MICHAEL TAY - GROUP MANAGING DIRECTOR OF THE HOUR GLASS
Group Managing Director of the Hour Glass, Mr. Michael Tay is in charge of one of the most (if not the most) famous network of boutiques in Asia. With a large choice of Luxury Watches (Big names & Independents), i was very curious to hear his point of view on the Watchmaking industry.
In the past 2 or 3 years, What have been the main Challenges for the distribution or retailers ?
We face the same Challenges as the all Watch industry. It mainly comes from actions that have been taken perhaps back in 2009. I’m talking about the 2008 great recession, that’s really when the major crunch came. Lehman Brothers collapsed and there was an immediate reaction from consumers. It led to a big consumption decline in the Luxury market especially in Watches. The all world experienced that decline, Europe, America and more… Asia did not suffer much because China decided to boost the economy. They released a ton a liquidity which led very quickly to a reversion. That’s why Chinese consumers became the most important buyer of the world. As a result, Watch brands continued to move on with the expansion of their production capacities.
It really was unbalanced because only one part of the world was driving the consumption and it distorted the market significantly.
When China finally climb down on consumption, it led to a sharp pull back in purchases and brands heavily exposed in China started to feel the full effects of it.
The Watch industry declined once again and we started to feel a sort of “slow burn” so everything we experienced in the past 5 years is the result of actions taken a decade ago.
To me, the real issue here is the production capacity (excess inventory) and now we’re in a phase of rebalancing. The brands finally realized that what attracts the consumer is the notion of Emotion, Values, Long term values, Exclusivity, Rarity… and for the past decade, most of the brands didn’t pay enough attention to those notions.
What type of timepieces generate sales, nowadays ?
The key driver of Luxury Watch sales is a category that i define as “Luxury Performance Sports” watch. The brands that have the right products in this category demonstrated success in the past decade. I would say close to about 15 years ago, we started investing heavily in this category. Brands like Audemars Piguet, Hublot, Richard Mille, Rolex, and to some extend even Patek Philippe with the Nautilus.
How would you define your relation with the brands ?
You know, Asia sells about 65% of Luxury watches. 65% of Luxury watches are on Asian wrists! That’s huge. As a result, they of course support communication to the Asian market.
Nevertheless, I see an evolution because for example, in the past few years social media drives a lot of attention to millennials and this idea of “story telling” has become much more prevalent. Brands that have great stories to tell (and are able to communicate those stories effectively) achieve more recognition and commercial success. Even if the product is strong, credible, innovative, if they are unable to tell a story around it, it’s probably not going to succeed.
Do your customers have a strong interest for Independent timepieces/brands ?
Clearly. The Hour Glass is perhaps, a pioneer in this area. We started to work with independent artisans since the 80’s. We were perhaps the largest Gérald Genta agent in the world. We financed the first Philippe Dufour’s timepieces (The “Grande Sonnerie”). We have an incredible choice of artisans under one roof. It’s been an investment in the past three and a half decades and we have a solid base of clients who appreciate Independent Watchmaking.
Sometimes Independent watches are very complex (mechanically speaking) so
How do the Hour Glass manage their maintenance/service ?
With Mechanical objects, as long as they (the brands) apply traditional techniques (even if the brand is avant-garde in terms of design/construction like Urwerk or Mb&f…) those watches can be repaired or serviced by a skilled watchmaker. We very rarely partner with brands or artisans who propose new or unconventional way to produce a timepiece.
Thank you! Mr. Michael Tay.