Maurice Lacroix, the luxury Swiss watch brand, is still up for sale, and for the last three years, it has been profitable. The company has focused on young customers and Aikon, the entry-level priced model.
The profitability
DKSH Holding AG, the Zurich Based distribution giant that owns the watch brand, had put it on the block after the watch sector downturn in 2015. The company is yet to find a buyer.
Stephane Waser, the CEO, said that the brand had a record 2021 where the Aikon model was popular with the new millennial generation buyer looking for an affordable luxury Swiss watch.
While other brands focused on pricey watches, Maurice Lacroix has zeroed on the affordable segment.
After taking the top job in 2014, Waser has overhauled Maurice Lacroix, focusing on watches priced in the range of 1000 francs to 3000 francs. The company shifted to online sales and allowed work from home before the pandemic made it compulsory in 2017.
The CEO, in an interview, said that they had changed the company culture by trying to understand the younger generation’s behavior and needs before selling to them.
The decision to go lower on the price level is against the industry trends as rivals such as Richemont’s Baume & Mercier and LVMH’s Tag Heuer have focused on expensive models.
The top-end models drove the shipments of the Swiss watch in the recent rebound. The shipments for models costing more than 3000 francs increased by 28% in February, and those costing between 500 francs and 3000 francs were up by 16%. Lower priced models less than 500 francs rose by 4.8%.
The Aikin stainless steel automatic timepiece comes at one-tenth of the price of a similar design of Patek Philippe’s Nautilus and Royal Oak from Audemars Piguet. Aikon timepiece accounts for 70% of the total sales of the company.
One of the top 50 brands among Swiss watches, Maurice Lacroix, has an annual revenue of 35 million francs and selling 70,000 watches in 2021, as per estimates by Morgan Stanley. In comparison, the high-end cult watch brand F.P. Journe sold just 900 watches in 2021 but earned the same revenue.
Maurice Lacroix is doubling down its strategy at the entry-level, and it is launching a brightly colored quartz version made of recycled plastic of the Aikon model. The Aikon sells for around 700 francs and is marketed using sing basketball players, dancers, skateboarders, and parkour artists on advertising materials.
Waser noted that 30% of sales are online, and this strategy has translated to profits over the last three years. This has taken off the pressure on the company’s sales process, which, while it is ongoing, is not urgent for the parent company DKSH.
