The Hunger Games, Part the Second

I'm sure you've already read about it, but to confirm -
Georges Kern has "dropped his letter" at Richemont HQ.

Unlike many resignations and appointments, the news braking this Bastille Day has taken a lot of us by surprise, including me.  But when you spool it out and look at it in its (current) entirety, the pieces do fit together rather nicely.

Courtesy of tick-talk time

So let's start at the beginning with the announcement put out earlier today from (I suspect) a very harried PR department:

Richemont announces resignation of Head of Watchmaking, Marketing and Digital
 
14 July 2017

Richemont regrets to announce the resignation with immediate effect of Mr Georges Kern. Mr Kern was Head of Watchmaking, Marketing and Digital. He has stepped down from the Senior Executive Committee and the Group Management Committee and will no longer be standing for election to the Board of Directors of Compagnie Financière Richemont SA at the forthcoming annual general meeting of shareholders.

Commenting on Mr Kern's decision, Mr Johann Rupert, Chairman, said:

Quote
Georges has been offered an interesting opportunity to become an entrepreneur.
He has had a very successful career at IWC Schaffhausen and we wish him well.
Unquote

Richemont's watchmaking, marketing and digital activities will report to the Senior Executive Committee.

But there is, it would seem, another twist in the tale.  Later in the day it was intimated (albeit not by anyone willing to go officially on the record) that Mr. Kern would be taking control of another testosterone fueled brand, Breitling.  This reporting came from the folks at Le Temps.  Attempts to get either confirmation or denial from Mr. Kern were apparently unsuccessful as of this morning (Swiss time).

Okay, so that's the obviously knowable, but let's dig into the context.  Mr. Kern did a very good job with IWC, and I suspect that in the palace court that is Richemont HQ, there has been more than a little jockeying for position.  With the announcement of a "twin towers" approach which resulted in booting both Mr. Kern and Mr. Lambert upstairs into Richemont's newly re-jiggered corporate structure, it seemed that the one who could be the most Machiavellian would probably emerge as the CEO of the entire Richemont group.  And very often when you have two people who want the same thing, it can very rapidly become a war of attrition.

The other thing to consider is what Charles Horton Cooley termed the Looking Glass Self.  Essentially, that the way we view and value ourselves is, more often than not, a reflection of how we feel we are perceived by others.   When you have been at the forefront of a fairly successful brand, it can be a bit of a let-down to no longer be the face of that brand.   Being in charge of several brands gives you status for sure, but it is not nearly as sexy as the red carpet.  Breitling has historically been ready, willing and able to throw money around and pursue celebrity "chums".  And in fairness to Mr. Kern, he does posses a gift for the "grip and grin".

It is important to really understand that although this news is "breaking" for the rest of us, this was clearly put in motion some time ago.  From time to time impulsive decisions are made in the heat of passion, but I do not think this is one of those times.  This has clearly been building, and more than likely Mr. Kern was just looking for the best possible sortie (and that would be the French definition).

So if the reports are true, and Mr. Kern is on his way to Grenchen, then it marks an interesting step in his career.  As to the "entrepreneurial" aspect of this step, it is also unclear as to whether Mr. Kern raided his piggy bank or whether he was granted some equity in exchange for taking on the challenge.  

My only request would be that he remove the fighter jet from the Grenchen roundabout just off the highway... it's an eyesore.

 

March...

Would seem to be an improvement -

Courtesy of the FH

The March numbers are in, and as noted by the FH they seem to be a bit better.  But interesting to relate that the FH has taken to tempering their feedback of late, stating essentially that although this is an improvement, don't read too much into it.

But there are a few other indicators out there that might shed a wee bit of sunshine.  Per some reports, the total number of retail store closures in North America has been down this first quarter.  And that is a potentially positive development as well.  But these same outlets also report that the number of NEW North American retail stores is also down. 

Obviously, it is in the best interest of everyone involved if the industry rebounds.  But this has been a beat-down of nearly epic proportions for brands, distributors, retailers and yes, even customers.  A beat-down the likes of which we haven't seen since the "Quartz Crisis".  And while there were real lessons learned from that paradigm shift, it remains to be seen if this current paradigm shift will illicit the same level of introspection at the higher echelons.

And while the rate of decline is slowing, it does not necessarily mean that we are in blue sky territory. What it most likely means is that the rubber has finally hit the road and at least some of the brands, distributors and retail store owners are starting to realize that things are most likely not going to rebound back to the level that they were.  Production, sales forecasts and pricing might finally be getting closer scrutiny.  The perceived need to carry such large staffs both in Switzerland and in the "outposts" might be getting a second look as well. 

And we have anecdotal evidence that clearly shows that brands and those dependent upon those brands are starting to change their attitudes and approaches.  Some for sound business reasons, some just out of panic:

BaselWorld - will be reduced by 2 full days with participation fees (reportedly) to be reduced to reflect this change.  With attendance down again for retailers and journalists, this was most likely a very cold cup of espresso for the BaselWorld organizers to swallow, but the numbers just don't lie.  It was a bold decision to take, and one that I agree with.

SIHH - 'nuff said.  

Brand Managers - several found themselves let go just before and just after BaselWorld.  This is not exactly a new development, but the level and depth of these cuts was a little more marked this year. So brands are going to be REALLY looking at who is performing and who isn't.  Tough love time.

The "Soft Grey" Market - well known brands are clearly not selling at the level that the could or should, and growing portions of their stocks are being dumped into group buy sites.  Merchandise has to be moved, and this seems to be the most acceptable of a lot of really unacceptable solutions.

And then, as always, there will be holdouts:
 
The Brand Boutique - for a few independent brands, there is still a monumental disconnect on the realities of their given situations and they continue to insist on dropping more and more money into a boutique that can never really pay for itself.  For a group brand?  No big deal, it is a marketing expense.  For an independent brand?  It is an ego stroke and a fairly clear disregard for reality.  And it also reflects the Sunk Cost Fallacy (please refer back to the Sunk Cost Trap - http://www.tempusfugit.watch/2017/04/the-sunk-cost-trap.html for further examples) that is at work at the highest levels of some of these brands.  When you have sunk as much money as some independents have into these boutiques, it becomes harder and harder to walk away.

Now contrary to the frantic assertions of a certain watch industry writer, I am not the Antichrist.  I truly take no satisfaction in seeing the industry suffer.  But I also believe that just because you trim a donkey's ears, that doesn't suddenly give you a Shetland Pony.  

Some of the industry is moving to adapt, and some particularly sharp operators have been a few steps ahead and have done okay even during this downturn.  The real challenge now is for the remaining denizens of planet "Watch" to decide if they are ready to adapt or not.  

Because while a reduced loss is better than an increased one, it is still a loss. 

Where's the Love?

So it is now clear that the shot callers at Richemont, and the people that they employ have recognized that they have a fundamental difference of opinion regarding how they should work together to improve the financial situation of the group.

Richemont believes that jobs should be cut.  Oh, and instead of trimming the executive levels, they should increase them by shifting the current CEOs into even higher level (most likely higher paying) positions and replace them with new CEOs which will (you guessed it) increase the amount of payroll and benefits directed towards senior level management.

The people who do the actual heavy lifting have a different perspective - maybe they could go to part time / reduced schedules, hang on to their jobs, and work TOGETHER to try and improve the very awful situation that the very people getting promoted are actually responsible for.

Today the rubber hit the road as the UNIA labor union reported in their newsletter that approximately 700 watch makers in the Vallée de Joux and Geneva protested against what appears to be a nearly terminal case of "Greedy Bastarditis".  Here is a link to the article -

UNIA

"Our lives count more than your profit!"
That was the rallying cry of those protesting, and it signals what an industry insider shared with me was a truly unique moment in the history of the Swiss watch industry.  Typically, the employees would cave, accept the situation and move on.  But in my personal opinion, I think that the people who are being expected to pay the freight on the excesses, miscalculations, and failures of the people now being promoted have finally had enough and are calling BULLSHIT.  The emperor is running around "starkers" and it's time to work TOGETHER to try and find a reasonable solution.

Again, I am sure nobody at the upper levels of Richemont or UNIA are likely reading this, but I am a qualified mediator, and I'd be happy to help you guys work it out ; )

 

 

The Blue Merit

This just in from Grieb & Benzinger

Courtesy of Grieb & Benzinger

GRIEB & BENZINGER proudly presents its 2014 spring top highlight: the BLUE MERIT,

a tourbillon based on the famous, rare, and sought-after Tourbillon Pour le Mérite by A. Lange & Söhne.

NOMOS Lambda Roségold

Courtesy of NOMOS Glashutte 

And Now for Something Completely Different - Lux Weißgold

This just announced from NOMOS Glashütte -

Courtesy of NOMOS Glashutte 

I WANT ONE!

Lange 1 Moon Phase - Restrained Exuberance

There is something about a first kiss - it stays with you your whole life.  In many ways the Lange 1 was my first horological kiss.  A. Lange & Sohne's Lange 1 Moon Phase is perhaps my favorite

Courtesy of  A. Lange & Sohne

NOMOS' Zürich watch awarded Good Design Award

Courtesy of NOMOS

Glashütte, January 2012. NOMOS Glashütte is proud to have been awarded the Good Design Award 2011 by the Chicago Athenaeum for NOMOS' Zürich watch. The Swiss design legend Hannes Wettstein created this watch for the independent German manufactory as one of his last projects before he died.

"The Good Design Award is an internationally recognized prize with a long history. We are very pleased about it and about the American design scene's appreciation of beautiful and well made watches, " states Simon Husslein, Studio Wettstein chief designer.
While it is not its first recognition, the Good Design Award is a very special prize for the Zürich watch, which also won the Red Dot Design Award 2010 and the iF Product Design Award 2011.  This underlines NOMOS' aim to combine traditional watchmaking skills at the German watchmaking mecca Glashütte with a timeless modern design.The Good Design Award's legacy dates back to 1950, when the prize was created by Charles and Ray Eames, Eero Saarinen, and Edgar Kaufmann, Jr., in Chicago.  Today it is awarded by The Chicago Athenaeum: Museum of Architecture and Design, and the European Centre for Architecture, Art, Design and Urban Studies in Dublin.

New Reverso Update

An important clarification on the new Reverso - 

The steel version of “Tribute to 1931” is NOT limited.  Good news for those of you out there wanting the steel version!

The pink gold version of “Tribute to 1931” is limited.

Jaeger-LeCoultre Charity Polo Match

It has been a very busy week of polo and charity in Argentina for Jaeger-LeCoulture and its ambassadors.

This past Monday the 29th saw a special match with some of its ambassadors to benefit the Christian Family Polo Movement - a group that strives to help build school infrastructure for children in low-income families.

So it seems that Santa Clause is alive and well and rides a Polo pony!  It is great to see a company and its ambassadors actively engaged in charitable efforts!

                                            www.jaeger-lecoultre.com

JLC, Polo and the Reverso

Necessity it has often been said, is the mother of invention.  This was indeed the case back in 1931 when Jaeger-LeCoultre gave the world the Reverso.  The Reverso was an answer to what was becoming an increasingly frustrating problem - watch crystals being destroyed while playing polo.  The solution was to create a pivoting watch case that would enable the main case to be literally "reversed" so that it was dial side down.

Photo courtesy of Jaeger-LeCoulture

As you can see, the reverso is still involved with top-flight polo and world class polo players.  This is Eduardo Novillo Astrada of Argentina, and a member of a proud family of polo champions.


More to come as the 80th Anniversary of the Reverso approaches.  Thank you to the nice folks at JLC for the details!




www.jaeger-lecoultre.com

Junghans, Max Bill and the Bauhaus

Over the past few weeks I've been catching up on some reading. About a year ago I received a biography on Charles-Édouard Jeanneret - also known professionally as Le Corbusier. What was interesting to learn was that his father made watch cases for, among others, Longines.

I then moved onto a relatively new book on some of the founding members of the Bauhaus and there was Max Bill who later went on to lead a group of Swiss artists that came to be known as the Allianz.

Of course I am also thinking about the Max Bill watch that Wendy gave me for Christmas in 2002.

This is the more "classic" size, hand wound (and would you really want it any other way?) and perhaps one of my all time favorite designs.

DEFAKTO - Feedback from Wendy

And now, a word from the lady of the house…

James has kindly allowed me to contribute to the blog, after wearing the Defakto for the day yesterday. 

First impression—cool watch (but wait, how can I tell the time?)!  Actually, I have to say that telling the time is really quite simple and I seemed to manage to estimate the time within 3 minutes of accuracy. For someone sitting behind a desk most of the time (and ample access to phone/ computer/ wall clocks), not being able to see the time down to the exact minute or second on my wrist was not an issue at all.  The watch face is incredibly clear and legible and I personally really like the red dot as a small splash of color.

Second impression- really comfortable, surprisingly so…. The watch strap felt a little ‘thick’ when I first put it on but after it was on, I pretty much forgot it was there. The case is really flat and smooth so it sat on my wrist really well—no hanging or bulging out. Yes it’s a big-ish watch (this is, after all, meant to be a man’s watch and my wrists are somewhat small) but the strap is fairly thick so it feels really uniform between the watch case and the watch strap and I, personally, really like the look of a man’s watch on a woman (and James seems partial to the look too, thankfully, since I’m not one for small, delicate timepieces!)  The other great thing is that while the watch doesn’t feel insubstantial, once it’s on, it doesn’t weigh down your hand. The other great thing is that because it fit so flush on my arm, I didn’t have any issue with ‘bashing’ it on my desk or other surfaces—sometimes a big watch sort of gets in the way and I’m aware of it hitting hard surfaces (unintentionally, of course!); this one doesn’t present the risk at all!

Third impression—I showed the watch to a colleague and he was obviously smitten from the moment he saw it. The design is simple but really appealing and it was this aesthetic which I think drew him most of all (and this is someone whose father worked under Frank Lloyd Wright, so knows a little ‘something something’ about design!)  He too remarked on the weight—not too heavy but no lightweight, a watch that lets you know it’s there but then sits quietly in the background until called into action…

From the ‘fashionista’ perspective, it’s the kind of watch that goes with pretty much anything (OK, perhaps not the Dior gown!); is dressy enough for work but cool enough for play; is a conversation piece; is functional; and, most importantly (for me at least) a lot of fun!

James can always tell when I particularly like something he’s got, be it a sweater, a pen or a watch, since it won’t be too long after he has it before I (sweetly, of course) ask if I could “just borrow it for the day”. My intention is always to return it immediately and yet, certain items just somehow, mysteriously, inevitably, move to my side of the closet or on my desk or, yep, into my jewelry case… at that moment, James knows he’s a goner and accepts that he’ll never use that pen again, the sweater will never hang on his shoulders and if he’s lucky, maybe, just maybe I’ll let him wear the watch again for a day or two. I somehow suspect that if the Defakto ever made it into his ‘permanent’ collection, I’d be one happy camper. And yes, if he asked nicely, he could borrow it from time to time…

The Night Shift - after dark

On the face of it, the DEFAKTO Night Shift appears to be a nice, basic (albeit one-handed) traditionally white-faced watch.  However, once the lights go out it is a pleasantly different story...

Photo courtesy of DEFAKTO

The dial is wonderfully illuminated.  Unlike many "lume-face" watches, it is able to achieve this effect without resorting to the sometimes "lemon-lime" look.  It is a very well-executed design element, and makes me smile at night when I see it glowing nearby.  Thank you to DEFAKTO for the image as my sad efforts to capture this effect were nowhere near the quality that they achieved.

www.defakto-watches.com

15 days with the DEFAKTO NACHTSCHICHT

Just in today -

And now - 15 days with the DEFAKTO NACHTSCHICHT 

First update tomorrow morning 

Something a bit whimsical from Glashutte

As you have probably figured out by now, I have a tough time going more than a week without talking about NOMOS.  David has been kind enough to keep feeding me with great bits of information and has gone well above and beyond the normal scope of what a PR guy would usually do - or at least above and beyond what I used to do!  This is the greeting card you get when you receive a communication from the folks at NOMOS.  Think about this for a moment.  Usually the image and message you are receiving from a watch company is all about the history, the beauty, style, strength, accuracy, etc.  and as the guy who sometimes writes these messages - I am not necessarily disagreeing.  BUT - what happens when you take a classic watch from a company making their own movements, operating in one of the most famous sites in the world of horology... and let them really communicate with you?  You get the NOMOS Encyclopaedia.  And unless you are just a boring person - you smile!

This is 300 PLUS pages of pure fun!  Yes, there is a lot of information about NOMOS, watches, movements, etc., but there is more!  So this will begin my examination of the ENCYCLOPAEDIA and I will be sharing a weekly entry.  All credit for text goes to NOMOS Glashutte.  Today's topic is - 

Kissing with NOMOS - and why NOMOS is called "NOMOS"

From 1906 to 1910 there was already a company in Glashutte with the name NOMOS, founded by Guido Muller, and advertising specialist from Dresden.  He produced only pocket watches.  They were beautiful, tasteful models that very quickly became cult objects of the intellectual scene.  However, they were watches with a catch: the ebauche that ticked in them was very good - but it came from Switzerland.  So, after a few years, Muller had to shut his workshop.  A. Lange & Sohne had started proceedings against NOMOS, which ended with a settlement.  The company was no longer allowed to distribute its products from Dresden either because it did not submit to the rules that the court imposed.  

What had caused outrage in 1910 was necessary in 1990, when Roland Schwertner came to Glashutte.  Everyone who, like him, started making watches in Glashutte again, initially obtained components from Switzerland.  So too did the newly founded company NOMOS, which had nothing in common with the old company except for the name.  Schwertner, the managing director, simply liked the name.  Firstly because of what it actually stands for - "NOMOS" is Greek and means law, convention and just distribution.  Secondly, because Bruce Chatwin wrote about NOMOS in his book "The Songlines" and Schwertner likes Chatwin a lot.  And thirdly, "when you say NOMOS, your mouth forms a beautiful kiss."

From:  NOMOS Glashutte - The Great Universal ENCYCLOPAEDIA, copyright Kommunikationsverein, Berlin, 2006

   

And of course there has to be some watches!  These are three different versions of the NOMOS CLUB.

A Classic Design

With all of the new innovations out there - and there are plenty - it is nice to see something classic - and reasonably priced! This is the Limes Pharo Hand/Wound Power Reserve, truly a beautiful watch.

The Limes watch company is owned by the Ickler family Pforzheim, Germany. Limes was one of the first companies to utilize the direct sales model - connecting to customers around the world via the internet.



And for US customers there is an added bonus, Limes watches are sold with the shipping charges included!

Visit the folks at Limes here for more information on this hand wound classic:

http://www.limes-uhren.de



Limes combines their own beautifully finished cases with Swiss made movements. The results speak for themselves.

Limes hosts a lively discussion forum where owners and owners to be hold forth on their favorite watch:

http://www.watchandclockforum.com/viewforum.php?f=110

Not just Black or White

On the surface of things, it would be easy to jump to the conclusion that NOMOS makes either white or black watches. But the great thing about NOMOS is that nothing is as obvious or "standard" as that.

To quote the NOMOS press release regarding these watches -

Exciting, Colorful Gray

Gray dominates, reigns, but in the most beautiful way. There is a limited edition of 20 Orion models - "Unification -NOMOS" - twenty years after the Fall of the Berlin Wall. Each one in gray and each one carries the name of a town.

These were released last year 2009, and I got to view a few up close and personal while in Europe for BaselWorld.

For more information on this collection, please visit the NOMOS website:

http://www.glashuette.com/index.php?id=315&L=1

I would like to thank my contact at NOMOS - David, for his support and providing us with images and information.