Downturns and touchdowns: Georges Kern on Breitling's NFL deal

In this first episode of The Luxury Society podcast Season 2, hosts Robin Swithinbank and David Sadigh are joined by Georges Kern, CEO of Breitling, to discuss tariffs, transformation and the bold bets shaping the future of Swiss watchmaking.

Kern reflects on his six years at the helm of Breitling, the challenges facing the luxury watch industry, and why agility, partnerships and brand positioning matter more than ever in today’s volatile market.

Tune in for a candid conversation on:

• How Trump’s 39% tariffs are reshaping the Swiss watch industry
• Why Breitling is betting big on the NFL – and what it says about luxury sponsorships
• Geneva Watch Days vs. Watches & Wonders: where should brands really show up?
• The rebirth of Universal Genève and Gallet – and Breitling’s move into new price points
• Gray markets, pre-owned growth, and whether tariffs could trigger a distribution shake-up
• How to thrive when the luxury market faces a “perfect storm”

🎧 Plus: Georges Kern on why in luxury, purchases aren’t cancelled – only postponed.

Brought to you by https://digitalluxurygroup.com/ 

Follow us @digitalluxurygroup & @robin_swithinbank on Instagram

Produced by Juliet Fallowfield, 2025 www.fallowfieldmason.com

Transcript

Main edit

Robin Swithinbank: [00:00:00] Hello. And after the long and winding summer break, welcome back to the Luxury Society Podcast brought to you in association with Digital Luxury Group. I'm your host, Robin Swen Bank. 

David Sadigh: And I am your cohost, David Sadigh. 

Robin Swithinbank: So we're back for season two and once again, we're gonna be delving into the glistening world of luxury, which over the summer has continued to lose some of its shine.

There have been few bright spots over the past couple of months with President Trump's tariffs dominating the headlines. Luxury groups and brands were already steering into the wind and the imposition of punishing import duties on luxury goods to the critical US market has moved the dial to gale force.

Uh, but let's not be too gloomy. There are some winners, of course. And in every crisis there are opportunities. During the course of this season, we'll be speaking with some of the industry's most dynamic leaders, inviting them to share their vision for how the luxury industry can navigate through the storm.

And indeed, to identify the characteristics brands will need to demonstrate if they are not only to [00:01:00] survive but thrive. And all that will be backed up as before by data-driven insights from digital luxury group's. Panel of experts whose research will help us to understand exactly what's going on in the world of luxury today.

So David, on with the show, I.

David Sadigh: Let's do it. 

Georges Kern: I cannot imagine. Again, I hope it's not only wishful thinking that we will stay at 39%,  As a company, you have to deal with it. You have to be better than the others. 

 It is like the prohibition 

we are the first. Luxury brand.

being sponsor of the NFL.

I don't think that we would sell one watch more or less being in a fair or not.

Georges Kern:  what you have to understand is that in the luxury industry, people postpone purchases. They don't cancel purchases.

Robin Swithinbank: Okay, so it's time to introduce our New Season's first guest. In this episode, David and I are thrilled to be joined by George Kern, chief executive of the [00:02:00] Swiss Watch Company, Breitling, and the man tasked with rebooting the historic dial names universal gene and gile. But first a quick bio. After a long career in watches that began at TA Hoer and then saw him take on various roles at smore, including as chief executive of IWC and the group's head of specialist watchmaking, George was appointed Brightling Chief Executive in the autumn of 2017.

Since then, Breitling has been transformed. Revenues have doubled amped up by new branding and new watch collections, as well as a roster of sponsorship deals. In recent years, the watchmaker has aligned with Hollywood A-Listers, Charlize Theron and Austin Butler, the footballer, Erling, Harlan, six Nations, rugby vintage cars, Victoria Beckham, and even surfing.

And just last week, George was in New York to unveil Breitlings latest big deal. This time with the NFL, the World's Richest Sports League. Later this week, he'll be heading to Geneva for Geneva Watch Days, an event he co-founded in 2020. [00:03:00] But I'm delighted to say he joins us now from Brightling Swiss HQ in Grin.

George, great to see you. Thank you so much for coming on The Luxury Society Podcast. 

Georges Kern: thank you very much for this invitation.

Robin Swithinbank: let's, let's get straight into it. I will come to the NFL, which is clearly a huge deal for Breitling shortly. But before that, can we have a quick look at the big picture? And this summer's unwelcome headline has been that Swiss watch companies are now caught in the crosshairs of US trade war and are now facing a 39%, duties on exports to what is by far the industry's largest market.

 from your viewpoint, how is this impacting the industry? How's it affecting Breitling and what are the solutions?

Georges Kern: Well, obviously these are very bad news. as there were first discussions with,the Trump administration and the Swiss government, and everybody's thought about 10%, terrorists or something. Europe has 15, the UK 10. And this was the level of expectation. And, obviously when, the [00:04:00] 39%, went, or was were announced as a result, it was an incredible, disappointment.

And for many people in shock, I'm convinced and hope, and I don't know if it's wishful thinking that, the situation will improve, as Today, many business, people and big companies are supporting Swiss government to find better solutions, with the Trump administration in order to balance, this,A deficit of 41 billion, which, the US has with, with Switzerland. I cannot imagine. Again, I hope it's not only wishful thinking that we will stay at 39%, but obviously many things went wrong in the process. including this famous 20 minute conversation of our president, Swiss president who is the American president, and this has to be fixed.

yeah, concerning Breitling, thank [00:05:00] God we, in a way we smelt it and we shipped, lots of stock before the official announcement. I think we have now enough stock for the next two or three months, so, I really hope that the solution will be found. In this period of time.

Robin Swithinbank: Yeah. and the expectation from a consumer perspective is that prices are gonna have to go up. are you able to comment on that at this point?

Georges Kern: if, which I don't believe this really falls in place and stays, we obviously cannot increase prices by 39% in the us. Nobody will. Nobody will. And, I think there will be. If that worst case scenario stays, a kind of mixed basket of, measurements, obviously an increase in the us, an increase in the rest of the world, a decrease of margins of our credit partners, a decrease of margin, at our side. In order to avoid dramatic [00:06:00] price increase because you would suffocate the market. forget it, it's impossible to, to deal it in this way. I think that, what probably the administration didn't consider the Trump administration is that there would be. Gigantic, gray market as we have seen between Hong Kong and China.

There will be dramatic, transfer of purchases, in Canada, in Mexico, in the Caribbean, and of course in Europe. So, hopefully, somebody is explaining 📍 I was always the outsider That is I think what made Hodinkee work right Both my parents were public school teachers I did not grow up in this space at all whereas most people in this space did Or many people did So I always viewed myself as the outsider And then to Now to be viewed as in many ways the ultimate insider even though I don't view myself at all is shocking to me And I think it's important that I remain really distant from Switzerland in many ways to remain relevant And I'll give you a fun braggy anecdote but I was speaking at Harvard Business School probably a month ago and 3 people And said My father loves Hodinkee I said Your father what about you And I was like Jesus Christ how old am I And I realised that these MBA students and they're all like over intelligent like almost too intelligent for their own good ages 21 to 24 etc So that their fathers are probably my age or maybe a little bit older To be fair there were a few Hodinkee fans as well and otherwise I don't think it would've been there but it's really pretty jarringsomebody is explaining these aspects to the Trump administration and to President Trump. I'm convinced that at that moment in time, we will have reasonable tariffs,and other measurements in order to balance this trade deficit in the us.

Robin Swithinbank: Yeah, it's such a complex picture and I don't pretend to understand it in its fullness, but, One of the facets of the deal, as it's been struck so far, is that there are some exemptions. Obviously the Swiss watch industry is not one of them. pharmaceuticals are apparently one of them. what sort of conversations are you having, as an industry [00:07:00] with your government,and further afield with the Trump administration in order to level out the playing field, it seems really quite unfair.

Isn.

Georges Kern: Yeah. Not only it's unfair, but it is interesting in a sense that, the Trump administration want to reduce. The cost of, medicine in the us the prices for pharmaceuticals are three to four times more expensive in the US and in Europe. there are no regulations in the us unlike in Europe.

top of that you don't have, medical, insurances in the us as you have in Europe. So, he wants to decrease prices. You have an exemption of the pharmaceutical at this moment in time, and obviously there's some pressure put on us in order, to find a solution for the country.

and, this is all of that is, as you said, very complex. and the objectives are also complex, and all of that has to [00:08:00] be dealt with. But again, there was a meeting a couple of weeks ago, with our president, with the president of Roche, with the president of Swiss, with, investors in order to explain the whole picture, to the, US administration.

So let's hope for the best.

Robin Swithinbank: Yeah, let's hope for the best. because of course the timing couldn't really have been worse. you and I have had conversations a number of times this year talking about how depressed the luxury watch market already is following a couple of years of macroeconomic turmoil. Wars in Europe, wars in the Middle East, rising gold prices.

The slowdown in China, of course the Swiss Franc proves to be, bulletproof as far as we can work out. And then there's been this falling consumer sentiment in the face of pricing inflation. I don't wanna go on before it becomes too depressing, but have you ever known a time like this, while you've been in working, certainly in the Swiss watch industry 

Georges Kern: no. this is a kind of perfect storm, but, yeah, we have to face a situation. and as a company, you have to deal with it. You have to be better than the others. You have to [00:09:00] outperform. You have to find other markets.

You have to. yeah, deal with it. we cannot just be, sailing in the sunshine, right? Sometimes you have storms and, and you have to deal with that. and this is what we are doing.

David Sadigh: it's interesting, George, that you mentioned like doing. Importance of trying to find new markets and new potential growth engine. we have been seeing in the market, the tariff being slightly, reduced in India, with some tax exemption. Lots of companies like,showcasing strong interests.

We have been hearing a lot about Middle East and Saudi Arabia. To some extent, Japan was a market that people were not really looking at, considering it a mature market and so on. What are your views on how this industry can potentially, let's say, avoid the potential,US trap?

Georges Kern: Yeah. So as Switzer is one of the very few countries having a free trade agreement with India. The market is developing very well. You're right. also, Latin America, central macros doing well the Middle East. there will be huge transfer. In [00:10:00] the Caribbean, the boats, the tourist, boats are full of Americans.

 but still the US remains, a strong market. It's 22, 20 3% of our turnover, and it's growing by, at least for us, by over 20%. so I don't know. If this is the case, because the consumer believes that the prices will increase, why we see that, boost now in the us But,we can, we are in a price, in a price point where we can still deal with it.

I think the problem is, for lower price. Points, entrance price points where, the price elasticity is much lower than at our price point. and I think we, at our price point, our average price point is 7,200 US dollars. we can still deal with it with, soft price increases. In the US and elsewhere and, and still find our way out of the situation and in pushing other markets.

but,[00:11:00] we make now scenarios, but really I believe that the terrorists will not stay at 39% because it just doesn't make sense.

David Sadigh: Yeah, there is one. Just quick reaction on that, George. I look at the numbers both for biting on our data, but also the category, and what I'm seeing is that. there is also a risk of seeing more and more pre-owned watches going back on the market because, as you mentioned with Gray, you also have like those,vintage watches or like people trying to take advantage of the fact that prices might continue to increase.

So there is a risk, in my opinion that we get, a large amount of like Breitling and other brands as well, offers, of preowned watches floating the market in the US in the months to come. What do you think about that?

Georges Kern: I think where you're right is that the CPO market certified pre-owned market is something which is doing very well and has been developing very well with great, partners of ours. But I don't think that the current terrorists will. [00:12:00] Impact, the volume of pieces reaching the market.

why would you do this? if you're not in the need of selling a watch, you can have a very good, you, for the person selling that pre-owned watch. I don't see the motivation why today there's a bigger motivation than a couple of months ago. because of terrorists, I don't see this.

The real risk I see is gray market. that's the big risk. If you have price difference of 10, 15% at such a price point, you have gigantic gray market. And of course, consumer, even an American consumer buying a watch abroad should declare it at the customs, but nobody will do. Nobody will do that.

it's very easy to transport. we have seen this since decades, how gray market functions and they will not do it. So, It is like the prohibition, if you want to import, alcohol, you import alcohol, it's the same [00:13:00] thing. and that's for me is the biggest risk.

And nobody's thought about that, especially in the washing industry. it's a very small product. We're not selling cars here. we're not selling,bulky products. We are, we're selling, very small watches. And, these can be,from a logistic point of view, transported and imported to the US in very easily.

Robin Swithinbank: Let's, let's change tax slightly, because, while it's clear that, there will be some brands who are hit very hard by this and some may decide to curl into a ball and hope that, the storm blows over, uh.Occur to me that's never been your modus operandi. You are a much more sort of front foot style of chief executive.

Indeed. the announcement that you guys are moving into NFL is a very good example of that. You'll no stranger, two big sponsorships, as I said at the head of this conversation. but even so, moving into the NFL is clearly a huge strategic decision. Tell us a little bit about what the partnership involves.

Georges Kern: So first of all, it's not a reaction towards the tariffs. these decisions were taken a year and a half ago. These are long negotiations, as you said, they're expensive [00:14:00] negotiations and expensive sponsorships. the US market is our biggest market. we are the first. Luxury brand.

being sponsor of the NFL. The NFL is the, ultimate American. Sports representing everything. What the US is, is a strategic sport, is a physical sport. It is, also a family, sport. 40% of the public are female. it's, totally trans society from CEOs to workers. and it totally represents, the American way of.

Being and doing and acting top of that. It has an incredible coverage. So it's, very much of course in American sports, but getting much more popular. also in the uk, in Europe, in Asia and elsewhere.

So as, a partnership, it was, Something we really hope to sign and thank [00:15:00] God we have signed and we are very happy about that. And there will be a very important campaign, advertising campaign supporting that investment.

 the NFL is interesting as well because, on the one hand, Bryan doesn't have any obvious tangible heritage in the sport. I think you've done a few limited editions in the past. There was a collection last year that was US only,you've had no tangible heritage in surfing or rugby either, so, so perhaps,this is, not necessarily a hindrance to the success of a partnership, but marketing experts have often said that there needs to be this sort of level of authentic connection between.

Robin Swithinbank: A brand and its partner, but maybe your example suggests that, that they're wrong.

Georges Kern: that's a very intellectual,approach of sponsorship.

Robin Swithinbank: Thank.

Georges Kern: so obviously a much less intellectual than you are. No, we have to do. Something and partner with sports or people which fit to us, which are meaningful, which are, relevant, for the market.

And as I said earlier, I think our product, fits. [00:16:00] the NFL, we are an outdoor brand. We are, in a way also sports brand and all of that. fits, American football. many people believe that we are an American brand. When I go,to the us say, oh, in the what industry?

Yeah. Breitling, everybody knows Breitling. and some people believe at least that's a customs, that's an American brand. So, we have incredible American roots, in, in the US obviously through aviation, et cetera. And the sports fits our brand. The values are the same. it has an incredible impact and as I said, we'll put also a little bit of money behind it to, to capitalize on it.

Robin Swithinbank: How exactly is it gonna manifest itself as consumers, how will we see Breitling in the NFL.

Georges Kern: Well, you will see us, you will see our advertising. We have all the rights, we have, partnerships with, some teams. this is part of, the deal. then we have products.

 we can use a logo, of the NFL [00:17:00] everywhere. And this is what is the most important. It's not in the stadium where you have to have visibility that, doesn't make sense. What you have to have are the rights for advertising and being visible on a much broader, spectrum.

Robin Swithinbank: Because you're not the official timekeeper, are you? there's no timekeeping element to the partnership as I understand it.

Georges Kern: no. there's no timekeeping, but it's more, it's more a partnership of two, I would say, entities, which are, complimentary. again, it's about outdoor, it's about team spirit, it's about toughness. all of that fits.

Robin Swithinbank: Yeah, and the NFL is huge. according to sports marketeers, it's still growing very fast. What impact do you actually expect this deal to have on your business? How transformative can it be, particularly in this climate?

Georges Kern: Well, we developed and grew a lot of last couple of years, but if you compare Breitling to, I would say the top five to, 📍 To be frank I I don't feel I have kind of much left to prove but I did feel that there was a lot left to be done Crown and Caliber that became uh an anchor for for the business Uh and not not an anchor in in a good sense To now be kind of viewed as in many ways the ultimate insider is is shocking to me And I think it's important that I remain really distant from Switzerland in in many ways um to remain relevant influence uh you know a a chief complaint of the Swiss watch industry or is that it takes itself too seriously A lot of people have taken their their shots at me some of them fair some of them certainly not we've been here before you know what I mean the Swiss watch industry is gonna be just fine pricing has gotten out of control pricing at the high end in particular is really outrageous at this point But I think the pricing delta versus what the what they trade for is just too too vast It'll be far fewer watches but but but much better watches So I came back for for a you know to to be frank I I don't feel I have kind of much left to prove but I did feel that there was a lot left to be done on the table for Hodinkee for the industry at large We had acquired a business called Crown and Caliber that became uh an anchor for for the business Uh and not not an anchor in in a good sense I will say look you know without an ounce of of vanity like nobody has a better audience a more active buying audience in the watch community than us Fuck We didn't really talk and watch this together and he said dude do not sell this business Like you are gonna be so regretful if you sell this thing now to a big media group that's kind of on its way down anyway If you look at the average buyer and the people that are that are spending the most money with watch brands. today Hodinkee is still the number one source by a factor of a hundred I will say you know uh I you know I I am shocked at you know I was the young I'm I'm very American as you can see I do not speak French Uh I was always the outsider and that is I think what made Hodinkee work right I both my parents were public school teachers I did not grow up in this space at all whereas most people in this space did or many people did So I always viewed myself as the outsider And then to now be kind of viewed as In many ways the ultimate insider even though I don't view myself at all is is shocking to me And I think it's important that I remain really distant from Switzerland in in many ways um to remain relevant And I'll give you a a fun braggy anecdote but I was speaking at Harvard Business School probably a month ago your father what about you You know And and I was like Jesus Christ how old am I And I realised that these MBA students were you know and they're all like over intelligent like almost too intelligent for their own good you know ages 21 to 24 etc So that their fathers are probably my age or maybe a And to be to be fair there were a few Hodinkee fans as well and otherwise I don't think it would've been there But I mean it's really pretty jarring And that was the first time that I had people in Chorus say my father was a fan of Hodinkee But I think that that doesn't like I'm only 42 and the average reader of Hodinkee is is 40 Right So the average reader of Hodinkee is still very young and becoming emergingly affluent right I mean like when I started Hodinkee we had kids reading it of course you know myself included Now the people that are that are aging into their forties are now able to buy Pateks they're able to buy Langes and Journes and et cetera But to to your original question my great challenge to James Stacey to Dave O'Hara to a guy named Tim Jeffreys who's our associate editor Um Become more relevant to that generation of people I think the traditional influencers that we see now on TikTok etc will actually wane in influence uh because they'll just be anybody could create one right And I think you know a a chief complaint of the Swiss watch industry or or about the Swiss watch industry is that it takes itself too seriously The approach of of the launch has been incredible I mean really as you say like really different than anything else And I think to to many of the old guard it's a little jarring Um If it weren't the folks that I mentioned involved I think there would be real kind of reticence about it Objective quality of the watch is just superlative And as you know at the end of the day I'm still just a watch guy The product is fucking great Like there's just no question about that A lot of people have taken their their shots at me some of them fair some of them certainly not Uh And that's okay and I've just kind of learned to let that it's all part of it you know it's all part of of being public in in some way We've been here before you know what I mean The Swiss watch industry is gonna be just fine Pricing has gotten out of control Pricing at the high end in particular is really outrageous at this point But I think the pricing delta versus what the what they trade for is just too too vast And it's not just Patek Lange AP I mean every watch I'm focusing on because people know them are charging so much for watches that are are are worth it in the sense that the innovation is there that the quality is there but

that the market don't doesn't support it And that's a real challenge It'll be far fewer watches but but but much better watches And to be frank the watch guy in me loves that And frankly like you know the the the industry pundit loves that because there's so much garbage out there six brands. In the world. [00:18:00] We were the only one not having one major sponsorship like Formula One or golf or tennis or Olympics or what have you. And we started.

with, more lifestyle sports like surfing or triathlon, which by the way is used now by everybody else since we, we started with it. But, we needed something, extremely powerful I think to, To bring us to the next level. and, yeah, reflecting also who we are today, we are an adult brand, a powerful brand.

And, and again, I think the NFL is perfect for that.

Robin Swithinbank: you were one of the first co-founder, as Robin mentioned of the Geneva Watch days. you started the Geneva Watch days, after the pandemic, at the time where the major shows were canceled and this year it has grown to include more than.

David Sadigh: 60, exhibiting [00:19:00] brands. obviously Breitling is, one of them. where is, the value in the event for you?

Georges Kern: Yeah, it's crazy. I will always remember, from Bulgari called me, I was on the,slopes in Switzerland. He said, listen,Probably in summers that will be, we will have a window to organize, something. Would you agree to do so? And I said, okay. and we started with I think 7, 8, 9 brands.

people were, smiling and today look where we are. What is very cool with the Geneva, watch days is that everybody is free, right? Every brand can basically. organize, itself, in the way, they want. So there's no, fixed structure. and it has a very good, spirit. also the journalists are super keen.

because it's quite informal, much more informal than, than what you would have in other, watch fairs. And it gives the opportunity to smaller brands to be [00:20:00] present, on the, an important umbrella. And we have, I think. Hundred, I think five or 600 journalists coming. all the retailers of Europe are coming Middle East.

it's getting bigger and bigger and nobody thought it would ever be as big. And we use it now, as a platform to launch products. So it's a fixed element in the calendar. and it's very Cost efficient. versus other fares. I was always a little critical about the fares when we left Basel, et cetera. Because of the cost and because of, yeah, the fact that the investment was not very efficient. And I think this is a very, efficient platform. and I'm very happy that so many small brands, which I didn't, some of them I didn't even know, joint affair and have an opportunity to have,visibility.

So, no, we're very happy about that.

Robin Swithinbank: Yeah. The undertone here of course is that, Breitling has not returned, well returned watches and Wonders has of course been created since you left Basel World, but you are not, [00:21:00] currently exhibiting and not currently due to be exhibiting as far as I know at Watches and Wonders Geneva next year, which is the big fair.

It's where Rolex are. It's where take high rights where IWC are and so on. when you said the old Faires were not cost effective, do you still feel that watches and wonders. Isn't cost effective or because you are bringing three brands to the table next year, perhaps you'll be back.

 can you enlighten us a little bit at this point?

Georges Kern: Yeah. many questions here. so, let's put it in this way. I don't think that we would sell one watch more or less being in a fair or not. Today. You're in digital age. you can present the products all over the world. Again, Geneva Watch days was different because we initiated it, and obviously we have an emotional attachment to it, and you are right with three brands.

The game changes a little bit and, we have to consider, other possibilities and eventually one day consider watching Wanderers, but I don't know. It's a big [00:22:00] investment. As I'm myself, an investor in Breitling. I'm an entrepreneur and I have to look into efficiency of our investments.

And, as much as Geneva Watch Day is a meaningful and efficient investment. And by the way, Dubai Watch Weeks where we have a big boost with all three brands, later this year in November. I'm not yet convinced about, watch and wonders.

Robin Swithinbank: Interesting. Okay. Well, it's good to hear you're gonna be at Dubai Watch Week, which has become a significant touch point, in the watch industry calendar over the past few years. we're touching here on Universal Jean and Galley without really explaining what they are. For the benefit of listeners who aren't perhaps familiar with this, just give us a quick idea of what these brands are and indeed why you and Breitlings backers have chosen to invest in them.

Georges Kern: So the brand BrightLink developed a lot over the last couple of years. One aspect is that we left some price points, in particular, the price points between two and a half and 5,000,dollars I would say. And, Gile [00:23:00] will fill in that gap and Universa will start at 15,000. I don't believe that you can stretch a brand indefinitely.

You cannot stretch it to the bottom. And you cannot stretch it to the top. You have a core business. And the core business, of Breitling is between, let's say 5,000 and, or let's say 50,000 if you take gold watches. That's our segment. And, there are some segments we cannot reach with Breitling, but we can reach with a group of brands.

Gile will clearly be a system brand of Breitling. It will be, engineered and manufactured. By Breitling, which is also in terms of efficiency grade because we can use our manufacturing capacities. gile will also be distributed in our, in, in many of our own boutiques. and you have seen this,with other brands in the past.

the brand will have a touch and fee, which is quite similar to Breitling, but again in a different price point, while Universal will be matched. In a [00:24:00] total different manner, totally independently. the team will be based, after I would say the incubation period will be based in ge, based in Geneva.

As I said, we'll start at something like 15,000 U uss dollars. So different, total different, ballgame. But having three brands like this at in these price, points. With this type of products, I think it's a great offering, from an independent, manufacturer like Breitling for the retailers, for our partners.

David Sadigh: George under your impulsion, Breitling has moved from like wholesale to,retail or like a big portion of the sales on retail. You have been quite at the forefront in term of DTC experiences and so on. Does it mean, the goal is to apply the same playbook to, G Universal?

Georges Kern: well, g Obviously cannot run and survive with own boutiques. the average price is too low. but being part, or having, a position in the writing [00:25:00] boutique, makes sense. Right. Especially that then we control the distribution, we control the training, we control the quality.

and this is a huge asset, having an infrastructure, also distribution, where you can plug in gile. Okay? So that's one thing. Uni Universal will have a much, much smaller distribution. the product is much, much more expensive. and again, uni Universal will have nothing to do with Breitling.

And, and we have different teams and also a different, distribution. But of course there will be boutiques with Al which will be run,sometimes internally, but sometimes, through our partners around the world. But the distribution cannot be compared with Breitling, considering the price point.

David Sadigh: remember that, you have been quite aggressive in term of like, opening new point of sales, including in like cities that were like potentially under leverage by your [00:26:00] competitors. I remember one of our discussion probably two years ago about some, subsidies in France and other places, and you told me that the average rent was like probably lower, making it like more attractive and so on.

is the strategy paying off.

Georges Kern: Yeah, of course. if you look at the profitability of the boutiques, it's, the profitability of the high streets. Big streets, are by far less profitable than,in, in other cities. you, look at the rent,on Bond Street versus,a rent you might have in Leon or in, in Strat work.

you cannot compare the rent and, per square meters of profitability is much higher in the other boutiques. but you need of course, to be on medicine, you need to be in, in Zurich, et cetera, because of the image. but here you need to make a lot of turnover to be profitable.

a lot of turnover.

David Sadigh: Do you know Richmore, a company you know, well, started with a couple of brands. you already have like three brands. is it fair to assume you are like building the [00:27:00] next luxury watch group?

Georges Kern: no, we are much more modest. we are very happy with what we have. We're looking forward to be successful with these two other brands, as we are with breitling. And,we don't have such ambitions.

Robin Swithinbank: I'm intrigued because, the picture you paint for Universal, Jeanne, I don't have a problem getting my head around that $15,000 and up, so it's high value, but it's low volume and that, that. Segment of the market has demonstrated that it has plenty of price elasticity at the low end where Gile is going, the market is demonstrating significantly less price elasticity and that, so that segment of the market is really quite stressed.

How ambitious can you be for gile in this climate?

Georges Kern: I don't believe In these kind of statements, it's not about, being expensive or excess price. The question is, are you good or are you not good? You have very good brands in the interest price points and you know these brands, and you have many brands in the high price point, which are totally failing, [00:28:00] so there's no.

correlation for me in terms of, of price points. You just have to do it right. And I can only repeat myself. We have an infrastructure, which is very efficient. I don't pay rent for gile in the writing boutiques, right? So, yes, I understand your point. If we were alone as a.

Standalone brand, running a loan and trying to build distribution, that's very difficult at that price point. But when you have a big brother, having a big house, I think it's much more, it's much more feasible.

Robin Swithinbank: Incubation is the name of the game. Perhaps. Well look before we let you go because some time is running on. we've noted on this podcast before that the bigger you get, the harder it can be to respond to a crisis. the sort of the old adage of turning the oil tanker,is very applicable here.

What do your plans for growth become into 2026 and beyond, and do you believe that the [00:29:00] customers are gonna be there to help you achieve that growth?

Georges Kern: Well, we have plans obviously with Breitling, growth Business Breitling, which we, I mentioned earlier, and we are launching 2026, both gile and Universal, obviously, slowly,and the real, growth will come in 27 and 28, but all of that will help if you want our house of brands,to grow.

And,I'm a cyclist and, I know that when you cycle, up the hill, sometimes it's going down, but when you go down, you think about, oh my God, I have a couple of,kilometers to go up again. So, the market is going down, the market's going up. And,I'm sure that the market will, will recover, and we'll be ready at that, at that moment in time.

And I remember when we launched, for instance, econom Art at Bright Think it was just at the beginning of COVID, and we decided to invest in the Econom art to do, the advertising during COVID, et cetera. And it helped us tremendously when, the, there [00:30:00] were no lockdowns anymore. So. I went through so many crisis in my life and we always came back.

the industry always came back because what you have to understand is that in the luxury industry, people postpone purchases. They don't cancel purchases. You postpone, you might cancel a flight, you might cancel holidays, and it's lost for the year, but. Somebody who wants to buy a watch or a bag will buy it sooner or later.

And the second thing is, we are humans and we are pecore and people will always buy luxury products. And the third element, you cannot find demography people, We are 8 billion people on the planet. More and more people have access to these price points and to these products.

So if you take all these three elements together, I'm super confident for the luxury industry and for the, for the watch industry. you have to, to move forward.

Robin Swithinbank: Well, David, that, that's a really positive note to end on, and I'm reluctant to [00:31:00] ask yours any more

questions. Do you Yeah, I agree with Yeah,

David Sadigh: 

Robin Swithinbank: Brightness in Breitling. Let's finish there. George, thanks so much for joining us. It's been a real pleasure as always, talking to you. 

David Sadigh: Thank you job for coming.

Georges Kern: thank you. Thank you, us. 

Robin Swithinbank: So David, uh, George can on bullish form as ever, and not bury his head in the sand. Interestingly, what jumped out at you from our conversation with him.

David Sadigh: The fighting spirit, I think, this, idea of facing important,crisis. Let's use the word. with, still uncertainty around the 39% tariff in the market where he is doing like 23% of his sales. So super challenging.

Robin Swithinbank: Yeah, super challenging. the NFL deal would of course, have been in the pipe for,years probably. Bearing in mind that last year Breitling introduced a, a limited edition collection of, uh, watches for the NFL into the US market a year ago. So this isn't necessarily anything new as far as they're concerned.

But of course it arrives into a market that, as you say, is in some sort of crisis, particularly given the arrival of these, uh, 39% tariff. it's an interesting move taking the tariff outta the [00:32:00] equation because of course, Brightling is moving into one of the world's biggest and most valuable sport, and trying to dominate that space.

Rolex Omega, Hublot, Tag Heuer, these guys have all built their brands around some huge sporting partnerships. What do you make of that?

David Sadigh: you summarize it well, I think the. The sports category is extremely important as far as luxury brands are concerned, and even more for obviously, Swiss watch making brands. But the reality is that, uh, this territory is already packed. Rolex dominate like tennis, golf, uh, as some activities obviously in sailing.

launching is extremely strong in Ian Tag Heuer. we spoke with Anto, our first episode about the Formula one LVMH deal. Omega has trusted the Olympics, so I can go on and go on. And obviously you have other players such as that are also quite involved in like golf and tennis. So my understanding is that you don't have a lot of territories as far as sport is concerned, for major sponsorship.

So this raises the question of what are [00:33:00] the different opportunity remaining? And obviously the NFL as far as the numbers and the eyeballs are concerned is a fantastic opportunity. Now the question is that no one ever did a partnership, within NFL. is it going to work? Is it going to fly?

What will be the product? we have seen some of the new product, that Bright launch, is it going to get traction? And especially in the context of 39% tariff.

Robin Swithinbank: Yeah. And one of the interesting factors, of this partnership is that it demonstrates some ambition to become the number one in a territory. It's not competing with any of the brands in this space at the moment. And also, of course, it's a very big territory as we've outlined. Oliver Muller at Lux Consult, made the point to me that, it's all about being number one when you go into sponsorships, when you go into partnerships at this kind of level.

And if you're not number one, then the question is why are you even bothering? And the NFL is Fertile Land. No Luxury Watch brand has been there before. Timex were in there at one point with sub $100 watches. Brightling has no legitimacy in this sport, but done right, I think its involvement could be, hugely profitable, but [00:34:00] at the same time, if it ends up just being a three year deal and the partnership dries up, it'll have the opposite effect and dilute the brand.

David Sadigh: And it could end up looking like Folly, George Kern said that, uh, Breitlings largest market is the us. That's, that makes it a significant play as well, Yeah, no, absolutely. And people tend to see the NFL being only an American sport, but what we have seen in the last couple of years is that there is, also like some kind of growing audience from Mexico, from Canada, from Germany. so I think this is interesting, even though it remains like quite small in comparison.

To the US audience, but you're know, just connecting the dots. I'm under the impression that having a very strong partnership with NFL, that can also, reach more than 23, 20 4 million of, people in, Mexico, I think is interesting idea, at delight of the current tariff.

Robin Swithinbank: Yeah, there's no question tariffs are a threat, and George made no attempt to hide from that. I thought it was interesting as well that he said he only has two or three months worth of stock state size, which I'd imagine is a fairly universal figure across the industry without having heard from too many other [00:35:00] CEOs as to exactly how much stock they exported, before the tariffs kicked in.

we know that in both April and July brands went hell for leather with exports to front load their US inventories in a bid to get ahead of those tariffs. And so far they seem to have been slow to raise prices while they work through that stock. And of course, when that stock runs out, prices, we assume will have to go up.

that means the clock's ticking, right? there's a sort of an ultimatum on the table. Suddenly, the Swiss government's got, what, two, maybe three months to go and get a better deal as far as the, the Swiss watcher industry is concerned. Maybe it'll get 15%, like the eu, maybe 10% like the uk, maybe not very much, maybe nothing at all.

But in that case, the number one market for the Swiss Watch industry's product, the market that has held up the industry over the past five years is gonna be hit incredibly hard. and with that will come the economic hits, job losses in the main, I would imagine.

David Sadigh: We are like probably, ahead of some kind of revolution, when it comes to distribution watches and so on. we are hearing brands starting, started [00:36:00] considering to potentially, start crafting watches outside of Switzerland. We are hearing companies trying to build subsidiaries in the uk, trying to distribute their brands and try to take advantage of like more favorable type of, tariff.

we've heard, Nico Hayak, CEO of SWAT group mentioning,a moon watch. apparently made, of different materials, so that the price, can remain adjusted to the US market. so I think this is probably the beginning of something bigger. what I'm hearing on the market is that the assumption is that the tariff will roughly remain in place.

and, obviously no one has a crystal ball and we cannot know. But this pressure, this pricing pressure on what is, let's remind everyone the most important market in the world for the luxury watch industry. And at a moment of like slowdown in China that has been like there for a couple of years now.

this situation creates all the ingredients for some kind of [00:37:00] disruption in the weeks to come.

Robin Swithinbank: One of the things I thought was really interesting, was when you and he picked up on the gray market and what's gonna happen to it in the course of the next, three to six months at least, but possibly longer as a consequence of these tariffs. what's your thinking on what's gonna happen with watches in the gray market?

David Sadigh: It's interesting to look at what happened in the past, either in Asia when we had like major price discrepancies between Hong Kong and mainland China, or even, in Europe, when the war, started, And I think that every time you have price discrepancies, you will find obviously people trying to take advantage of that and trying to need arbitrage.

And nowadays, especially with the emergence of all the chrono 24 type of like marketplaces, and it's easier to basically find and source watches with box and papers that are like new condition and try to play that game. And obviously I think many of the retailers are also on the fresher. So I wouldn't be surprised indeed to see lots of gray market issues arising around the us.

I think George was clear on the fact that, biomass, Mexico, [00:38:00] Canada, and some of those markets would become like primary destination for US travelers,to buy watches from. Now, the reality is that I do not believe that these overseas buyers will compensate for the challenge.

As far as the domestic sales are concerned. So if you add on top in this gray market issue, that's why indeed the world revolution might be a bit like tough, but I wouldn't be surprised to see some important moves coming, 

Robin Swithinbank: yeah. Well, I mean, the, the situation will unfold before us, of course. and if we are gonna see mergers and acquisitions, then the landscape is gonna change significantly, and that makes it interesting, certainly interesting period in which to be observing and to be recording a podcast. the gray market thing for me is interesting, because, certainly in the earlier part of my career, in late two thousands into the 2000 tens, I often spoke with brands and retailers about the battle they had with the gray market.

And they were at that point really struggling as internet exploded and as e-commerce exploded, they were really struggling to manage supply to control distribution. And so they did a huge amount of [00:39:00] work to combat, the gray markets. They pushed pre-owned market regulation. Offering certifications to sellers who could demonstrate, legitimacy, competency, all around trustworthiness, all that sort of thing.

And the effect of this was that consumers were drawn more readily to brand approved and certified outlets where prices were much more controllable. But now I think as you've just outlined, with pricing already outta control and consumers already telling their backs on the primary market, it's only gonna open the market up to the sort of abuse that the industry lives in fear of, as unsold product moves around behind closed doors.

And you mentioned the pressure that's on retailers. There are so many stories at the moment of retailers just with safes that are overflowing with watches that, they've had to take from their brand partners. In advance of the tariffs kicking in that they simply can't sell. So at some point, those retailers are gonna, the hand will be forced, one would imagine, as they try and move stock through, where does it go?

If it's not going to the customer outta their doors, then they're gonna try and find somewhere else for it. a febrile situation, no doubt.

David Sadigh: New alliances are going to get [00:40:00] formed. people are going to travel much more to India, Saudi Arabia. We can, see, that there is a shift happening. And I think that, it would be difficult for people to, only bet on the potential like,let's say a reduction of tariff, especially at the moment.

And you might have seen the news in the last two, three days. Several analysts, and it has been for going on for a couple of weeks now, are saying that a slowdown is ahead in the us. and that, obviously, no one is, fully trusting the numbers that are like coming out at the moment. So I think all this makes it quite difficult to know what's going to happen.

exciting time for a Luxury Society podcast.

Robin Swithinbank: Very exciting to have the Luxury Society Podcast. David, let's, call time on the conversation. it's always a pleasure talking to you, but, we'll, we'll get together next week and do it all over again.

David Sadigh: Cool.

Robin Swithinbank: Thank you for listening to the Luxury Society Podcast. If you've enjoyed this episode and would like to hear more, don't forget to subscribe. And if you want to go deeper into any of these topics, check out luxury society.com where you'll find stories, insights, [00:41:00] and profiles that unpack what's going on in the world of luxury right now.

I've been your host, Robin Swithinbank, and this has been the Luxury Society Podcast available on Apple, Spotify, and wherever you get your podcasts.