REVOLUTION Interview: Panerai CEO Angelo Bonati on Panerai and the economic downturn

Untouchable: Panerai breezes through the downturn

Panerai’s Angelo Bonati helms the one brand that is seemingly unaffected by the economic downturn
By Wei Koh


Angelo Bonati, CEO of Panerai


Amid all our pain inflicted by the current economic crisis, there are certain brands that are weathering the storm gallantly. They will remain as steadfast as the Rock of Gibraltar amid Bernard Madoff’s indictment, hedge-fund implosions and the like… they shall not be moved. How can you tell who they are? As it was put so eloquently by Robert De Niro as Al Capone in David Mamet’s The Untouchables, “In an all-out prize fight, when one guy's left standing, that's how you know who won.”

So, who’s still standing after the first combative flurry of body blows and headshots dished out by the economic downturn? Says owner of Chronopassion Paris, Laurent Picciotto, “It’s simple, it’s Panerai. We’ve seen certain brands experience big drop-offs in sales, but Panerai is as constant as the North Star.” And it’s not a phenomenon isolated to one country but a global occurrence. From Tokyo to Las Vegas, sales of Panerai watches have been unwavering; and even more impressive — the waiting list for “highly collectible” Panerais is as robust as ever.

So, what “recession-proof” magic does Panerai have that the others don’t? It can be attributed to two things. The first is that Panerai has never shifted focus from its core identity, and even in the transformation of the brand to attain manufacture status, it has charted its growth steadily and with logical progression. All these attributes stand in stark contrast to the flash-in-the-pan, overhyped growth of more marketing-oriented brands that now find themselves in the same situation as real estate developers in Miami — holding on to a vast inventory that no one wants to buy.

The second and perhaps most important factor is this. In its 12-year history, Panerai has managed to create the most powerful brand equity in the luxury watch world. How do you judge this? By the fact that you could close your eyes, pick any Panerai at random, sell it away the next day, and realize that it would still command 90 percent of its original value. This is unheard of for any brand across the board — not even Rolex or Patek Philippe can claim this. Says one collector, “I look at this as a time of opportunity where some harder-to-find Panerai watches might emerge because of market conditions. As such, I’m putting my money into Patek Philippe complications and Panerais. I’ll buy every PAM 317 I can get my hands on. In today’s world, Panerai is more stable than most financial currencies.”

REVOLUTION caught up with Angelo Bonati, the man responsible for overseeing the incredible development of this most extraordinary brand, in Beijing during an exhibition of Galileo’s scientific achievements, which was sponsored by Panerai. We spoke to him to learn first-hand about the connection between Panerai and the great Florentine astronomer, the brand’s new direction, and more prevailingly, about the right steps that Bonati has taken to ensure that his brand will not only weather the economic storm, but be emboldened by it.

Why an association with Galileo?
Florence is the birthplace of some of the most significant scientific and cultural achievements in human history. We are lucky because Panerai comes from this same nurturing environment. The heritage of Panerai is distinctively Florentine. The opportunity to link our watch brand to the scientific achievements of Galileo was a great opportunity for us. As a Florentine brand, we wanted to support the endeavor to showcase Galileo’s key contributions to astrology, because these are the cultural treasures of the city of our birth.

Was Galileo’s work on finding a way to determine longitude inspiring to you?
Yes. As you know, the need to determine longitude has always been related to both the sea and to timekeeping. John Harrison created the world’s first marine chronometer out of the desire to be able to determine longitude, and this invention opened up the modern era of sea exploration. But Galileo had also created a system for determining longitude as well. His system was very interesting because it involves observing Jupiter and her moons. In fact, a new device for regulating clocks came out of Galileo’s desire to find ways to determine longitude; and so, there is a great synergy between Panerai’s values and his work.

What precisely was his method for determining longitude?
Galileo had the desire to create a fantastic astronomical clock that showed Jupiter’s position and the phases of its moons precisely, which would be a way to read local time. This could be combined with an astronomical calculation of the Sun’s position at noon, as well as measurements using tables, to arrive at the longitude. It was a combination of astronomical and horological solutions that resulted in a method to determine longitude.

Is it true that you are recreating this clock?
We wanted to celebrate both the International Year of Astronomy [in 2009], as well as Galileo’s works. As such, we decided to build this clock that is very much inspired by his unique combination of astronomical and horological solutions, and eventually give it to the Florentine Museum as a part of its cultural heritage. Of course, it makes sense for Panerai, a native Florentine brand, to be the one to create this clock.

Why an astronomical complication?
It was very important for us to demonstrate that we were able to render a complication like this, which is at the very highest level in watchmaking. If you look at the progression of Panerai, it is a brand that first made the leap to become a legitimate luxury brand from a military tool. It’s a brand that then became a true manufacture with some of the most technically innovative movements in the industry, including a truly functional tourbillon for wristwatch application. Now, we want to demonstrate that we can create extraordinary astronomical functions. We don’t want to sell our clock; we simply want to create a museum object. It was not intended to be commercialized.

Does this point at a new direction for Panerai?
Yes, these astrological complications that are very much a part of the heritage of the sea will become part of the DNA of Panerai. We want to demonstrate that we have the in-house capability to create complicated watches. But we also want to define complications our own way, meaning we are not trying to create the most complicated watch on earth. Instead, we want to develop a specialization in these astrological complications because they have to do with navigation, which is the very reason for Panerai’s existence. We are not interested in being complicated for the sake of being complicated. Our complications must have true synergy with our story. Remember that 12 years ago, we were nothing in terms of horological achievement.

Laurent Picciotto of Chronopassion says that Panerai is the one brand going strong despite the horrific market conditions. Why is this?
It’s interesting that Mr Picciotto has mentioned this. It is, of course, something we are very grateful for. It is not just enough to work in a commercial way. You must be passionate, because without passion, you cannot realize dreams. That is the very essence of what we do — we try to execute our dreams. Maybe it’s because we are Italian, but this is our character.

Professor Paolo Galluzzi, the director of the Institute and Museum of the History of Science in Florence said during the Galileo exhibit in Beijing that Panerai is one of the cultural treasures of Florence. What do you think of this?
It is very nice that Professor Galluzzi said this. He expressed that one of the limitations of Florentine culture is that it tends to be narrowly focused on only the distant past, and it doesn’t pay attention to what is going on in the modern world. And so, Panerai’s growth as a legitimate watch brand out of a small shop in Florence has in some way written a part of Florence’s modern history. We need to connect the past and present, and Florence is doing that. This is one of the motivations for us to create this clock for its museum. We are also interested in having a Panerai museum in Florence one day. Italy has many legendary fashion and automobile designers, but we’ve had only one truly successful watch brand and we are very grateful for Panerai’s success. Panerai was born in Florence and is linked to innovation, so its tradition could be a story that marries well with the historic stories in that wonderful city.

Panerai is unique as a military brand that transformed into a luxury one. How have you transformed Panerai to have it make such a global impact?
Panerai’s roots are pragmatic and we are quite unique in this. I don’t know if we have really conquered a whole new generation, as you say. But what is important is that even as you grow a brand like Panerai from phase to phase, you must, in everything you do, always remember who you are. If you lose track of that, it is easy to head off in the wrong direction and lose yourself trying to chase opportunities in the market. In terms of products or communication, of course, it’s a challenge to innovate and yet retain your core identity. But this is the strategy to conquer the perennial aspect of the brand.

The PAM 317 won the REVOLUTION Award for Best Sports Watch. Can you tell us a bit about this timepiece?
This watch is a very good expression of Panerai. It keeps the military concept of the brand alive. It is a backward-looking watch in that it extends the stealth black concept — which Panerai created in the 1990s — to the movement of the watch, which is treated in black. But it is also a forward-looking watch in that it houses a very modern, ultra-performance-focused chronograph movement that we developed in-house and it uses the modern material ceramic for its case. This represents just the start of a new era of Panerai, where we want to always use and discover new materials.


Luminor 1950 Ceramic 8 Days Chrono Monopulsante GMT (PAM00317)

How is this watch a symbol of the future?
Panerai was the first modern brand to use PVD on its cases (the PAM 4) and it was the first to use materials like titanium (PAM 36). It was also a very early adopter of materials such as tantalum. It is a symbol of the future because we have some things up our sleeve in material development, which I think can surprise you. It was important for us to reclaim the dominance in this field. We started 12 years ago with PVD-treated cases and we stopped even as everyone else in the market pursued it, because I could not guarantee the quality of the cases.

Why ceramic?
Ceramic is an old material, but also a very innovative material. The Panerai case is very complex to render — we worked on it for four years. The lugs are a weak point of the watch and it took us this long to attain the right proportion. You will see that they are not the same as those in a steel watch.