Interview with Jean-Christophe Babin, CEO of Replica Watches Bulgari

Replica Watches UK — Our editor-in-chief spoke to Bulgari CEO Jean-Christophe Babin about the global economic situation, watch prices, smart technology and the vertical integration of Bulgari’s watchmaking division.

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The last time we spoke it was by telephone during the SIHH last year, when Bulgari announced its “Bulgari Protect” programme in support of Swiss retailers after the Swiss National Bank removed the exchange rate peg with the euro. How successful was this programme?
The Bulgari Protect programme was in force until August last year, when the Swiss Franc/euro exchange rate stabilized, even though it did not return to its historical level of 1.20 before the Swiss National Bank removed its peg. The rate is now around 1.10 and, by increasing prices in the euro zone, we have managed to bring prices in Switzerland back into line with those in the euro zone.
The programme was very well received because at the time we were one of the few brands who reacted quickly to the news across all our product range and it allowed us to close the year with positive figures for the Swiss market. This is all the more remarkable because as everyone knows 2015 was a difficult year for the industry.

What about the wider economic context, with a weaker Chinese economy, problems in Russia and a drop in the tourist trade?
Bulgari Protect did not just have a direct impact on prices, it also had a positive psychological impact. As far as our global business is concerned, the growth rate in Chinese tourism has slowed and after the terrorist attacks in Paris there was a big drop in the number of tour groups visiting countries like France and Italy, which also had an indirect impact on the Swiss market because a lot of these tour groups pass through Switzerland as well.
But aside from this, customs controls in China have had a direct impact on sales in specific product categories. For example, the tax applied to watches in China is 30%, irrespective of which country you are returning from, but for jewellery and leather goods it is only 10%. If you add fines to this it can make a big difference to the final price you pay for the watch. But the good news is that this is boosting domestic demand in China, since buying a watch locally may be a little more expensive but you have no risk of incurring additional customs charges and fines.

Do you feel competition on price, for example with models like the Diagono Magnesium you launched last year?
At Bulgari we tend to look more at the customer than the price. We do have the Diagono Magnesium from around 4,000 Swiss francs and up to 5,000 for the new models that we will present in Basel this year, but we remain convinced that a beautiful watch with a clear identity like the Octo, with a manufacture movement, in the 7,000 – 15,000 Swiss franc price range, will continue to dominate the market in terms of value. I think this should be our core focus.

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