The Polarization Effect: Getting Personal With Hublot's Jean-François Sberro
"No matter what people say about Hublot, good or bad, they are going to talk about us." Our exclusive sit-down with Hublot's North American President.
Last year, I wrote an article titled “How I Learned to Stop Worrying and Appreciate Hublot” where I dove headfirst into the watchmaking technicity of Hublot. My opinion at the time (and still) is that watch enthusiasts tend to overlook Hublot and focus too much on the brand’s limited editions and ambassadors. I argued that Hublot had much more to offer than what so many tended to view only on the surface.
Shortly after writing the article, I received a very ominous email from Jean-François Sberro, President of Hublot North America (follow him on Instagram at @jfsberro). The title of his email was “Hublot Editorial” I thought I was cooked. It’s every watch journalist’s worst nightmare that your article will be the one to sever a relationship with a brand. However, Sberro’s email was the complete opposite, here’s an excerpt, “I think it (the article) is very representative of what Hublot is and what the brand is so exciting, even if polarizing in many instances. Anyway, I love the candor, spontaneity and straightforward enthusiasm. I hope to see you soon, whether it is in NYC or Miami.”
Wow! I thought. Sberro had actually read my piece and took the time to send a personal note. It was a very touching gesture, and I knew I had to take him up on the opportunity for a coffee. So during last month's Watches & Wonders, I paid a visit to Sberro at his Miami office.
Interview with Jean-François Sberro
Josh Shanks: Jean-François! A pleasure to see you again. How’s the last year been for Hublot?
Jean-François Sberro: Josh! Good to see you. In a sense, very good! We see a constant increase in traffic to our stores year after year. The Florida and South Florida market has bounced back very strongly after almost three years of being depressed. So, the last 12 months have been much stronger than the three years before. When it comes to Hublot in Florida, we're lucky, our Ball Harbor boutique is hugely successful. So for the Miami Design District boutique, we pushed to be more creative, and we came with a very cool concept, a collector’s boutique.
J-FS: For this concept, our Miami Design District boutique will carry one piece of any limited edition available no matter where in the world. Whether it is a worldwide limited edition, whether it’s a very original limited edition, Hong Kong only, we are going to have it here. It could be that maybe the only piece that will ever enter the US is going to be at the Miami Design District Boutique.
JS: And they’re all going to be for sale?
J-FS: And they're all going to be for sale! So, in terms of the proposition, in terms of value, the boutique always has the ammunition that no other store in the country has. So that boutique is doing pretty good, I would say.
JS: How has traffic been to the Design District?
J-FS: Traffic is still a little bit challenging. First, because Miami Design District is extremely high end, so you don’t get the kind of traffic you can get when you have some middle range brands. In a sense, I'm delighted that my boutique is selling on average $20,000 watches, so I don't need a lot of clients to turn that boutique into profitability. Now if I were one of these other brands, I would be concerned because even if my brand is healthy, I wouldn’t have the opportunity to convert clients because of low foot traffic.
JS: And what about the US market as a whole?
J-FS: In 2018, we achieved the biggest year ever in the US market. Obviously, I cannot disclose numbers because we belong to LVMH, but we grew by almost 15% in North America when it comes to net sales. In the $10,000 retail segment, the market research shows other brands having a decrease in 2018 compared to the previous three years. So, we are very happy that Hublot outperformed the market and posted steady growth. Hublot is on a little bit of trajectory of its own because I think it corresponds to a new form of watchmaking. The new generation is embracing us. Hublot is trendy and hype. So, we are benefitting off that trend and momentum from a new form of watchmaking.
JS: Could you name a few positives from 2018?
J-FS: I would say the two positives that I will remember will be; First, we posted the highest level of sales ever, but, at the same time, with the smallest type of network ever. We only had 51 doors last year in North America. As a brand, we’ve never been so small. For us, the idea is to make it even more exclusive, intensive, and productive. Second, is that we have transitioned, and I believe much more than other brands. Our business model has shifted from being a wholesaler to retailer. Last year we had more than 60% of our sales done through Hublot owned boutiques. We also have some great projects in the works, and that, of course, doesn’t mean excluding, at all, our wholesale network.
JS: In terms of cities, what’s your biggest market in the US?
J-FS: I would say Las Vegas.
JS: I love Vegas! I was just about to ask because there is such a connection between Vegas and Hublot, right?
J-FS: Hublot has many traits of personality. But, in Vegas, you can really embrace the brand’s lifestyle to its fullest. We see this every day because people in Vegas are in that mindset that gets caught up in the Vegas atmosphere. Gambling, partying, and shipping. Vegas contributes to a considerable portion of our turnover. We have two boutiques that are extremely big for us. One is in the Caesars Forum Shops, and since its opening, it's been in the top three of all Hublot boutiques worldwide. Then there’s our boutique in Crystals, which opened only two years ago. Vegas has generated numbers that surprised everybody in the company.
JS: Ok, it’s safe to say that Hublot is a very polarizing brand. As President of North America, what's your perception?
J-FS: I think in a sense, the watchmaking industry is a very established industry and every disruption of the status quo is going to be perceived as disturbing or polarizing. I think the success of Hublot has been very polarizing. I think Hublot has disturbed the status quo in a very significant way in the last 12 years. In 2005, Hublot was really nothing, honestly, and the brand has been multiplied by 20 times sales in just 12 years. For Mr. Biver, the polarization and the noise was the way to create interest in the brand. So he always encouraged that in a way. No matter what people say about Hublot, good or bad, they are going to talk about us.
JS: What’s one tip you would give to a collector?
J-FS: Focus on art and passion, and less on the investment. A watch is a piece of art, and I see too many collectors that ask, "But how does that hold value?" I understand this because if you're going to invest $20,000, you don't want to wake up next year and see that your watch is worth $5,000. Ouch! That hurts. Just the idea that, potentially, you have a $15,000 loss on your wrist is horrible to live with. But, first, you will need to fall in love. Do you feel a connection? Do you see yourself aging with this watch? I think that money and value have to be something that becomes secondary, even if it can't be excluded. Keep the emotional connection, react to the design, the technical quality, material, to even the story. And then, obviously, you say okay that brand is maybe a little established, and I'm going to invest my money at Hublot. Just make sure that you connect with the watch.
JS: You mention value, and I think brands are paying more attention than ever to secondary market values.
J-FS: Big time
JS: These days, anyone that walks into a boutique can look at a watch and sees the watch retails for $10,000 and then open their phone and checks Chrono24 and says, “Well, it’s cheaper here.” I think brands have done a much better job of making their prices more accessible, maybe lowering prices when they need to be, but then also drying up the gray market too.
J-FS: 100% because that problem will not go away and I think that the internet revolution started affecting the watchmaking industry pretty late. We feel the effects very strongly on the first market for new watches, but on the second hand, big time. Brands realized at some point, and it was so prominent they had to embrace it. Before was liquidation of final products had always been an issue for brands. What do I do with all the product and lines that aren't selling? Some brands were losing money and choosing all the wrong paths. Some were a little more careful about their product and would say, “No, I’ll just destroy my product and that the price of failure.” I think the next challenge is the second-hand market because there's a ton of new players there. But many are just concluding that there is one watch market, and it's growing every year. The internet to the watch industry is uncharted territory.
JS: Lastly, what tip you would give to someone starting in the watch industry?
J-FS: So, one of the first things that come to mind, and I would say this is very valuable for many things in life, but don’t burn bridges. I’ve rarely seen an industry which is, at the end of the day is so small. Watchmaking is one very few industries in the world where, geographically, it’s concentrated. It just so happens that 80% of the high-end mechanical watches are produced in maybe a 200-kilometer radius around Geneva, so it is extremely concentrated. You see people with careers spanning 40+ years, and they work at multiple brands, groups, or even launch their own ventures. You have the same players throughout the game, and throughout their careers, they’re going to end up at different places. So, don’t burn bridges, because the people you’re going to meet today, you’re surely going to see them again.