Time masters: Chopard continue to grow in the Gulf region

Nearly 160 years after it was founded, Chopard remains focused on an ethical and sustainable future that will keep the Swiss watchmaker popular with GCC consumers. Siblings and co-presidents Karl-Friedrich and Caroline Scheufele reveal how the family business is moving into the future without forgetting its past.

Caroline and Karl-Friedrich Scheufele are leading Chopard into a new hour of watchmaking.

Caroline and Karl-Friedrich Scheufele are leading Chopard into a new hour of watchmaking.

Chopard has been part of the Gulf for as long as the UAE has existed. It was one of the first luxury brands to be established in the region, and it is among the top sellers.

“Our products have been admired by our loyal Arab clientele since the early 1970s,” says Karl-Friedrich Scheufele, who along with his sister, Caroline, is co-president of the 157-year-old Swiss company.

Chopard is a rarity in the world of today’s jewellery and watchmakers because it is family owned. Karl-Friedrich, 59, and Caroline, born three years later, and father, Karl (who despite being in his 80s continues to arrive at work in the Geneva office every weekday at 8am), try to build on the brand’s past while celebrating the present and doing what is necessary to secure its future.

“Our family history is the cornerstone of Chopard,” Karl-Friedrich says.

From the last emperor of Russia, Nicholas II, who was a loyal Chopard customer, to today’s kings in the Middle East, the company known for making jewellery and watches of the highest quality continues to find new ways to grow the business.

It is the only luxury brand in the world that can tell its customers where it sourced the gold used to make a watch or a piece of jewellery. In the less-than-transparent business world, Chopard says it is doing for gold what the Kimberley Process did for diamonds.

While Karl (and his wife, Karin) continue to chair the group, it is siblings Karl-Friedrich and Caroline who plan to keep the brand relevant and popular in the GCC for decades to come.

Chopard established its own watch manufacturing facility in Fleurier in 1996, reducing the need for third party parts.

Karl bought Chopard from Paul-André Chopard, the grandson of the founder Louis-Ulysse Chopard, in 1963 and set out to revive the name.

In 2016, the company saw 10 percent year-on-year growth, and Chopard expects 5 percent year-on-year growth in 2017.

“Our team in Dubai has been very active with marketing, organising exhibitions and telling the stories of Chopard,” Karl-Friedrich says.

“Another reason for the uptick last year was Dubai Watch Week in November; we saw a sales uplift and were able to promote awareness of good craftsmanship.” He refuses to reveal any figures.

“The Middle East makes a positive contribution to the overall business,” Karl-Friedrich says. “It accounts for more than 15 percent of the total business, as a direct contribution, and represents a gain over other parts of the world. Most of this business is from local clients. Some sales are from made-to-order pieces, but around 90 percent are off-the-shelf pieces.”

In the region, there is a preference for precious stones and specific designs, he says. “But when I first travelled to this part of the world 25 years ago, we had specific, tailor-made pieces for regional customers, bigger and more intricate – this is not the case anymore. In fact, the tastes of these customers are quite refined [now].”

“In the GCC, the ladies’ favourite precious stone is the emerald,” Karl-Friedrich says. “Arab women are also more attracted to the rose gold than white gold. In terms of colours, green is their first choice. When it comes to men, it is more about the technicality and design of the watch in general.”

The famed Cannes Film Festival Palme d’or is awarded annually.

Caroline says her father had the idea of setting diamonds on the bezel of a men’s watch. “He travelled a lot in the Middle East, and Chopard was a pioneer in this market,” she says.

As tastes have changed, Chopard has had to remain as relevant as it was when it began in 1860. With the world more connected, and clients able to learn what is popular simply by using their mobile phones, companies need to do more to survive, never mind turn a profit.

Active in 125 countries, Chopard makes 80,000 watches and 80,000 pieces of jewellery a year. With 2,000 employees worldwide and corporate partnerships with the Mille Miglia car rally (since 1988), the Cannes Film Festival (1998) and the Historic Grand Prix of Monaco (official timekeeper since 2002), the company already stands tall on the global stage. But it is perhaps its ethical and sustainable philosophies that will help it secure a profitable future.

Five years ago, Caroline had a conversation with Livia Firth, wife of British actor and Academy Award winner Colin Firth, and the creative director of Eco-Age, which works with companies as they develop sustainable and ethical strategies. Livia brought to Caroline’s attention the fairmined philosophy – that is, ethically mined minerals. Caroline grabbed hold of the idea and Chopard became the first (and remains the only) luxury watch and jewellery maker to follow a fairmined policy.

“It is not an easy journey, but it is the right one,” Caroline says.

Chopard buys gold directly from certified mines. The company has partnered with the Alliance for Responsible Mining, which works to increase the proportion of fairmined gold the company can use but access to fairmined gold remains limited. Chopard can obtain only 2 kilos per month. The jeweller hopes to be able to buy a portion of its gold from fairmined cooperatives in South America, allowing it to create more products.

The ethical concept received a promotional boost three years ago at the 67th edition of the Cannes International Film Festival when Chopard introduced the world to a pair of earrings (worn by Marion Cotillard) made with fairmined white gold.

Chopard has designed the Palme d’Or trophy presented to the best film at Cannes since 1998 – using fairmined gold since 2014.

While the number of watches sold has declined this year, the total value has continued to rise thanks to a continued desire for luxury timepieces.

Strong ideas and a rich history, however, are not enough to help a family business survive – an issue all too well known in the GCC, which has been built on multi-generation firms. Caroline and Karl-Friedrich seem to have it all worked out. More than 20 years ago, the siblings created a leadership team that was inspired by their parents, and uses the strengths of each to help the company continue to grow.

While they share the same office, Caroline, who is a trained gemmologist, focuses on jewellery making. She is in charge of design, boutique organisation and management as well as fragrances and accessories.

Karl-Friedrich, a trained goldsmith and watchmaker, is responsible for the men’s watch division, and handles the technological and commercial aspects of the company.

The family consult one another when it comes to global strategy, production, distribution, new designs and new products. The family/company organisational chart has helped Chopard not just stay on track, but continue to grow. In addition to the 20 Chopard boutiques in GCC malls, the company opened a regional representative office in Dubai in 2015.

“In fact, the biggest Chopard boutique worldwide is located at The Avenues-Prestige Mall in Kuwait,” Karl-Friedrich says.

Chopard’s strategy for the GCC includes expanding retail operations, with two new boutique openings set for the next couple of months. One will be in Khobar, Saudi Arabia, and the other in the recently opened Mall of Qatar. Additional openings are planned for 2018, Karl-Friedrich says.

“The strategy is to provide the best retail experience to our clients, to deliver the best product, the best service, to accompany our client through the years and make sure to provide an excellent after-sales service,” Karl-Friedrich says.

“Although the collapsing oil prices had undeniable effects on the economic situation in the GCC, it has not affected all the luxury industry across the region. As per the economic theory, luxury goods are not linked proportionally to the drop in salaries and revenues. The watches and jewellery sector is nowadays experiencing a more moderate growth.”

Karl-Friedrich says Chopard needs to look to the future but not forget its past.

Despite Amazon buying Souq.com, and Mohamed Alabbar’s Noon.com soon to launch, Chopard has no plans anytime soon to move completely away from the traditional retail experience.

“Going to a store, touching and feeling a product, especially watches and jewellery, cannot be reproduced online,” Karl-Friedrich says. “We do not believe that internet retailing will really affect the sales in our boutiques.”

Having said that, many potential customers use the internet to compare prices. “Three years ago in the US, we introduced an e-boutique [and another more recently in the UK]. We are getting to see a good response, which is positive,” he says.

“At this point in time, we have not taken any decision if or when we will enter into the e-commerce business in the Middle East. It’s quite a logistical challenge.”

In three years, Dubai will be welcoming the world to Expo 2020, the UAE will be on the verge of its fiftieth year and Chopard will be marking its 160th anniversary. The company has seen generations come and go since opening up shop in Sonvilier, Switzerland, in 1860, and it intends to experience plenty more as it continues to set a path that separates it the competition.

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