NEW OWNERS AT FRÉDÉRIQUE CONSTANT
Gisbert L. Brunner has been a journalist writing about watches since 1981.
I got the phone call while at the airport in Zurich. What I was told by Peter Stas, whom I’ve known personally since 2003, surprised and amazed me in equal measure because I’d already discussed the matter with the owner of the Frédérique Constant group many times before. But here he was telling me that after long and hard consideration, he and his wife Aletta Stas had decided to sell the thriving company. In 2013 and 2014, there had been no question of that, in spite of a number of offers coming in.
Yet in my view the reasons for this very serious step are plain to see. Both the children of the Dutch couple, who took the proverbial plunge when founding Frédérique Constant in 1988, are interested in other things. Their son Pieter-Jan has devoted himself to renewable energies at Stanford University. Their daughter Eline plans to go into medicine. Aletta and Peter have made it clear to me on several occasions that they respect the wishes of their children and would never force them into the watch business.
With that in mind, it made it much easier to deal with the multiple offers which started coming in again in 2015. Erring on the side of caution, Peter Stas, who studied Business Economics himself, hired a consultant from Goldman Sachs. They ended up deciding in Citizen’s favour. The Japanese giant, founded in 1918 as The Shokosha Watch Research Institute, made the most attractive offer overall. A confidentiality agreement means we know nothing of the purchase price or the details of the deal.
“It was important for us,” Peter Stas reveals, “to insure the independence of the Frédérique Constant group to the greatest extent possible and to maintain market structure and integrity.” That being said, the Swiss firm will obviously profit from their buyer’s international sales and service activities and huge research and development capacity. By the same token, Citizen – the name came from former Mayor of Tokyo Gotō Shinpei – could help Frédérique Constant to further develop the Horological Smartwatch, for example.
Beneficial synergies are also conceivable when it comes to traditional mechanisms. As we know, Citizen already has La Joux-Perret, the movement and complication manufacture, and the brand Arnold & Son under its command in Switzerland.
Peter Stas has been particularly interested in hairsprings for years now. The new Japanese owners could make them largely free of any reliance on Nivarox supplies, for example. But there should be no fear that Alpina, Frédérique Constant or Ateliers deMonaco watches will ever have ébauches from the Land of the Rising Sun ticking away behind the dial. Swiss Made is and will remain the Holy Grail. Peter and Aletta Stas and their management team guarantee to keep the philosophy of affordable luxury going for at least five years. That’s the length of time for which they are still tied into their contracts. But when I spoke to him, Peter Stas didn’t rule out staying on for longer provided the conditions and the form of co-operation suited.
The phenomenal growth at the Frédérique Constant group is manifested in annual manufacture of more than 150,000 watches and the lion’s share is accounted for by the core brand itself. There are 170 people on the payroll in all in six locations around the globe. Five of those are their own distributorships.
The manufacture currently produces 19 different mechanical calibres. With its own perpetual calendar retailing at around €8,000, Frédérique Constant demonstrated in 2016 that complex products need not necessarily be extortionate in price.
All of which suits the new owners just fine. When it comes to high-grade mechanisms, Citizen has been lagging behind arch-rivals Seiko for decades now. In acquiring Arnold & Son, they have already established a foothold in the hard-fought price range beyond €10,000, where the niche brand Ateliers DeMonaco also plies its trade.
Alpina and Frédérique Constant will cover the far more important price range below that, particularly watches costing up to €5,000. This is where Peter and Aletta Stas can, must, will and should continue their successful work for the foreseeable future. As ever, Alpina will look after sports watches while Frédérique Constant will focus on classic timepieces.
But by no means does this acquisition mark the end of the Japanese multinational’s shopping spree. They have already shown an appetite for other Swiss brands. In view of the current sense of crisis, many might be happy to finally be taken over by a financially healthy corporation. But Citizen is very picky. By no means do the Japanese like everything that is served up and offered to them. So things are going to remain interesting for some time yet.