MYKONOS – George Clooney, Naomi Harris and ocean explorer Victor Vescovo were among the stars that gathered on the Greek island of Mykonos for the 75th anniversary of Omega’s iconic Seamaster watch in June. Their job: to inject some glamour into Switzerland’s third-largest watch brand as it looks to fuel further growth after clawing its way back above pre-Covid levels last year.

“Bouncing back is definitely here, and sales are going from one record to another,” the brand’s president and chief executive officer Raynald Aeschlimann told BoF.

While Omega owner Swatch Group does not break out performance for individual brands, analysts at Morgan Stanley said Omega’s turnover reached 2.47 billion Swiss francs ($2.78 billion) last year, surpassing 2019′s pre-pandemic levels by around 5 percent. Omega’s growth has been driven by a buoyant American market, Aeschlimann said, while the key Chinese market remains slower. “China is recovering, but it is still not at the level it used to be in the boom years,” said Aeschlimann.

The brand is betting on continued momentum in the US as well as rebounding sales to Chinese clients — both at home and abroad, as international tourism gradually recovers — to power its next chapter.

Investment in the brand’s retail stores and online flagships is also set to fuel the brand’s expansion. Direct-to-consumer now accounts for 35 percent of the brand’s business, allowing the brand to forge closer ties with clients and recover value that was would be otherwise passed on to third-party dealers.

The brand expects to sell 600,000 watches this year, increasing volumes by around 20 percent year-on-year, Aeschlimann said. Analysts at HSBC expect parent Swatch Group, which is set to next report figures 28 July, to grow revenues 17 percent this year.

Still, a smooth ride for Omega is hardly guaranteed: While the brand is currently seeing strong growth, it has bounced back more slowly from the pandemic than key rivals. According to Morgan Stanley, Rolex increased estimated turnover by around 45 percent between 2019 and 2022 to 9.3 billion Swiss francs ($10.5 billion), distancing itself from its nearest industry challengers. Meanwhile, jewellery giant Cartier’s watches also surged, adding more than 1 billion Swiss francs in revenue since 2019 to overtake Omega in 2021.

Price Hikes

Aggressive price hikes and step-and-repeat marketing may be to blame. Omega has tripled its average price point over 20 years, according to Aeschlimann, with key models like the Speedmaster and Seamaster now priced broadly in line with models from IWC, Hublot and Panerai — brands to which the brand had previously offered a more accessible alternative.

Those price hikes continue. Morgan Stanley calculated that in the two weeks to 6 July, Omega had raised prices by 8 percent in the US and 2 percent in Switzerland and China. Its analysts concluded that “the Omega price increase results from weakness rather than strength,” with Omega’s growth propping up lesser-performing brands in Swatch Group, such as Longines, Tissot and Breguet.

In recent years, Omega has justified the move upmarket by adding more value to each piece, reinforcing its appeal among watch aficionados with advanced mechanical movements (an independent Swiss institute called METAS certifies Omega timepieces for properties such as anti-magnetism, accuracy and water-resistance) — and higher quality materials like ceramic or proprietary innovations such as Moonshine Gold.

The new Seamaster Summer Blue collection, introduced in Mykonos, includes watches with 21st century innovations, such as ceramic bezel inserts, laser-ablated dials, water-resistance to 6,000 metres and industry-leading levels of anti-magnetism (an invisible but useful feature in a watch with moving parts).

Still, Aeschlimann acknowledges that for a brand at Omega’s scale, many customers aren’t concerned by these improvements. “There is an incredible paradox where we gain so much of our brand identity by working on precision, innovation and pioneer technologies,” he said. “While at the same time, people just say: ‘It’s a nice watch.’”

The upmarket push is also in line with industry trends. Despite rampant global inflation and tighter economic policies, as well as the rebound of other spending categories like travel and experiences, Swiss watch exports continue to break records in value terms (the Federation of the Swiss Watch Industry estimated sales rose 11 percent year-on-year for the five months through May). Volumes, by contrast, have fallen by around 45 percent since 2015.

Some price hikes may have been motivated by macro-economic factors outside Omega’s control. “Omega’s decision to raise the prices is just a needed move to realign with adverse foreign exchange rates,” said Oliver Müller, founder of the Swiss luxury consultancy LuxeConsult, adding that the Swiss franc remained “unfavourably strong”.

But Müller said even a slight increase could slow sales. “A client who was considering buying a Speedmaster Professional might want to postpone his discretionary spend for a few weeks or months considering that a few hundred dollars more might be too much,” he said. “But let’s face it, all the competitors in the same position and with pricing power will eventually realign their prices as well. Rolex did it twice in 2022 and already once in 2023.”

“Frankenstein” Watch

Omega recently faced a setback for its credibility among collectors when the blogger Perezcope identified that a record-setting 1957 Speedmaster auctioned by Phillips for $3.4 million in 2021 was a so-called “Frankenstein” watch, containing parts from several watches despite previous assertions from Omega’s museum that the rare timepiece was entirely original.

The story was picked up by major news outlets around the world, three Omega employees were implicated (including the now-former head of Omega Museum and Brand Heritage), and a criminal investigation is underway. Aeschlimann told Swiss newspaper NZZ the fraud had been “to the massive detriment of Omega.”

Omega released a statement June 2 responding to the crisis, acknowledging the role played by its former employees. “We were very clear about being attacked by criminals, and at the same time also quite transparent about having these issues,” Aeschlimann told BoF. “Everything will be available for the police and the prosecutors to understand what’s happening.”

Marketing Evolution

Omega now has to balance maintaining a powerful brand image with tweaking its approach to reach the next generation of customers.

Omega has been James Bond’s watch in every one of the franchise’s films since 1995, and in Paris next year it will be the timekeeper for the Olympics for the 31st time. George Clooney and Cindy Crawford have been Omega ambassadors since 2007 and 1995 respectively. Some observers see a need to update its marketing formula in line with its upmarket push.

“Omega is not the Volkswagen of watches any more,” said Kristian Haagen, author of eight books on watches. “It wants to enter the luxury watch business. Can you be Omega and still run the old meal of James Bond and Cindy Crawford, or do you need to shake the bag and do something more luxurious? I can’t see Omega continuing what they’re doing right now if they want to be part of the luxury watch segment.”

Aeschlimann, however, said the brand’s success lay in its ability to reinvent itself while sticking with tried-and-tested marketing initiatives. For example, in “No Time To Die,” actor Daniel Craig collaborated on the design of Bond’s Seamaster, issuing a piece that earned critical approval and which now retails at $10,000.

And at this year’s Mykonos launch, Clooney was flanked by 23-year-old TikTok star Jacob Rott and French recording artist Ninho. Last year the company added film star and Yves Saint Laurent-ambassador Zoe Kravitz to its roster.

“We’re making the new generation aware [of Omega] by working in their new codes,” said Aeschlimann. “Young people don’t say James Bond isn’t modern or inspiring, because he’s been evolving. We’ve been consistent, but it doesn’t mean they [our partnerships] are starting to be dusty.”