There are some personalities in the watch trade who are always entering our orbit. The two CEOs we profile elsewhere in this section are cases in point, but A. Lange & Söhne presents a rare counterpoint. Over the years, we have featured the instantly recognisable Tino Bobbi and the charismatic Anthony de Haas many times. Somehow though, the top gun, Mr Wilhem Schmid, has always eluded us; indeed, not since Jerome Lambert was CEO of Jaeger-LeCoultre and A. Lange & Söhne have we managed to grab any official face time with the top executive at the Glashütte company. Happily, that changed this year, and thus we have to spend a little more time here to introduce Schmid.
After eight years at the helm of A. Lange & Söhne – he replaced Lambert, who is now Richemont CEO – Schmid is certainly no stranger to watch collectors around the world. While A. Lange & Söhne is still not a powerhouse on the order of Patek Philippe for example, the standard-bearer for German fine watchmaking has built up an admirable cachet in the 25 years since it relaunched. The recently released anniversary watches showcase this.
Today, A. Lange & Söhne is still a very small production firm, producing just about 5,000 watches annually. Schmid is very clear that he does not see that changing at all, which is entirely in-line with the expectations of collectors. At the same time, Schmid is passionate about the art and craft of watchmaking itself, and in drawing connections between the world of horology and other areas, especially cars. This is only to be expected as Schmid was an executive at BMW prior to joining A. Lange & Söhne, and watch collectors of a certain stipe have always been drawn to both cars and watches.
“I worked in the car industry but I spent all my money on watches!” says Schmid, with a laugh. Now the tables have turned of course. Schmid works in the watch trade, and has invested A. Lange & Söhne’s resources into partnerships with the Concorso d’Eleganza Villa d’Este, the Schloss Dyck Classic Days and the Concours of Elegance Hampton Court Palace. “People who buy fine watches have an interest in vintage cars because they see the similarities. You want to expose your brand to people who suit your values and the concourses show cars that were made by hand, that require careful care to maintain in good form. So it is really about appreciating the work of skilled craftspeople,” he continues.
The point of cultivating a love for the work of extraordinarily talented craftspeople comes up again and again in conversation with Schmid. He clearly feels that the romance of watchmaking is about the passion people have for the enormous amount of love and labour that goes into every single A. Lange & Söhne watch. Indeed, one could even extend that right down to each and every component of each and every watch.
Before we get to that, we have to understand the journey that Schmid has been though with A. Lange & Söhne because he tells us that as CEO, he never has a boring day!
You’ve been at the helm of A. Lange & Söhne for many years now, which is quite unusual these days in the watch trade. What does that feel like?
It has nine years (by the time people read this). In the time I’ve been here, things have changed a lot. If I compare the industry now and back then, but what I like is that we are still the same. I opened this (ION Orchard) boutique (originally) and now I’m here to reopen it (after the renovation)! In fact, this boutique is the first to have our new look – it beat Dubai by a month!
We have not lost our identity in the course of these changes; our values have not changed, and neither has how we treat our clients and our own team. I’m very proud of that because a lot of brands have lost their values in the course of changing (for contemporary realities).
In my first interview (as CEO), I was asked what we think about selling watches online, and if we would ever do it. I said that we don’t have such plans, but that I was very sure that watches would be sold in the digital world eventually. I can remember the comments – that I was losing it, and (that I was showing how green I was). Of course today watches are sold online – if you are asked this question today and you say no you would look like you (are the one who is losing it).
One thing that has certainly changed in the world of luxury watches is the method of communication…
Things are a lot more professional and diverse today, and omnichannel is something you have to master. You have to make sure that your digital footprint is strong enough. You also have to reach your clients in the right way, you know. Younger people, they don’t get their (information about watches) from magazines – they don’t know what a magazine is! It is not (our preference) but theirs – we have to adapt to their preferences and not vice versa.
“Are watches a great investment? I don’t think so. If someone offers you the prospect of trading watches to make money, you have to ask why that person isn’t only doing that.”
But is the messaging behind luxury itself something that needs work?
I can understand to a certain extent that the younger generation doesn’t feel that certain (aspects of what might be considered luxury lifestyle), especially ostentatious things, are admirable. A. Lange & Söhne is not ostentatious at all. We are making something that will be around for a long time – something that will outlast us. It is not really a consumable. Our watches are products put together thoughtfully by skilled people – yes we use rare resources but we do so carefully. Could we do a better job of communicating our values to a new generation? Absolutely, and so could the entire industry. I’m glad to say that when I am in our office in Berlin, we have a lot of young people working with us. I’ll be honest with you and say that my own media consumption habits have not changed – I still enjoy magazines! But I must not think about me and my peer group. I have think about the younger generation, and how to present what we do to them. They can decide if it is relevant. It is not up to us. If they don’t know us at all, we will for sure not be relevant at all.
As far as watches go, the idea of having an object that will pass from generation to generation is hardly a new idea!
I’m not so much into that! I am always joking that you can keep something for the next generation or you can wear it yourself! I have (teenage) kids so (I can tell you) they understand about quality. Are they interested in how quality products are made? Yes, they are. Do they care if the products are made in a sustainable way, that does not damage the environment…yes they care. Now, they are my kids so of course they have the exposure, but it leads me to think that we only have to find the right channels to show who we are and what we do. It is about perception and appreciation of quality, and appreciating the work of skilled people; it is not a question of the age (of the client base).
“Watches have charisma because they are made by people. It is the difference between art and wallpaper.”
What about the idea of the value of watches? We have seen more interest in the market in discussing watches from the perspective of investing.
Are watches a great investment? I don’t think so. If someone offers you the prospect of trading watches to make money, you have to ask why that person isn’t only doing that. What I believe is that if you have something that is rare and sustainable, that you enjoy wearing and using, then you might expect its value to (remain undiminished) or even for it to gain in value. Take a mobile phone – in a couple of years (what was once a new phone) is only worth the sum of its parts. Our watches are different; they are not consumables; they are here to stay. Now the value proposition, whether it is increasing, staying flat or even decreasing, that can change over time…depending on perception.
How people perceive watches does change over time, as you say, so what do you think of trends that shape current thinking?
Let me put it to you this way: do you remember what you were wearing 25 years ago? How about your TV set? Now if maybe it was a work of art that was on your wall – assuming you stay in the same place – then it is likely still on your wall. There are certainly watches that are part of the zeitgeist – you will enjoy them today but whether there is any longevity, it remains to be seen.
Then there are watches that are classics, like a three-hander that you might have inherited from your father; maybe you don’t wear it every day but you will wear it some of the time. It is still something you appreciate. This is something important for watches because if a watch is fashionable, it will go out of fashion, that’s for sure; if a watch is not a part of fashion then it will never go out of fashion. Maybe the size trend is a good thing, as far as trends go. So watches today being 40mm or 42mm; some people go crazy about 34mm watches but I think to be honest that men don’t wear this size anymore! I struggle with my first 1815 from years ago – it was a tiny little watch! (Schmid is referring here to the 35.90mm size of the 1815 when it first came out in 1995).
With regards to ambassadors, you don’t use any but you do have an endorsement from a very prominent watchmaker…
I think we have a lot of ambassadors, with one big difference – we don’t pay them. If you see people wearing our watches you can be sure they paid for it. The best thing is when you put your money where you mouth is (so to speak).
The understanding that real people worked on the watches, carefully finishing tiny components, also influences the value proposition no?
Look, (the A. Lange & Söhne watch) is the product of hands – of handwork. There are machines involved, I’m not denying this, but it is primarily a product made by hands. A typical question I get is will we grow (in terms of the number of pieces we do), and yes we grow every year but we can only grow to the extent that we can expand our capacity – without losing what we stand for. We produce a few thousand watches with 500 people; could I make more if I had more people? Yes, but it is hard to find another 500 skilled watchmakers!
Sometimes I wonder, when I think of Swiss watchmaking, how they do it. I’ve been to some of the manufactures and they are not that much bigger than us but they produce 10 to 15 times the number of watches we do. I wonder if there are really people involved. If you pay so much money for a watch, as you would for our watches, you want something made by real people. I think people want to be a part of this world, where products are made by skilled people by hand. You want to be part of that romantic journey. Watches have charisma because they are made by people. It is the difference between art and wallpaper.