Summer Repeat: Time to Sack Up - Eterna Can Be Saved

I first dropped this over a year ago, and it's as true today as it was then. City Champ - this is fixable!  But only if you're ready to.  So once again -

Time to Sack Up - Eterna Can Be Saved

In the city of Grenchen, on the train line from Biel/Bienne to Basel, there is a once mighty watch manufacturer that now lies (mostly) dormant.  A beautiful factory and administration building that evokes memories of Willy Wonka's factory.  An owner with enough money to (if they wanted to) not just save the company, but truly resurrect it.  But just like that fictitious confectioner, the building is a shell of its former self.  It would seem that nobody goes in, and nobody comes out.

And for some of us hard-core Eterna fans?  This is frustrating.  In fairness, a very solid sales network has been created by some very talented people who are out there, every day, preaching the gospel of Eterna and the KonTiki.  So a lot of the pieces are already in place.

So a few simple suggestions -

1.  Eliminate everything on the menu except the KonTiki.  Focus on three different versions with the same "guts".  In essence, a single version with three different "flavors".  As any parent will tell you, you never ask a kid what flavor of ice cream they want.  You will be there all day.  Simply ask them - "Do you want ice cream?  Great, we have chocolate, vanilla or strawberry."

Do this for one to two years.  Simply put?  You are guaranteed to sell a lot of this model, and take that time to revamp and slowly introduce new collections.

2.  Find a real turn-around specialist.  Look beyond the hucksters and the confidence men that you have been turning to.  Sorry, I have to call this one like I see it.  The people making the hiring decisions when it comes to the top spot at Eterna keep making some flawed choices.  And once again, I refer to Moneyball:

 “Managers tend to pick a strategy that is the least likely to fail, rather then to pick a strategy that is most efficient," Said Palmer." The pain of looking bad is worse than the gain of making the best move.”
― Michael Lewis, Moneyball: The Art of Winning an Unfair Game 

How many CEOs and "interim" leaders do you need to go through before you maybe look in a different direction?  Stop worrying about making a potentially embarrassing decision, because guess what?  That ship has sailed!  You've made enough bad hiring decisions to last the next ten years.

But there is one guy out there, one person out there uniquely qualified to fix Eterna.  Note that I DID NOT say fix Corum and Eterna.  Let's focus on one problem at a time ; )

There is one person out there who could objectively identify the troubles at Eterna, offer honest analysis without being fearful of keeping everyone happy, and would leave his ego out of the equation.  He is perhaps the most influential person in the Swiss watch industry that you've never heard of, and he and a few of his long-term teammates could not only get their hands around this situation, but chart a course to the sea of success.

Citichamp, if you're reading this and you're ready to sack up and try to right the good-ship Eterna?  Drop me a line!  I won't even charge you a finder's fee ; )

3.  COMMUNICATE!  Silence, in this particular situation?  Not golden.  Stop waiting for the press and fans to come to you - go to them. 

Searching for Severin

Contrary to what some of my not-so-collegial colleagues would have you believe, I truly hate seeing people and companies fail.  But the news about Corum withdrawing from BaselWorld has deeper implications than many people want to consider.  While I realize that they are (at least on paper) separate entities, the fates of Corum and Eterna are now intimately intertwined.  And the current state of affairs at Eterna is (to be diplomatic) not great.  And that is simply on the watch front.  

The other, more concerning aspect is the fate of Eterna Movements.  The word around the campfire is that after some "away time", and a few tentative moves forward had been made Eterna and the Eterna Movements might do a "JEANRICHARD".  The "sleeping beauty" strategy is starting to become a somewhat worrying trend.  We often think back wistfully of similar "Prince Charming" happy endings in the 80s, where the plucky young entrepreneur gently kissed the slumbering watch brand, bringing it back to life, while Jim Kerr (Simple Minds) gently crooned in the background.  But I don't think that Jean-Claude Biver is going to be donning a Polo shirt and bomber jacket, regenerate a wedge hair style (complete with perma-gel) and ride in on his moped to save the day any time soon.  Because those (Blancpain and others) were brands that had been beaten, lay down their hands at the table and walked away.  They did not exist any longer.  But Corum and Eterna?  These are brands that have now passed through several sets of hands before landing at City Champ.  And the sense that many of us are getting is that City Champ can wait it out hoping for their own Prince Charming to come in and buy them out of the current quagmire.  

And as I often say when acting as a mediator in my dispute resolution practice - we didn't get here overnight.  This didn't just happen.  This is a series of decisions - some good, some clearly bad, that have led to the situation these brands are now in.  And I turn back again to that (seemingly) crazy guy who took a fairly basic idea, priced it at an appealing level, and brought Corum back to life.  The Bubble that caught everyone's imagination was not a $5,000 watch.  It was much more attainable.  And it sold.  I realize that Corum is much more than the Bubble, but the Bubble is somewhat emblematic about the dysfunction in the decision making paradigm.  The belief that Corum must be priced at very high levels in relation to what the other brands are selling for, has put them in a bit of an unworkable corner.  The result?  Too many SKUs languishing, unsold.  Severin Wunderman was unique in that although he was rich, successful, and in later years lived a lifestyle many would be envious of, he understood what people wanted.  And he also understood pricing.

Two things -

One - I don't claim to have any special "insider" knowledge about the current situation at any of these brands, and I have been wrong before.  But I also can read the tea leaves well enough to know that when news stops flowing, new models cease being released, shows are cancelled... let's just say it raises more questions than it answers.

Two - Running a watch brand is hard, hard work.  Watch enthusiasts all think that they can do it, and do it better than the people doing it.  We are, of course, wrong.  Having said that, the watch industry is also an incredibly forgiving industry which tends to attract people with a certain degree of moral flexibility, where people are promoted, fail, crash, and come back reborn multiple times.  And it is not to say that people don't deserve second (or third, fourth and fifth) chances.  It is to say that when you continue to pursue the same path, strategy, philosophy even though it has failed repeatedly, then perhaps you need to rethink the entire premise of how you do business.

If I were City Champ?  Well, if the stories are to be believed, they have plenty of cash.  They do not need for their Swiss investments to start shitting Tiffany cufflinks right away.  On the other hand, they are not stupid.  The smart play would be to simply not put any more money into either of these brands until they can either straighten themselves out, or find a buyer who is looking for a hobby to dump his/her millions into.  

We all wanted something better for Corum and Eterna, and you never know, there could indeed be a happy ending out there.  So get your hair gel out, and bust out that soundtrack to Sixteen Candles!

And Corum Clocks Out

So word has reached Tempus Fugit HQ that Corum has opted to take a pass on the upcoming BaselWorld leaving another space on the monopoly board that is Hall 1 empty.

The feedback from Corum HQ is somewhat consistent with what the other brands have been saying - more direct contact with retailers, journalists and customers with smaller, more localized events.

But what Corum (or any of the other brands, for that matter) have not been so forthright about is what that really means.  SWATCH Group, and Hayek the younger in particular, were in a position to say "my way or the highway", and the folks at the fair told them to "take it on the arches", so they did.  The other brands that have bowed out while significant, are ultimately replaceable.  No offense Corum and RW, but you are two brands that can be temporarily "covered".  I find Corum's logic for withdrawing a wee bit baffling.  The past two years there have been no shortage of journalists at their booth, and from the feedback I have received, sales are taking place.

The deeper question that I feel (and maybe I am wrong) that very few people have been asking is this - given the pricing of the fair, and the (sorry) extortionate rates for accommodation, meals, etc. ever really sustainable?  Just as the brands were slow to realize that there was actually not, in fact, a limitless supply of watch customers out there, there is also not a limitless supply of cash that your board will continue to authorize you to operate with.

From the journalist side we tend to get a gauge on how things are really going for a brand based on 2 things:
1.  Did the brand buy advertising from us (or others)?
2.  What was the swag like at their booth/event?

It sounds pretty tacky, and certainly cynical, but those are two very clear identifiers.  Rolex has come out and told at least a few outlets that they will not be spending any advertising money on "trade" publications in the US this year.  And another brand that used to give elaborate gifts every year presented a thumb drive.

I do not think that BaselWorld is going away this year.  While it is not "too big to fail", it is too big to disappear.  I will assume that they will take the hit, adjust their sense of reality, and finally come up with a realistic plan to move forward.  And for those who are saying that BaselWorld is dead and the SIHH has the right idea?  Well Richard Mille and Audemars Piguet might refute that notion.  

Again, I do not think that this is really being driven by any sudden realization that the earth is indeed round instead of flat, and that fairs have been doing it all wrong and are suddenly obsolete.  This year is certainly a reckoning, be in no doubt of that.  But at it's heart, the reckoning is about fiscal realities.

One final thing - the fairs have done this to themselves, but it has most definitely been a co-dependent relationship for some time now.  And like any co-dependent relationship, each partner suffers when the other suffers.  And on a subconscious level, I often wonder if this is exactly what each side has wanted, a reckoning.  A wake-up call that will reset the clocks and put things back to a more normal, realistic level. 

Or as that other great commentator on the watch industry (John Corbett playing Chris Stevens in Northern Exposures once 
mused -

Chris Stevens: I can see how that can be a problem. You know, it's like Jung says, "The unconscious is revealed through the imagery of our dreams, which express our innermost fears and our desires."

Bernard Stevens: Jung said that?

Chris Stevens: Yeah, I think it was Jung. Or maybe Vincent Price.

Hiatus

It is safe to say that a first love, regardless of how it works out, is something that stays with us throughout our lives, not unlike that broken watch that you keep telling yourself you'll get fixed ; )  


And for those who write about these things (watches), we tend to have favorites.  For me at least, it's hard not to feel romantic about watches.  And perhaps that first horological love was Eterna.

I still remember buying the 50th anniversary KonTiki from Seregin's in San Francisco back in 2000.  I loved that watch.  It was well before I worked for Tourneau, DOXA, or started writing about watches.

Interesting to relate, the first real connection that I ever made in the Swiss watch industry was with Eterna and perhaps one of the best brand PR people I ever got to work with - Manon Vauthier.  It is also worth noting that was back in 2010.  A lot has changed since then.  There have been several different CEO's, a few "caretakers", one or two turn-around specialists, and sundry others who have all had a turn at the wheel and managed somewhat spectacularly to guide the good ship Eterna further and further out into stormy seas.  Eterna has come to be somewhat reminiscent of the Flying Dutchman. 

Eterna really had everything it ever needed to be successful.  They had a facility (quite a large and beautiful one in Grenchen), they had a solid movement and a very talented team creating it, they had several capable people who brought new ideas and energy, and they had the KonTiki. 

But...

They also had rot.  Institutional rot.  A company vibe that would make the mood on the Titanic seem upbeat.  And as I have mentioned in the past, this is perhaps the most regrettable part of the Eterna legacy, it is a legacy.  It is not a new phenomenon. 

The not-infrequently proposed solution was to switch leaders.  And this became something of a game of musical chairs, with many of us in the Fourth and Fifth Estate playing CEO Bingo, speculating on how long anyone would last in the role.  It is also worth noting that this has been going on for nearly as long as I have been covering Eterna.  But in all fairness to those who went through the revolving doors at Eterna HQ, they were not the real problem.  If you change ownership, management, manufacturing ideas and you still can't get things on track, that leaves only a few possible alternatives, and again this comes back to the institution or organization itself.  And it could be fixed.  It could be made to work again.  But that will take more than just a manager coming in, it would take an entire cultural shift.  And change at that level can be scary.  But maybe, just maybe, it is time to say goodbye to the idea of "this is the way we have always done things", and find a new path.

A reader had mentioned that Eterna would not be at BaselWorld this year, and did I have any info seeing as I was a fan?  Well, yes and no.  As far as I know Eterna will not be displaying at BaselWorld.  It is also worth noting that a lot of Eterna's functions have been absorbed by City Champ stable mate Corum, so to some extent yes, they will be there, just in a different booth.  Eterna are still in the movement business, but at just what capacity that is happening?  Well, it is not really clear just now.  There are several micro brands that are counting not just on new movements, but the serviceability of the movements that they have purchased when issues arise, which they inevitably will as they do with any movement manufacturer. 

But here's to hoping that this is merely a one year hiatus, and that with a bit of luck, and a lot of honest reflection?  Maybe the good ship Eterna can make it back to port.

The Transfer Window Opens -

At Eterna And Corum -

Courtesy of Courm

After weeks of speculation, the City Champ version of The Bachelor has ended, and Jérôme Biard has emerged from the final Rose Ceremony holding the final rose.

Whether or not it is a good idea to make a singular appointment to have oversight of two brands is debatable.  But considering that Eterna has lost more staff than Marie Osmond has lost pounds over multiple Nutrisystem campaigns, it seems that Eterna is the needier of the two corporate children for adult supervision.  

Eterna has been a poster child for corporate dysfunction going back longer than I've been writing this blog.  And while there have been some less-than-spectacular leaders at the helm of the flagship in Grenchen, there have also been a few that were hindered from doing as well as they were capable because of the corporate culture that has pervaded Eterna for more than 10 years.  Ownership has changed hands a few times.  Previous CEOs have come and gone.  What has remained consistent?  A pervasively negative internal "company vibe". 

If my math is right, this is the 8th leader of Eterna since 2011.  For many of us, we have equated a promotion to running Eterna with a duck being promoted to a l'orange.  

And as mentioned before, it is profoundly convenient for the xenophobes currently bemoaning Eterna's poor performance to claim that it's all down to the current ownership.  'Cause, you know, they were clearly not born lily white and Swiss.  

Numpties!

Courtesy of the Urban Dictionary:

numpty

Dialect, chiefly scots. A bumbling fool or one who is intellectually challanged.
(plural : numpties)

"they numpties couldnae organise a pissup in a brewery."
In reference to MSPs( members of scottish parliment)

by Gerry K. April 26, 2005

Can Eterna be fixed?  Sure!  But the owners need to realize that the change is not just needed at the top, but bottom up.  Eterna had an amazing PR team for awhile.  Starting in 2014 to now after that person left, it has been run by a largely indifferent group suffering from a major case of millennialitis.  

Some suggestions?

Eterna currently has three valuable assets:

1.  The KonTiki - focus on doing that and doing that well.  Get rid of some of the clutter.

2.  Movements - but maybe try to actually get them out to the brands and microbrands who have committed to buying them rather than leaving them dangling.

3.  A magnificent facility - odd idea, but perhaps lease some of the space of the facility out to an assembler in exchange for a reduced price paid to said assembler.  Otherwise?  Start doing casing and assembly again.  Arrange tours of the facility.  Create a "assemble your own watch" day where people from the general public can come in and take a one or two day program that teaches them the basics, and under supervision they can assemble their own watch.  It's a great corporate activity that companies as well as individuals would be anxious to take advantage of.  Promotes the brand and puts Eterna watches on new "brand ambassadors"

Lastly?  Create an official online store and stop feeding the grey market.  I sincerely wish Mr. Biard good luck and God's speed in his new appointment.  A lot of us really want to see Eterna succeed.  I personally am ready for some actual good news and a little less hyperbole thinly veiled as reassurance.  Let Eterna be all it can be, but perhaps the brain trust at City Champ and the folks at Eterna need to stop trying to be what they are not now, and never have been.



After everything is said and done, you can pump millions of dollars into a brand, but that will never guarantee results.  You have to punch your weight.  Let's hope that this is an approach that Eterna is finally ready to accept and embrace. 

Here is the release as received from City Champ this AM:

Jérôme Biard appointed Director of European Timepiece Division
7th July 2017 - Citychamp Watch & Jewellery Ltd is pleased to announce the appointment of Mr. Jérôme Biard as Director of the Watch Division on the European Board of Directors of Citychamp Watch & Jewellery. 

Mr. Jérôme Biard will take over the management of Corum and Eterna on 1st of September; Which includes the implementation of the overall strategy initiated by the Board of Directors and the general management of the operations of the two brands.

A veteran in the watch industry with more than 25 years’ experience, including 16 years at Richemont in sales and marketing for Vacheron Constantin and Cartier. In 2005, he assumed the role of International Sales Director for Girard-Perregaux and in 2009 was appointed CEO of LPI (Weitnauer Group) - a luxury watch & lifestyle distribution company for the Russian market, as well as Turkey and Brazil, including the creation of a retail division by capitalizing on his vast business development experience. Mr. Biard’s extensive experience in the watch industry will be an asset to the Group’s profitability and diversification. 

Mr. Jacques-Alain Vuille is pleased to continue to share with Mr. Jérôme Biard the experience he has gained during his 37 years in the company.

Dear Corum - YES, It's Too Soon

Okay, I know that Switzerland is, allegedly, neutral.  I know that being cheeky can be fun and a clever way to pitch an idea.  I mean, I like to poke fun too!

But...

Given the current tensions in the US and UK, I honestly do NOT think that your choice of names for your recent Bubble press release was really that well thought out.

The level of tension currently in the US regarding the political situation and leadership of the country is at an all time high.  People who have been friends for years are no longer talking to each other, and regardless of which side of the rapidly expanding cultural and political divide you find yourself, it is safe to say that you wish that things were different.

While I realize that this was meant to be a clever jab, it really is a bit too far.

Shamelessly borrowed from the worldwide infoweb

 
I truly do like Corum and I love the Bubble, but I think all things being equal, following the controversy of retaining Booba, the incredibly tacky "Make Corum Great Again" hats intentionally designed to resemble the then candidate (now President) Trump's headgear that were being handed out at BaselWorld, and now this?
 

BUT...

that is just my opinion, and in the interest of avoiding being accused of not reporting fairly, or spreading "fake news", here is the press release exactly as I received it -

Courtesy of Corum

Bubble America First & Bubble Brexit  
In Bubble We Trust

Flag flying high, America's greatness takes centre stage. Corum introduces a proud and independent Bubble. On Stars & Stripes, the colours of the New World are on majestic display for Independence Day. In God We Trust, In Bubble We Trust. 

This "4th of July", Corum is giving prominence to those colours associated with the land of Uncle Sam. True to the grandeur and power of the country, the La Chaux-de-Fonds watch brand has chosen to immortalise not one, but two nations on its dial.
This is how the United Kingdom’s tricolour flag also came to be represented on the dial, suitably enlarged thanks to the legendary magnifying effect of the Bubble’s sapphire crystal.
In keeping with the bubble style unique to Corum, the Swiss watchmaker proudly exhibits the colours of both nations, united in their exceptional power.