Sellita will expand in 2018

Sellita will expand in 2018

Postby koimaster » May 9th 2017, 9:51am

Miguel Garcia: "Sellita will expand in 2018"

Miguel Garcia, boss of the manufacturer of calibres Sellita, also suffers from the current crisis watchmaking. It refers to the fall of half of its sales but also its plans for the future and its relations with the rest of the industry

That was exactly thirty years ago. In an announcement published in the local press, the company Sellita Watches said it was looking for an "intelligent, honest, serious, dynamic young man who wants to create an interesting situation" for a position of "handler - office". Miguel Garcia had postulated and won the place. In 2003, after gradually climbing the ranks, he bought the company then specialized in assembling movements from the Swatch Group to give it a new direction by investing in the creation of its own movements.

Today, this 50-year-old Swiss is the owner, sole shareholder and CEO of Sellita. Its calibres are found in watches of more than a hundred watch brands. "Le Temps" went to meet him in his office in La Chaux-de-Fonds (NE), where he kept a copy of the announcement he replied thirty years ago and that his employees found recently .

Time: About a year ago, you were expecting to take "a real shake" in 2017. Is this the case?

Miguel Garcia: Yes, the period is complicated. We had a lot of work in 2013-2014, orders drops started in 2015 and everything accelerated in 2016. The fall in watch sales is no secret to anyone and our customers are falling under stocks. This is reflected in our figures: in 2014, we sold about 1.5 million movements (1 million of our own calibers and about 500,000 from Swatch Group). I think we will sell about 850,000 movements in 2017, that gives you an idea of ​​the situation.

- What answers have you found to deal with this crisis?

- We try to work better with our customers. Some of them are fairly transparent and tell us the progress of their business, which allows us to anticipate the evolution of their orders. More generally, from the beginning of 2015, we have put in place a few measures to avoid shocks that are too brutal.

- Does that mean there are job cuts?
- We have not done any collective redundancies, but I would say that we let some of our employees go. On our three sites (in Germany, Breuleux (JU) and Crêt-du-Locle (NE)), we were 500 in 2014 and are about 450 today; A 10% decrease is reasonable given that our sales have fallen by almost half over the same period.

- In December 2015, you bought a large building opposite yours, here in Crêt-du-Locle. But nothing has happened since then. Did you stop using it?

"We have not done anything yet. But that would not be long. As of 2018, Sellita will expand: we will destroy this building in February and then build 4,000 square meters of extension at our current factory. Some departments are cramped and we take advantage of the current period to diversify ourselves, for example by making our own machines or by imagining new materials.

- Do not you worry about getting involved in such a project today?

"When they see that I'm digging, my neighbors will believe I've lost my head. But this is completely false. On the day when business is about to start, we will need these spaces. The building should be finished in 2019 and if the crisis is not over at that time, I guarantee you will have other concerns than this building.

- You are best known for making entry-level mechanical movements. Does the diversification to which you are referring go through an upscale?

- Our core business will always remain the entry-level movements. Sellita does volume first, which allows it to be competitive on prices. One thing is for sure: we will never swirl or rehearse minutes. But without going to that degree of complications, there is already quite a lot to do by going up a bit in range. We are also approached by some of our customers - for example Raymond Weil, who spoke at the last fair in Basel - to develop exclusives limited in time.

- You have been accused of selling movements to foreign companies, particularly in favor of "quality" counterfeiting. Who are your customers today?

- We have more than 100 customers, the vast majority of whom are Swiss. Out of ten movements I sell, nine remain in Switzerland.

- In 2003, you decided to go into the manufacturing of whole movements because Swatch Group said it no longer wanted to deliver components. Do you, in this logic of independence, also engage in the production of regulating organs (spirals, balances, wheels and anchors) that you are still purchasing for the time being from Nivarox (Swatch Group)?

- We are working on this issue and we are learning this new job. But there is no urgency because, to my knowledge, Nivarox has not announced its intention to reduce its deliveries. However, we prefer to be prepared if this happens. Besides, it also gives us some legitimacy to be able to say that we are totally independent from some of our suppliers.

- There have already been many rumors about selling Sellita, of which you are the sole shareholder. Do you sometimes regret not selling when business was working?

"When you truly love your profession, as it is for me, you do not ask yourself this question. For me, the important thing is our independence, not to draw money from this company. It allows us to offer considerable freedom to all watch brands by leaving them an alternative in the purchase of their movements.

- Indeed, but independence is also a risk. If the crisis continues, do you think the kidneys are financially strong enough to keep up?

- You know, we are still quite important for the watch industry. And I am convinced that if we had a big concern, a good part of our customers would come to our rescue; They supported us in our beginnings and would not let us down today. Of course people come to see us to offer us: investment funds, publicly traded companies ... But I make it a matter of ethics. Many people have trusted us and I would feel like betraying them if I handed over part of the business.

- We have seen in recent years that many watch brands - including your customers - were investing in large factories to make "house" movements. Do you think there will always be a place for subcontractors like you in the future?

"Without bad puns, I would say that a big crisis like the one we are going through right now sets the record straight. I am sure that many brands today are wondering if it was really worth spending millions of francs in developing simple movements (three hands with a date) simply to increase the price of their watches. Too much success kills success.

I think we will gradually come back from this idea according to which "everyone must have his own manufactory and his movements houses". The Swiss watch industry is first of all volumes. What keeps the hundreds of small Swiss subcontractors is the volumes. Competitive prices are thanks to the volumes. If one dispenses too much and the brands all want to do small things in their corners, the subcontractors will be asphyxiated and disappear. And, this is a risk even for the biggest brands.

- At the last fair in Basel, Tudor and Breitling announced a partnership to exchange movements. As a caliber supplier, do not you feel that you are being short-circuited, especially since Breitling is one of your customers?
- I do not want to comment on that. We, our only job, is to continue to supply the best products, at the best price and with the best service. For the rest, brands do what they want; I am obliged to respect the choice of my clients.

- You have long had the ambition to take over the distribution of movements when ETA leaves the market in 2019. But for the past two years, it has been observed that this company of the Swatch Group is returning more and more to the market, for example In Basel where it is present with a new stand. Does that worry you, knowing that your movements are almost identical to theirs but cost a little more?

- Let me repeat first that our credo was to be ready in 2019 in case ETA maintained its decision to stop delivering the brands. We never intended to take 100% of the cake. Then, of course, this return to the ETA market worries me. One time, they announced that they no longer wanted to deliver, and a little later they changed their minds. So I wonder about this turnaround.

"And how do you interpret it?"

- I think that, given the current situation, it is no worse to have some additional orders. Including for Swatch Group.

- Last October in a statement , Swatch Group said you had "significantly reduced orders" at home. And in our columns you said you cut "95% of your orders" . Why did you do that?

"Because we no longer needed it." As required by the agreement with Comco, we have always respected our commitments but this year we ended up with massive cancellations of our customers. And these cancellations essentially affected the ETA movements that we assemble. It's as simple as that.

"You always say that you are faithful in business." But do not you find it unfair to cancel 95% of an order overnight without notice?
- No. I always heard that Swatch Group did not want to give any movement to third parties so I thought it would not cause any problems if I canceled my orders. And none of them approached me or contacted me to negotiate or discuss this decline.

- Swatch Group and Richemont have announced that they have agreed on the delivery of movements by 2019 . Does that worry you, knowing that Richemont is one of your important customers?

- They signed an agreement with Swatch Group, but that does not mean they will stop working with us. ... andir-2018


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