Moving with the times

OMEGA can boast many firsts in watchmaking. Its innovative co-axial mechanical timepieces have put the brand back on top

Omega co-axial

LAST year was a record one for the Swiss watch industry with sales of over 19 billion francs. And that stellar result - a year-on-year increase of 19.2 per cent - is something of a paradox for the industry.

We are confronted with myriad timekeeping devices all day long - on computers, phones, car dashboards, just to name a few - to the point where pulling back your sleeve to see the time on a wristwatch almost takes more effort than glancing at the timekeeping device right in front of you or in your hand. Today keeping time is almost a secondary - albeit convenient - function of a wristwatch.

"I don't wear a watch to tell the time," Stephen Urquhart, president of watch brand Omega, told WISH recently in Switzerland during an interview at the annual watch-fest, Baselworld. "Having a watch just to tell the time is no longer valid, unless of course you need it because you have a special job. A mechanical watch serves many functions but telling the time is not the primary thing. Someone who wants a watch just to tell the time will buy something cheap. You don't buy a nice suit just to keep you warm. One can live today without wearing a watch. I don't know how many times I've said that it's a man's only piece of jewellery and all that, but it's more than that. A watch is a piece of sculpture you can wear on your wrist and it's something that is not a rational decision, it's an emotional one."

Omega is possibly the most commercially important brand in the Swatch Group stable, which also includes brands Longines, Rado, Tissot, Breguet and Blancpain as well as Swatch, making it the world's largest watchmaker. The Omega story, however, has not been without twists and turns and is one that could be a case study in how to revive an ailing brand and turn it into a luxury industry leader.

The brand was founded in 1848 by Louis Brandt in La Chaux de Fonds in Switzerland and moved to Bienne in 1880 where it is still located. The name Omega first appeared on its watches in 1894. The company can list many firsts in watchmaking including being the first watch on the Moon (the Speedmaster was worn by both the US and Soviet astronauts), the first official timekeeper of the Olympic Games (1932) and the first mass-produced calibre (1885), among others.

But the brand's illustrious reputation took a beating in the 1970s when the industry shifted from mechanical movements to quartz, or battery-operated, mechanisms. At the time, it was thought that quartz movements, which never need winding and are always accurate, would be the future of the industry. Keen to be at the forefront of innovation in watchmaking, Omega went headfirst into this new technology.

"Perhaps we made a mistake going into quartz," says Urquhart, who started his career in the watch industry with Omega in 1968 before moving to Audemars Piguet in 1974. Urquhart moved back to the Swatch Group as president of Blancpain and then returned to Omega as president in 1999. "I remember the quartz revolution very well, I was new in my career but it was considered at the time perfectly normal that Omega should go into this new world of timekeeping because that was going to be the way of the future and, in a very few years, Omega became the leader in that technology. The Omega Megaquartz is still the most accurate watch we've ever made but we no longer have the technology to make it. Can you imagine?"

When Omega finally emerged from the quartz crisis, the damage to its brand had been done. Its products were perceived as downmarket and sales slumped. Omega and Rolex dominated the industry pre-quartz, with Omega outselling Rolex, but all that changed as Omega tried to compete with Japanese watchmakers and produced Swiss-made quartz movements while Rolex continued to specialise in mechanical movements (although it did also make quartz watches). To reclaim its position in the watch industry Omega needed to come up with another first.

In the early 1990s, Swatch group chairman Nicolas G. Hayek acquired the rights from the English master watchmaker George Daniels to his prototype of the co-axial escapement that he invented in the 1970s. The revolutionary co-axial escapement, which is the first practical new watch escapement to be invented in about 250 years, made its debut in 1999 in the Omega De Ville watch and replaced the traditional Swiss lever escapement.

Often described as the heart of the watch movement, the escapement transfers the energy from the power source to the gear wheels, or the timekeeping components of the watch, in precisely measured intervals and is what gives a mechanical watch its tick-tock sound. The problem with the Swiss lever escapement is that it needs lubrication to run smoothly and as the lubricating oil thickens over time it leads to a slower movement and therefore inaccurate timekeeping and more maintenance.

"When I came back [to Omega] in 1999 and I saw the co-axial movement I thought, wow, this is just manna from heaven," says Urquhart. "Back then it was 300 watches with co-axial movements that we were making as a limited edition and now, this year, we will produce over 400,000 co-axial mechanical movements." According to Urquhart, the day will come "very soon" when virtually all Omega mechanical movements will have the co-axial escapement. "It [the co-axial movement] has become synonymous with Omega and it has taken us back to our roots because Omega has always been devoted to what is inside the watch. I think the co-axial has become an inherent part of our culture and has allowed us to offer a better product and command a higher price because there is intrinsic value there and that, for me, will play a key role in everything we will do."

While a watchmaker might find something like a co-axial movement sexy, it alone is not enough to bring new followers to the brand. Jean-Claude Biver is credited with spearheading the revival at Omega, after which he left to revive the Hublot watch brand. Biver appointed supermodel Cindy Crawford as the face of Omega in 1995 and in one fell swoop made the brand appeal to a younger demographic and seem cool again.

Since then Omega has employed the services of a stellar line-up of brand ambassadors to join Crawford - George Clooney, Daniel Craig and Nicole Kidman and, at the height of his career, swimmer Ian Thorpe, among them - to bring glamour to the brand. Ask Urquhart if the strategy of using brand ambassadors pays off and you will get an emphatic yes. "Ambassadors gave Omega a face," he says. "I think ambassadors are so important for a brand today. You see all the top watch brands using ambassadors, they can't all be wrong."

At the same time, Omega has cut back on the number of retailers selling the brand and opened more than 250 Omega boutiques around the world, 100 of which are wholly owned by the company. The combination of selling through mono-brand boutiques and the use of the co-axial movement has allowed Omega to command higher prices and keep a tighter control on discounting by watch retailers.

The brand continues its association with the Olympics as official timekeeper and this year will, once again, be involved with a new James Bond movie, which not only includes product placement in the film but also the release of a limited edition 007 watch. "With all that going on, if we don't have good sales this year then we're in trouble," says Urquhart. "But that said, in 2011 there was no major event for Omega but we had a record year. The effect from the London Olympics could go on for years and the sales of anything to do with Bond are pretty constant; there is a peak during the film but it's fairly constant.

"Look, the cheapest alarm clock you can buy in a shop is a very accurate keeper of time," Urquhart continues. "A mechanical watch should be accurate, don't get me wrong; it's got to tell the time but that's not the reason that people spend money on a watch. The revival of the mechanical watch is due to the fact that it is something that is meaningful, sentimental and emotional and something that has lasting value. The mechanical watch was invented more than 250 years ago and has been improved over time and I think that has given this product lasting value, which is something that no electronic device can have.

"I love my mobile phone but I know my handset will not be working in five years' time and it will be far less likely to be able to be repaired. At Omega, we can repair any watch we've ever made in the past 100 years. We might have to make certain parts and it might cost money but we can do it, with one exception. The electronic watches we made in the 1970s and '80s we cannot repair, some we can but most of them we can't."