Focus on your domestic market, not foreign buyers: The Hour Glass’s Michael Tay
As The Hour Glass celebrates turning the big 4-0, Group Managing Director Michael Tay ruminates over surviving two financial crises, and how he feels about the current state of the watch industry.
In a young nation like Singapore, homegrown companies that have been around for decades are a bit of a rarity. That’s perhaps why The Hour Glass, which was founded in 1979, is pulling out all the stops to mark its 40th anniversary.
Its flagship store off Orchard Road, Malmaison by The Hour Glass, has been redesigned by JoAnn Tan Studio, a Milan-based firm specialising in window display, installations, scenography and set design. The new – albeit temporary – refresh is an ode to Stanley Kubrick’s iconic retro-futuristic movie 2001: A Space Odyssey.
The refresh sets the stage for Then Now Beyond, an exhibition featuring special commissioned works by four renowned designers and contemporary artists addressing the beauty and essence of time. It will run from November 24, 2019 until January 31, 2020.
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“The idea to have this themed exhibition came about two years ago,” Michael Tay, The Hour Glass’s Group Managing Director since 2015, told CNA Luxury. He first joined the company in 1999 as its Business Re-Engineering Manager, and has been its Executive Director since 2005; his parents Dr Henry Tay and Jannie Chan founded the company in 1979.
“We decided to leverage on our reputation as specialist watch retailers, to dig deep, to expand the cultural milieu of watchmaking arts, to locate contemporary watchmaking right alongside contemporary art and design,” he elaborated.
Horology and art are twin passions of Tay’s, so it was a natural decision to commission works that fuse the two disciplines. Studio Wieki Somers’ artwork Beetle Clock, for example, sees two beetles chase time around the age rings of a tree trunk. It explores the increasing destruction of insect habitats through urbanisation.
A cuboid shaped clock by Nendo sees the clock’s hands neatly overlap only twice a day (at 12 o’clock), uniting the shape in its original appearance and signifying the resetting of the mind.
A bronze structure by Daniel Arsham (who frequently collaborates with brands such as Rimowa and Dior) examines the constructions of time and immortalises the form of the ancient time-telling device, the hour glass.
Marc Newson’s Klepsydra reinterprets the ancient hour glass, with 2.8 million metallic-dusted nanoballs trickling between two interconnected crystal structures to provide accurate recordings of time.
“We commissioned Newson to produce a limited-edition series of hour glasses to mark our 30th anniversary in 2009, so it seemed fitting to invite him back to do a limited edition collection of 10 Klepsydras for our 40th anniversary, especially since he also designed other timepiece-related works before, for example, Jaeger LeCoultre’s Atmos clocks,” said Tay.
Specially-commissioned commemorative watches from brands such as Audemars Piguet, Chopard, TAG Heuer and Ulysse Nardin will also be on sale.
“We decided to leverage on our reputation as specialist watch retailers, to dig deep, to expand the cultural milieu of watchmaking arts, to locate contemporary watchmaking right alongside contemporary art and design.” – Michael Tay
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NO REST FOR THE WICKED
Despite The Hour Glass’s apparent success, which includes representation of forty luxury brands such as Cartier, Hublot, Patek Philippe, Piaget and Rolex; and dozens of stores across the Asia-Pacific – Singapore, Malaysia, Thailand, Vietnam, Hong Kong, Japan and Australia – Tay still feels it’s not time to rest on his laurels.
“You know that quote by Jack Kerouac? ‘When you get to the top of the mountain, keep climbing’? To me, there’s never an end in sight; there’s no way one can stop improving,” said the self-confessed workaholic, who names his biggest learning experience as the Asian financial crisis in 1997.
“Back then, we had a handful of regular foreign clients who made very big purchases; half our business was driven by them. When those clients faced difficulties, they stopped buying, which definitely impacted us,” he recalled.
“I learned it’s important to build and scale a business with a keen focus on the domestic clientele in each market we’re in, and to diversify our client base. We also needed to overhaul our retail setting and customer service – complacency had set in.
“And, even though our borrowings were nominal at that point, we still felt pretty intense pressure from the banks. We also owned brands such as Gerald Genta and Daniel Roth, which we’ve since divested. It was almost the perfect storm for disaster. But I believe we should always be forging ahead to continue creating our destinies. Mistakes will of course be made, but the point is just never to repeat them!”
“You know that quote by Jack Kerouac? ‘When you get to the top of the mountain, keep climbing’? To me, there’s never an end in sight; there’s no way one can stop improving.” – Michael Tay
When the global financial crisis hit in 2008, Tay and his firm were more than ready.
“One of my staff commented that there seemed to be a lot of froth on the market, given the way people seemed to be spending so recklessly. That’s the point I knew the bubble was going to burst – I didn’t know when, but we reduced debt and started to prepare for the downturn.
“When the economy went belly up, it caught everyone off guard except us. Between 2009 to 2012, we managed to negotiate excellent leases and went on an expansion spree. This help put us in a great position for when the economy picked up again,” he recalled.
As for the firm’s overarching strategy, Tay offered: “Our singular aim is to advance watch culture, to pursue qualitative growth. We don’t need to be the biggest, to make the most sales, to have the largest number of stores. What we aim for, is to be the favoured and trusted place where customers know they’re getting good service from knowledgeable watch experts, and feel welcome and at home when they visit us.
“In terms of online engagement, we’re not focusing on e-commerce, but on providing quality content, with lots of storytelling, to engage and educate consumers, to push CRM, to get a better sense of our clients. What we do know is, for big-ticket items such as luxury timepieces, people still prefer to buy offline, even if they do a lot of prior research online.”
“We don’t need to be the biggest, to make the most sales, to have the largest number of stores. What we aim for, is to be the favoured and trusted place where customers know they’re getting good service from knowledgeable watch experts, and feel welcome and at home when they visit us.” – Michael Tay
THE WATCH INDUSTRY TODAY
In spite of ongoing US-China trade tensions and the crisis playing out in Hong Kong, Tay remains bullish about the current state of the watch industry.
“We’re operating in a part of the world that’s experiencing very strong growth rates, seeing very keen interest from a large and growing pool of young watch enthusiasts. If you look at the Swiss luxury watch industry, 65 to 75 per cent of its products end up on Asian wrists.
“The Hour Glass is poised to benefit from this trend… we’re in a region where there’s tremendous wealth creation, coupled with huge income disparities. That creates a tremendous need for status competition, and that’s where sales of objects of prestige really take off,” he noted, adding that “watch enthusiasts are still mainly men”.
He observed that the idea of a “starter watch” has evolved. “Fifteen or 20 years ago, a recent graduate might treat himself to his first nice watch with his first paycheque, and upgrade over the years in tandem with his annual bonus or a big promotion. These days, the bar seems to be set higher. People seem to be buying fewer watches, but buying better. And they seem to have it all planned out.
“Now, a recent graduate might spend up to four months’ salary – not on a ‘starter watch’, but on a watch that’ll be part of the collection he plans to amass over a lifetime. There’s an ‘always-on’, ‘instant gratification’ approach, with people buying watches when the whim hits them or when an eagerly-awaited model becomes available.”
And what of having grown up in a family that’s been involved in the watch business for this long? “Working [in the business], having a passion for [watches] and building my own collection of watches, I really have to say that timepieces form the core of my being.
“I consider myself very, very fortunate that I’m in the business of watches, and I have a personal passion for them. Not many people get to love the products they deal with. For example, a guy who runs a waste manufacturing plant may love his business and his work, but I doubt he gets to say he loves his products,” he concluded.
“I consider myself very, very fortunate that I’m in the business of watches, and I have a personal passion for them. Not many people get to love the products they deal with.” – Michael Tay