If you were one of the 99 people who bought a limited-edition Excellence Marqueterie watch by Swiss brand Louis Erard, know this: The company does not make any money on these watches, which feature wood-marquetry dials hand-crafted by Swiss artisan Bastien Chevalier. In Singapore for the launch of the Time-Eater II, the latest collaboration between Louis Erard and Russian independent watchmaker Konstantin Chaykin, the company’s delegate board member Manuel Emch breaks down the math for The Peak during an interview.
Explaining the cost of producing the Excellence Marqueterie watches, which retailed for 3,900 Swiss francs ($5,979) each, Emch says, “Each dial costs me 1,200 Swiss francs; that’s what I pay Bastien. I add the dial to the watch, and of course, I give our retailers some margin. So for the watches we sell through our retailers, I lose money. When I sell them directly (through Louis Erard’s online store), I make a little. So in the end, (my profit on this model) basically works out to zero.”
Why, then, bother producing these timepieces, where each dial requires the artisan to cut and piece together more than 70 pieces of wood to form geometric shapes? With a smile, Emch says, “It’s about building brand equity.”
He would know. Since joining Louis Erard in 2019, the 51-year-old Swiss horology veteran has executed a remarkable turnaround for the brand. Speaking with the confidence and eloquence of a seasoned storyteller, Emch, who previously headed premium brands Jaquet Droz and RJ-Romain Jerome, shares that Louis Erard had made a loss of 10 million Swiss francs when he first arrived.
However, seeing great potential in the brand — whose name actually dates back to 1929, although it has been through several incarnations — as well as its “small, dedicated” team, Emch decided to take on the challenge of revamping it. He also saw an opportunity for Louis Erard in the affordable-luxury segment of the watch market: “There were very few brands with a boutique approach in this segment.”
Within four years, the company has become profitable, thanks to a winning formula of high-profile collaborations and metiers d’art offerings (such as the wood-marquetry timepiece) — attributes typically found in the high-horology space but which are offered by Louis Erard at almost unbelievably accessible prices, mostly ranging from 2,000 to 4,000 Swiss francs. To offer quality Swiss watchmaking at these price points, Emch trims the fat where he can, sourcing for the most efficient and reliable solutions where possible — for instance, the brand mostly uses mechanical movements made by Swiss specialist Sellita.
Produced in limited editions of 178 pieces, Louis Erard’s collaborative timepieces with famous names such as watch designer Alain Silberstein, watchmakers like Vianney Halter and Chaykin, as well as design studios such as Atelier Oi, have been a runaway success. They often sell out quickly, and — unusually for timepieces in this price segment — can even fetch multiples of their retail prices: At an auction less than four months after its initial launch, a two-piece Time-Eater set comprising the first collaboration between Louis Erard and Chaykin sold at auction for 20,000 Swiss francs — 2.5 times the set’s retail price of 7,900 Swiss francs.
Of the importance of its partnerships, Emch says, “The collaborations bring visibility and credibility to the brand.” These high-visibility projects also allow Emch to grow Louis Erard’s metiers d’art offerings while maintaining a healthy balance sheet. He explains, “For pieces like the Chaykin watches, I make more money than on the Marqueterie. They sell at around the same price, but they both add equally to our brand equity. For pieces like those by Chaykin, there is a lot of excitement: People go crazy and line up for them.
“So on certain products, I make more money, and on certain products, I lose some. At the end of the day, what is important is that at the end of the year, with our product mix, we are profitable.”
A matter of value
However, Emch emphasises that Louis Erard is not competing with other brands on price but on value. The brand’s latest project with Silberstein includes a tourbillon timepiece, which is sold as part of a two-piece set. The set retails for $33,333, a fraction of the prices of tourbillon timepieces by high-end manufactures.
And this is only the beginning. Says Emch, “We have only rolled out 10 per cent of the strategy.” While the brand has already produced an impressive list of collaborative timepieces and watches featuring metiers d’art like Grand Feu enamel, guilloche, and marquetry, Emch shares that there are still many crafts and partnerships the company has yet to unveil or embark on. He also has many plans for Louis Erard’s sports-watch category.
For now, though, thanks to the work that has been done, Emch — who also works with other brands such as Russian watch company Raketa — has the luxury of time to chart the brand’s next course of action. “We have many other things in the pipeline. But we will see how things evolve and how we can build around them. The business is still (relatively) small, but things are going well, and we have reached a certain cruising altitude.”