity as a producer but also as a brand, is very great. Who would want to stop this potential? Obviously no one. The long-term is our daily leitmotiv. Considering the price paid for us, a long-term policy is based on economic necessity. The Richemont group is giving us time and I am under no greater financial pressure today than I was yesterday. The people who manage the group know perfectly well what the watch industry is like, and they don't demand unrealistic goals. On the other hand, they understand Jaeger-Lecoultre's enormous potential in research and development that will allow, precisely, to undertake other projects with implications for the future.

ES: Should we then consider that these 'rumours' were due to those retailers that you excluded from carrying the brand? Are they merely 'sour grapes' because you have radically 'cleaned' up your distribution network?

J.L: It is true that we have rather severely 'cleaned' up our distribution network. Today, there remain only 850 sales points in the world. To take only the example of Switzerland, we reduced our sales points from 200 to 105 and are further reducing them to 85. It is not out of pleasure that we have done this, but in the view of maintaining our quality and rarity. The arrival of Richemont has taught us a lot in this domain. Now, we have our own teams in the field. We have obtained a greater closeness and understanding of our markets. We have our own subsidiaries but in some cases, we are keeping those people in the field who have proved themselves with our brand. In this manner, we have reconstructed our entire distribution in Asia. As another example, we have formed an autonomous team in the United States. In two years, the USA market has become one of our three best markets, with a hundred sales points. But we are not dogmatic about our distribution. Where it is better for us, we keep the relationship with our agents.

ES: What is the size of the manufacture today? And, where are you with your expansion plans?

J.L.: The Jaeger-LeCoultre manufacturing facility in Le Sentier, is a huge ship of 900 people. On board, there are 40 different trades, 20 technologies... These teams are the result of our determination to have the best possible mastery over the best technologies and to ensure our ability to maintain and develop our savoir-faire. We are integrating all those trades that we intend to conserve and develop, as exemplified recently by the stone-setter Kirchoffer who brings us his unique techniques. As for our expansion projects, which involve mainly regrouping our activities that are currently spread out in the Vallée as well as certain movement-related activities, they are scheduled for 2005-2006. We are and will continue to be prudent, preferring to wait until global economic conditions are optimal.