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Wednesday, September 12, 2012

Girard-Perregaux’s U.S. President Goes After the Aspirational Consumer

Michael Margolis
You may remember in February a piece on Michael Margolis being named as U.S. president of Girard-Perregaux. Well I caught up with Margolis in June and we discussed what he's been doing along with his future plans for the luxury watch brand.

It’s been a busy time for Margolis. In that short time span, he was involved in updating the brand’s website, helped build a new advertising campaign, started a lifestyle blog and made a key personnel change at the Girard-Perregaux’s boutique in New York.

One of the major reasons for all of these changes is to attract the younger aspirational customer to the venerable Swiss luxury watch brand.

“I think our average customer today is probably 45 or 50 years old. We love our 45- and 50-year-old customers,” Margolis said. “But we also need the 25- and 30-year-old customer. We need the young guys who have their first big job and they’re going to reward themselves with a watch.… We need that aspirational G-P buyer. I want the 15-year-old kid who looks through a watch magazine and I want him cutting a picture of our watch out and posting it on his refrigerator and telling his parents: ‘Someday I’m going to own that watch.’”

There are probably few people in the Swiss watch industry who understand this perspective more than Margolis, who is an outsider in a largely inbred industry. His background is in the high-tech industry but has always been a passionate watch collector. Through his passion he became a forum moderator at timezone.com, a popular website for watch enthusiasts.

“I was a watch fanatic,” he said. “So I bring a little different perspective to the table. I bring a consumer’s perspective, a collector’s perspective. I see things a little differently I think because I’ve been to the other side of the counter. Most of the people were born in the industry.”

In 2005, Margolis was approached by Jean-Claude Biver, a very successful figure in the Swiss watch industry, who at the time was working for the Swatch Group. He told Margolis his plan to take over and rebuild a dormant watch brand. Biver wanted Margolis to manage a forum on Timezone about the brand. The brand was Hublot, which under Biver’s leadership, experienced spectacular growth to become one of the world’s best-known watch brands. During this time (2005 – 2012), Margolis’ role grew into communications director and eventually sales director of the brand.

Margolis is using his high-tech background, his communications and sales skills, his understanding of the passionate watch customer, and his newly acquired Swiss watch industry experience, to create ways to appeal to watch lovers in the modern world.

One of the most creative ways Margolis is attracting both the current Girard-Perregaux client and the aspiration person is by the creation of the Mechanics of Style blog. It is basically an online luxury lifestyle publication with articles from professional writers on a variety of topics, including food, travel, wine and spirits, sports, collectibles and just about anything that would be of interest to the timepiece connoisseur.

“We’re talking about all kinds of things that a person who buys a Girard-Perregaux or another watch might be interested in, such as custom shirts, fragrances, espresso machines, wine and cigars,” he said. “I won’t say it’s completely independent of Girard-Perregaux because it’s not. There’s some history and some facts and some fun things about GP as well. We have the World Timer watch that’s been an icon of GP for many years. We have a travel segment where we’re visiting all 24 of the cities that are on the World Timer’s bezel. It will be a 24-month campaign to visit all the cities on the dial.”

The website, which was not discussed during the interview, is a sleek, fast site that doesn’t use flash, which I consider groundbreaking. In the stodgy world of luxury Swiss watches and luxury in general, the industry has seemed incapable of letting go of the slow, cumbersome flash platform. Featured prominently on the new site is the company’s new advertising campaign. It focuses on a group of the band’s young watch makers, discussing their passion for the trade and their interests outside of work. The campaign includes an ongoing world tour where the young watchmakers give one-on-one workshops to watch connoisseurs and guests for insight on watchmaking and how complicated timepieces are built.

On the retail level, Margolis hired a new manager at its Madison Avenue boutique, the only brand-specific, brand-operated Girard-Perregaux boutique in the world: Chip Henderson, a veteran watch retailer.

“He’s not a guy who grew up in the industry,” Margolis said. “He’s a guy who has passion for the product and he’s exactly what we need for our Madison Avenue boutique.”

Margolis has big plans for the boutique.

“I want to turn the boutique into what I’m calling a Girard-Perregaux embassy. Yes of course it’s a retail space where a customer can come in and buy a watch and we don’t apologize for that. But I want it to be much more than that. I want it to be where the customer can come, he can be educated, he can buy just a strap for his watch, he can learn about the brand. We have a full-time watchmaker on staff. When you walk in the door he’s right in front of you. We take in a tremendous amount of repairs. We have repair facilities in the U.S. but it’s rare that brand boutiques on Madison have a watchmaker on staff so we’re very happy about that.”

Margolis said Girard-Perregaux has no plans to build more boutiques. Instead, it will continue to enhance its relationships with its retailers.

“My opinion as a watch guy is that we are manufacturers and distributors and wholesalers. It’s not our place to be retailers,” he said. “We have a number of boutiques in China but they’re all owned by retailers. The only boutique that we have in the world that’s not owned by a retailer is Madison Avenue and if you look at the rent structure for what a square-foot of space on Madison Avenue in the 60s costs, it’s nearly impossible for a retailer to make a business model that works. For us, the boutique becomes an advertising expense.”

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