The Business of Watches [042] Formex CEO And Head Of Product Development At Dexel Raphael Granito¶
Published on Wed, 30 Sep 2026 15:00:00 +0000
This watch executive sees two sides of the industry from his position as the head of the brand Formex and a senior leader at component producer and supplier Dexel.
Synopsis¶
In this episode of The Business of Watches podcast, host Andy Hoffman visits Formex and Dexcel in Biel, Switzerland, to speak with Rafael Granito, CEO of Formex and Head of Product Development at Dexcel. Granito discusses how he revived the Formex watch brand in 2016 after acquiring it from its original founders, who had struggled following the 2008 financial crisis. He explains the brand's direct-to-consumer strategy, which allows them to offer Swiss-made watches with premium features at competitive prices (average around $1,800) using a 3x multiplier instead of the industry standard 5-6x.
The conversation explores Formex's growth from a few hundred watches annually to approximately 6,000 units in 2026, achieved through Kickstarter launches, attendance at consumer watch shows, and eventually retail partnerships primarily in the United States. Granito details the symbiotic relationship between Formex and Dexcel, the component manufacturer founded by his father, which specializes in innovative bracelet systems, clasps, and works with premium materials like ceramic and Grade 5 titanium. He discusses the recently launched Aria model featuring a manufacture movement developed with Horage, priced just under $8,000, demonstrating Formex's ability to deliver high-end features at accessible price points while maintaining the brand's commitment to value-driven watchmaking for collectors rather than pursuing mass market appeal.
Links¶
Transcript¶
| Speaker | |
|---|---|
| Andy Hoffman | Welcome to the Business of Watches, the Ho Dinky podcast, where we go behind the scenes and talk to the executives and the leaders in the watch industry who are making things tick. I'm your host, Andy Hoffman. Today we are in Bien Biel here in Switzerland. We are at both a watch brand and a watch manufacturer. Formex is the watch brand and Dexcel is the manufacturer, the component maker that is also here in this new facility. And we are talking to Rafael Granito, who is the CEO of Formex and I guess your title at uh Dexel is |
| Rafael Granito | uh Head of uh Product Development. Head of |
| Andy Hoffman | Product Development. Raphael, welcome to the business of watches. |
| Rafael Granito | Thanks for having me, Andy, and thanks for your visit here today. |
| Andy Hoffman | Well thank you for having me. It's been um quite eye-opening and fascinating. It's this is a really distinct and interesting, unique kind of manufacturer and office facility here. So, you know, you are the CEO of Formex, the brand. Let's talk about first Formex, and then we'll talk about Dexel, which is a manufacturer and a component maker that's been around for more than four decades, I think, but Formex is a little bit newer and it's your baby. And uh let's talk about Formex. So tell me about the brand. I mean, it actually started over 20 years ago, over 25 years ago, but you really only took over in about twenty sixteen. |
| Rafael Granito | That's correct. So Formex was founded by two brothers from the area here. Uh they were also uh working in watch component manufacturer uh businesses and they were huge car guys and motorcycle, everything that had an engine and wheels. And so they came up with this uh case suspension system for watch cases. They patented that in 1999 and founded the brand in the year 2000. So they built quite extreme uh designs and and uh quite large watches large diameter but also pretty hefty in terms of height. Uh you saw a couple of pieces uh earlier today, so uh the name came about from these extreme shapes and designs and and it's it's composed of the two French words form extreme, extreme shapes, or extreme shape. And uh so they yeah, they were pretty successful, had uh worldwide distribution uh on all continents, uh, were participating in uh Basel World Fares and then yeah, built up a really nice business with subsidiaries in in different countries and the US as well. And then the global financial turndown down came or crisis two thousand eight and um a lot of their distribution network didn't make it through that crisis and uh they never really made it back out from that and and the brand was kind of in a uh Cinderella nap, so a longer nap. They still kept it going, so they didn't close the doors. Uh but it was a very uh reduced contingency for the brand. So there was one watchmaker just doing repairs in that time when I met them, they outsourced the you know assembly and were down to a couple of hundred watches a year. And one of the uh uh co-founders, uh Hans Peter Gratel, his name is, we were working together. He was based in Hong Kong. He's a Swiss guy, but he had moved to Hong Kong and was working there on different projects. And we were working together on the components manufacturing business side. So from Dexel. And uh he approached us to to see if we would try and and revive the brand and and buy uh the brand rights and inventory from him, uh which uh I discussed with my dad and after actually after a few years, because I was um acting in in Dexcel |
| Andy Hoffman | in product development already, |
| Rafael Granito | where we we develop and manufacture components for a lot of the watch industry, cases, bracelets, and even dials with Cadrenor or dial manufacturing. So I decided to give it a try in 2016. So we bought the rights and the inventory to the brand, set it up in a in a small office at the Dexel facilities back then. And yeah, it took about two years from 2016 to 2018 to get a clear picture of what I wanted to do or what, you know, in my opinion was the right thing to do with the brand, because I came from product development, manufacturing. I had no clue, no connections whatsoever in terms of distribution, |
| Andy Hoffman | the retailers, et cetera. So I sat |
| Rafael Granito | down with a few retailers in Switzerland, which were uh not very impressed with what we had to offer. And so I took the time and said, okay, I'm not gonna try that. I'm gonna invest my time into developing the new version of Formex. And so we we set out to design the uh the essence, uh, which is still pretty much the same today with a few tweaks here and there, uh but it's still basically the same watch. And also knew that I couldn't do this on my own, marketing wise. I was always a product guy, so I needed some help. So that's when I call my best friend Marcus, Marcus Welkeley, uh, who study with me. And we actually even uh lived together when we were studying in in Zurich. And um he was working in the ho hotel industry so not another thing. Not in the lunch industry. But I just knew that we well it would be fun to work together with your best friend, obviously. And also that we worked really well together during the studies. So we we had our late nights uh pulling all nighters because we started too late on projects. So we knew we could pull ourselves together and and work really hard. And um so yeah, he he agreed with some doubts. He said, Yeah, but we're friends and you're gonna be my boss. And I said, Well we shouldn't look at it like that, because uh our friendship's always gonna come first and I think it will be fun. And yeah, it was a lot of fun. It was also very trying and hard at times because it was a brand that had kind of you know been almost uh knocked down when it was just about to break into the mainstream, so it n didn't really have the the notoriety that we could build upon. |
| Andy Hoffman | Did you consider changing the name or or the design or I mean you changed the design, but did you consider changing the name or anything else? |
| Rafael Granito | We wanted to keep the name for the people who were still following the brand. There still were a few. And also, you know, a name's a name, uh and then you have to turn it into the brand. So I you know, a lot of people s uh complained about the name in the beginning because they didn't know it came from Forme Extreme. They just tried it was th they just thought it was some weird composition of something. Um and uh yeah, then once you hear it enough times, then you don't think about the name that much anymore. And it it's what what the name stands for that becomes important and uh that's what we've been building Aaron Powell |
| Andy Hoffman | Yeah. And let's talk about um how you at first you you didn't seem to have much response from uh retailers here in Switzerland. I believe um you began Talk about that and talk about you know what um kind of price point, price category that you played in, and then we'll talk about um what you know your experience and proximity to Dexel has brought to the Formex brand. Aaron Powell |
| Rafael Granito | Yeah. So in in the beginning, uh obviously that was a bit uh disencouraging or or discouraging uh to to get the feedback from the retailers. But I also understood that it was still the times where they had a lot of pressure when they wanted one brand that was belonging to a group, they also had to take you, know th,ree other brands and stock up on inventory. So nobody really wanted to commit to a brand that wasn't you know, one thing I heard is come back when I see an ad on TV was one of the things. So we failed, we still don't have an ad on TV nowadays, but I think we manage differently. But that's when I understood that, you know, we should focus on the product and then try to address watch collectors, you know, really watch nerds because we packed the product full of features, full of certification with the cost uh movements, etc. That we felt that we don't really have to explain the features to the watch nerds. It's just boils down to whether they like the design or not. And I think we managed to boil down the essence of what ForMex was into a much more potable everyday watch with the essence and that's also why we called it the essence. |
| Andy Hoffman | Hence the name. Hence the name. And also |
| Rafael Granito | the plan for it to become the backbone of the company. Uh which also turned out to be the case. So yeah, that that worked out. And we decided to do a Kickstarter. It was kind of on the downward slope of successful watch Kickstarters already in late 2018. Hmm. But it it allowed us. Well, we did a little thing that was kind of gave us an idea of how many watches we're gonna sell straight away because it was important on Kickstarter to get good traction to sell a lot straight in the first hours of going live. So we actually allowed people to pay a deposit to us directly to secure the early bird pricing. So we knew exactly when we launched it. Oh, we already have 250 watches sold. That was around that. And then it went up to six hundred uh pieces. And the goal with that campaign was to get as many watches out on wrists as possible because it really was at a very low price. I think our it was not even uh times two factor to get to the Kickstarter price. |
| Andy Hoffman | Right. Yeah. So we didn't plan on it. What was the price in the the first for the Kickstarter? I think it |
| Rafael Granito | was around eight hundred dollars for the for the for the essence. So yeah, really, you know, most people say, oh, it's after the Kickstarter is going to be more expensive or whatever. And it that was really the case for the Essence. And we didn't want to fill the coffers with the Kickstarter campaign. What we wanted to do is cover our costs, get a little bit of something to get us started, but mostly get watches out there. And because we had the effect of showing prototypes to experts and you know, watch YouTubers and watch journalists. And the reaction we got from them for the price, even the MSRP, not the Kickstarter price, was just, you know, wide-eyed wonder about the what kind of watch we were able to put out at the price. And um so we kinda had a feeling it could work, but obviously you never know ahead of time. But that's what really launched Formx two point all. |
| Andy Hoffman | Yeah, and that's quite interesting. I mean, yeah, we used to see a lot of watches. There was a real heyday for watches launching on Kickstarter. Why is that changed? and would you, you know, if you had it to do all over again, would you still have gone the Kickstarter route? |
| Rafael Granito | I'd probably start earlier, like straight away in 2016. That would have been good. But the reason why it went down, in my opinion, is just too many people buying stock components on Alibaba and offering it as the you know, revolutionizing the watch industry, blah blah blah, cutting out the middleman, you know, the the old spiel. And uh also fraud. A couple of guys were not actually making the watches they um they charged you for and yeah, Kickstarter wasn't really liable for that. So that that was a risk and that turned off a lot of people. You know, a lot of real watch collectors who were dabbling in micro brands in Kickstarter. But then there are some really good examples, such as you know, Andrea from Fort Lamari uh or Studio Underdog. These guys started on Kickstarter and they're still here, as are we. So they they meant business and they didn't just wanna do a houdini after getting the money. |
| Andy Hoffman | Absolutely. And yeah, let's talk about you know we we talked about you know the sort of quality of some of those Kickstarter projects. But let's talk about the quality and the value for money that you're offering with FormX. Talk about w the kind of watches you're making, um the kind of design elements and you know, um that price point that you're existing in. I think you you know you've just released, you just um showed me your your latest watch, which is in a price point which you haven't been in before. Talk about you know how the brand has tried to differentiate itself and give that value for money. |
| Rafael Granito | So it's pure math. Because we went the direct-to-consumer route, we could have a different multiplier from when you have to work with distributor and agents and etc. So that is usually uh five X, six from five X on. Uh for us it was uh in now is a three X because we also noticed, you know, two point five two is not enough to sustain a business and hire people and we were always in you know, in for the manufacturing part as well, the assembly part. We build everything in-house. The watches are assembled and tested here. So you need staff for that. So and you can't pay them with a with a two, uh factor two. So we moved up to a three and then it just was down to getting enough volume to sustain a business, getting the cash flow going. Uh it was never our goal to, you know, just make as much cash as possible and everything we make goes back into the next product, into machinery, into streamlining and and improving our quality assurance. So our goal is to build a sustainable brand in terms of a brand that's gonna be around for a while. And um so that's what we set out to do. And the factor three works uh from a certain volume, uh, but not below that. So cash was always a concern. So we pretty quickly we didn't want to get outside investment. Uh so we invested everything from our private uh money, which meant sometimes, you know, paying salaries from like private accounts when it, you know, just didn't work out for for that end of the month. But it also means that we had to very quickly break even. |
| Andy Hoffman | Yes. I said if in five |
| Rafael Granito | years we're not breaking even, I'm just gonna stop it and go back and do whatever I was doing before. And we managed in just shy of four years to break even. And then yeah. I would lie if I was saying if I was gonna say that after those four years, uh you know, cash was abundant, uh we still had to pay very close attention uh on what we spent and how we spent it. So this kind of also forces you to run a lead ship in terms of marketing and really early on figure out the the things that will bring a return on ad spend, a return on investment, um and then allows you to grow your brand organically. |
| Andy Hoffman | Absolutely. And talk about, you know, what kind of growth you've experienced. I mean, you said you probably made uh a few hundred watches in your first year, uh I guess that's back in twenty eighteen. We're here in twenty twenty six. I think you were saying your staff, your number of people working for you has doubled to about sixteen people now for formex. What about production and how is that looking and how are you sort of keeping up and and still managing uh to not grow too big too fast. |
| Rafael Granito | I mean we're trying to be able to deliver because nowadays we do work with retailers and they're uh really valued partners and uh we don't want to upset them by not having stock, which you know a couple of months this year was definitely an issue. So we stopped actually onboarding new uh retailers so we could ramp up production, but this means training people, uh getting new equipment and it's just just you can't call up a guy and say I need more watches in our case. So um and then a big topic is also ramping up production, but we managed to ramp it up. Uh and still improve quality. So we're still lowering our you know rate of failure or or or things that go wrong on a customer's wrist is is down to you know about three percent, which is incredible. And And which has to be like that if you want to run a lean ship and not hire twenty customer support agents that you know are constantly sending watches around to watchmakers and fixing issues. So we pay uh very close attention to that. And um we'd rather stop onboarding new retailers and m maybe slow down the launch pace a little bit uh just because we also don't want to burden the staff with too much stress because they actually enjoy working here and I want to keep it that way. So |
| Andy Hoffman | Yeah, no. That is uh that is definitely uh |
| Rafael Granito | the challenges. It's uh you know, we call them champagne problems, but it's still a problem and it needs to be addressed in the correct manner. |
| Andy Hoffman | Absolutely. And so, you know, we talked about um uh how that how the business has grown. I mean how many watches are you making a year now? and then, you know, can you give us a sense of your average price and and the area that price point that you play in uh and how you compete? Aaron |
| Rafael Granito | Powell Yeah. So this year we're probably gonna probably gonna reach six thousand units at an average price of s eighteen hundred. |
| Andy Hoffman | Wow. Yeah. Eighteen hundred. And |
| Rafael Granito | with a pretty big price range or span, because one thing we figured out is as a small company, we're quite nimble in what we what we can do decision-making-wise, uh, but also product development. Uh, and you know, the ARIA was a good example. Our price range was, you know from a thousand dollars to about three thousand. On then we came out with the ceramic pieces, which got a bit more expensive, up to forty-nine hundred, something like that. And that worked out well. But it didn't make me want to go only towards that price range, which is it it's always something that customers who've been supporting the brand at our regular price point are scared of or worried about. And even with the ARIA that came out at just shy of eight thousand dollars with our manufacturer caliber, that was not the intent it's not the intention to go there. It's the intention to keep the Arya there uh to to keep manufact we're actually on the second batch now and to manufacture that movement with horaj uh and to to work on new iterations of it but it's not necessarily going to be the bread and butter. |
| Andy Hoffman | Just the butter. But it's easy. Let's talk about sort of what this watch consists of. It's an integrated bracelet uh watch, full titanium. Um it's got a basically d a movement designed by uh Formex and uh produced by Orage. It is uses a lot of very high-end sort of finishing components. It's a extremely thin watch. Yeah, I mean, why move to this kind of piece at this time for the brand? As you say, it's uh it's um to show that you could, I guess. Aaron Powell |
| Rafael Granito | Yeah, I think the right answer is why not? that's pretty much the philosophy. So I have to uh kinda specify there the movement wasn't designed by us. We designed the decoration so the the the way it looks, uh but the movement is is uh completely developed by Horage uh based on their K2 caliber, which means it has a silicone hairspring, silicone escapement. It's a micro rotor that is only two point nine millimeters thick as a movement, quite slim. And uh it has 72 hours of power reserve. And we you know, travel the world with our friend brands uh with the or people at our at those brands who became friends because we traveled to the same shows, we go uh promote our brands, and then in the evening we have dinner together. And the same was the case for Horage. Uh we're also neighbors. It's literally a 20-minute walk over to them. And um I don't really remember if Yeah, I think they sh they already had plans to work for a small number of brands when we first started talking and making movements for them. their intention is never to become an OEM movement manufacturer. And so we got into talking and I was really impressed with their K two, the fact that they can cost it, that they can use that technology reliably and and make a really, really good and prof make high performance movement. So we got together and started talking and agreed. They agreed. We agreed. We settled on a on an amount of pieces we would start with. Um and then we started, you know, building the watch around the movement. And uh we could have said, okay, the movement is about eight and nine times more expensive than our regular movements we use. Uh w we work uh mostly with Solita, who provides amazing movements. Considering the price, we could have gone, okay, we're gonna try to save money on all the other components to still get a price point that is kind of familiar with our customer base. But I think the movement deserved for us to throw everything at it. |
| Andy Hoffman | Right. And also, |
| Rafael Granito | that's why I said the why not. We don't really have, you know, like a board or or or uh you know like the d big distribution partners we have to answer to and it doesn't necessarily have to make sense our price range. We can do something like that. I mean the worst that can happen is we fail and we lost money on that project. So I felt ready for that. It was two and a half years ago, so not quite where we are now with Formex. So it was a move that required some reflection and also for me to, you know, say, okay, let's do this. Uh we'll do it. And then we worked for a long time on the design because we wanted to do something that didn't look like just another integrated uh steel sports watch. Uh we decided to go with grade five titanium so we can really get you know show our our finishing skills and also the engineering skills. So everything came together nicely and we wanted to we were inspired in inspiring ourselves by elements that are shaped by nature. So you know the the the rock formations in the Moab deserts, uh a rock that is shaped by the time and water uh rounding everything off nicely. So we wanted to take that very angular uh typical very angular design shape uh or design language of an integrated bracelet watch and kind of round it off a little bit uh sprinkled it with some organic shapes and that also comes together on the dial that is stamped and has all these 3D shapes. At a first glance, it looks like a very clean design because I've always been a fan of slim watches and also clean designs, not overloaded with too much information. But then again, I also am a fan of discovering details when you look closer. So it's kind of a balance between adding more features that people can sometimes discover after th wearing the watch for three months and go, oh I didn't notice that that's nice. So that's kind of the goal. And that's I would say I owned that skill with the previous models and we kinda exaggerated it on on the on the ARIA. |
| Andy Hoffman | Absolutely. That's how the price came together. So it's |
| Rafael Granito | not a commercial reflection, we need to be in that price range. Let's do that. It's let's see where we land and then |
| Andy Hoffman | And Marcus your your uh business partner who's also a uh shareholder in the company you said, but he's based in the United States and the United States is is um your biggest market now, I believe. Yes. Yeah. I mean talk about you know how your your watches are are distributed now, what markets that you're big in, where you want to grow, and then it's interesting the experience that's happening with your retailers. You were telling me they're growing it at even they're growing sales of your watches at a faster rate than the than the company's actually growing. Aaron |
| Rafael Granito | Powell Yes. I think it's kind of a critical mass thing, but it's also us having been present for quite a while now, mostly online, selling direct to consumer, going to all the consumer shows, the wind up fairs, the intersect fairs where where we're involved in the organization. So it's a fair organized by brands for brands where we just do cost sharing and give a relatively cheap platform for brands to be able to present it all over the US. So it's in in Charlotte. We're gonna do one in Miami, it's in New York sometimes, in Austin, all over the place. And it gives smaller brands like us, or even smaller brands that are just starting out a platform, and we've been doing this for for the past uh eight years, |
| Andy Hoffman | being present on at all the wind ups, |
| Rafael Granito | uh meeting literally tens of thousands of people on a single weekend. And that kind of when you have these conversations and the brand creator or owner of the brand talks to the people, it kind of gives them a a lasting impression uh of what the brand is. You know, it's not marketing speak kind of. it's really you get to feel the energy behind the brand. And I think that work ultimately transmitted in the watch community and there's still a lot of people that wouldn't spend that much on an online purchase before seeing the product. So opening new physical retail locations really captures the people that have been following the brand for a while but want to get hands-on before purchasing. |
| Andy Hoffman | Absolutely. And yeah, I mean there's um there's certainly a big part of the watch community which indeed um still needs to see a watch in the metal before making that purchase. So you know, let's talk about Dexel and the and the role that that um company plays. You were nice enough to show me everything we're doing here at Formex, but I also got to see a tour of the manufacturing and the um production facilities for Dexcel, which obviously makes uh components for some of the biggest names in the industry. We can't say who they are, but you're making things like bracelets, clasps, cases in various materials for some significant names in the industry. How are youing leverag that experience in your role at Dexel with FormX? |
| Rafael Granito | I think it's just a natural evolution of somebody working at a place and learning and then moving on to his next job and applying what he's learned. And I'm I'm still involved uh in Dexcel, so I'm I'm aware of what what's going on, what the projects they're working on. And vice versa, there is an effect of you know us always using the latest patents and systems for microadjustment, quick release and other things that are coming up, or even materials. We're always using them or trying to put them in our next model at Formex. So we we start we already know what kind of clasp. We don't you know we just have to adapt the the design, etcetera and that uh with Formex we have a launch, for instance. we launch a new model. We ship it out you know two days after we shipped out the first one, uh the first batches of those first models. Uh we already get customer feedback via email. We encourage it and we get it, which means that we have a very tight feedback loop with the end customer, which ultimately is something that can flow back into the developments at Texcel. Or when we're developing something and and my dad is is tinkering the latest system and I just swoop in to his office to drop off my kid so he can watch it. I see what he's working on and it's like and in some cases I said, oh customers actually like it to open it from the other side. Or, you know, that's I've talked about |
| Andy Hoffman | a class. I've literally |
| Rafael Granito | seen, you know, in the end hundreds of thousands of people handling our systems and watches, just watching them handling a a deploying clasp has led to significant development of of changes that we've implemented. |
| Andy Hoffman | Yeah. So that's definitely something that where |
| Rafael Granito | both companies have kind of a symbiotic relationship. Uh yeah, in the beginning I admit it was m pretty parasitic from from Formeg's side. No, but something we discussed earlier. |
| Andy Hoffman | You pay full price to the to to Dexel as a supplier just as you do to other suppliers. And to |
| Rafael Granito | other suppliers as well. or Caternor because it would be unwise for me. be unvi unwise to burden our other businesses with you know lower margins on on something that my goal was always to be in it for the long run. That's the ultimate goal is to establish a functioning brand uh that is financially uh healthy, viable and but also consistently brings out good and better watches. Uh and for for me to do that on the backs of the other companies wouldn't be very smart. |
| Andy Hoffman | And to be clear, for those who don't know, I mean Dexel is sort of a specialist in bracelets, clasps, kind of a uh innovator and a leader in terms of you know microadjustment and and the and the way that um clasps open and close. You also uh utilize uh you know interesting materials. Uh you you make bracelets and cases in ceramic, titanium, uh carbon, other materials. Yeah. I mean, you know, talk about that sort of innovation and role that that Dexel has played in in terms of, you know, especially bracelets and clasps, which one of the first things I learned about, you know, the Swiss watch industry is that there's a bit of a uh bit of a uh bottleneck in terms of um uh capacity to produce bracelets uh here. It's uh it's difficult. Uh so yeah. |
| Rafael Granito | Yeah, so the special alchemy I would say of of Dexel is that it was never just a supplier. So nowadays about ten percent of our workforce is actually in design and engineering, which is a pretty big amount for a supplier. Because we've always had uh or my dad always had the mantra of innovating first. His passion is, you know, tinkering and figuring out new systems in very confined little spaces and also coming up with the simplest ideas, which the path to those is sometimes very convoluted and complicated. But when you want to industrialize a system that you can, you know, produce ten thousand times exactly the same time and it works for fifty thousand times on the customer's wrist, opening and closing and using the microadjustment, you want to keep it very simple in terms of how many components it has, uh how much machining and how everything comes to be together. So that was always his kind of alchemy was to come up with simple systems and then marry them also with material science. And then every function kinda has to have a form and vice versa. And kind of our mantra at at Forxme also is we're not watch designers, we're doing designing kind of there is no part that is engineered that isn't nicely designed, and there's no design feature that doesn't serve a purpose also. So it's kind of uh you know, these wheels of a cog uh gripping into each other and coming together. Uh that has always been the philosophy. And also as a supplier, you usually wait for a customer to come with requirements and and then produce it according to their requirements but my dad has always developed systems and then went to knock at brand stores and see if they're interested. Although I have to say micro adjustments when he first started you know working on them in two thousand six no brand uh was ready for it and nobody thought we needed that as customers as |
| Andy Hoffman | Nowadays if you don't have micro adjustment uh on your bracelet, you're gonna hear about it and pretty |
| Rafael Granito | good. But uh yeah, many other people were working on really cool systems that I'm always amazed to see being steeped so deeply inside it. And I I always, you know, when when another brand owner shows me his watch, they probably look at me strange when I check out the buckle |
| Andy Hoffman | a a little bit too long. Not first, |
| Rafael Granito | but maybe for a little bit too long. So yeah, that was always kind of innovation first, then industrialization, because you need to manufacture be able to manufacture it and working with partners first, but now also having capabilities that you saw earlier with a with the whole C and C departments, uh the laser department, hand finishing and then assembly and and that involves a lot of people. we saw pretty much a bracelet go from raw material into the end uh assembly, not in not the actual one piece, but uh we saw the different stages and there's so many parts to a bracelet. Trevor Burrus |
| Andy Hoffman | So many steps, indeed, and so much um high-tech inexpensive machinery and uh and people involved for sure. I mean, yeah, I mean, talking about those materials that that high end stuff, I mean, you know, you're working as in a brand that, you know, I think you said your your your average uh price is around eighteen hundred francs. You're working with ceramic, you're working with meteorite dials, you're working with stone dials, you're working with grade five titanium. Are you you know here exposing the uh markup that the rest of the industry utilizes and enjoys or or what are we seeing here with uh with these this these quality, you know, this level of materials and and workmanship at this at this price level. |
| Rafael Granito | Really, as I mentioned before, I think it's just pure math and a different business model. You know, we don't have the retail structure. We're making we're we're pretty small fry compared to the brands you're mentioning, probably. And so it's also leaner to run our structure at this time. Maybe sometime we're gonna have to increase the prices to you know have more testimonials or famous people wearing the watch. Right now we're catering to the real watch collector. And what we've noticed is we had the watch collectors that are really into the hobby and are still looking for a good deal. That was like that was our prototype customer. And now with the ARIA, it kind of opened up because it was maybe slightly out of budget for for m a lot of our regular or our our repeat customers that and that's something we have a lot of as well. Like people with a collection of five, six, seven, four max watches in in their watchbox. Open kind of the um maybe a little bit the ears, uh, but also the you know, people wanted to start to dabble with the brand with the ARIA because it's a manufacture movement and it's at a price point that they maybe still consider uh uh a steal for what the watch is, but uh other people might be out of range already. So it was interesting to see that our retailers, uh some of our retailers said yeah, the the guys who ordered the Aria, they usually get watches in the twenty K, thirty K range. So that's that's also interesting to see. And it's interesting to see that people more and more uh and I would say led by the United States are emancipating themselves as collectors because they're open to discover new brands. They don't necessarily need the brand that everyone knows. They don't necessarily want everyone to wa look at our wrists and recognize the watch at the first glance. Maybe today is actually cool to have something that the other collectors say, Oh, what what is that? Can I yeah and start a conversation. |
| Andy Hoffman | Absolutely. Yeah. as you were mentioning, I mean, you know, that um when you first started out, you thought maybe, you know, the brand or at its early period, you thought maybe the brand would have to, you know, evolve in a way that would appeal to sort of non-watch nerds and and and you know a very commercial mainstream audience, but you think that, you know, that educated, knowing, in the know sort of customer base has now grown large enough. Did a full |
| Rafael Granito | 180 on that one. I was you know, planning ahead for the future of Formex and saying, okay, now we need to maybe start looking outside the watch collector watch nerd bubble because uh we need to you know grow and and then sell a little bit more watches to sustain uh the the structure we've built up here and you know covet hit and yeah that that made me do a 180 because I think the collector sphere just grew or doubled or or tripled. I c I can't even put a number on it. But uh yeah, we don't need to necessarily break out of that bubble yet to to keep growing. And something I want to mention is also we're not growing for growing sake. We're growing so we can finance becoming a better watch brand. Not necessarily to increase our marketing budget. My ultimate goal is always to make better watches and to to be able to throw more at the development and and you know make watches that stand out. So that's growing is a tool for that. Success and more recognition. And yeah, I'm already rubbing my my hands at what we're going to work on next. Well let's talk |
| Andy Hoffman | about what you're what you're going to work on next. I mean, where do you want to take the brand to then? Where would you like it to be at in say two, three, five years in terms of volumes, in terms of the kind of watches that you're making, in terms of the distribution you have, and then in terms of the price category, I mean are you kind of committed to staying into that mid-level luxury price category? Or will you be taking the inevitable elevator up as uh we've seen so many other brands? Aaron Powell |
| Rafael Granito | Yeah I think what what excites us here at Formix is being able to put s you know a taste of higher horology uh on people's wrists that you wouldn't necessarily find at that price point. So that's really something we're passionate about. Uh we want to put formix watches on whoever wants one. So uh in terms of growth and numbers and revenues, we don't have fixed goals for that. We want to stay healthy, which means uh, you know, a good cash flow. Uh we want people to stay happy working here uh and actually be proud of what they're doing, which means while you're growing, you actually have to put your money where your mouth is and hire people when you're growing and not, you know, burden your your people too much. Uh because uh, you know, we have a very good team now and uh the the the atmosphere working here is amazing. So I wanna that's one of my main goals. And in terms of products, it's just making products that we all f think are cool. Maybe something uh that is that you don't see everywhere is always, you know, some uniqueness factor uh that gets infused in our watches. We want to keep doing that. And then but also pushing, you know, uh the the more a supplier says that can't be done, the more I want to find a way of having it done. And you know, you mentioned the stone dials, the meteorite, you know, we started gold plating meteorite which hadn't been done before, then our stone dials are quite complicated to make because you know we're actually applying the indices with two index feet onto every stone dial, which means you need to drill two holes into a very fragile and thin piece of stone. But these are a little little things that show our attention to detail, and it's kind of an obsession that we don't want to make compromises uh that much. So we'd rather find a solution that we can that allows us to make it exactly the way we want it. But then, you know, as a business person, sometimes you also have to take a step back and say, okay, that that's not gonna work. So either we find a different solution or we go for the compromise, but it's very rare and and we like to push um the possibilities uh like that kind of. Not for the sake of pushing it, but because we end up with a product that uh looks cool uh and that we think is cool and we want to keep making those and and also maybe surprising people is is also something we are uh we like to do. So nobody expected us to come out with the ARIA and and a lot of people were surprised and that's very nice to see. it's a desired result for us. Aaron Powell |
| Andy Hoffman | Absolutely. So the last thing, I mean you know, one of the things we've been talking about, the overarching theme of the Swiss watch industry, this sort of you know volume decline crisis that we're feeling. You know, that's something that's felt with traditional component suppliers like Dexcel, which need those volumes to keep the business healthy. At the same time, your Formax is a is a brand that is trying to deliver value for money. So, you know, tell us everything you can about a Swiss watch brand competing for price and yet at the same time trying to solve the Swiss industry's problem of declining volumes and ever raising prices. Aaron Powell |
| Rafael Granito | Yeah. Price and luxury item is yeah, tends to be a conundrum. For us it was as well, because a watch is a luxury product, no matter what price range you're at, because it's something we don't necessarily need to tell the time. It's convenient. You don't have to look on your phone. But most people don't buy it purely for that. They put buy it for the passion, the mechanics, having a little uh marvel on the wrist, a mechanical Marvel. And so we weren't really able to advertise on price and say, hey, we're we're the best value for money. other people to say about us and in luxury marketing you don't usually put the price on the on the ad either and also another thing is when you are at a competitive price you some somebody that has a certain budget and is shopping for a watch is throwing you together with brands that uh or not brands but products that necess don't necessarily have the same features or the same level of features just because of our different uh business model. So that's kind of hard. And then also as a brand who maybe went a little bit too high in price increases over the last year, how do you get back from that? You |
| Unknown | c can you do lower |
| Rafael Granito | prices for the same products pretty difficult. So you know you see some brands or group of brands who buy up maybe uh lower price point brands. We talked about that earlier, which I think is a smart move. Or coming out with new models that are uh at a lower price point but without necessarily compromising the quality and and the features. But yeah, if if I had the the golden ticket solution, uh yeah, probably wouldn't be sharing it here first of all. But uh yeah, it's it's definitely um yeah it's a situation or the other thing is since lower volumes is a reality is, adjust to that reality is probably the most straightforward thing to do. Aaron Powell |
| Andy Hoffman | Indeed. But what you're suggesting is that Swiss made watches can still compete in terms of value for money, even in that reality of declining volumes. Well, your space in the market has become even more competitive these days, and FormX is certainly standing out, and it was extraordinary to see all the innovative and interesting and intricate work that Dexcel does here as well. So Rafael Granito, thank you very much for joining us on the business of watches. |
| Unknown | Thanks for having me on the and |
| Andy Hoffman | that's the business of watches for this episode we hope you enjoyed please head on over to Hodinkee.com where you can join the discussion and leave any comments or questions about this episode or the business of watches in general. Who knows, we might even answer your question on a future episode. Thanks for listening and see you next time. |