Glashütte Original traces its history back some 160 years. Located in the small German village of Glashutte, a scenic one-hour drive from Dresden, the company has, like its country, overcome adversity. Under the guidance of marketing guru Wolfgang Stelling, the company is using its position within Swatch Group to step onto the world stage. Recently, Elite Traveler Editor-in-Chief Douglas Gollan traveled to the cradle of German watchmaking to see why Glashütte Original is becoming a hot item for timepiece enthusiasts.
ET: Tell us about your background and how you came to Glashütte Original.
Wolfgang Stelling: My career started in the pharma industry. I worked for the Bayer concern with some cosmetic products for eight years. Afterwards, I worked for the leading German optical company doing all the license business with brands like Porsche, Reebok, and Karl Lagerfeld. An interesting thing there was the variety of brands and how they approached the market. But compared to Glashütte Original, which is a true luxury brand, it’s a totally different story. It’s really exciting to meet the interesting people, to learn from the watch enthusiasts and also from the collection of the company.
ET: For those not familiar with Glashütte Original, could you tell us a little of the history?
Wolfgang Stelling: Glashütte Original can be described by five basic characteristics. First of all, it’s a German company with, second, a very long history. Glashütte Original existed under various names since 1845. It is the oldest watch company in Germany, existing for more than 162 years. It is, thirdly, a company that creates watches from A to Z. That seems to be normal, but today is actually an exception—that a company is conceiving movement and watches, designing, producing the tools for production, actually producing the components of the watch movement, assembling and what we call finishing, decorating, and embellishing the watches to perfection. To find that under one single roof is nowadays an exception.
That leads me to the fourth point: Glashütte Original is highly exclusive. We produce only a few thousand pieces on an annual basis, one of the smallest watch manufacturers you can find on the globe. And finally, having mentioned being German, this company is about culture. We have our own watch-making school. We have our own watch museum, and we are publishing magazines about the notion of time. We are more than just a manufacturer of watches. We are about the culture of time.
ET: Talk about the relationship with Swatch Group, the major player in the watch business. What does that mean for Glashütte and how does that impact the way you run this company?
Wolfgang Stelling: For us, it was a fortunate event that the Swatch Group bought us years ago. Our mother company takes care of us like a mother. She gives us the means to develop, to grow, while allowing us to keep our German DNA. And that is perfect. Like parents in a way, they do the best to support the children, yet they make sure that the children can develop their own personality. Today, we are still working quite independently in terms of product and production, yet we have the means to grow internationally.
ET: About a month ago, I interviewed Richard Santulli, the Chairman and Founder of NetJets, and asked him about working for Warren Buffett. How is working for Mr. Hayek, the most famous person in the watch industry? What is he like as a boss and what type of involvement does he have in terms of what Glashütte Original does?
Wolfgang Stelling: It’s exciting to work with a genius, the savior of the Swiss and European watch industry. And he’s so sharp, so brilliant. Every time I meet him, I learn from him, the way he acts and thinks. It’s quite inspiring. However, we witness the change of generations. So I’m also working very closely with Mr. Hayek, Jr., a different person, yet interesting to the same extent. It’s wonderful to see how a huge corporation, the world’s largest watch manufacturer, is dealing with that topic of hand-over.
ET: Talk to us about the global nature of your business. What markets are important to you? What markets are growing?
Wolfgang Stelling: We need to look where the potential is for the brand. We defined our five-year strategy by putting the focus on the key markets in the world. It’s U.S.A., China, Hong Kong, Russia, the Middle East and our home, Germany. We are investing above average in these countries.
We see an increasing interest in Glashütte Original in markets we haven’t seen before, like in the U.S. I was there recently and if you talk to the retailers – and consumers – coming into the store, more and more are asking for Glashütte Original, an experience we hadn’t had two years ago. We need to take that momentum.
ET: You come from an non-watch background. What are some of the things that you’ve done with Glashütte Original marketing? What are some of the opportunities you see to be innovative in this space?
Wolfgang Stelling: First of all the watch industry is not the watch industry. We need to divide the watch industry into the different segments. We always look very carefully at the differentiation between premium brands and luxury brands. We see ourselves as a true luxury brand. True luxury brands are a very individual and a personal business.You need to be very close to your potential consumers. You need to have very, very good relationships to your retailers. You need to talk to them every day, listen to them carefully and support them whenever you can, however you can.
ET: There’s a certain amount of uncertainty in the markets. You come from a company that’s got tremendous financial stability and a lot of assets. How are you approaching the things that are happening in the market? Are there any changes that you’re making to your business plan for the coming year?
Wolfgang Stelling: Glashütte Original is a company of more than 160 years of experience, so this is not the first crisis – if it is really a crisis – but it is not the biggest crisis we have experienced. Look at the history of Germany, which always left traces in our company. We know how to deal with such circumstances and our approach is quite simple. If we have rough times, okay, let’s work hard and push through it.
We are going to invest even more in the months to come. In the next few years, we are very confident that we can grow. We want to express this sort of optimism that sawed off aggressiveness in the near future – no doubt about it. And it is a crisis that will eventually be over.
Looking at the notion of luxury, there was always a lust for luxury. And if you look at the mechanical watch as an object in an environment that is today technical, global, digital, biotech—you name it—a mechanical watch is a sort of counter-argument to those developments. The mechanical watch will have a huge future. It’s all about creating interesting, exciting time pieces. If we do so, the future of Glashütte Original will be great, great, great.
ET: You talked about the mechanical watch being the antithesis of BlackBerrys and all the technology in our world today. You’re making these highly-complicated mechanical watches in a beautiful state-of-the-art building. How does modern technology help or now play a part in the centuries-old tradition of watchmaking.
Wolfgang Stelling: That’s an interesting remark of yours. As a matter of fact, modern watchmaking, fine watchmaking, is about state-of-the-art technology. If you look at the tolerances in our production we are talking thousands of a millimeter of preciseness. We need to produce those plates, those wheels, those groves…But that’s just one element of the story.
The second one is tradition, craftsmanship, design. You’ve got hard facts and you’ve got soft facts, you’ve got quantity and you’ve got quality. Modern fine watchmaking is about history, but at the same time, state-of-the-art technology.
ET: Switching gears. When you aren’t busy traversing the world and overseeing the manufacturing here in Glashütte, any hobbies or passions that you like to pursue outside of work?
Wolfgang Stelling: I’m a hobby cook, so I do some cooking here for my colleagues once in a while. I’m quite famous among my friends for fine food.
ET: What’s your type of cuisine?
Wolfgang Stelling: Mostly Italian, because it’s the easiest way to cook. If I had a restaurant, it would definitely be an Italian restaurant because Italian food does the highest margins. But I also do some Indian cuisine and some crossover.
ET: I always like to ask, if you hadn’t gotten into this business what would you have done? And so would you have a been a TV chef? Could you have seen yourself being a Gordon Ramsey of Germany?
Wolfgang Stelling: Some people might expect this from me: I don’t know. But yes, I’m quite an entertaining person. It could be something if the quotation’s right.
ET: You also travel quite a bit for work. Any favorite hotels for business or places on vacation you’ve been to that you would recommend to our readers?
Wolfgang Stelling: I was very impressed by the Conrad Hilton in Tokyo, which is an outstanding hotel located on the 26th floor of a huge building—the mixture of traditional and modern architecture and that beautiful view over the harbor. I really can recommend that hotel.
ET: You run a commercial for profit business. At the same time, making these watches is extremely complex. How do you balance the creativity that goes in, the process of putting the watches together and making the business commercially successful?
Wolfgang Stelling: That is a key success factor for luxury products—if you can express personality, personal taste, and creativity into something that appeals to people. Creating watches is a business obviously, a tough business where you have to know what you’re doing. On the other side, it’s the same as creating a painting, modern art or traditional art. It’s a process that starts with an idea.
Working in the watch industry is fantastic. It is an industry but it’s a universe of arts. And balancing these two things in terms of function and design creates a highly complex object that has fascinated people for the last 500 years.
ET: Has there ever been a watch that you wanted to make but couldn’t make because you didn’t think it would be commercially successful?
Wolfgang Stelling: As a matter of fact we do that once in a while, to enjoy life and do things outside of the mainstream. We have the means to create whatever we want to create. We have the designers, the engineers, the production capacities, the prototyping department. We can afford that luxury, because we don’t have to go to a supplier.
ET: This beautiful facility is also open to the public. Tell us about people who come here.
Wolfgang Stelling: We’re welcoming about 8,000 people every year. We’re doing tours two times a day, tours in every requested language. We have native speakers in German, English, Russian, Chinese…but reservations are needed.
It’s funny, because this small city is really far away from the big hubs of Germany. It’s a long way here. The people coming are really interested in what we are doing, how this whole area developed over the last couple of years. And the new German watch museum that we opened in May is another point of attraction. Since the museum opened, only five months ago, we have already seen more than 24,000 people, outstanding to a small place like Glashütte.
ET: What somebody would find in the museum? It was sponsored by Mr. Hyack and the Swatch Group, so tell us how Glashütte Original came to be involved in the museum.
Wolfgang Stelling: It was an initiative from Dr. Frank Mueller, who really approached the Swatch Group to see if they were willing to invest into this once-in-a-lifetime opportunity with the City of Glashütte and Glashütte Original. We started in 2006 with the approval from the City. We only had 18 months to rebuilt this old building, which was the former watchmaking school in Glashütte. And luckily, we finished in the scheduled time. It’s really, really nice.
ET: It looked like you have a store. Do people actually come here and buy watches after the tours?
Wolfgang Stelling: That’s always a nice story. We are not really wanting to sell watches here in the store. But there are some enthusiasts taking the manufacturer tour. They are emotionally loaded, and they want to buy a watch. We are not complaining, so we offer this opportunity! But the difference between our manufacturing store and a regular retailer is that we are not giving any discounts. People who want to buy a watch here have to pay the regular price. This is how we protect our retail partners.
ET: Do you take credit cards or do they have to pay cash?
Wolfgang Stelling: We take both. Would you like to buy a watch?
ET: If my credit card goes through. I think the bank is tightening up on me. So we touched on Glashütte Original and the contribution you’re making to the community here – things like the watch school. Talk about Glashütte Original and your integration into the community.
Wolfgang Stelling: Glashütte Original is not only a successful story because of its heritage. We feel responsibility not only for the region but for the people. Several years ago, we built our own watchmaking school. Fifteen percent of all employees are students here in the company, far above average in Germany or other countries. It’s also about bringing culture to this region, building up knowledge about culture, having events for the people locally. These are all investments into this area.
ET: Your customers are from around the world, but you’re supporting the local community. What do you think it gives back to Glashütte Original as a company?
Wolfgang Stelling: It’s about the reliability of and the confidence of the customer to Glashütte Original. It’s about being connected, being proud of being a German brand. Today, all around the world, “Made in Germany” is known as a sign of the quality of German engineering.
ET: You have an alliance with Lufthansa. What was behind that alliance?
Wolfgang Stelling: You have to see it from two angles. The first is our ambition, what we invested into this partnership. We see our core target audience with the Lufthansa traveler, especially with the frequent travelers like the Senators, the HON members, people who are globally oriented, our decision makers in the world of economy, politics and media. So this is the right way to get in touch with these people, to convince them about Glashütte Original.
On the other hand, Lufthansa’s interested in partnering with a German luxury brand, because we are both from Germany and have a long history in this country. They also want to offer some special experiences for their most valuable clients [and] we can offer something.
ET: Anything else that you’d like to talk about or mention in terms of Glashütte Original or what’s happening now in the luxury segment?
Wolfgang Stelling: The biggest thing we are facing since this company was reborn is the strengths of the Swiss watch industry. Germany is not really known as a proud or a famous place for watches. We are more known for beer, automobiles and things like that. But Germany is still known for high-end engineering, quality, and reliability, and these are also true for Glashütte Original.
Come to Glashütte, come to this beautiful place. It’s really an experience and you can see that we do not need to fear the competition from Switzerland. It’s a totally different story, but we are true manufacturers. So be welcome.