The Hour Glass' Michael Tay on how the Singapore watch company, which marks its 40th year, weathered tough times

SINGAPORE - Mr Michael Tay has just had lunch and is now comfortably ensconced in an armchair in the coffee lounge of the Lutetia, a luxury hotel in Paris' fashionable St Germain district.

It is a rare window in the busy schedule of the group managing director of luxury watch retailer The Hour Glass; he is in the French capital for the launch of a new range of Ulysse Nardin (UN) dive watches.

The nattily-dressed 44-year-old - whose company is the exclusive distributor for UN watches in Singapore - is in good spirits, and for good reason.

The watch company - founded by his parents Henry Tay and Jannie Chan in 1979 - is celebrating its 40th anniversary on the back of a superb year which saw profits surging 41 per cent to hit $71.4 million.

"We've had some really difficult moments, but we've also had some really wonderful moments and I think our 40th is a cap on a very positive decade," says Mr Tay, who joined the company on Jan 10, 1999, immediately upon completing his national service.

He is quick to credit his parents for turning The Hour Glass into one of the world's leading luxury watch retail groups, with 40 boutiques in 11 cities including Tokyo and Melbourne. In Singapore, there are 11 boutiques including flagship store Malmaison in Orchard Road.

But his own role in the group's success is well-known in the horological world. Among other things, he helped to reengineer the company, which was badly hit during the 1997 Asian financial crisis, and steer it through the 2008 global recession.

This year's rosy profits, he believes, is also the harvest from a reorganisational exercise he put the company through three years ago.

"Three years ago, we had recorded really strong results, but I remember saying to the leadership team: 'You know, I'm feeling nervous because something's about to happen to the industry and I don't know what it is.'"

 
 
 

So he spent the next 12 months travelling the world, looking at different business models and hoping to get a good grip of "where the watch world was trajecting".

He watched countless YouTube interview videos of various chief executives and their experiences with digitalisation and also pored over research on new platforms.

"What most people think about when they think about digital transformation is technology, but for me, it's a rally cry to transform the entire organisation from top to bottom: It's a byword for organisational change. It's about people and if you can change their mindset and how they behave on the ground, your transformation exercise with whatever new technologies you are going to implement will succeed," he says.

His research showed that while clients like to do their watch buying online, they like to transact offline.

"So we decided to focus on the retail experience. It starts with the customer: What are the pain points, how can we address these issues? We sell really valuable objects, but the service and experience that accompany these objects often leave a lot to be desired."

It was not an easy process and not all the staff survived the transition.

"It's harsh and we know how difficult it is for mindsets to change..., but I had to shake the organisation to the core again to secure our future for the next decade."

A former competitive cyclist, he adds: "In competitive cycling, it's not about 10, 20 or 30 per cent improvement. It's about your daily incremental and marginal gains, maybe half a per cent. Over time, these changes compound."

He also has a mantra. Profit is the percussionary effect of the pursuit of passion: If you do what you do well and with passion, the numbers will follow.

 

"Everything we do at The Hour Glass, we do with these questions in mind: What are we doing to build watch culture and the community? What are we doing to advance the cause of watch collecting in Singapore, the region, around the world?"

It explains why the company regularly organises talks and exhibitions and has associations and partnerships with leading bodies including Foundation of the Grand Prix d'Horlogerie de Geneve (a non-profit which recognises excellence in watchmaking) and the Horological Institute of New York.

"The more we empower people with knowledge, the more interested they will become and the greater the share of the watch market."

Singapore is doing impressively in this area. According to the Federation of the Swiss Watch Industry, the little red dot imported 1.1 billion Swiss francs worth of Swiss luxury watches last year, putting it sixth (behind Hong Kong, the United States, China, Japan and Britain) on the world list.

It helps, he says, that Singapore has policies which encourage robust watch logistics.

"Automobile prices are exorbitant, property prices are high, so watches are a good proposition. And you don't need a lot of space to store watches," he adds with a grin.

He is also bullish about the future because the demand for watches from Asian consumers is extremely strong.

Asia, he says, has seen incredible levels of wealth creation in the last few decades and is now the centre of the luxury watch world.

"I estimate that between 65 and 70 per cent of all Swiss luxury watches produced end up on an Asian wrist," he says

"There is a high degree of income inequality in certain countries in South-east Asia. And when you have such a situation, there's a greater sense of status competition (among the rich). And when there are high levels of status competition, objects of prestige are desired," he adds.

Sent to boarding school in England when he was 12, the twice- divorced business and international management graduate from Oxford Brookes University speaks in a plummy British accent.

Although he had a stint studying theatre and dance in Britain, there was "never an ounce of doubt" he would join the family business.

After all, he grew up in The Hour Glass stores and interacted with the likes of Philippe Stern, Jean-Claude Biver and Patrick Heiniger when he was growing up.

The trio are all fabled figures in the Swiss watchmaking industry. Stern is the former president of Patek Philippe, Biver has changed the fortunes of several brands including Omega and Hublot, while the late Heiniger used to head Rolex.

The Hour Glass' Michael Tay with Philippe Stern, former president of Patek Philippe. PHOTO: THE HOUR GLASS

Mr Tay, a self-professed watch geek, says his passion for timepieces, however, was sparked when he started working for the company.

He spent his first year in Geneva where he learnt "how the whole supply chain works, how to start a project from conceptualisation to delivery, how watches are distributed and marketed globally".

He then came home to overhaul the company, then reeling from the Asian financial crisis, by reorganising their stores, introducing new concepts and remerchandising.

"You know the one piece of advice I also give to people? 'When you go to work, you should go look for a smaller company that's not doing well because that's where you learn what not to do, and how to turn things around'," says Mr Tay, who is also a keen art collector.

Asked if he has any guiding principles in life, Mr Tay smiles and quotes Lao Tzu.

"Trying to understand is like straining through muddy water. Have the patience to wait. Be still and allow the mud to settle."