Rolex Names Dufour CEO in Third Post Change Since 2008Thomas Mulier
Rolex will make its third change in top leadership since 2008, naming Jean-Frederic Dufour to become chief executive officer of the 109-year-old maker of Swiss timepieces.
Dufour, head of LVMH Moet Hennessy Louis Vuitton SA’s Zenith watch brand, will replace Rolex CEO Gian Riccardo Marini at a date to be decided, the Geneva-based company said today in a statement. Dufour helped restructure Zenith since becoming the division’s CEO in 2009, refocusing product lines and returning to more classic models to rejuvenate sales. Previously, he worked at Chopard, Swatch Group and Ulysse Nardin.
Closely held Rolex has faced increasing competition from Swatch Group AG and Cie. Financiere Richemont SA in the quest for consumers’ wrists as Swiss watch exports have doubled in the past decade. Together the three companies sell about 46 percent of the world’s timepieces by value, according to estimates by Bank Vontobel.
“Rolex has missed one step or two in the competition to be the top dog in the watches business,” said Luca Solca, head of luxury goods research at Exane BNP Paribas.
The industry’s growth slowed last year as China’s government clamped down on bribery and extravagant shows of wealth among state officials. Swiss watch exports rose 1.9 percent in 2013, the slowest growth since the financial crisis.
“Dufour did a great job at Zenith, which was close to dead,” said Rene Weber, an analyst at Vontobel who said the new CEO will bring “some young ideas” to Rolex.
Rolex doesn’t publish financial information. The company probably generates annual sales of about 4.5 billion Swiss francs ($5.1 billion), compared with 8.5 billion francs at Swatch, which owns brands including Omega and Harry Winston, according to estimates by Jon Cox, an analyst at Kepler Cheuvreux. That would make Rolex the world’s largest watch brand by revenue, Cox said.
“There is a conflict within the organization between the modernizers, who want to see faster development and more innovation, and more traditionalists, who want to see a more steady-as-she-goes approach and blame overexposure to greater China for current woes,” Cox said.
Rolex was run by members of the Heiniger family for almost half a century until December 2008, when Patrick Heiniger resigned. Bruno Meier, formerly Rolex’s chief financial officer, succeeded Heiniger, who died in 2013. Marini replaced Meier in 2011.
“They overlooked the intermediate price opportunity in China,” Solca said, adding that Rolex’s Tudor brand is “only now catching up” after Swatch’s Longines has built a “major position there.”
Rolex produced 11.8 percent of the watches sold by value in 2012, compared with 18.3 percent for Swatch Group and 15.7 percent for Richemont, Vontobel’s Weber estimates.