AnthonyTsai
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PuristSPro interviews Angelo Bonati, CEO of Panerai
PuristSPro Interviews Angelo Bonati
by Anthony Tsai
© April 2008
Angelo Bonati joined Panerai as the CEO in 1997 and has lead and transformed Panerai into a huge success of which many other CEOs are probably envious of. Leading the charge and establishing itself as the leader of the large watch trend, Panerai continues to defy those who believe Panerai watches are just a “fad”. This is the first time PuristSPro has interviewed Mr. Bonati, and I hope you enjoy this interview as much as I had fun asking him the below questions and seeing him share his views and passion with the PuristS community.
PPro: When you first joined Panerai, which brands did you see as your closest competitors at the beginning of 1997? And are those same brands your competitors today?
AB: This is first time someone asked me this question…hmmm…I’ve never thought about this. Basically when we started at the beginning, there was no specific competition in our segment because the segment didn’t exist yet. The extra large size, the military soul, was proper to Panerai and not fitting to other brands. Don’t forget that 10 years ago, the average diameter size of a men’s watch was 34, 35, or 36mm and for the ladies 32mm. Panerai entered the market with 44mm, and it was enormous compared to what was out there. That’s why competition was not really competition, of course everything in one market is competition; but in any case, we really didn’t have any competitors.
After the enormous success that Panerai had at that time, all the brands started to follow the extra large way. And for me, they are not competitors - in the sense of direct competitors of Panerai - but rather they are the followers of Panerai. Also, brands who are more famous than Panerai are now following and producing their own large watches even though large watches are not part of their brand DNA and authenticity. The unique watch who has the real authenticity in the extra large size watches is Panerai. The others are just following. Now it’s the standard and not the exception, and Panerai continues to be the point of reference. Panerai continues to be Panerai, and Panerai is getting stronger just because it keeps its own authenticity.
We can talk about the chronograph segment in which Panerai is being compared to; but basically, Panerai is located between Rolex and Audemars Piguet. If you imagine the sports segment that Rolex and Audemars Piguet occupy, we are in the middle more or less.
PAM308 - 44mm Luminor 1950 Regatta Chronograph
PPro: How do you see Panerai positioned relative to the other brands in the Richemont Group?
AB: That is the same as the position of Panerai in the market. The various brands in the Richemont Group occupy different segments of the market, but Panerai is a brand who has its own path to follow. I don’t move day by day in order to fight and to satisfy different needs. Panerai has its own path, and we continue to follow our own path. I don’t want to move from that. We have our strategy which we plan to follow for a long period of time, and we cannot change it every year because if we do, we change the soul of the brand. And once you change the soul of the brand, you then won’t be able to recognize with the brand anymore.
PPro: With Panerai's heavy emphasis on military links to the Italian Navy, what is your client demographic now – who is your target customer?
AB: Right now Panerai is its own best selling client. It’s not one client located in one social position. If you want to talk about age, we can say the age of Panerai’s clients ranges between 25-60 years old. However this 25-60 year old range is so large that it practically covers everyone. There really is no “specific” client. Who loves Panerai, loves Panerai. And the orientation of our collection is small but made to target this range. And at the entry level, we can’t satisfy everybody so then we have to grow.
PPro: How important is it to Panerai to develop vertically integrated manufacturing capability?
AB: It’s fundamental. It’s not important but fundamental for the brand. From the beginning when we decided to enter this segment, to be not a trendy watch but a complete watch brand, we chose to follow the way of the contest and not the way of marketing communication soul. Of course we use marketing and communication but it’s not a priority. As a necessity to the brand, you need to have your in-house movement, your cases, your manufacture, and specific know-how, not common know-how; and that is what we are expressing.
PAM311 Luminor 1950 8-days Chrono Monopulsante GMT using the in-house P.2004 calibre
PPro: Is there a plan to release a more simple version of the in-house movement at a lower cost so lower priced models can benefit as well?
AB: As for Panerai, the cost is not a problem. Panerai for me is to express the quality…let me try to explain this…if we produce a simple in-house movement, of which we are doing, of course the price is not higher than the other. But don’t forget that, in any case, it will always be a manufacture movement and not a movement where our production can jump up to 500,000 pieces but only to a few thousand pieces. And through these few thousand pieces, you always want to keep the original way and not the industrial way. That’s why our movement is always more expensive compared to the other. What is important is to keep the soul of the brand and to make the client dream. You know…if the watch costs $4,000 or $5,000 USD, I don’t think we lose our client, our entry level client. Maybe you wait 2 months longer to save up more money to buy the watch, but what is important is to buy your dream - to have the possibility to buy your dream and to buy a watch that can make your dream. You are not buying an object. You are buying something different that an object.
PPro: And will you plan to phase out the standard ETA/Unitas movements after the release of the more simple basic in-house movement?
AB: (Draws pyramid on sheet of paper)…Imagine this pyramid. The top is the special editions, the middle is the chrono mid-range, and the bottom is the entry-level. This kind of segment (pointing to the bottom of the pyramid) is reserved for the ETA movement. We don’t have to leave this segment, and we want to develop our segment.
PPro: The reason why I ask this is because if the more simple in-house movement PAM’s cost between $4-5k USD, it won’t cost that much more than the $4k ETA models.
AB: What’s important for us is that we don’t want to fight against this kind of segment. Otherwise, if we fight against this segment, it means what we produced up to now is garbage. But it’s not garbage because we produce something with quality, and we continue to keep that quality. The problem with these movements, ie: Valjoux, is these movements are made for the industry that produces millions of pieces. That’s why you have a specific price; and when you produce a thousand pieces, you have another price but then you get higher quality, ie: better finishing, etc.
PPro: The Ferrari watches are engineered by Panerai – how long of a partnership will this be for?
AB: It will be a long time agreement because you cannot develop a project, as what we are developing, in such a short time otherwise it would be a waste of money.
PPro: And what is your goal for the Ferrari watches in relation to Panerai’s product line and strategy?
AB: Panerai and Ferrari are 2 different worlds. What’s the link between these 2 different worlds? - Italian heritage, the passion, the design, and the technology. But they are 2 different brands. Panerai follows its own way. Ferrari made by Panerai, “made” by Panerai because Ferrari is not a watchmaker, is distributed by Panerai. They are 2 different worlds.
PPro: Some watch brands are strongly 'male' or 'female'. Panerai is obviously very male oriented…
AB: Let me correct you please. Panerai is not a male or female brand, but rather Panerai is a watchmaker brand. It’s open to whoever wants to buy. It’s true that basically Panerai watches are big, military, and for men or for women, but we now have different shapes. And the ladies who appreciate this watch, buy this watch.
PPro: Like my wife…
AB: Like your wife. You know most of the brands in the market, they reduce…I’m sorry to say…the fact that to produce something for the ladies is just to change the size. That’s not my opinion because when you change the size of the watch, you risk changing the soul of the watch. If you want to do something specifically for females, not as a watch but as an object, you have to be serious about creating something for women. And these objects must but be totally different than the others. If you take the big watch and reduce the diameter to make it a female’s watch, that’s not correct - it’s not my philosophy.
PAM310 - 40mm Luminor Chrono
PPro: I personally would like Panerai to continue expanding its product line, and one possible option is to introduce a totally brand new case. What do you think of this, and does Panerai have any plans to introduce a new case?
AB: I cannot say in the future that Panerai will not introduce a new case; but right now with the cases we are currently producing, we still have a lot of potential to develop, so why do we have to produce a new case? We don’t need to now.
PPro: Panerai has recently come out with a couple Radiomirs using platinum cases (ie: Platinum Cali dial & Platinum 8 days), will we see future Luminor models using platinum cases as well? If not, why not?
AB: It’s a little difficult because the geometry and structure of the Luminor case has too many sharp angles. If we use platinum in a Luminor case, it’ll be so heavy that you’ll need something to help lift your arm up (demonstrating gesture and chuckling at same time).
PPro: If you have to pick one, which Panerai model in the past do you feel should have performed better commercially and why?
AB: I’ve never thought about this because in the past, all the models we have made have been great sellers.
PPro: And which model surprisingly exceeded your expectations? ie: PAM127, PAM203, etc.?
AB: In ten years, we had so many successful models which I consider “status” watches. It’s not easy for me to declare which one because starting from the beginning, the Luminor base for instance is an icon, the Luminor Marina is still an icon, the 40mm PAM48 is an icon, and so is the Power Reserve. I’m really not able to answer this question.
PPro: Can you please describe your ultimate Panerai concept watch?
AB: (laughing)…I would like a concept watch that can tell me “Good morning Mr. Bonati.” (laughing again).
PPro: How does the use of ceramic cases such as the PAM292 Ceramic Blackseal, which debuted last year, and this year’s PAM317 Ceramic Monopusher fit in with Panerai’s roadmap? Should we expect cases made out of different materials in the future?
AB: Regarding the ceramic case, we started to work on the ceramic case 4-5 years ago. And the reason why we did so was because we had to find a substitute for PVD. The market was very demanding of the black color, and I didn’t want to insist on PVD because, as you know, PVD can have problems with the quality if you scratch it. And once it’s scratched, you can do nothing more. We made the PAM195 and now we are presenting the PVD PAM26 this year, of which I produced for the collectors. But the main problem was to find a black color proper to Panerai in a material that can resist scratches. That’s why we worked on the ceramic, and the particular cases of the Radiomir and Luminor 1950 made this process very difficult because of the curves of the case. Now we are able to produce 20 ceramic pieces per month, and 20 is enough.
PPro: When I was still in New York and a former moderator on Paneristi, we had a meeting with all the other Paneristi moderators; and at this one meeting, you showed us a green colored PVD coating prototype which you were testing. Whatever came about this green colored coating?
AB: Ahhh yes…nothing came about with it because the coating would come off and couldn’t guarantee me a longer lasting life.
PPro: Was this green coating at least stronger than the black PVD coating?
AB: Yes, it was stronger than PVD but once you scratch the coating, it’s always going to be scratched and there’s nothing you can’t do anything about it.
PPro: I cherish my PAM195 and am planning on giving it to my daughter when she grows up. The PAM195 collector’s edition was a huge headache for you and Panerai such as incorrect Pre-V logo, engraving of owner’s name on the caseback, etc. Will there ever be a time in the future when Panerai will consider making another collector’s edition model?
AB: Yes we’ve already have. This year I’ve made the left-handed PVD PAM26 as another collector’s edition.
PPro: Panerai’s slogan is "Where ideas come to life". What does this mean to you, and how will Panerai enthusiasts and collectors see that meaning expressed in the future?
AB: “Where ideas come to life” is not only our claim – is our philosophy. It’s a part of our philosophy, and we cannot change our philosophy in the future. And the clients, our collectors, our supporters, have to understand that we will continue to work with this kind of philosophy. Not just me but all the people that work at Panerai.
PPro: In the new 47mm Radiomirs w/ Minerva movements, why did you choose titanium as the material for the case?
AB: Because it’s so beautiful. Look at the combination between the titanium case and polished titanium bezel with this kind of movement. Basically, in the watch industry people use high level movement with platinum or gold, and I love to do the opposite - to use the simple materials - because in using the simple materials, you give more value to your movement. If you use platinum, I’ve used it and made 50 pieces just for the collectors who wanted it, you basically have to express you’re somewhat fair through the simple material because it’s inherent for us. And don’t forget that we come from Italy.
PPro: Regarding the new Radiomir Tourbillon housed in a 48mm case, is there any reason why you used 48mm instead of 47mm? Would the movement fit in a 47mm Radiomir case?
AB: We used 48mm because it fit better. It was a technical decision, and we didn’t use 48mm as a marketing choice.
PPro: What do think is Panerai’s greatest strength and weakness, if any, today?
AB: The authenticity of the brand gives us the strength to continue to fight the market.
PPro: And you have a passion for sailing, right? How did your passion for sailing grow?
AB: Sailing grew inside of me because sailing represents freedom and beauty for me. It’s contact with nature and lets me unplug from daily life and to enter another dimension. When you grow up on the sea, you get to free your mind which allows you to think better.
PPro: If you weren’t wearing a Panerai right now, which watch would you be wearing?
AB: Hmmm...I have a lot of watches I like from other brands. For me, it would be the Audemars Piguet Royal Oak.
PPro: Royal Oak or Offshore?
AB: Royal Oak. Offshore is too big, and the case is too massive. You know what I love is a piece they no longer produce anymore. It was one of the first Royal Oak with bracelet in steel. It was fantastic.
PPro: Thank you very much for your time, and I wish you and Panerai great success at SIHH 2008.
AB: Your welcome and thank you!
-------------------------------------------------------------------------------- Copyright April 2008 - Anthony Tsai and PuristSPro.com
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