Tuesday, August 23, 2005

The Business of Stainless Steel

Excerpt from an interview with Fabian Krone CEO of A. Lange & Söhne:
Question: Do you see Lange & Söhne ever producing watches in stainless steel?

Fabian Krone: This is a question which is often asked. We have a very limited capacity, which we are not able to increase very much. We have around 350 employees, of which around 50 % are watchmakers. To find a watchmaker is not easy. So we have a school where we train them for three years and they come into the process. So before we are able to increase the capacity, it takes time, and if we increase by maybe 500, 600 watches, this is nothing. So the question is “Why do stainless steel?” If we do it, we will probably increase the demand and will have a price which is lower than today, and we will not be able to deliver those watches. So there's not a reason today to do stainless steel.

I never thought of that before, how much growth a luxury mechanical watch manufacturer must have before stainless steel watches make good business sense. At another point in the interview Mr. Krone says they have no immediate plans to reach an annual production of 10,000 pieces. Quality over quantity is what keeps the mechanical watch business ticking I suppose.

Read the entire interview on Timezone.com


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