CEO Magada Aims to Broaden Appeal of Zenith Watches
Being the CEO of a luxury watch brand may sound glamorous but the worldwide political and economic upheavals over the last few years have made the business of selling expensive timepieces more challenging than ever before. In a recent interview with Financial Times, Zenith CEO Aldo Magada revealed how he faces those challenges as well as his plans to give the brand more popular appeal.
Zenith was founded in Switzerland back in 1865 and by the mid-20th century had become one of the best-known brands in the industry before running into problems during the 1970s. In 2000, LVMH purchased the brand and over time increased the number of movements produced from 8,000 in 2009 to 50,000 in 2014.
That’s why it came as something of a shock when it was announced at the 2014 Baselworld that Zenith would no longer make all of its movements in-house. On taking over the reins of Zenith watches later that year, Magada cancelled the plan to outsource the brand’s movements to Sellita. Instead the CEO instead hopes to broaden the appeal of the long-running Zenith name.
“I think the idea was to make Zenith a more volume-oriented product,” Magada said of the decision. “For me, it was a bit too early. Zenith is still very niche today, but there is no reason why it cannot be as famous as the other big brands.”
One way he intends to make the Zenith brand more attractive to buyers is by simplifying the array of models offered. “We have so many models and movements,” said Magada. “We have to use an assortment that makes sense and is recognised by the customer.”
All makers of luxury products have been affected by the economic troubles experienced by some of the most significant markets for their wares. Magada zeroed in on one country that has such problems. “Russia is a big market for us, but with the rouble devaluation and the politics, it’s a problem, like [it is] for everyone,” he stated.
“We were also selling to a lot of [wealthy] managers, but these people have less to spend at the moment. We’ve had to raise prices, because we are not a commodity product, but we hope the rouble will come back.”
Such are the problems of a CEO when you’re trying to sell products to the very rich.