The two Norbert Platt Interviews - Part 1 : April 2004, President & CEO of Montblanc International
In his 17 years of leading Montblanc (1987 - 2004), the pragmatic no-nonsense Norbert Platt has successfully transformed the brand to a mass-luxury power house from a relatively niche player.
Alfred Dunhill Limited bought Montblanc in 1977 and by the time Norbert Platt was appointed the Group CEO of Richemont Group in September 2004, he has left the brand he revived solidly as the second biggest in the Richemont stables of luxury brands, both in terms of total revenue and net profit.
This first part of two interviews was conducted in early April 2004 when Mr. Platt was still at the helm in Montblanc and some 5 months before his Richemont Group CEO appointment.
The two interviews provide interesting and candid insight to the man Norbert Platt, his management styles, his very frank demeanor and the way Richemont group operates.
Today, Mr. Platt is the Group CEO of Richemont, member of the Montblanc Management Board, Non-Executive President of Montblanc International and also a member of the board of Richemont S.A.
NP: - Mr. Norbert Platt
Jaw: I remember during the mid 80s, when the luxury pen market was dominated by brands like Cartier and S.T. Dupont etc. and all of a sudden we saw the invasion of Montblanc Meisterstuck Pens not made of precious metals, but Resin. How was such phenomenal success possible?
NP: You see, Montblanc has been around since 1906, we have not been active in the East till the 1980s. The Meisterstuck introduced in 1924 has been an iconic and successful product for a long time; this is one of the rare products this old which in fact it is still today active, fashionable and relevant. There are not many products who can claim to be the same.
The fountain pen market went into a crisis in the late seventies till early eighties. Montblanc started to look at the global market just as we were coming out of the crisis in mid 1985.
In today’s small world you can only survive if you are a global player. If you buy an iconic Montblanc product in Europe, Paris, London or Berlin and then you travel to Asia and nobody knows about your pen, then the luxury concept won’t work.
When I live in Singapore, you had the presence of perhaps S.T. Dupont and Alfred Dunhill, but the luxury market was emerging but was not as prevalent as is today. You needed to have nice watch, nice shoes, nice pen and perhaps a nice bag. That’s what you saw in the mid eighties.
We at Montblanc have a better value concept than others and we are more specific about our distribution and we are also very early and selective in choosing our outlets in the East. Our first boutique opened in Hong Kong in 1989 and even though we had only writing instruments then, for many years we had such loyal customers that it was a fantastic money making business. Our boutique was also relatively small but because we have a focused strategy and a good story, it brought us success.
Jaw: Is the writing instrument market bigger than the watch market?
NP: No, in the luxury market, the pen market is much smaller, you probably have 50 serious market players and another 200 and more also ran in the watch industry, with very strong brands like A Lange & Sohne, Rolex, Omega and Patek Philippe. The size of the watch market is probably 15 times of the luxury pen market today. In the luxury writing instrument market Montblanc has 60% to 70% of the markets. In the watch business, even Rolex doesn’t have that kind of share.
Jaw: Why go into the watch market then?
NP: If you have 60% to 70% of the market, economists will tell you how difficult it is to grow as nobody can achieve 100% of any market. When we looked for potential growth and we don’t want to go down-market, we have to study products which carry the same emotion as the writing instruments.
I came into the company in 1987 and the demand for luxury products is continuously increasing, when we started selling the DM 2, 000 pens, it was considered expensive and we weren’t sure if we could sell them. Today we sell thousands and thousands of such pens including those costing Euro 10,000 to Euro 15,000 or more.
Watches are very similar as we wear them not just to look at time but due to its prestige, the quality, appreciation of the mechanics, and the idea of keeping something for your sons is an emotional one.
When we wanted to expand, we did some market research and see what we could do. We could do leather which we did, we could do lighter which we didn’t, and we went into watches. Today, people are not only looking at “the authentic know-how and the heritage” of a brand. Look at the jewelry market, people used to buy only from traditional Jewellers like Cartier, Bvlgari & Van Cleef & Arpels etc, today you see Dior and Chanel and the customer accepts the brands. Gucci and Dior are also making serious effort in jewelry and watches. This is true also with luxury brand like Hermes, and Hermes is a very strong player.
Jaw: Montblanc entered the watch business only in 1997 and perhaps only seriously since the year 2000? You are producing close to 100 thousands watches a year now, what caused the Montblanc success in this very crowded market?
NP: We have well-positioned products, targeted at different groups. We have unique designs, we have fair prices. And because we are not as established as say Rolex, we have to be more modest with our pricing structure, and so customers get better value with our products. We also have distinctive lines, which we have continuously extended.
We will keep our watches mechanical and in our seven years we think we have good products of good design, good quality and own manufacturing.
Jaw: How do you define manufacturing?
NP: We don’t make our movements ourselves. we produced watches basically the way Swiss industry has produced for the last 200 years. We basically are the creator, designer and the assembler, We talk to the different specialists, the people who make the crown and the case-maker etc. and we develop the product with them and assemble the watch ourselves. This is how the industry works except for a few top manufacturing brands. We have full control of the manufacturing process and We don’t go to OEM and say “make a watch for me”. I think we are creating pride within the company. We may not be successful with pride but we will definitely fail without pride.
Jaw: There is a feeling that even though Montblanc has been relatively quiet in terms of the mass luxury watch market; it has eaten into the market share of Tag-Heuer and Omega somewhat
NP: We are not the company arrogantly talking about our success. Our customers don’t want us to behave like this. People who are successful has no need to big-mouth about it. Omega is a big brand no doubt, but we are ok.
Jaw: Who are your competitors?
NP: We look at Omega, We look at Baume & Mercier and some companies who are also in the luxury segment like Hermes, in the sport sector it could be Tag Heuer and Breitling is a very focused competitor.
Jaw: Would you say Montblanc watches offer better value for money in the same segment?
NP: The customers will decide, I cannot make a statement on this. They are making the choice everyday. Not just the final customers, it is also the retailers, the jewelers etc… They will collectively make the decision.
We are difficult customers to our corporate suppliers and we have a high standard to defend which we have been doing for the last 100 years or so, we have been making the best writing instruments in the world and we have to be very particular about our quality. Surely this is not a marketing product as these are well engineered products
Jaw: Will we see high end complication in Montblanc?
NP: In the watch market, we are like kids still crawling, we must take step by step, and we have to come from solid ground. Could we see more serious watch in the future? of course? By the time we fly we must know how to fly.
Jaw: Would you consider Montblanc as a German company? Even under the Richemont group?
NP: I like the idea that Montblanc as a very European company, of the Greek-Roman philosophy and European culture, although it comes from the country of Beethoven,
In Richemont, we are No. 2, Cartier is No 1, but then there is a very clear gap with the number 3. We have a certain kind of freedom because we are successful. Mr. Rupert rightfully is a very critical boss and I think he is reasonably happy about what we are doing.
We delivered the result we promised and bear in mind that last year (April 2003 to March 2004) was a difficult year, the high dollars with SARS etc. but we are stable and steady in our reputation and performance. If we are not delivering result then we must not complain if our freedom is restricted.
Jaw: Is the profitability of Montblanc close to number 1 in Richemont Group?
NP: No, it’s not so, Cartier is still No. 1
Jaw: You worked for Rollei in Singapore, which is very different with Montblanc.
NP: I don’t know if it is VERY different. In terms of concept, Rollei camera was still a mechanical masterpiece at that time; it was not too far from what Montblanc is doing today. Positioning of Rollei camera is a different though. Cameras don’t have the quality of becoming part of you as watches and pens and clothes when you walk around. You could (laughter), but most can’t bring a camera around with them.
Jaw: Do you consider luxury products has a lot to do with social status rather than appreciating fine pens and fine watches?
NP: No: I am not saying this. The fundamental platform is the pride in craftsmanship and quality of the products as the basis, if you don’t have a good product you can’t built the emotion, people buy brands but the product has to be well crafted. Today, this is not good enough any more, people also want to be different and don’t want to be the same with the crowd. The modern society hierarchy can be seen through many symbols. You put people on the street, they are mostly well educated, you have to see the shoes, the pens, the watches and how they speak, what kind of hand bags they carry etc. This is how people make a statement and there is nothing wrong with this.
Jaw: Your performance has been consistent and impressive. What is the secret of your success? What have you done that has not been done before?
NP: This is a very difficult question, I think you have to focus; we have a few basic rules in the top end market. we created success based on pride, success also begets more success, we can now employ better, pay better, reward better, invest more, and also making sure our customers understand we are the best. Montblanc has also been reasonably successful in building consistency in management. We need to know the people, with 2500 employees; we are still relatively small as compared with company like Siemens. I still know most of the people in the company very well.
In Richemont, our philosophy is that the brand is the hero, this is logical as we have brands who are 100 years old or more. Fashion brands took big risk by building god-like stars, we don’t do that.
Jaw: Is there also a lot of ego in this industry?
NP: Leadership always has to do with ego, it is so nice to see yourself in the front page of magazines, but we have to take ourselves back. We have to be aware that the brands don’t serve the CEO, the CEO serves the brand.
Jaw: Is this why you have been performing consistently well?
NP: I think so.
Jaw: A hypothetical question, you are probably the most consistent and impressive performer in the Richemont Group. As an observer, we see big possibility of you being asked to take on an important role outside your brand, perhaps in the top position of the Richemont Group?
NP: I am very happy with what I am doing, it is a very hypothetical question, I can’t answer that, you have to ask Mr. Rupert (laughter).
Jaw: What I mean is, assuming a situation where you are asked to leave your beloved brand to serve a higher position, will you do it?
NP: You see I am a Prussian. You know Frederick the Great? The Prussian State? I have the Prussian way of looking at things. Prussia has been the cradle which we are raised. I always think that if we are called to take responsibilities, we cannot say no.
Montblanc is my life; I build it from a small beginning with a group of good people. You can all get emotional with me and gave opinions… At the end of the day, after I made the decision, I don’t want people to come back to me the next day to challenge the decision. I still have lots of friends in this company. I am happy here, but a call of duty is a call of duty.
Jaw: Mr Gunther Blumlein once told me that a Corporation is not a democracy.
NP: I have great respect for Mr. Blumlein, his early departure was a great loss for Richemont and the watch industry. Well, Carpe Diem, and he went too fast. This is also what I am saying. I told my people to talk about family values and take time for the very important thing. although I expect 150% effort from my people and I always say “Believe or leave!” If you don’t believe then leave, there are other nice companies waiting for you.
Blumlein is a great guy! What he has done with A Lange & Sohne from nothing was unbelievable. I am 56 years old now, when I leave I must ensure that I have done everything I could. I am also getting older, the traditional values of Men only as providers of money to women and children is no longer applicable. Life is more complicated today. You are probably a better father than I am and the younger father will be even more committed.
I am also saying that we have spent a lot of our time working, and we should not miss the birthday of our child. Life is also family, friends and values. We have to make sure that we have a good life. As life is short, we better think about this each morning.
Jaw: Thank you!
NP: Thank you.
To continue reading Part 2 of our Interview conducted on April 2006, see http://www.revolution-press.com/news/?p=14