I visited with the owner of Guillard, Bernard Metzger, in his Lausanne city centre store. Despite the challenges facing his business, Mr. Metzger remains optimistic and upbeat about the watch industry in general and his stores' prospects in particular.

ES: How's business?

BM: We have good and not so good periods. Lausanne has been losing tourists, we get mostly business people. The real tourists that we had 20 years ago, who came to enjoy the countryside, are gone. We get the day tourists and the people who drive through, but they are not looking to buy a watch.
The price of watches from country to country in Europe is about the same. If a German man goes to France, the price is the same as it is in Switzerland. There is no price advantage any more and that is hampering us. The tourists used to buy a lot of watches, but they don’t any more. We need Americans, Asians and others. For most tourists, Lausanne is just a stop over, not a destination.
The local business is all right, but we can't live on the local market alone, we need the foreigners to survive. We now sell as much jewellery as watches, and that's good for us because it safeguards our business. Watches, except the real high-end, aren't really strong right now. People from other countries can buy the watches in their own countries. Sometimes, in those other countries, you can even get a better price.
20 years ago, there were only specialized watch stores. Now, the manufacturers have their own boutiques. Everyone seems to have their own stores. We have so much competition that it has become very difficult to survive. Many retailers have closed down.

ES: How have things changed in the watch industry?

BM: Especially in the top watch brands, you don't have the old guard there. It's not about partnership any more, it's about strategy. There used to be gentleman's agreements. Rolex is one of those that still keeps up the idealistic attitude, if you are fair with them, they will stick with you and help you. Others, if they can find a shop near you that will do better, they will do it. I think it's killing the business.





ES: Is the grey market an issue in Switzerland?

BM: We run into some grey market here, because you can find anything today. There are plenty of French and German sites that sell on the Internet. There are many shops that do grey market business. There are shops that are not agents of any company but they can get all the watches customers want. The problem has always been there, but it's growing in my opinion. Cartier is one brand that is really trying to clean the European market.
Most of the retailers who participate in the grey market are pressured by the brands to take all these watches, and the retailers want to keep the brand, but they cannot sell these watches, so they call around and see how they can get rid of them. The manufacturers know where these grey market watches are coming from. For many manufacturers, sold is sold and many of the manufacturers sell themselves to the grey market. If there is no big player in the market willing to stop it, nothing is going to happen.

ES: Is discounting common?

BM: More and more customers are asking for discounts. We don't give much discount because our margins are so much smaller. We have costly infrastructure and we have to have a certain margin to survive. When the manufacturers cut our margin, it makes it difficult to make a profit.
The other retailers don't really discount. There are some retailers who give discounts, but most retailers know they have to protect their margins. It's the grey market we have to worry about - they sell the same watches at 25% or 30% discount.
I have also heard that distributors are under the same pressure from the brands to take a certain amount of watches, and they have to sell the watches as well.

ES: What is your relationship like with other retailers?

BM: Our relations are good. We had a local retailer association before and every part of the canton had its own association and the umbrella association. Now we only have the cantonal association. We can now open on Saturday for one more hour. It would be interesting to know the position of all the other watch shops, to decide what we want to do. There is no real local interaction anymore. You can call your friends in the business, but there is no consensus.

ES: What do you like about your job?

BM: I am passionate about my business. I adore it, even though things have changed. My biggest regret is that it's no longer a handshake business. It's all contracts. The administrative structure is now so big. There was a common aim in the brands, the quality of the watchmaking, creating an image for the world, and today it has come down to bare business, how can I kill the other companies and take their place. It has become Americanized, in a way. That is unpleasant for someone not born in this system. I am quite unhappy about this. It is much easier to do business with a handshake, every one makes a living. Now, I have to be careful and more circumspect.

ES: How do you market your store?

BM: I do a lot of advertising. Before, we did like the rain, we went over everything. Now we do it like a hosepipe, where we are more targeted. We have succeeded in moving the company up-market a little bit, the image of the company and the products we sell. We sell more high-end products. Before we sold an enormous amount of medium-class watches and jewellery, but now the competitors are too many. In that market, everyone goes after the price. We decided to move up, little by little so we wouldn't lose our customers. We had to educate our customers and create new customers. Some customers are very loyal while others are just looking for the best price. You used to have family jewellers but not anymore. Customers go from place to place to buy watches. Today, people want to buy now. They want it all now. Instant pleasure, I want it now, they don't want to wait. You need to have a bigger stock or they won't buy it.
My profession has changed a hell of a lot over the past ten years. If you aren't prepared in your head to accept the changes and adapt to them, you will go under. For a traditional watchmaker, who is a good worker and knows his trade, but doesn't have the business side, he can't get anywhere. It's dreadful, but that's the way it goes. It's society upside down. It's the people who do the good job that should be on the top, not the ones that talk the best game.

ES: Who is your customer?

BM: My customers are predominantly local women. Women are more liberated, they have more money and they do the buying. I'm very happy with that. Within four shops, every shop has a different kind of customer. We refuse nobody, we treat everyone as a potential customer and a friend of the house.

ES: How important is customer service?

BM: Extremely important. This is one of the only advantages we have over the manufacturers. That's what we have left, they have the money and the brand, but we are close to the customer. Even if they make their own brand store, they are not closer to the customer. They react differently than we do with small shops. We are more human and closer. That's why I insist on good, quick after sales service. You have to sit in the pocket of the customer and be ready when he needs you.

ES: How do you handle repairs?

BM: We do watch repairs here and we have a jewellery workshop. The image of the store suffers if we can't get service. I sold the watches, I accept the repairs and for my customers I am the idiot who can't get their watch fixed. I have gotten rid of brands that don't do after sales service well. I can't ruin my image. I am considered a good shop and a good watchmaker. I can't cope with a bad image given by bad after sales service.
I don't know how some of these brands can be so bad. Maybe it's arrogance; they feel that they are above everyone. They always have an explanation. I am a trained watchmaker and I take courses at the brands. I think the structure they have is too administrative, I don't know if they have the right system.
Sometimes, I order spare parts and I get the wrong thing. They aren't watchmakers anymore, they are just order takers. A watchmaker would look at the part and check it, but this is not the situation anymore. Switzerland is not Switzerland any more. It used to be a place of excellence. When things go too well, everyone falls asleep.

ES: Are you optimistic about the future?

BM: I am optimistic. I think the watch business will be good worldwide. I think there are so many countries that still have room to develop their watch market. The global watch market, I have no doubt will be very strong.
For the retailers, I don't know. If the retailers are good, they will succeed. I think retailers have to work together to have more strength. Even if you are a big player in the market and have a lot of muscle, the brands have more money and more muscle.
I think we should come back again to a strong retailer association - people who have the same brand should work together to have more muscle. My four stores mean nothing to the big manufacturers.

ES: What is your favourite watch?

BM: My favourite watch is the Patek Philippe 5960P Platinum chronograph. I am wearing a Bulgari today, which is my daily watch. I like many watches, so I often change my opinion.


Location: four stores in Lausanne, Switzerland
How long: established in 1858, Metzger took over ownership in 1990
No. of Employees: 23
Average sale: CHF 320
Price range: CHF 60 – CHF 100,000
Best selling watch: Patek Philippe
Watch brands: Baume & Mercier, Bulgari, Cartier, Chanel, Chopard, Ebel, Frederique Constant, Gucci, Longines, Louis Erard, Maurice Lacroix, Patek Philippe, Rado, Swiza, Tissot.
Email: [email protected]
Website: www.guillard.ch


Source: Europa Star October-November 2006 Magazine Issue

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