We sat down with the Greubel Forsey co-founder to better understand just how a watch can justify a price tag that stretches into the hundreds of thousands and beyond
By Chris Hall
Earlier this month (September 12th to be exact), we attended the Horology Forum at Christie’s auction house, which saw Dubai Watch Week bring a little of what it does so well to London for a couple of days. (The main event itself isn’t taking place this year, taking a year off like a kind of horological Glastonbury before returning in 2019). The two-day agenda was filled with talks and panel discussions featuring a cross-section of the watch world’s most interesting characters, from CEOs and watchmakers to journalists.
In the very last talk of the second day, titled “The British Roast”, the audience was invited to put any questions we liked to four representatives – of sorts – of the British watch industry. On the panel were Rebecca Struthers, Roger Smith, Richard Stenning and Stephen Forsey. After some lively back-and-forth between the panel and the audience (mostly journalists, eager to probe a bit further than the industry usually allows, and emboldened by the format), the question came: “What one thing about the watch industry really drives you mad?”
The answers were illuminating, revolving mostly around dubious marketing and simplistic journalism (Roger Smith’s words on Arnold & Son and Richard Stenning’s take on “what’s next?” journalism are highlights to be revisited another time). But the one we’re going to focus in on today is Stephen Forsey’s answer:
“I hate it when you’ve worked on a watch, perhaps for years, and put everything into it, then you’ve had a presentation with a journalist, talked about every element of the watch in detail, and they write a story that just says ‘this is a $600,000 watch!’ For 99.999% of the population of the planet, it’s unthinkable and vulgar to imagine a watch for $100,000 let alone multiples of that. When they only thing they take away is the headline price, and the picture, consciously or not, they make it look very vulgar in the world. When there are people who are starving and catastrophic situations around the world, we don’t want to be painted in that way. Behind it, is the craft.”
Here at QP we believe it’s always time for an open and honest conversation about prices in the watch world. In general, it is easy to feel like watches have become too expensive, and the Swiss, hampered by their natural tendency towards secrecy and financial opacity, have not been good enough at explaining to customers why watches cost what they do. And at the top end of the market – where Greubel Forsey undoubtedly resides – the numbers can often seem insane. Where once a £200,000 watch would have seemed incredible, now the latest creations from Richard Mille et al regularly nudge £800,000, £900,000 or £1,000,000. The Greubel Forsey GMT Earth, revealed this year at SIHH, has a retail price of CHF 610,000; the brand has made several watches whose prices exceed $1 million, and its “entry-level” watch is the Signature 1, which costs $170,000.
So surely this is an open-and-shut case. A watch that costs multiple times the price of an average family home cannot be justified, let alone represent – the very idea – value for money? Can it? We sat down with Stephen Forsey the next day to dig a little deeper.
QP: “Let’s go back to that question of price. It upsets you when people fixate on the money, but it’s understandable why it draws people’s attention.”
SF: “Just if you take that number, that is the cost of achieving what we’ve done. It’s not something machine-made and sold as artisan made. It’s really artisan-made. The value is constructed so that we can exist, and continue our development and innovation.”
QP: “Do you suffer from comparison with brands that charge six or seven figures for their watches but don’t stand up to the same scrutiny as a Greubel Forsey watch – either in terms of finishing, or innovation? Or does it help to normalise the cost of your watches, say for example when Richard Mille produces something for a million dollars?
SF: “In a way, [other highly priced watches] can help to prepare the market, construct the market. And on another side, yes it can create an incomprehension. I mean, Richard Mille wouldn’t be an example because I think there is innovation there, in materials and stuff, and it’s extremely hard to analyse, and extremely easy to say ‘this isn’t the same as what we do’. It’s a different message, but it’s complimentary. A collector can go from a Richard Mille to a Greubel Forsey; it’s part of the same sphere.
What there is today is more scrutiny, more professionalism, and it’s much harder to hide something today. If you’re trying to hide something, then good luck. Beucase there are enough watch aficionados online, and the expertise of the media is finely tuned, so you’re going to be unmasked.”
QP: “But at every price level, we do see watches and think ‘that’s a bit steep for what it is’.
SF: “Yes but then it’s the buyer that decides. If people buy, it means they consider it value for money.”
QP: “Where do you stand on the idea that some things are desirable simply because they are expensive; that for a certain type of buyer, it’s about how much it cost?
SF: “Why people come on board isn’t always vital – initially, when you start, you have this purist watchmaker idea that the collector has to sort of pass an entry test in order to be able to own a Greubel Forsey, and it’s an ideological, utopian sort of idea. But the reality is, that’s not realistic. The important thing is to get people on board; we know the value is there, the quality is there, the rarity and the exclusivity is all there, and we know that if the collector wears one, chances are someone’s going to say ‘wow, that’s a Greubel Forsey’, and then perhaps we can spark their interest and capture them.”
QP: “You mention rarity and exclusivity, and those are obviously intangible elements that go into the price of a watch. How many watches do you make a year?
SF: “Last year we made 108. Maybe one day we can make more, but it’s not easy. The bar is fixed, in terms of the criteria we set, and we’re not prepared to compromise on those. We employ 115 people, to make 108 watches. It’s a completely insane ratio. In total about 30 are watchmakers; 12 build the watches, we have six in the laboratory doing R&D, testing, analysing and improving prototypes. Some are in movement design, we have a unique piece workshop with four people and an after-sales workshop with two people. And if you count those with watchmaker training but who aren’t active permanently at the bench, like myself, then it’s about 30. Twenty-two people are employed to do hand-finishing; they’re not watchmakers, and 10-15 do machining of components. By contrast our marketing team is six people, so it’s fairly small.”
QP: “People are quick to criticise marketing, and we recognise that some brands spend a lot more on it than others. Obviously there is very little transparency about how much of the price of a watch is going on marketing and other things like that. In general, do you think the industry needs to do better in that regard?
SF: “It’s not really for me to say, but there has probably been complacency in the marketplace in the past, people thinking that watches sell themselves. Watches do not sell themselves. There is a huge amount of marketing involved, and it’s coming out of the cost of the product. Somebody’s paying for the marketing. It’s not free! We can’t sit in La Chaux de Fonds and wait for the phone to ring. It doesn’t happen. Some brands say they can but… it’s a challenging time for everyone.”
QP: “How much time is given over to servicing?”
SF: “We have two people, full-time. They’re mostly looking after the press presentation watches; we don’t have many pieces back for service. A few years ago we held a collectors’ workshop in the region, invited them back for services. We need to understand better why they don’t want to bring them back for service. When you buy a high value timepiece, it’s not often part of the sales pitch – ‘don’t forget to bring it back in five years so I can take some money off you!’ It’s something we have to work on, part of the education of the whole thing. There are just over 1,300 watches out there in total but the number that comes back every year is very small.”
QP: “We would imagine that most owners treat the watches quite reverentially – how much servicing is normally needed?
SF: “Each piece that comes back, occasionally there are problems, usually aesthetic. An issue with the case, or that kind of thing. One of the first ones we had back after five or six years, it came back and there was not one square millimetre of polish left on the case. And the watchmaker was nearly in tears! Crying, ‘look what they’ve done to our work!’ And I said ‘wow, that’s fantastic!’ He thought I was crazy, but I said ‘Think about it, he’s worn it every day, he’s lived with it, clearly he’s really happy with it’. It was a red gold piece, one of the first double tourbillons. It showed that it did not sit in a drawer, and that’s why we build them.”
QP: “So obviously from the sales of 108 watches you’re paying 115 people a salary, and it’s fair to imagine that being a watchmaker for Greubel Forsey, you need to have a fairly serious amount of experience?”
SF: “Not necessarily – what you need in a good team is complimentary skills, and people who share the vision. That’s the challenging thing, to get people with the right state of mind, as much as the pure ability. We have quite a young team, actually. In their 30s, on average.”
QP: “But in hand-finishing specifically, you are acknowledged as having some of the best work in the world. So you must have the best team in the world, and surely that doesn’t come cheap?
SF: “Well we had to build that and train the people, and that’s the bottleneck. On machines we could make 200 watches, and the watchmakers could assemble 200 watches. But the finishing is the problem. Take the watch I’m wearing now, the Differential d’Egalité: this is the third construction of the movement. In 2008 we made a prototype; in 2011 we had the first 1:1 scale experimental version of the watch, and this is the third one. Where another company would be more commercial and invest in marketing, all of our money is ploughed into our in-house movements. We have a very small marketing budget.”
QP: “What percentage of budget goes into R&D?”
SF: “It’s significant. Six people, full time. Every calibre is as robust as a series-made piece, for example. Our R&D budget is huge – it’s a big, evil, hungry machine. Projects like the mechanical nano are really pure R&D with no return at all; take the Grand Sonnerie, to take that and make it relevant for the 21st century, and fitting with the expectations of today’s collector, that took 11 years. Three years of testing with two prototypes on the wrist before we launched. We’ve got a vision for pretty much the next ten years.”
QP: “Is there the same pressure on you to have something new every year, to get products released to a precise schedule? It feels like you release things when they are ready and not before, rather than to suit a marketing plan or to get fresh watches in jewellers’ windows, like a mass-volume brand.
SF: “We have to survive – we actually have more projects, because we don’t know which ones will be ready in time. We don’t fix the public presentation date until quite late. If we’re not happy, we don’t do it. For example, there are about a dozen details from the SIHH prototype of this watch that are different to the final piece. Because it’s the first time we have the 1:1 – even though we have rendering and 3D printing, it’s when you live with it for the first time, you realise things aren’t just quite right.”
It’s not simple logistic planning. We have a tendency to disperse, to run in different directions. It’s the difference between a product and a creation. When you have a product, you have a brief, and you have a committee. When you get a majority in the committee say ‘yes, that’s good, let’s produce it’, you’ve hit the target. That’s a commercial product. That’s where we start – then we go the extra mile, or miles, to make it a creation. We fine-tune it, we refine it, change a texture here, the font there, seemingly insignificant details. It’s like architecture – look at a classic building, they are rarely a one-shot. The only version we know is the final version, but it has been through dozens of prototypes, which you don’t see.
QP: “To take that analogy, big architecture projects are normally delivered late and over budget – how do you make sure the watches aren’t that?
SF: “Well, they usually are! Take something like the Signature 1: this isn’t a commercial success for us. We haven’t finished it yet, more than three years after announcing it, and we’ve limited it because we can’t make too many. They’re not profitable for us – we had to push and squeeze even to get to that level, it’s very tough. It’s appreciated hugely by collectors’ but it’s not a commercial winner for us. And that’s not because we missed the target, but the gap between our way of working and making a watch like that, in relatively large batches, is light-years apart.
QP: “But you still believe it was worth making?”
SF: “Oh totally. It was a serious look in the mirror, and for our team a salutary lesson on a number of things. It helped us do better, identify where we need to be sharper. Certainly as value for money it’s an extraordinary piece, for what you get. It’s not easy to explain but it’s pretty much as difficult to make as our single tourbillon. Which from a value perspective, ok there are more components, but it costs a lot more. But with the Signature we had to make the whole balance wheel; we can make our own balance springs and we’ve always made the levers of our escapements, but we had four people pretty much full time making a few balance wheels a year. So it costs thousands of Swiss francs to build each balance wheel. It’s not at all economically viable – but what we’ve learned in terms of know-how is invaluable. And that’s just one thing; Didier Cretin, the watchmaker, he made the entire winding gear by hand with traditional machines. We couldn’t have him spending ten years just doing that.”
QP: “As a background to all this, we assume of course that the company is in good health. But independent watch brands have struggled recently; you look at what happened at De Bethune – it’s a cautionary tale, isn’t it?
SF: “Well, we’re doing ok. But we struggle, sometimes, for sure. If you have key people in a production line, as we do, with key know-how, you can’t ring-fence that. It’s with those people. If they leave for any reason, that’s a big problem. Ring-fencing that knowledge, means doubling up on staff, making yourself even less efficient, and you try and build a multi-faceted approach, but it’s not cut and dried.
We’re very fragile in a lot of ways. We’re very dependent on our people; it could be easier. There could be less competition, there could be less geopolitical turmoil, the currency could be kinder, anything and everything can cool off a market. We can hold prices for so long when the franc changes, but you have to review local prices all the time.”
QP: “Finally, the assumption may be that making very expensive watches is making you and Robert Greubel extremely rich into the process…”
SF: “No, it’s not. It’s about the adventure, and raising awareness of the loss of skills. We want to make sure we have a core of people who can transfer this knowledge to a new generation, because we feel there’s a cultural significance to what we’re doing here.”