Discussing Grand Seiko’s Past and Future with Seiko Watch Corporation President Akio Naito
Recently, I traveled to Japan to experience Japanese culture, and more importantly, visit Grand Seiko’s manufacturing. I visited both Seiko Epson, where Grand Seiko Spring Drive and quartz watches are produced, and Grand Seiko Studio Shizukuishi, where Grand Seiko’s mechanical watches are manufactured. And while the experience was truly unforgettable, one of the most memorable aspects of the trip was being able to sit down and talk to Seiko Watch Corporation’s President, Mr. Akio Naito.
I had a lot of questions for Mr. Naito, that covered a variety of topics. From our mutual legal backgrounds, to Grand Seiko’s meteoritic rise in the US market, and Grand Seiko’s plans for future innovation, Mr. Naito opened up to me on a variety of interesting subjects, many of which collectors have been clamoring to know more about.
Craig Karger (Wrist Enthusiast): Even though you are still still general counsel, how did you decide to move from a legal background to watches? I found that for me at least, my legal background, I was a litigator, had very practical use, in journalism. The way I wrote, and I think it's helpful is I've seen a lot of former lawyers get into watch journalism, but obviously becoming the president of Seiko Watches is a little bit different.
Mr. Akio Naito (President of Seiko Watch Corporation): Very different. I mean, I am very unique in that respect as a career, the first guy out of the legal department to be the CEO of company. That happened in the year 2015.
I was CFO of the holding company, Seiko Group Corporation. And one of the topics at the board meetings back then was how we could develop Grand Seiko outside of Japan, and especially the US market, which was, and still is the biggest market for us outside of Japan. And we launched Grand Seiko in 2010 to the global market. And before that was just Japanese domestic market brand. And for three, four years, Grand Seiko didn't sell in the US market. We had enormous difficulty getting into the high-end retailers because they perceived Seiko as a mid-price point, mid-tier department store brand. So, they didn't like carrying Grand Seiko.
And at one of our board meetings, the external board members directors, they said perhaps we should send someone who's not that much used to the Seiko business, but someone who could run the US company. And they all looked at me. "Perhaps you should go." That was the moment that I was sent over to the US market. I was transferred from Japan to the US in 2016, and I stayed there for three years.
I joined the company in 1984, so 40 years ago, as a member of the legal department, in-house lawyer. And then all the way I climbed the corporate ladder up to general counsel and then became the board member of the holding company in charge of both legal and finance as well. Yes.
CK: So, you kind of talked about it. Up until I would say 2017, I wasn't personally very familiar with Grand Seiko as a brand, but the brand has, I feel, grown pretty exponentially in the United States since around 2017, 2018 maybe.
Mr. Naito: That's me. Yes.
CK: Besides yourself, what do you attribute that growth to?
Mr. Naito: Well, the biggest turning point I should say for the brand is brand independence or separation of Grand Seiko from Seiko. And that took place in 2017. In 2018, we established Grand Seiko America. Previously, Seiko Corporation of America handled both Grand Seiko and Seiko, and with the establishment of Grand Seiko America, and one year prior to that, I recruited the management for Grand Seiko to run Grand Seiko. That's Brice Le Troadec, now president of Grand Seiko America. So, he was with Omega at that time, and one day I spoke to him, I had a drink with him, and I suggested that he spend one week traveling to Japan and visiting Shiojiri, Shizukuishi, the trip that you made. So, he and I traveled to all our facilities and he understood the potential of the brand and decided to join us.
“The biggest turning point I should say for the brand is brand independence or separation of Grand Seiko from Seiko”
Grand Seiko Studio Shizukuishi, where mechanical Grand Seiko timepieces are manufactured.
CK: While Seiko has been in the USA for decades, Grand Seiko launched internationally in 2010 and Grand Seiko Corporation of America was launched in 2018. Why did you make the decision to really move into the US market?
Mr. Naito: Instead of answering directly to your question, let me begin with the history. In Japan, Grand Seiko has been known as the ultimate watch from Seiko and has represented the pinnacle of the company's watchmaking since its birth in 1960. In 1969, Seiko unveiled the world's first quartz watch named “Seiko Quartz Astron," which changed the industry standard for accuracy in timekeeping. The 1970s was the age of quartz watches, which made mechanical watches technologically obsolete. In 1983, today's Swatch Group was established in an attempt to revive the traditional mechanical watchmaking industry in Switzerland. Their strategy was to make mechanical watches a luxury item created by craftsmanship, while making a quartz watch a fashion accessory. Gradually this strategy made its way to the global market and the world started seeing the recovery of the demand for mechanical watches. At Seiko, where our focus was on quartz technology in the 1970s and 80s, mechanical watchmaking was almost dormant.
In 1998, however, seeing the success of mechanical watches from Europe, an entirely new movement, Caliber 9S, was designed from scratch to deliver the high precision and excellent durability for which Grand Seiko was already renowned. With the introduction of Caliber 9S, Grand Seiko gradually became known among the watch community and fans outside of Japan with its high accuracy and high-quality watchmaking. International fans had wanted Grand Seiko to go global since the 2000s, but the production capacity to expand overseas needed to be put in place. At the time, Grand Seiko was not for the general public but for those aficionados who could appreciate the quality of our mechanical watchmaking technology. In 2010, we were able to clear production capacity issues necessary to reach a wider audience overseas. We determined the time was right to focus our efforts and investments on the global launch of Grand Seiko and take advantage of the vast international potential we had not exploited until then. We wanted to take on the challenge of moving into the US market because we were aware of the solid fan base that had already existed. We were aware that many watch fans deeply understood watches and the heritage of Seiko as a company and brand, as well as Grand Seiko's history and reputation in the Japanese market. We also believed that Grand Seiko's success in the United States would lead to the brand's growth worldwide.
Caliber 9SA5 automatic movement in the Grand Seiko White Birch SLGH005.
CK: Seiko has a deep history in the US and it is obviously at a very different price-point than Grand Seiko. How did you educate the market about the differences between the two brands? Was it difficult?
Mr. Naito: Although we introduced Grand Seiko overseas in 2010, we struggled with growth for several years because the general perception of the name Seiko was that it is a mid-priced brand. The international public had difficulty distinguishing the perceived image of Grand Seiko from that of the Seiko brand.
At Baselword 2017, we announced the independenceof Grand Seiko from Seiko to communicate the two brands as different entities with distinctively different characteristics and qualities. After its brand independence, we established companies dedicated to Grand Seiko, such as Grand Seiko Corporation of America in 2018, Grand Seiko Europe SAS in France in 2020, and Grand Seiko Asia-Pacific Pty Ltd in Singapore in 2022, all dedicated to the distribution and marketing of Grand Seiko in their respective territories.
Clarifying the difference between the two brands was a challenge, but we put a lot of effort into overcoming it. When I was assigned Chairman and CEO of Grand Seiko Corporation of America in 2018, one of my focuses was to develop Grand Seiko in the United States by clarifying its brand identity and communicating its unique qualities to watch fans in the United States.
At first, our retail partners struggled to understand the difference between Grand Seiko and Seiko. Therefore, we had to choose strategically which retail partners to work with to share Grand Seiko in the US market.
We also held many "mini" events where we had watchmakers demonstrate their watchmaking craft to watch fans. At a time when SNS was becoming increasingly popular, many of our fans shared their passion for Grand Seiko online. This grassroots movement, combined with the support of media like yours, helped Grand Seiko gain popularity, especially in the US market.
Although it was a challenge, due to efforts in communication, the unique characteristics of Grand Seiko were praised by watch enthusiasts, and the difference between the Grand Seiko brand and the Seiko brand became much more understood by watch fans.
CK: While most of Grand Seiko's collections are under $10,000, over the past few years we have seen the brand do more and more high complications and jewelry pieces (like the Kodo and the SBGD215). What do these pieces mean to the brand? Are there any other complications (such as a minute repeater) that Grand Seiko plans to work on?
Mr. Naito: Both of the creations you mentioned belong to the Masterpiece collection within Grand Seiko, whose creations showcase Grand Seiko's watchmaking of the highest order. In design and material, they are unique compared to the creations from other collections, such as our Evolution 9, Heritage, Elegance, and Sport. However, at the same time, they share the same core values with every Grand Seiko creation, which are high accuracy, legibility, beauty, durability, and ease of use. Ever since the first Grand Seiko was introduced in 1960, every creation was made in pursuit of watchmaking perfection with those core values.
Kodo Constant-Force Tourbillon was born from our pursuit of watchmaking perfection. It played a significant role in demonstrating Grand Seiko's capability of creating mechanical high complication watches, but we did not create Kodo just to make a patented complication. It was, though, an expression of our company's spirit to always innovate, as represented in our founder, Kintaro Hattori's philosophy to be “Always one step ahead of the rest." Whether it is a complication, jewelry watch, or a robust sports watch, we will continue creating Grand Seiko timepieces to pursue the aforementioned values with the spirit of our founder.
“Kodo Constant-Force Tourbillon was born from our pursuit of watchmaking perfection.”
Grand Seiko Kodo Constant Force Tourbillon Daylight.
In terms of potential for future complications, with the Atelier Ginza, we aim to introduce truly unique timepieces that showcase the imagination and creativity of our very best watchmakers and designers. We have been working on various projects, but coming up with a truly innovative model is not easy, as exemplified by the fact that it took us more than 10 years to develop Kodo. Although I cannot say precisely when such a mechanism or watch will be born, please look forward to it.
“We aim to introduce truly unique timepieces that showcase the imagination and creativity of our very best watchmakers and designers.”
CK: Grand Seiko is known for its Spring Drive movement and the movements incredible accuracy. Right now, the Spring Drive is only offered with two complications, the GMT and Chronograph. Are there any plans to expand the complications offered with a Spring Drive? For example,amoonphase?
Mr. Naito: This year marks the 20th anniversary of the Spring Drive 9R Caliber. Although Spring Drive achieves an accuracy of ±15 seconds per month, or about+1 seconds per day, which is more accurate than any other spring-powered watch can achieve, we are always working on ways to enhance our Spring Drive movement.
For example, in 2020, we introduced the latest and finest Spring Drive Caliber 9RA series on the 60th anniversary of Grand Seiko. Compared to the 9R6 caliber, which is the mainstay of the current collection, the Caliber 9RA series delivers a five-day power reserve, an increase of 60%. Its monthly precision rate has risen from +15 seconds a month to +10. The movement depth has been reduced fromn 5.8mm to 5.0mm. The new series reflected our commitment to continuously enhance our watchmaking technologies.
Regarding complications, the Spring Drive 9R86 and 9R96 movements feature a chronograph function and GMT. Our latest creation announced at Watches & Wonders this year is the SBGC275, which is powered by the Spring Drive Chronograph GMT Caliber 9R96, a specially adjusted version of Caliber 9R86. Caliber 9R96 delivers anaccuracy of +10secondsper month, or +0.5 seconds per day, compared to the 15 secondsper month accuracy of the mainstay Spring Drive Chronograph GMT Caliber 9R86.
Watchmaker working on a Credor Spring Drive movement at Seiko Epson.
Another Spring Drive complication I'd like to mention is the Spring Drive 8-Days creations powered by Caliber 9R01. You may have had the chance to see these watches at the Micro Artist Studio in Shinshu. The creations were the first Grand Seiko timepieces made by the studio. The movement features three barrels and was designed to reduce friction between parts that would otherwise lead to los in the transmission of the energy derived from the mainspring. Precise manufacturing and polishing deliver reduced friction to create a movement with a 192-hour power reserve.
Although I cannot mention anything specific about future creations at the moment, I can say that our R&D team is constantly working on refining the already highly precise Spring Drive movement, as Grand Seiko's pursuit of watchmaking perfection knows no end.
CK: Most Swiss watch brands have had a tough couple of years since the heights the industry reached during the pandemic. However, it seems that Grand Seiko has been doing better than ever (at least in the US). How have the last two years impacted Grand Seiko?
Mr. Naito: Thank you for your comment. Even under the pandemic, Grand Seiko made many important milestones, which, I believe, has led to the consistent momentum Grand Seiko is experiencing worldwide. To name a few, in 2020, we opened the Grand Seiko Studio Shizukuishi, which you visited this week. The same year, a new Grand Seiko Boutique opened in Place Vendome, Paris, one of the most iconic locations in the world for luxury. We also established new companies dedicated to Grand Seiko in the key markets. We have reached a significant point in our progress, and although we faced many challenges during the pandemic, we increased Grand Seiko's global sales. Our efforts in communication, digitalization, and enhancing customer experience have all contributed to the growth we see today.
Our global recognition as a luxury brand has been significantly boosted by our success at international awards. In 2021, our high-beat mechanical "White Birch" SLGH005 creation was awarded the Men's Watch Prize at the Grand Prix d'Horlogerie de Genève (GPHG). This prestigious award, received at an industry-leading ceremony, signifies the global acceptance of Grand Seiko's philosophy and watchmaking expertise.
Grand Seiko White Birch SLGH005. Check out our review here.
We were also awarded the Chronometry Prize in GPHG 2022 with the Kodo Constant-force Tourbillon. I attended the ceremony with Mr. Takuma Kawauchiya, the movement designer and watchmaker of Kodo, and it was indeed a special moment for the brand. With Kodo, Grand Seiko demonstrated to the watchmaking community its capability of creating mechanical, high complication watches, which, in recognition and watchmaking capability, truly captured the evolution of Grand Seiko. Furthermore, the brand's presence at an internationally recognized luxury watch fair, i.e., Watches and Wonders, since 2022 as the only non-European brand reinforced Grand Seiko's prestige as a luxury watch brand in the eyes of the wider audience all over the world.
This year, we opened a new Grand Seiko Boutique in Madison Avenue, New York. The new Flagship Boutique on Madison Avenue will serve two very important purposes. One, it will be a place where watch connoisseurs from all over the world visit to experience the worldview of Grand Seiko. The other is to increase the awareness of Grand Seiko among the wider public. I believe that success in such a famous destination will further grow Grand Seiko as a global luxury brand.
Grand Seiko’s new Madison Ave, New York flagship boutique.
CK: What are the plans for Grand Seiko over the next 5-10 years? Particularly in regard to innovation.
Mr. Naito: As I mentioned, Grand Seiko is a brand whose pursuit of watchmaking perfection knows no end. Grand Seiko's brand message, "Alive in Time," introduced in 2023, represents our dynamic spirit and desire to push the boundaries of watchmaking continuously, in addition to our founder's philosophy to be “Always one step ahead of the rest," which lies at the heart of every creation.
I believe we have expressed this spirit through our recent creations introduced at Watches and Wonders, such as the Kodo (2022 and 2024), the Tentagraph (2023), and this year's Manual winding Hi-beat 9SA4 creation.
Grand Seiko Tentagraph SLGC001. Check out our review here.
As a vertically integrated manufacture, our watchmakers, engineers, designers are always working together to push our watchmaking further and to introduce timepieces that will bring joy to watch fans around the world. Please look forward to our future creations.
CK: And Seiko itself is a very kind of mass market brand with more widespread appeal. What do you think it is about Grand Seiko and the more Japanese sensibility of it that allowed for it to kind of gain attention globally now as opposed to kind of in the past?
Mr. Naito: Well, when Seiko was sort of booming in the global market, say after Seiko launched the world-first quartz watch in 1969, so the 1970s and early part of '80s was the golden age for Seiko. That time, Seiko became a mass brand all over the world. And then the Swiss industry came up with the luxury strategy and craftsmanship and the branding. And also more recent years, smartwatch has grown.
So, today we really have to think of what are our core values, not just Grand Seiko, but both Seiko and Grand Seiko. Actually in the last five, six years, you can see the significant rapid growth of Grand Seiko in the US market, but Seiko business itself has changed quite a bit. We reduced one-third of the doors, the retail distribution, and curtailed number of SKUs to be focused on more interesting pieces, a lot higher average unit price for Seiko. Of course, different brands and different strategies, but both for Seiko and Grand Seiko today, we are more appealing to the consumers with our brand story and the emotional value, not just as a functional timepiece.
Zaratsu polishing being applied to a case at Seiko Epson.
CK: I really like the kind of ode to nature and obviously the Japanese nature and trees and everything. I love the White Birch. How do you get that message across and make it seem authentic and not seem kind of corny or like a gimmick?
Mr. Naito: Yeah, yeah, yeah, yeah. Yes, yes. Well, yeah, that's an interesting point because when we first entered into the market, as I said, say in 2017, it was really the beginning of Grand Seiko after the separation of the brand. Our focus, the focus in our communication, is how we are different from the Swiss brands. We are from Japan and rich in history and culture and beautiful natural environment and the brand philosophy of the nature of time, Japanese craftsmanship, all these elements helped us to differentiate ourselves from the Swiss counterparts. And that strategy, I think, has been successful for us.
“Our focus, the focus in our communication, is how we are different from the Swiss brands.”
Serene garden at Grand Seiko Studio Shizukuishi.
As a result, the brand has grown, but we are, today, the brand is a lot more known in the US market compared to 10 years ago. We have to really appeal to wider audience, wider consumers, and whether we can keep continuing the same approach of Japan or nature, that should be seriously questioned. So, that discussion is actually taking place internally. It is, of course, important for us to consistently maintain our own brand identity, but at the same time, as we try to develop or widen the customer base, we should think of the new strategy.
CK: One thing that I've noticed, I think, with Grand Seiko as opposed to other maybe some Swiss brands, there is this identity that kind of sweeps across all the models. How do you make sure to follow the rules, I guess, while also kind of looking at customer feedback and changes that customers may want? How do you navigate that in a way that listens to them and maybe takes it into account without going against what you do?
Mr. Naito: We don't necessarily. Of course, we don't disregard all the voices from the market, but we think what is important as a luxury brand is to pursue its own identity rather than trying to accommodate with the consumer requests or demands. And as a brand, because we have more than 60 years of our history, there are sort of unwritten rules governing what the brand should be for the designers and for the watchmakers. And it doesn't really take any effort to try to stick to origin. That was sort of embedded as a DNA.
CK: So, one of the things that I've noticed over the past maybe five years is that Grand Seiko has had a lot of international recognition. You've won GPHG awards. You've developed new high-horology pieces like the Kodo. Why is it important to venture into doing projects like the Kodo, and is that something you're going to be doing more of, expanding that kind of high-horology line in the future?
Mr. Naito: Well, first of all, it is extremely important for us to be seen as a mainstream luxury watch brand. And for that we should get closer to the mainstream events like Watches and Wonders or GPHG and be a serious sort of player in that family of high-end watches. So, that's something we are very much conscious of.
As for the complication product, we have a history of it. This applies both to Grand Seiko and Seiko. The founder's management philosophy, or the motto, was one step ahead of the rest. So, try to be innovative, try to create something, the advancement of the industry standard. And that's been ongoing for many, many years. And we came up with world-first quartz watch, unique movements like Spring Drive, also something like Kodo. We will continue doing it because it's been our DNA from the origin.
As a business, I think we have a huge potential in the super-expensive product line. And if you look at a brand like Richard Mille, which is a new brand, but they have been successful in establishing the brand as a ultra high-end. So, I think watch industry is an interesting industry where you can all of a sudden come to the stage and run the show and become the star.
CK: And do you think that the fact that you're putting out watches like the Kodo allows just an everyday consumer, maybe not in Japan, kind of consider Grand Seiko amongst other brands like Jaegar and maybe Vacheron Constantin, Swiss brands that they may be familiar with, saying like, "Okay, look what they can do also. They can do as complicated a watch as the best of them."
Mr. Naito: Yes, yes, I think so. In Japan or Japanese consumers, in their mind, Grand Seiko has been here for many, many years and they recognize the value of the brand. So, the brand perception is slightly different from Japanese domestic market and the rest of the world. But coming up with that kind of significant, innovative product, as you say, many people reconsidered the brand value and had a significant impact, even in Japan.