Friday, March 5, 2021

When You Run Out Of Juice - The Rise And Inevitable Fall Of HYT

Unicorns. We talk about them in Watch Town and in all fairness, it keeps things interesting. Typically, a unicorn in Watch Town is more down to a rare or madly sought after model. But every now and then, there is a brand that bubbles to the surface that defies the rules and norms and establishes a foothold. And HYT was certainly one of those brands.

And I know, it is easy to play Monday (or in this case, Friday) morning quarterback, but now the news is out that HYT will be heading to bankruptcy in Switzerland, which was outlined in a letter that seems to have been sent by HYT to its suppliers and made public in several social media outlets, including Linkedin, on (I believe) Sunday. Additional coverage can be found here from Robb Report -

Whether the public airing out of this news was intentional or not, long story short it seems that this might put paid to HYT for the foreseeable future. In the letter, which appears to have been printed in its entirety, it points out that the key hindrance to moving forward is getting additional institutional funding. In other words, it is clear that HYT had not yet become self-sufficient. 

You can read it, as well as some other commentary here at Watch U Seek -,a%20steady%20downturn%20in%20sales.%22

I reached out to the folks at HYT for comment/confirmation, but for the past 3 days they have remained silent.

And if we are all being honest with each other (and ourselves), it begs the question as to how stable are many of the other brands out there? When a brand's ability to exist and continue operations is so closely and intimately intertwined with regular, external monies being funneled in, not unlike the need to continually fill up the gas tank in your car, it really becomes a question of when, not if the doors might be forcibly shut.

Ultimately, for any business to realistically not only establish itself, but survive, grow and endure - it must be self-sufficient. A business that 10 years on continually needs cash injections begs the question - when will the corner actually be turned? 

Owning, or institutionally investing in a watch brand used to be a sign of arrival for men of a certain fiscal fiber. If you couldn't afford a premier league football club, it seemed a path to at least a little bit of fame and notoriety. But invariably it would seem that the watch business is, in fact, just that - a business, not a hobby and not a plaything.

What HYT, Favre Leuba, Vulcain and really too many other brands to name have proven is that investment without intention or plan is about as effective as treating diarrhea by constructing more port-a-potties. 

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