Richard Mille and the business of watchmaking

In an industry where heritage is often associated with pedigree, watchmaking brand Richard Mille has proved its critics wrong many a time, bucked most trends and managed to perform exceedingly well, with the management doing things differently from industry norms.

For a company that has been around for only 24 years, Richard Mille has gone from strength to strength and is now one of the big four privately owned watch companies, together with the likes of Rolex, founded in 1905; Patek Philippe, which has made watches since 1839; and Audemars Piguet, which commenced operations in 1875.

To be in the same league as these three powerhouses would have been nothing short of inconceivable just a few years ago. Then again, the manner in which Richard Mille’s top brass run the luxury watch business has been unconventional.

To put things in perspective, Rolex is estimated to have sold 1.18 million watches and made CHF10.58 billion ($16.76 billion) for the top spot in terms of revenue, according to the Morgan Stanley LuxeConsult Swiss Luxury Watch Report 2024. The implied average retail price of a Rolex (excluding value added tax or VAT) was CHF15,451. Richard Mille, which focuses on the ultra-high-end segment was sixth on the list, having sold 5,700 watches for an estimated revenue of CHF1.55 billion, with the estimated average retail price (excluding VAT) at CHF271,930.

Of the other two brands that make up the big four, Audemars Piguet was fourth on the list with CHF2.38 billion in turnover from an estimated 51,000 watches sold, with an average retail price (excluding VAT) of CHF49,075. Patek Phillippe came in fifth with revenue of CHF2.3 billion on the back of about 72,000 watches sold. Its average retail price (excluding VAT) was CHF43,620.

Alexandre Mille, brand director of Richard Mille watches, and the son of Richard Mille himself, explained the watchmaker’s philosophy in a meeting with members of the press in Paris recently. His insights came about when he was asked about the investment required for a new model that was launched a couple of weeks ago, the Richard Mille RM 43-01 Tourbillon Split Seconds Chronograph Ferrari.

“It [the investment or capex] is a lot … [there is] no compromise on our part. Our capex is huge and there is no limit. [Basically] when you have a budget, when you have a deadline in terms of timing, or when you have a targeted price, is when you start to compromise … [And we] don’t want to do that, we want to make the watch that we dream of without compromise … so there is no budget, the investment is the time taken to build the watch, the back and forth, and the time our designers take on the watch. And you talk about three or four years of development, that is the type of costs we are talking about,” he says.

In a nutshell, at Richard Mille’s watchmaking facility, the investment in a new watch continues until it achieves the requisite level of satisfaction. And only after that does the company come up with the price tag. Considering that the average retail price is in excess of $300,000, the watchmaker seems to be sitting pretty in a growing niche market that is unaffected by economic slowdown or similar challenges.

In fact, the Morgan Stanley LuxeConsult report has it that timepieces above CHF50,000 represented 33.5% of the total market value of watches exported and accounted for 84% of the growth in 2024, despite a 3% dip in watch exports. Put another way, the big four privately owned brands Rolex, Patek Philippe, Audemars Piguet and Richard Mille are growing despite a challenging operating environment.

Then again, the 2024 contraction was not surprising as both 2022 and 2023 were bumper years, with a huge jump in prices that nudged up Rolex, Patek Philippe and Audemars Piguet models to record levels. For Richard Mille, a new watch by working with Ferrari excited the markets recently.

Partnership with Ferrari

In fact, Richard Mille and supercar outfit Ferrari are looking to extend their collaboration that commenced in 2021 by another five years, which guarantees there will be more watches produced over the next few years as a result of the alliance of the two iconic brands.

“We are [in the process of] signing it ... For us, 10 years is normally the minimum we sign for a partnership because we want to develop watches, and our watches take a long time to develop,” Alexandre told the press in Paris prior to the launch of the RM 43-01 Tourbillon Split-Seconds Chronograph Ferrari, the second offering from the collaboration.

And the new RM 43-01 did not disappoint.

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It is a handsome watch with all the hallmarks the Richard Mille brand is known for — the distinctive tonneau-shaped skeleton casing, which means the intricate details on the dials and movement are there on display perpetually; the manual winding tourbillon; and a split-second chronograph complication to boot, allowing one to record separately the time taken by two cars to cross the finish line.

While the tourbillon is considered by many to be at the pinnacle of watchmaking capability, the split-second chronograph indicates a very high level of craftsmanship on the part of the watchmaker for it to function with such precision.

To put things in perspective, the RM 43-01 has both complications in the case, whose dimensions are 42.9mm wide, 17.1mm thick and 51.2mm long from lug to lug. Other attributes include a power reserve of up to 70 hours, with the indicator located on the top left of the watch, and a torque indication, located across the power reserve indicator between the 12 o’clock and 3 o’clock markers. It comes with rubber straps and titanium double-folding clasps and is water resistant up to 50m.

The RM 43-01 comprises 514 components or parts within a titanium baseplate. Hence, there seems to be a lot going on in the heart of the watch at any one time.

RM 43-01’s Ferrari heritage is apparent, especially from models such as the Formula One racer SF90 designed and constructed by Scuderia Ferrari for the 2019 Formula One World Championship. The Ferrari-inspired components on the RM 43-01 include the crown, the markers that match the shape of the super car’s intake, the tail lights of an SF90 and a small Ferrari logo plate in the lower left corner of the dial that is the same shape as the endplate on the wing of a Ferrari 499P.

Exclusivity is guaranteed as the RM 43-01 is limited to 150 pieces. It is available in two variants — the first, in micro-blasted and polished grade 5 titanium with a Carbon TPT case band and the second, in Carbon TPT, a lightweight and durable thin-ply composite.

With a staggering price tag of CHF1.35 million for the carbon version and an astounding CHF1.15 million for the titanium version, the timepieces are clearly only for the uber rich.

“Ferrari is at the pinnacle in terms of history in the racing world, in terms of the car world, and is still very relevant today. So for us to be aligned with that is really a dream come true. In fact, we all love Ferrari in terms of design, and it’s a new challenge for us, a new way to offer an expression,” said Alexandre.

Discussions on the third watch are underway, with the new five-year collaboration being ironed out.

This second collaboration is totally different from the RM UP-01, among the thinnest watches in the world at 1.75mm, which took more than 6,000 hours of development and laboratory testing to craft the watch out of grade five titanium, a biocompatible, highly corrosion-resistant and remarkably rigid alloy — 90% titanium, 6% aluminium and 4% vanadium — that can withstand accelerations of more than 5,000 g’s. In total, including the strap, the watch weighs only 30g.

Considering the thin case, a function selector was incorporated into the bezel, located between 10 o’clock and 11 o’clock, to allow the wearer to select the winding or hand-setting function via the rotation of the crown. Setting the time or winding the barrel is then possible by turning the second crown located between 7 o’clock and 8 o’clock.

Limited to 150 pieces and priced at US$1.88 million, the RM UP-01 was launched in July 2022. On the stark difference between the two watches, Alexandre said, “The two watches for us are a statement that you will never know what to expect with us and with Ferrari, and you will always be surprised.”