The history of Swiss mechanical watchmaking is littered with stories of brands that perished, unable to cope with the onslaught of the Quartz Crisis in the 70s and 80s. DuBois et fils, founded in 1785 in the Swiss watchmaking town of Le Locle, would have faded into oblivion too had it not been for one man’s impending midlife crisis.
Thomas Steinemann, the former CEO of Fossil Watches Europe, felt the need to do something more meaningful than buying a Harley Davidson as a response to turning 50. So in 2010, he acquired a struggling but pedigreed Swiss watch company from its German owners with the aim of transforming its fortunes in the years to come.
This was no impulse buy. Steinemann had been scouting the market for a company that would tick all the boxes in his checklist. “The company had to have some history and heritage, it had to be family-owned and needed to still be active,” says Steinmann. “But importantly, it should have been a struggling business, that’s the only way I could have afforded it.”
Founded in 1743 by Moise DuBois, the company was established as DuBois et fils in 1785 after Moise’s son Philippe took over in 1760. The brand claims to be the oldest Swiss watch factory and is one of the oldest Swiss watch brands around now.
“The DuBois family owned the brand till the 80s before they sold it to a German business during the Quartz Crisis. It passed through three different owners in Germany over the next 25 years. They still made watches, but they were sold mainly in Germany. They pretty much faded out of Switzerland,” recalls Steinemann.
Steinemann knew the acquisition was the easiest piece of the puzzle. Jean-Claude Biver famously turned around Blancpain in the 80s, A. Lange & Söhne was resurrected as a haute horology brand nearly five decades after the German Reunification in the 1990. However, there’s been no major revival of a watch brand in the last 10 years.
“I stood no chance if I tried to take on the big brands, I am never going to match their marketing and distribution might,” says Steinemann. As clichéd as it sounds, Steinmann knew he had to think different to stay in the game. “Where is the watch and luxury business going to be in 10 years? What is the luxury consumer going to be like in a decade? How are they going to interact with the brand? We started thinking about these questions,” recalls Steinmann.
He gathered a clutch of marketing gurus and consultants and brainstormed ideas and two years later, he had his vision for the new DuBois et Fils brand. “The luxury of the future is going to be about limited access. Price will not determine luxury; it will be more about availability and rarity. The future is understatement – people want to wear a luxury product but do not want to flaunt it anymore. Our consumer of the future is a digital native, 85 percent of millennials today make their buying decisions on the phone. So a lot of the existing patterns in the watch industry was not going to work for us,” he says.
So Steinemann now had a plan, he still needed the capital to bring this to fruition. He did with DuBois et fils something that was hitherto never attempted in the industry - an equity-based crowdfunding scheme that allowed consumers to buy shares and become stockholders. There were many naysayers given that back in 2012, there were no crowdfunding platforms like Kickstarter active for watch brands, but Steinemann went ahead anyway.
How difficult was it to get people to buy into his vision?
Transparency was key. They had to see a face driving the brand. I made it very clear that this is a high-risk investment because you are parking your money in a start-up. You should not need this capital in the next seven years - Thomas Steinemann
Shareholders were offered an immediate return on their investment in the form of a 50 per cent discount on the first batch of watches.
Steinemann set up a website to launch his equity-based crowdfunding model. For investments of at least CHF500 (About $500), investors would own shares of the company and the right to buy a watch with the value of CHF9,000 at half price. Those who invested CHF3,000 to CHF10,000 were given the option to buy a watch with a discount of 70 per cent each year.
It took them only five months to reach the financing target of CHF1.5 million thanks to 587 different investors. Today Steinemann owns around 65 per cent of the company. The rest of the equity is divided between close to 930 shareholders from 31 different counties.
Dubois et fils also offers a rental plan for customers who want to try on one of their timepieces for short term periods (like 3 months). For as little as $150, clients can rent a timepiece from the brand’s website.