Zenith, when history comes full circle

Zenith is preparing another restructuring, this time quite drastic. According to reports in the Swiss press, a significant portion of jobs in Le Locle is at risk, and the LVMH group is considering reducing the number of collections, closing some boutiques, and moving the brand into a higher price segment.

By the way, the latter is somewhat curious, because if the brand failed to win over customers, collectors, or the secondary market with cheaper models, why on earth would it succeed after raising prices?

In the background, another scenario emerges, representing something of a return to the past: broader utilization of the manufacture as a movement supplier for the group's other brands.

Let us therefore return for a moment to the beginnings, when in 1959 Zenith acquired Martel Watch Co., a chronograph movement manufacturer from Les Ponts-de-Martel. Thanks to this, ten years later it introduced the El Primero, a construction that secured its lasting place in horological history. Incidentally, as I describe in the book Watcher of Watches, this movement—along with all its tooling and documentation—came very close to being irrevocably destroyed.

However, it was saved by Vermot's uncompromising and courageous decision. As a result, over the following decades, the movement found its way into watches from other manufacturers, including Ebel and Rolex. External orders helped sustain production during a period when the future of mechanical watches was far from certain.

According to reports published by "Le Temps" and subsequently cited by "Revolution" and other industry media, around one hundred jobs at the Le Locle facility could be at risk, along with a similar number of positions across international structures. There is also talk of closing boutiques and significantly streamlining the catalog by 2029.

Benoît de Clerck, who took over as CEO of Zenith in 2024, explains the necessity of the changes by citing the difficult market situation. In an interview with "The Business of Fashion," he pointed out that operating conditions for watch brands in this segment have fundamentally changed.

On the one hand, this is true, as the Swiss watch market is undergoing a period of significant reshuffling. Growth is concentrated in the highest price tiers, and many manufacturers in the segment of several thousand to ten-plus thousand francs are feeling the pressure on sales and margins. However, the scale of Zenith's troubles suggests that the broader economic climate is only part of the explanation.

Olivier R. Müller of LuxeConsult pointed out that since Zenith's acquisition by LVMH in 1999, the brand has had five CEOs, nearly as many strategies, and has repeatedly altered its price positioning. According to his estimates, the company's revenue has dropped by nearly 30 percent over two years. If these figures are close to reality, we are dealing with a problem that goes far beyond a simple market slowdown. In my view, this is the accumulation of years of neglect and short-sighted decisions, focusing all the flaws of corporate brand management like a magnifying glass.

Martel and the Birth of the El Primero

Martel Watch Co. spent decades developing and manufacturing chronograph movements. It was a key supplier to Universal Genève, whose Compur and Compax models relied on solutions engineered in Les Ponts-de-Martel. Zenith had also collaborated with Martel before deciding to acquire the company in 1959.

The acquisition gave it access to specialized personnel, engineering documentation, production facilities, and expertise accumulated over years of working on chronographs. Combined with Zenith's own capabilities, this laid the groundwork for developing a new generation of movement.

In January 1969, the El Primero was unveiled—an integrated automatic chronograph beating at a frequency of 36,000 vibrations per hour. Competing in the race for the first automatic chronograph at the time were also Seiko and the Chronomatic consortium, which brought together Heuer, Breitling, Hamilton-Büren, and Dubois-Dépraz, among others. Each party adopted different technical solutions, and the dispute over primacy still requires distinguishing between presentation dates, the start of production, and retail release.

The El Primero distinguished itself through its integrated architecture and high operating frequency, enabling the measurement of tenths of a second. At the same time, it was a relatively compact movement, even though its construction was complex.

Soon after came the quartz crisis. In 1975, under its American owner Zenith Radio Corporation, the decision was made to cease the production of mechanical chronograph movements. Charles Vermot, an employee of the manufacture, defied orders to scrap the documentation and equipment. He preserved a significant portion of the tooling, blueprints, and machinery, making the later resumption of production possible.

In the 1980s, the El Primero returned to the market. Orders from Ebel, which utilized the movement in its chronographs, played a crucial role. In 1988, Rolex unveiled the automatic Daytona, powered by a heavily modified Zenith caliber designated by Rolex as the Caliber 4030.

The automatic chronograph Daytona went on to become one of the most recognizable sports watches in the world. Ebel also successfully leveraged the movement's reputation across its models.

Zenith was thus supplying technology that others knew how to put to excellent use, and the El Primero took its permanent place in the pantheon of history's most important movements.

The Curse of the El Primero

It takes just a simple experiment. Ask a watch enthusiast which models they associate with Rolex. They will most likely name the Submariner, Daytona, or Datejust. For Omega, we will hear Speedmaster or Seamaster, while Cartier, for instance, will be associated with the Santos, Tank, or Pasha.

And Zenith?

El Primero.

Except that El Primero is the name of a movement, not a specific watch model.

Of course, Zenith has a rich catalog, and some of its watches are held in high regard by collectors. However, the recognition of none of these collections rivals the fame of the El Primero itself, and many model lines faded into obscurity faster than slide decks on strategy shifts at countless corporate brainstorming sessions.

It is a rather extraordinary situation: a company possesses one of the most famous chronograph movements in history, yet failed to build an iconic watch model around it.

What is more, Zenith has a far greater technical heritage than its contemporary communications might suggest.

Calibre 135, developed in the late 1940s, won prizes at the Neuchâtel Observatory chronometry trials. Its track record includes five consecutive first prizes between 1950 and 1954—an exceptional achievement even in an era when competition between manufactures in rate accuracy was exceptionally fierce.

In 1994, Zenith introduced the Elite, a family of modern, relatively slim automatic movements. These were calibers designed primarily for dress watches, proving that the manufacture's expertise was not limited to chronographs.

Modern Zenith continues to develop high-frequency movements, experiments with technical architecture, and is capable of creating watches of a very high technical caliber. This makes the discrepancy between the reputation of its movements and the market standing of the brand itself all the more baffling.

Five CEOs and Several Different Zeniths

Following the brand's acquisition by LVMH in 1999, a period of shifts began that can hardly be seen as part of a single, consistently executed strategy.

The most flamboyant—and at the very least controversial—era was that of Thierry Nataf. Zenith was then introducing massive, often stylistically overloaded watches whose aesthetics drifted increasingly further from the manufacture's earlier traditions. The 46.5 mm Defy Extreme, elaborate cases, intricate dials, and steep price points were meant to attract new clientele.

Nataf, who hailed from the "bubbly" industry—meaning champagne—favored spectacular presentations and an extravagant approach to communicating luxury. Under his watch, Zenith attempted to compete primarily through flashiness, despite having built its earlier reputation on precision and engineering prowess. This led to a state of affairs where his tenure deserves a story of its own: a story of outsized ego, byzantine party-throwing, and at best foolish business decisions that left behind smoldering ruins in the form of 50-percent discounts on brand-new models.

In 2009, Jean-Frédéric Dufour replaced Nataf and executed a radical turnaround. The catalog was slashed from around 800 to 150 models. A return was made to more classical design, historical references, and more accessible price points. Dufour restored the El Primero to center stage in the collection while attempting to rebuild customer trust in the brand itself.

In subsequent years, Zenith once again expanded the Defy lines, this time with a modern, high-tech approach. In parallel, further iterations of the Chronomaster were developed, alongside vintage-inspired watches and increasingly advanced variations of high-frequency movements.

Each of these directions had its own rationale, but a customer observing Zenith over the years saw a brand repeatedly shifting its identity, styling, and price tier. This resulted in both a weak position on the pre-owned market and an otherwise justified reluctance to buy at retail price.

In 2026, LVMH proposes yet another pivot. This time, Zenith is to scale back production and focus on considerably more expensive timepieces.

From a corporate governance perspective, it is important to understand the mechanics behind such decision-making. CEOs of massive conglomerates are judged on financial results achieved over a few years. Their compensation, bonuses, owner appraisals, and future career prospects depend on meeting these targets. Building the prestige of a watch brand, however, often takes several decades—directly contradicting the short-term incentives of an executive compensated on an annual basis and serving a limited tenure. Things look quite different in family-owned brands, where owners also consider the legacy they will leave to future generations.

This does not mean every executive is driven purely by self-interest. However, a system in which decisions with multi-year repercussions are made by people judged primarily on the results of the next few quarters contains an obvious conflict of interest.

A strategy shift can yield a rapid improvement in margins or cost reduction. If it simultaneously dilutes collection recognition and depreciates the brand on the secondary market, the consequences may only surface long after the CEO has departed.

Rolex spent decades refining the Submariner, Daytona, and Datejust while preserving the continuity of core design philosophies. During the same period, Zenith repeatedly overhauled the concept of its catalog.

There is no guarantee that consistency would have brought Zenith success comparable to Rolex, but it is hard not to notice that building lasting brand equity is virtually impossible when the brand's identity and positioning are subject to such frequent upheavals.

Will Calibre 135 Save the Day?

The new strategy is intended to leverage the manufacture's expertise in crafting high-end, complex timepieces. The G.F.J., a contemporary model paying homage to the historic Calibre 135, is cited as a prime example.

The watch won the Chronometry Prize at the Grand Prix d'Horlogerie de Genève in 2025. The initial run of 160 pieces sold out. This is a notable success, particularly since the model's price approached 50,000 Swiss francs.

But can the future of the entire manufacture be built on this foundation?

A client buying a limited-edition watch with a movement evoking famous observatory competition pieces is an entirely different buyer than someone purchasing a serial-production Chronomaster for ten-plus thousand francs.

In the former case, what matters is the exclusivity of the caliber, the low production volume, and the historical significance. In the latter, the customer compares Zenith with Rolex, Omega, Breitling, and sometimes also Jaeger-LeCoultre or IWC.

Olivier R. Müller highlighted price comparisons that are particularly unfavorable to Zenith. The Defy Skyline at around CHF 8,900 sits right in the neighborhood of the Submariner, while the Chronomaster Sport at CHF 10,900 competes head-to-head in price with certain Rolex models.

The difference in brand perception, however, is immense. Added to this is the secondary market, where many Zenith models lose a significant portion of their value immediately after purchase.

For a customer intending to keep a watch for a lifetime, this may not matter much. But it is difficult to ignore this factor when comparing brands operating in similar price brackets.

Introducing further models at 40,000 or 60,000 francs will not, in my opinion, automatically solve the demand issue. Zenith will have to persuade collectors who, at that price point, have access to manufactures with formidable collector status. Nor can one overlook the strong and steadily growing enthusiasm among aficionados for independent watchmaking.

Back to Movements?

In reports concerning the restructuring, something surfaces that I believe is paramount yet relatively overlooked: Zenith's manufacturing activities dedicated to producing movements for other brands are set to be maintained. This is not entirely a new concept, as back in 2024 Frédéric Arnault already pointed to the possibility of utilizing Zenith's facilities more extensively for LVMH's other watch brands.

From an economic standpoint, this makes complete sense, as the group owns several brands requiring advanced movements, and maintaining and developing specialized engineering capabilities is costly. Zenith possesses both the know-how and the infrastructure that can be leveraged across the entire group.

At the same time, this direction raises questions about the future role of the Zenith brand itself.

For many years, it supplied movements to other manufacturers, and now an increase in the importance of this activity is once again on the table—this time within LVMH.

The difference, however, is fundamental. In the past, Zenith supplied movements to external, independent companies; today, it would primarily be about having its capabilities utilized by brands under the same parent umbrella.

What Will Be Left of Zenith in 2029?

For now, we know the direction of the planned restructuring, but not its final shape. Zenith has confirmed the commencement of consultations with employees, which according to reports by "Le Temps" and "Hodinkee" are scheduled to last until November 12. Only afterward will it be possible to assess the scale of cuts and the details of the new organization.

Moving the brand into the haute horlogerie segment is theoretically possible, but the question of scale remains.

A manufacture producing small runs of watches priced in the tens of thousands of francs operates under different rules than an enterprise selling thousands of chronographs and sports watches. Distribution methods, production organization, cost structures, and customer profiles all change.

LVMH has the financial resources required to execute such a transformation. However, the conglomerate must decide how much time it is willing to grant Zenith to deliver results.

The El Primero survived the quartz crisis, changes of ownership, production halts, subsequent revivals, and numerous reorganizations. It remains one of the most recognizable chronograph movements.

Zenith's watches have failed to achieve even a comparable standing.

In a few years, we will see whether Zenith manages to carve out a new position as a producer of exclusive timepieces, or whether the lion's share of the manufacture's value will stem from supplying movements to other brands.

In the latter case, history will have come full circle in an especially ironic way.

photo: aBlogtoWatch