At the age of 66, when many are already enjoying retirement,
Walter Lange was setting out to prove great luxury watches do not have
to be Swiss.
In a remote corner of what was East
Germany, Lange aimed to rebuild a venerable watchmaking business whose
history reads like a chronicle of 20th century Europe, with its wars,
dislocation, Soviet-era occupation and finally, unity and peace.
Now watchmakers in the small town of Glashuette again sit bent over
work tables in whitewashed factory buildings, magnifying glasses
strapped to their eyes, polishing three-quarter plates made of German
silver and engraving balance cocks by hand.
"Back in the 1990s, when Lange & Soehne started making watches
again, selling a German watch to a Swiss was like selling a fridge to an
Eskimo," said Zurich watch retailer Rene Beyer. "But that has changed.
At present, half of our Lange watches go to Swiss customers."
Collectors value the brand's characteristic old-style movements
including a plate in the shape of a three-quarters full moon invented by
Ferdinand Lange in 1864 to add stability, and screwed gold sockets,
known as 'chatons', that today only serve decorative purposes.
The dial design – featured in the modern Lange 1 wristwatch – has become a classic.
Walter Lange tells how the factory started by his great-grandfather in
Saxony's Ore Mountains was razed by bombs on the last day of World War
Two.
"We had to dig the machines out of the rubble," Lange, now 88, said in a telephone interview.
Ferdinand Lange set up his watchmaking school and workshop in
Glashuette in 1845 with a loan from the Saxon state to help the town's
impoverished population recover from the closure of the local ore mines.
Talented watchmakers, his sons followed in their father's footsteps,
gaining renown for their pocket watches and employing about 100 people
during the firm's heyday around 1900. Watchmakers trained at the Lange
school opened workshops in town. Some manufactured their own watches and
others supplied parts to Lange and its smaller peers.
"Most of the town's 1,000 inhabitants worked in the watch industry
around the turn of the century," said Reinhard Reichel, director of the
local museum.
Quartz watches
Although World War Two all but destroyed the firm's operations,
production restarted, only to suffer another blow when Soviet occupiers
expropriated the firm in 1948.
"The little that
was left after the war was taken away by the Soviets," said Walter
Lange, who now lives in Pforzheim in southwest Germany but still travels
to Glashuette often.
"I myself helped packing
machines into boxes to be shipped to Russia. At Lange, we had to make
sketches to teach the Russians how to make marine chronometers," he
said.
The young Walter fled to West Germany to
escape work in a uranium mine and tried to refound the brand there, but
his attempts failed and he gave up hope of ever again seeing a Lange
watch leave a factory.
On regular visits to
Glashuette from the 1970s, Lange saw how the town's watch industry
turned to mass production of cheap quartz watches, a trend that also
plunged Swiss mechanical watches into crisis around the same time.
Only after the fall of the Berlin Wall did Lange dare to relaunch the
brand and create the Lange 1 model, with the help of the late Guenter
Bluemlein, then the head of Swiss watchmakers Jaeger-LeCoultre and IWC.
"Lange built a perfectly identifiable style, with its outsize date and
off-center displays: the Saxon style," said Gregory Pons, editor of
watch website businessmontres.
Richemont
acquired all three brands for 3.1 billion Swiss francs in 2000, leaving
Walter Lange a 10 percent stake in Lange & Soehne that he sold to
them in 2003.
"Together they represented a
wonderful collection of watchmaking skills and assets. Lange was and is
positioned at the pinnacle of the business," a spokesman for Richemont
said.
The same year, rival Swatch Group took
over Glashuetter Uhrenbetrieb, which succeeded the state-run enterprise
that manufactured watches under the Communists, and returned its 150
staff to making high-end mechanical watches in the 90s under the brand
name Glashuette Original.
A piece of history
Lange & Soehne's history fascinates its customers.
"I bought a Lange in Hamburg in 1998 when the brand was only known to
insiders. At the time, people thought good watches had to be Swiss,"
said a 53-year old Swiss private banker, who mostly keeps his Lange in
the safe and wears an IWC watch.
"A friend told
me about this East German brand being revived and I found that
interesting," he said. The value of his watch has risen to about 22,000
euros ($28,800) from 18,000, he said.
Watch collector Hans Gut, a retired dentist, has already visited the Glashuette factory three times with retailer Beyer.
"I'm Swiss so the fact that these watches are German was not a plus to
me, but I fell in love with them nevertheless, with the design and the
unique history of the brand," he said. "Seeing all the work that goes
into these watches really convinced me."
Lange
makes only a few thousand gold and platinum watches a year that sell for
15,000-400,000 euros, placing it at the top end of the price range
alongside Richemont's Vacheron Constantin, Swatch Group's Breguet and
family-owned Patek Philippe.
Richemont does not break down figures to brand level, but analysts estimate annual sales at 100 to 400 million euros.
Hard times
A difficult period for the brand started in 2009, when the financial crisis squeezed watchmakers' sales and earnings.
Glashuette mayor Markus Dressler confirmed local business tax revenue
declined by 70-80 percent in that year, a sign the town's biggest
taxpayer, Lange & Soehne, was not faring well. Tax revenue has
recovered gradually, returning to pre-crisis levels only last year, he
said.
Then-chief executive Fabian Krone quit in
2009 and was replaced by industry outsider Wilhelm Schmid, who had held
positions in distribution and marketing at car maker BMW.
Jaeger-LeCoultre Chief Executive Jerome Lambert was appointed to
oversee the brand's recovery on top of his responsibilities for
Jaeger-LeCoultre.
"Lambert, who is an excellent manager, has put the company back on track," Pons said.
Management problems may have been resolved, but challenges remain. "The
brand is struggling for a new identity. Its style has been imitated a
lot so it has less impact now," Pons said.
One
new difficulty for Lange & Soehne these days is finding qualified
workers in a region experiencing rural exodus and a collapse in birth
rates in the years after German reunification.
Four out of
five former East German states saw a double digit decline in their
populations between 1991 and 2008, against a positive trend in most
western German regions.
Birth rates in the
former German Democratic Republic slid to one child per woman in 1991
from 1.5 in 1990, according to official statistics, and stayed low in
the early 1990s, meaning fewer young people are arriving on the job
market these days.
"Germany is not a watchmaking
country and it is not easy to bring Swiss watchmakers over here. So it
is essential for us to train our own apprentices," CEO Schmid told
Reuters.
Indeed, all the young watchmakers
encountered at Lange's workshops said they got their training in town.
To secure the next generation, Lange will double the number of
apprentices trained at its watchmaking school to 20 this year.
"It makes me sad to see that the young people have left Glashuette,"
Walter Lange said. "Nobody wants to live here anymore because people
have just become so demanding nowadays.
"But to
craft complicated watches you need peace and quiet. To me, it is a great
joy to see how the company and the town have thrived thanks to the
watchmaking." – Reuters
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