The Breitling Watch Source Forums

2011 COSC numbers are out, which effectively are production numbers for Breitling as all pieces are certified.

Breitling's up, but perhaps not as much as they might hope.

Figures for the top 3 below (which are by far the biggest) - 2011 / 2010 / % change

1. Rolex - 751,285 / 611,424 / +22.9%
2. Omega - 509,301 / 342,798 / +48.6%
3. Breitling - 154,456 / 122,649 / +25.9%

Perhaps more worryingly for Breitling is that their numbers are still below the pre recession numbers of 2008, and in the last two years they have gone up a little less than 50% compared to Omega's almost 170%

As best I can tell these are mechanical only numbers.

Wow! Looks like Omega's marketing strategy is really working.
No wonder, given the widespread presence of Omega brand in the form of boutiques around major cities and airports combined with heavy TV advertisement, the Olympics sponsorship as well as the association with James Bond movies and release campaigns.
All of the above is aimed at and fully exposed to a very wide mass market segment.
Breitling's sponsorship and marketing efforts limited mostly to aviation events, are relatively niche and are reaching a very narrow potential customer base resulting in a much lower brand awareness and significantly lower sales volumes. I never expected the gap to be that huge.
All I can say is - well done Omega!

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"It is just a matter of time!"

Yes, Breitling's relative market share is clearly declining relative to the industry as a whole - Swiss watch exports are far above 2008 levels, Breitling is still lower (and they didn't have an in house movement in 2008) but I wonder what the performance is like in Breitling's core segment. Clearly Omega and Breitling play in the same broad segment, and Omega is dominating that, but Breitling has actually outperformed Rolex growth in the last 2 years at least so they may 'only' be losing to Omega and holding their own everywhere else. It's still worrying given how much Breitling has invested in the in house movements and their independence (and therefore inherent lower capacity to absorb downturns).

True, in relative terms. The same could be said about someone who sold one watch in 2010 and 2 watches in 2011. A 100% growth!
In actual terms however Rolex's growth just about equals Breitling's annual production and I presume sales. Omega's growth alone is even larger than Breitling's production, in actual figures and that's not even counting non-COSC certified movements which Breitling don't produce/sell.
These are very worrying sustainability signs especially in view of the the massive investments in-house movement development, production facilities and their independence as you have rightly pointed out.
One has to churn out quite a number of watches to recoup that investment, to keep the day to day global sales network going yet at he same time keep the Jet Team, Wingwalkers and Jetman going and John Travolta happy. Not sure if the margins on 150K watches are enough to sustain that and keep the investors happy. After all, there is a lot of money tied up in there.
I very much hope this is not the case? There is a risk however that Breitling might become a small, sun deprived bush amongst tall trees in a dense and fast growing forrest, that eventually shrivels up and dies

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"It is just a matter of time!"

Agree completely - they can't ne making any profit on 150,000 units. With a wholesale price of 55 - 60% of list their gross revenue is going to be the equivalent of $500 - $550 million or so and there are a heck of a lot of costs to come off of that gross.

OUt of curiosity how did you get from gross margin to gross revenue without a solid revenue total? Average price maybe? just curoius as it is an interesting look at the business side of our beloved Breitling

Not much science to it - just a guesstimate based on 150,000 units at an average wholesale price 0f $3,500 - $3,700 which would equate to an average retail of $5,800 ($3,500 at 60% of list) to $6,700 ($3,700 at 55% of list). That may be a little low with the recent price rises, but probably not a million miles out when you look at head prices. It's simplistic because it ignores bracelets / straps / servicing, and I have no idea what the revenue or margin would be on that.

That makes sense and an average retail of $5800-$6700 encompasses most all models from the new superoceans to the inhouse navi and transocean. That being said it may be possible to eek out a profit with a gross margin of $550M, which would be about $3,667 per watch in overhead, marketing and general and admin expenses. Not that I know anything at all regarding Breitling's income statement, but it is certainly feasible.

Margin is likely less for non owned distributors, presumably Breitling sells to distributor for less than distributor sells to retailer, and there is also the investment that they have made in the new equipment that needs to be paid - lease payments, investment in staff, premises, etc - the costs are going ot mount rapidly, especially in a country that is more expensive than most markets.

I never realized Breitling was so much smaller than Rolex and Omega!



Omega's marketing strategy is fantastic (Tag's was too).

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Correct...while they are growing, they are technically shrinking. Sales figures are often mined to show gains when there are actual losses..[/quote]


i can relate to that. living in the detroit area imho thats what the "big 3" auto makers have been doing for years......

Time for Breitling to be absorbed by a large consortium to
reverse its plummeting. Or, it can go public, & you potential(?)
major shareholders can dictate what it should offer, & @ what
price points. Barring these options, it can try revamping & hope
they haven't lost their breadcrumb trail back to success & solvency.

those in house movement from omega 8500 / 9300, great new design improvments along the great marketing really paid of

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Breitling Chrono Avenger Black Dial whit Pro II Ti, Diver Pro I
Breitling BlackBird Big Date brushed whit SS Bracelet, brown croco
Breitling BlackBird Blacksteel 528/2000 Whit Dp2 Deployment
Omega Planet Ocean Chrono 9300 Co-axial Ceramic on SS bracelet

The allure of in-house movement has had a positive net affect but unfortunately it is not enough to drive significant sales growth (albeit by attracting would-be buyers from Omega, IWC and on-the-fence Rolex buyers who want a luxury watch but feel Rolex is too boring and conservative). Almost every brand now has some sort of in-house movement. Rolex has raised prices so radically over the past 2-3 years that no doubt some of their growth has come from substatial price lifts. At the same time they have also begun to price many of their existing and would-be consumers out of the market---especially with the clamp down on AD discounts. Many on the RolexForum have begun to complain and state that their next watch will be pre-owned vs new. There is potential for Breitling to capture some of this runoff if they were to improve other factors that attract prospective buyers (already talked about on this Forum): brand recognition and styling. To many would-be Breitling owners, Breitling is considered to be a "bling" watch with a style that you either like or hate. There are so many choices, styles, and colors while at the same time popular styles die and fade away. Things that can drive Breitling market share: 1) moderize the styling by going back to the roots & heart that made the brand popular in the first place; 2) expand the number of styles that have the in-house movement (economy of scale principle--the more produced, the less expensive the cost to produce each unit); 3) expand marketing campaigns beyond that of just aviation for a broader mass appeal (what if Jason Bourne or James Bond wore a Breitling in their newest movie?); 5) offer more toned down styles for the non-aviator that exhibit more brushed bezels and brushed pilot bracelets and less busy dials for those who don't need/want tachymeters and chronographs; 6) don't economize on the buyer experience by offering a hat and a riveted cardboard storage box that many don't care for---economize by reducing the excessive number of watch styles & reduce AD discounting---and restore the feeling that the buyer has bought a luxury watch which gets them access to an exclusive membership club comprised of other Breitling enthusiasts.

I'll agree to more in house across the board! Give me an in house super avenger with display back and I'll go bonkers