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Interview With Peter Stas, President And CEO Of Frédérique Constant

Peter Stas

President and CEO of Frédérique Constant

A leading player in the midrange arena, the Frédérique Constant brand is experiencing growing success, having sold 120,000 watches in 2011. The numbers are enough to reaffirm the initial strategic decision of its Dutch founding directors, Peter and Aletta Stas, to focus the manufacture’s energy on classical luxury at an affordable price. This concept is so valuable that the couple chose to launch, or re-launch, two additional brands rather than diversify their collections. Alpina, with its sporty collections, and Ateliers deMonaco, operating in the very high end of the segment, define the present range of the Frédérique Constant group.

Peter Stas’s rise to success is certainly a beautiful story. Born in Holland, the lover of Swiss watches founded his brand in 1988. By combining the given name of his wife’s great-grandmother, Frédérique, with that of his own great-grandfather, Constant, he created a title that “sounded nicely Genevan,” as co-founder and Chief Operating Officer Aletta Stas likes to point out. Living in Switzerland since 1997, the couple has never ceased to enhance their company. More than 20 years into the brand’s history, the founding spouses maintain the status of majority shareholders with a 95% ownership of the firm they created—an independence that Aletta and Peter Stas are not nearly ready to relinquish.

You founded Frédérique Constant in 1988. What was your career path before that date?

I acquired a Masters degree in economics in Rotterdam, before moving to New York to work for a consulting firm for two years. I then joined Philips as Product Marketing Manager, first in Holland, then in the Far East, where I stayed for six years. In 1988, my wife and I founded the Frédérique Constant brand. But it was a part-time endeavor, as I hadn’t left Philips at the time. We produced prototypes and received our first order in 1991, from Japan. It took us a year to honor it, between Holland, the Far East, and Switzerland.

Where did your desire to create a watchmaking brand come from?

I’ve always loved watches. I loved to window-shop during my family vacations in Switzerland. But above all, I love to create, to build something different. I wouldn’t have wanted to work in finance, for example; I needed a product. I learned a lot with Philips in terms of investment, technology, and innovation.

When did you decide to relocate to Geneva?

We had a watch assembly partner in Geneva. But in 1997, we had a couple of issues with quality, which drove us to the decision to move there. We began in a small space, before expanding to 100m2, then 1,000. Since 2006, finally, we’ve been operating in our 3,200m2 facility.

How many watches did you sell in 2011?

Approximately 120,000 pieces, or a growth of 25% in relation to 2010.

Frédérique Constant was the first brand, in 1994, to incorporate an aperture in the dial, as a means of revealing a portion of the movement. How did this idea come to you?

At the time, right after the quartz crisis, nobody displayed the movement from the top, only from the caseback. We wanted to re-explain the mechanics to our clients. Today, nearly everybody has copied us…

You never patented this innovation?

No, and I regret that a little.

Revealing the inner workings of the movement is clearly close to your heart. In 2010, you launched the Junior collection, with a 38mm model for boys. In 2011, you released a feminine version. Why this line?

You’re right, it has to do with helping young people discover the beauty of horology. In 2010, my son was 14 years old. Several people asked me: “Why not produce a wristwatch for him?” We gifted the first model to one of his friends. The response was such that we turned it into a complete collection.

How successful has it been?

In 2010, we sold 8,000 pieces for boys, and in 2011, 5,000 for girls.

At the summit of the pyramid, you also developed a tourbillon. Your positioning is however one of affordable luxury. Isn’t such a timepiece, with grand feu enamel and a silicon escapement, sold for 50,000 swiss francs, outside of that realm?

This tourbillon equips one of our two in-house made base movements, in this instance the FC-930 Heart Beat Manufacture caliber. Such a regulating organ fits nicely within our open-heart concept. But above all, we had the internal competencies to accomplish it. It’s a way of showcasing our engineers’ know-how.

How many have you sold?

Eighty the first year, and 60 per year since.

Is it your grandest complication?

Yes, the FC-930 caliber was launched in 2004 after three years in development. We have interpreted it since in several versions—manualwinding, automatic, moonphase with date, tourbillon and GMT. In 2009, we presented the Maxime Manufacture FC-700. It currently exists in three variations—automatic, hand-indicated date, and power reserve. More versions will be launched in the near future.

Are all components manufactured in house?

No. The jewels and balance springs, for example, are outsourced.

Where do you acquire your balance springs?

From Nivarox at the moment, a Swatch Group company.

Are you very dependent on swatch Group for the delivery of your movements?

At the moment, Swatch Group only delivers 2,000 movements per year to us. But we’re in the process of developing, together with Sellita and Ronda, two movement makers that are independent of the group, a strategy designed to increase our own independence.

What portion of your production consists of mechanical watches?

We currently produce 50% mechanical watches, which adds up to 70% of our total sales.

You also founded, in 2009, the Ateliers demonaco brand, installed in the prestigious principality. Why?

We had the opportunity to create some special movements: perpetual calendar, tourbillon, minute repeater. But such models, worth between 40,000 and 200,000 euros, did not fit the identity of the Frédérique Constant brand. We therefore sought the acquisition of an existing brand, to no avail. Creating one seemed like the only solution, but many already existed in Geneva. Monaco is one of the greatest centers of luxury in the world—a unique place. Following two years of negotiating with authorities, we were able to set up there. The production, made in Monaco, is presently very exclusive, with only 60 to 70 pieces per year.

Where do the movements come from?

A portion of the components is produced here in Geneva.

Your Geneva-based headquarters house a third brand, Alpina…

Alpina has existed since 1883; we bought it in 2002. This acquisition represents the same logic: we wanted to release sporty models, which didn’t find their place within the DNA of the very classical Frédérique Constant collections. We deemed it quite important to preserve a coherent design identity across the entire brand.

How many Alpina models did you sell in 2011?

Around 8,000, a growth of 250% for the year. But it must be said that Alpina was somewhat affected by the 2009 crisis. Our objective is to reach 25,000 annually.

You recently inaugurated a Frédérique Constant boutique in taiyuan, the capital of the Chinese province of shanxi. Where will the next one be opened?

We already have two in Hong Kong, one in Seoul, and one in Saudi Arabia. The next boutique will be in Europe.

In switzerland, in Geneva?

Not yet, the rent is so expensive!

Is China an important market for you?

Very important. We have roughly 100 points of distribution in China, including seven in Taiyuan. It was self-evident for us to open our first mono-brand boutique in that city. It’s a beautiful high-end 1,400ft 2 space.

What does China represent in terms of sales?

Around 15% of our revenue.

Is it your number one market?

No. That’s Europe, with Germany, France, Switzerland and the Benelux (Belgium, Netherlands, Luxembourg) at the head of the pack. Together, these markets represent 38% of the sales. Next is Asia at 32%, then the United States and Russia. We have a very good overall balance.

Have you established a growth ceiling for yourselves?

No. We are presently distributed in 2,700 points of sale worldwide, and I think that we can increase that number to 3,000 or 3,500. That’s a reasonable growth.