The PuristS Interview Fabian Krone,
CEO, Lange& Söhne 

by alex
© May 2004

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Fabian Krone, has been Managing Director of Lange since January 2003 and CEO since May 1 2004. Born in Paris in 1963 he grew up in Rome and Peru, before pursuing studies in corporate management and subsequently joining the Fiat group.

This interview took place in April 2004 during the SIHH a week before he was named CEO.

The Interview

The Purists (TP): It has been a little over a year that you have joined Lange coming from the car industry.

Fabian Krone (FK): In the car industry I was in a brand full of passion and technique which is Alfa Romeo. One day I was offered to have a close look at A.Lange & Sohne. I thought why not and visited the manufacture: I said to myself Glashutte against Torino, a small company against a big multinational which then got me thinking. I next visited the ateliers and saw the watchlmakers and the people working there with all their passion and love for the product. Finally, being German myself and having the opportunity to work for this exclusive German brand made my mind up.

TP: Was it an easy decision?

FK: It was an easy decision because I was immediately touched by the brand's spirit.

TP: What were your responsibilities at Alfa Romeo?

FK: I was responsible for the worldwide distribution.

TP: People often compare automobiles to watches. Do you also see the resemblance?

FK: There are two reasons I think which enable this. First is the passion which surrounds both cars and watches as a beautiful and fascinating "men's" toy. The second element is the technology and mechanics behind both automobiles and watches. In these two products the clients live the brand and the product, I mean you don’t buy, lets say a Porsche, rationally, you buy it because you love it. It’s the same with watches.

TP: Were you interested in watches before joining Lange?

FK: I was not a collector but it was something I was interested in. When I was a student I actually hade to take a credit to buy a mechanical watch that I had seen and immediately fell in love with. It was a Favre Leuba.

TP: What are your attributes in the company compared to Hartmut Knothe ?

FK: We are two managing directors, Hartmut Knothe is responsible for production and technology and I am responsible for sales, marketing and finance.

TP: What have you changed since your arrival at Lange?

FK: There was not much to change. The team which was there was doing an excellent job. As a young manager I had to impregnate myself with Lange and see what was useful to change and what was not. Actually in the product strategy there was nothing to change, the products were excellent. The marketing and communication was perfect and expressed the same thing as the products.

The only big issue we had was with distribution, which due to the fast growth of the brand needed rethinking. So last year we cut heavily in the German points of sale by about 30% because we had too many dealers there and there were some grey market activities. Due to this we also stopped working with some English and Italian dealers. We also developed our distribution in the USA, the Asia/Pacific region and the Middle East.

TP: However, you did decide to put an end to the free servicing of the watches.

FK: Yes, and I think that it was the right decision It takes a lot of time and effort for a watchmaker to service a watch and I find it normal that a client pays for such service. Our goal is to educate the client in the different steps of servicing, and starting July we will supply a "log" book with our watches where we explain the servicing process. Once the watch is serviced the watchmaker will write, by hand, in the book what he has done as to keep the customer informed. Of course if a watch breaks the repair will be free but no longer the servicing.

TP: What steps are you taking to prevent Lange watches to be sold on the grey market?

FK: The most important is to understand these channels as to control them. During the first semester 2003 we communicated to our dealers that we would no longer tolerate any grey market activities, then during the second semester we started cancelling the contracts of dealers who did not follow us. Our dealers now know the consequences of dealing with the grey market and we will continue reacting very strictly on activities in the grey market.

TP: You were speaking of the development of new markets such as the USA. What are your main markets, and how do you see your development?

FK: Our main market is and always will be the German market. We also have markets which are traditionally strong such as Italy, Singapore and Hong Kong. Our focus in the next 2-3 years is on Japan, the USA and the Middle East.

TP: You will achieve this by opening new points of sale?

FK: Yes, but lets not forget that we have a very limited production and cannot increase our production capacities for natural reasons. Watchmakers do not grow on trees and we need to find young watchmakers which we train and it takes between 3-4 years before they start to work on a simple time only calibre. So you can imagine how long this will take. We will increase production and distribution very slowly. We want to remain exclusive and at the end of our development phase we will have no more than 200-210 points of sale worldwide.

TP: What is your production?

FK: Well (with a big smile) we will always remain far far under 10000 pieces per annum (note: from our sources Lange’s production is between 5000-6000 pieces a year).

TP: You consider that you have reached your critical size with your current production?

FK: There will be a slight increase in production but not much. When Lange presented its first pieces in 1994 other than the Tourbillon Pour le Merite which was a limited edition piece, our watches did not have complications. Today we have the 1815 Chronograph, the Datograph and the Double Split, the Langematik Perpetual and others, which are more complicated to make and take more time. We would need to drastically increase the number of watchmakers to have an increase in production of both complications and simple timepieces.

Click to enlarge
1815 Chronograph

TP: In 2003 Lange introduced the Grande Lange 1 and a 40mm Langematik. You are walking the big watch path, why’s that?

FK: I don’t know if the big watches are a trend or are here to stay. But we thought that these bigger watches would appeal to clients. However, we try not to follow trends and be fashionable, there are other brands who do it better than us. If you look at this year’s new models with the 1815 Automatik and 1815 Chronograph we have not made bigger cases. We’re obliged to do a big case for the Double Split but not for design and fashion reasons but because of the size of the movement.

TP: Let’s now talk about Lange in the Richemont concern. What is your independence within the group?

FK: I know that there has been a lot of talk about our independence or the lack thereof but Richemont’s policy is to leave each brand alone and not touch their DNA and creativity and leave their hands free in terms of product development. However, we can use the structure and the competence of the group to make our distribution more efficient.

Furthermore in some cases we can collaborate with sister brands such as this year by using a new balance developped and manufactured in-house by Jaeger LeCoultre.

TP: Within Richemont there are two high end brands: Lange and Vacheron Constantin. What are your relations and have you ever been asked not to enter in competition with one another with regards to products?

FK: No, because we never know what they are doing as they do not know what we do. There was a rumour this year that JLC would be presenting something big but we knew nothing about it until the news was released to the press. Our separation with Vacheron or any other brand of the group is the same as our separation with Patek Philippe.

TP: Then how did you feel last year when Lange presented the Lunae Mundi (note: a set of two watches each presenting the phases of the moon in the Northern and Southern Hemispheres respectively) and IWC presented their new Portuguese Perpetual Calendar which had the same moonphase featuring the same basic idea, and this year with IWC presenting the Split Minutes and Lange presenting the Double Split.

FK: For the moonphase the initial idea might go to a remark of a person living in the Southern Hemisphere thatordinary moonphase mechanisms are not working properly in his location.

The solutions are so different. For our Double Split, the names may confuse a little bit, but its not just the same, neither the basic concept nor the technical solution. But anyway you never know. In general you should not forget that the development of a complicated timepiece takes years and years, and as you know, until two and a half years ago a great man (note: Gunter Blümlein) was boss and head of product development for the LMH brands (note: Lange, IWC and JLC) and who can say that he had not decided that the two brands should work on a similar complication but implemented differently? Anyway, you can't stop people from talking and sharing ideas...

Click to enlarge
Double Split

TP: Were you involved in the development of this year’s new products?

FK: It’s always a team that works on the products but it’s the two managing directors who take the final decision. For example the Lang Double Split as presented at the SIHH will undergo certain minor changes and the final version that will be available this autumn will look slightly different from the one presented.

TP: When Richemont bought LMH rumours had it that they were not interested in Lange, since a top executive did not believe in the future of German horology, but to acquire IWC and JLC they also had to buy Lange.

FK: I don’t know if this was true or not, but I think that Lange has proved and will continue to prove that there is a big potential for German high horology. We have a big know-how and very passionate watchmakers in Glashütte.

TP: As a newcomer how do you perceive the watch industry?

FK: It’s a fascinating world and the evolution of the industry is quite interesting. We see many companies trying to upgrade their brand and enter the world of high horology and there are less and less brands in the middle range. Regarding the top end brands, collectors and journalists say that Patek Philippe is the benchmark, why shouldn't it be Lange & Söhne one day? (smiling)

TP: Along with Panerai, Lange is a brand which actually has cult status among its "fans". How can you explain this?

FK: We have a story and a history. Our products are coherent with this story and our marketing reflects this. And since we respect this, we do not misuse the DNA of the brand and are coherent in our actions the clients can find themselves in us.

TP: Is Walter Lange still involved in the company?

FK: Yes, he still gives his opinion with regards to the products, and recently his son Benjamin has joined us in the marketing department. It is important for us to keep the company “family” oriented.

TP: Could you tell us a bit about the future products?

FK: The future is beautiful (big smile). If I tell you now, you won’t come back next year to see us!

TP: Is there anything special you would like to tell the Purists community?

FK: I must say that The Purists is a very serious and professional site and I always have a lot of pleasure in reading or should I say listening to the participants. I say listening since sometimes it really seems as if the people are talking. I really appreciate what you are doing and the professional way you are building up the community around Lange.

TP: Thank you very much.

Geneva, May 20, 2004

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