GRENCHEN, Switzerland — In a downturn, business leaders often talk of continued investments in innovation as keys to unlocking future growth. But as the luxury watch industry’s slowdown continues, Breitling’s chief executive is closing the door on that idea. “We’re going to do more of the same,” says Georges Kern, who has run the private-equity-backed Swiss watchmaker since 2017.

“It doesn’t sound very exciting, but we have a proven concept,” he continues. “Over the last five or six years, the goal was to become relevant because the brand wasn’t relevant anymore. We’ve become a generalist brand that’s cool and relevant and we’ve been growing tremendously.”

Like most Swiss watch companies, Breitling does not publish its results, but according to Morgan Stanley estimates, the company has more than doubled its turnover since Kern’s appointment, growing revenues to 870 million Swiss francs ($976 million) last year. Kern won’t confirm those figures, but points to Morgan Stanley’s report when asked about his company’s performance.

Growth in the Swiss watch sector, however, has since slowed. In 2023, export values reached an all-time high of 26.7 billion Swiss francs, but according to the Federation of the Swiss Watch Industry, values have fallen 2.6 percent and volumes 8.7 percent year-on-year to the end of April.

Kern urges perspective. “Of course, turnover slowed down versus post-Covid,” he says. “But it’s still much, much higher than pre-Covid. Revenge spending after Covid was totally abnormal, not only for the watch industry but for the whole luxury industry. What are we complaining about? We should be very happy about what we have.”

The next step for Breitling, he says, is to build what he calls “esteem” by focusing on the company’s history and its manufacturing capabilities, which he says he is planning to expand. “These elements give reassurance to the consumer, who knows we’re a cool brand but maybe isn’t aware of our manufacturing,” he says.

Kern’s appointment seven years ago surprised the watch industry. He had just been promoted to Richemont’s head of watchmaking, marketing and digital after a successful 15-year stint as IWC’s chief executive and was due to stand for election to the group’s board but was lured away by private equity firm CVC Capital Partners to head up Breitling. Partners Group is now the 140-year-old watchmaker’s largest shareholder.

Breitling, says Kern, had become stuck in a rut, too focused on aviation and pilot’s watches that were pitched with outdated, often borderline misogynistic messaging. In the years that followed, Breitling invested heavily in a rebrand that positioned it as what Kern calls “a casual, inclusive and sustainable” luxury company, and launched an advertising campaign that featured Hollywood A-listers Brad Pitt, Charlize Theron and Adam Driver. Only Theron remains.

“Brad Pitt helped us a lot in changing perceptions of the brand and giving it a more modern touch,” explains Kern. “But after a while the brand had that growth and you don’t need that [Pitt] anymore. With maturity you dress in a different way.”

Kern says a lot of his advertising investment is now in retail following an aggressive boutique opening programme. “This is the biggest marketing tool you can imagine,” he offers. Breitling now has a global network of around 300 monobrand boutiques, many of them franchised, an increase from around 50 seven years ago. Employee numbers have spiked too, rising from 750 staff in 2017 to 1,900 in 2024.

“People want a physical experience,” says Kern. “They can buy sneakers online because they know their size.”

Despite the industry wobble, Breitling is still growing, Kern insists. The pinch, he says, is affecting smaller Swiss watch companies. “Some [smaller] brands enjoyed growth after Covid because there was no stock,” he says, referring to the supply and demand imbalance created by the pandemic, particularly at Rolex. “But now there is stock available, and these smaller brands are suffering much more than the bigger brands. The slowdown is mainly for the smaller and less solid brands.”

The FHS’ figures support the theory. In its most recent report published at the end of May, it indicated that watches with an export value (roughly half retail) of between 500 and 3,000 Swiss francs fell by 10 percent in April, while watches with an export value above 3,000 francs, where most of the big players operate, increased by 7.8 percent. Kern says most of the watches he sells are in the “sweet spot” between 5,000 and 15,000 Swiss francs.

Breitling has been reliant on a strong US economy for years, and Kern says that 20 percent of his sales today are done stateside, making it the company’s number one territory. Even with the uncertainty of the presidential election in November, he says he’s confident the US will continue to prop up Breitling’s business. “Analysts have been talking about a recession in the US for years, but it never happens,” he says. “It’s a very resilient, entrepreneurial, dynamic economy.”

He identifies China as a growth territory for Breitling, and says that, while less than 10 percent of the company’s sales are in the country today, he believes the figure should be 10 to 15 times higher before they “reach our fair share of market.”

Previously, Kern has commented on the industry’s need to invest in the entry-level watch category, beginning around 2,000 Swiss francs, where first-time watch buyers once found household name brands, such as Omega and TAG Heuer, as well as Breitling. But well documented price hikes have lifted Breitling out of this bracket, leaving a big-name brand vacuum.

Kern admits Breitling’s average price point has climbed significantly since his arrival, rising from $5,000 to $7,000. The increase, he says, is down to replacing off-the-shelf third-party mechanical movements with in-house calibres that offer higher performance, the continuing strength of the Swiss franc and inflation. But he concedes that the industry has been guilty of inflating prices.

“I know brands in the watch industry that have been increasing prices dramatically for the same product, and that’s a problem,” he says, without adding a name.

He alludes again to a project that will come to fruition next year and that will give him leverage in a lower price category he believes is still critical to the future success of Swiss watchmaking. “People say all the brands are moving up and there is no business in the lower price points,” he says. “But I don’t believe in this.”

He points to India’s population of 1.4 billion people. “Income levels will grow steadily and many people, before becoming rich, will be first middle class,” he says. “There will be more and more middle class in the world, everywhere. These people might want to buy an analogue watch and not an Apple Watch, but they will start with 2,000 Swiss francs.”

He won’t be drawn on what shape the project will take but says that despite Breitling’s acquisition of the heritage dial name Universal Genève last year, the company’s investors — of which he is one — “don’t have that ambition to become a group.” Instead, they will look to IPO or sell.

As for Kern himself, he says Breitling’s tailwind means he has no intention of hanging up his wings just yet. “Seven years ago, there was no expectation on Breitling and people said I was going to drive it into a wall,” he says. “But what we have from Breitling today is only 20 percent of what I imagined seven years ago.”