A win-win globalization
Swiss Style recently had the pleasure of speaking with Frank Low, CEO of LuxuryConcepts, a Malaysia-based firm which recently acquired the prestigious Swiss watchmaker Bedat & Co.
Acquisitions of this kind epitomize the direction the luxury market and the world economy are heading towards. However, Mr Low assures us that this will not dilute the “Swissness” of this renowned brand.
The tutor of a brand
“We did not buy Bedat & Co. to make it indigenous to Asia,” Low says with a calm voice in conveying his message. With his personal and professional background, he may look to many as an outsider in the world of luxury goods, but he does not want to be seen as a revolutionary, particularly in a market where image and tradition are the keys to success. As he puts it, “We are not selling commodities, we are selling brand stories, we are selling lifestyles.”
Indeed, Frank Low knows the business very well. After his studies in the United Kingdom and over 10 years of experience as an accountant dealing with M&A and asset valuation, he started to work with luxury and watch firms in 1997, helping to restructure their distribution chains in Asia. Positively impressed by the industry’s “different angle and personal relationships”, he immediately liked the business and eventually decided to stay.
It was not easy back then: the crisis was hitting the region hard and sellers were struggling against a spiral of currency depreciations. But Low is not one who fears times of crisis. In taking on the challenge in 1997 and building a solid distribution chain across all of Asia, he is raising the stakes during the current economic downturn.
Faith in Bedat & Co.’s strong branding power is what motivated him to take such a bold step. “We already were distributors of Bedat & Co. in Asia. We knew the brand and believed in it,” he explains. Mr Low’s respect for the brand founded in 1996 by Simone Bédat is such that he does not even like to be considered the “owner” of the brand, but rather – more modestly – a “tutor or a steward” or someone who is “just looking after something that is much bigger than us.”
Rooted in tradition
Even though the company is now managed from LuxuryConcepts’ headquarters in Malaysia, Low promises that all stages of production will be kept in Geneva/Switzerland and “nothing will come from Asia”. Such geographical eclecticism should not be a problem for a company that likes to define itself as “global” and already possesses its marketing branch in Hong Kong as well as offices in Tokyo and other Asian capitals. Outsourcing abroad would not even be a smart business decision for Bedat & Co., Mr Low argues. The idea of producing Swiss watches in cheaplabour locations to reduce costs is just inconceivable to him. “Those who want a good watch at a cheap price can buy Japanese ones,” he says, adding that “if someone buys a Swiss watch, he is looking for a piece of art.”
Low’s regard of the Swiss watchmaking craft is of the highest order and his words convey true admiration for the finest Swiss artisanal tradition, the same one in which Bedat & Co.’s founder Simone Bédat was born and started to work as an apprentice at a watch-case manufacturer in 1946, at the age of fifteen. Low’s mission is to make Bedat & Co. the “champion of this legacy” and a “tribute to the art of a nation”.
His embracement of the Swiss identity of the brand leads him to declare that “Should there be one day in which making watches in Switzerland will be so expensive that no one can afford them, we will not move production anywhere else. We will just stop producing at Bedat & Co.! We will not renegade on the honesty of producing a pure 100% Swiss artisan timepiece.”
Oriented to the future
Protection of the status quo cannot, however, be the only goal of a successful businessman like Frank Low.
His plans for the future are ambitious and include a significant sales expansion as well as the quotation on a stock exchange in a few years. Whilst the actual production will be rigorously kept in Switzerland, the horizons of the other business segments are much broader. When asked about the market on which the company may be listed, Low mentions London, Luxembourg or Hong Kong. In particular, Asia is the area on which the company will focus in the future, and not only because of the background of its CEO.
The impressive growth in the number of millionaires in South and East Asia is a boon to the luxury industry. As Low puts it, in Asia, “luxury is the badge of people’s success.” Unlike in other cultures with more crystallized social structures and less dynamic economies, sporting niche products in Asia is a clear sign of success and ability on the job, functioning as a magnet for new business and clients. Low compares this situation to that of Japan 15–20 years ago, when the consumption of luxury goods came to account for 20–30% of world production. The only difference, he notes, is that “the pace of the current transformation is much faster”. Needless to say, the future looks bright for LuxuryConcepts and Bedat & Co.
A win-win globalization
Headquarters in Malaysia and production in Geneva – full preservation of Swiss identity and determined expansion through Asia and the rest of the world: the vision Low has outlined spells out a model of economic globalization in which traditional craftsmanship is fully valued. It is a strategy that – by privileging history and tradition over cost curves – contradicts some wellestablished business principles. But the bet is being won: “We are growing at a rate much faster than expected; in effect, our production is behind our demand,” Frank Low admits – while not entirely hiding his satisfaction with the situation.
Article by Andrea Bonzanni