Mixed Emotions

About the reconstituted Gallet -

Courtesy of Gallet

So here's the thing, I'd like to be as excited as everyone else I'm wondering if Mr. Kern's reach might have exceeded his grasp on this one. 

On the one hand, the previous custodian of Gallet would have been reported to the Watch Town authorities for child neglect if such a thing existed, so it is nice that someone with money and conviction has rescued it. That's good.

People might recall that Gallet had a rather janky business model under the prior caregiver. Prices were enough to make your eyes water, and there were only two very similar models available. An abortive pop-up at BaselWorld many years before the fair's collapse was one of the very few forays made.

On the other hand, it seems like a heavy lift for what it is - if I have read the press releases correctly, it seems that Breitling is assembling the Gallet collection. Now while that isn't exactly defacto white label assembly, it would seem that there is capacity to do this work in addition to the work required for Breitling, which given the downturn in Breitling's results this past year it is actually a sensible deployment of resources. So consider this my consultant's "atta-boy" ; )

But back to the pricing - and is the juice worth the squeeze? 

Gallet has four different model families, almost exclusively chronographs, with the least expensive model weighing in at a robust $2,900 for a time & date model. The chronographs start at $4,400 US, with the Gallet Classics setting you back $6,700 US. One would assume the price gap between the two is down to the use of Breitling's manufacture movement - the hand winding Breitling B09. Which begs the question - is the B09 a + $1,500 movement? Well, maybe yes, maybe no. But the $4,400 pieces sport what Gallet is calling the Gallet 23. The Gallet 23 also goes by the title Sellita SW510. This movement will fetch between $430 - $500 from independent parts suppliers. Meaning if you are buying in bulk you are certainly paying less. So this then begs the further question, is the B09 a $2,000 movement? In truth, I'm not saying that it is, and I'm not saying that it isn't. Watch brands are not charities - nor should they be. They take the risks, they create the product, market and sell them. It is a business. We all expect to be paid for our work ; )

So the question remains - at $4,400 is the market going to have the appetite for this?

Don't get me wrong - I would love to see Gallet do very well. It is a brand that was pretty much treated like a red-headed stepchild, and certainly derserved better than it got. So we will watch, and we will wait.

The Transfer Window is Swinging WIDE OPEN

At House of Brands...

Freshly returned from Geneva, let's just say the multiple reincarnations taking place at the freshly minted "House of Brands" was a topic much discussed by Watch Town's cognoscenti. Curious to relate - fan boys and girls had nothing but sunshine for these re-re-re-releases. Gallet had actually been operating, albeit poorly, up until very recently, so this cannot really be placed in the class of a UG lift.

For those of us in Watch Town's Fourth and Fifth Estates, let's just say we are divided. Those who crave to maintain their invitations for comped travel with celebrity "squadies" will no doubt bark like the trained seals they have come to be, waiting to be fed the tasty sardine that is a luxury press junket. For the rest of us...

Well, while I do appreciate the operating policy of not intentionally trying to "yuck someone's yum", I have to look at this through a bigger lens. While Breitling is certainly a brand most folks are aware of, it continues to lean heavily on celebrity "chums of the brand" while the prices climb relentlessly upward. And many folks are starting to ask if the juice is worth the squeeze. I'm not saying it is, or is not. I have my eye firmly on getting a Breitling Montbrillant Eclipse so although I'm not a fan boy, I appreciate a fine watch when I see one.

So then we get onto the now churning debate as to whether or not Universal Geneve has been priced appropriately. Well, the word around the campfire in Geneva (at least as spoken by those not fearful of being uninvited next year) was a fairly firm no. But then in fairness, it is a deeper question as to whether or not we (the press and employees of other brands) are really in a demographic that will matter in terms of sales. Probably not.

As for Gallet? Not unlike poor Yorick, I knew it. It was a brand bought by someone who then hired someone else to run it. It produced (if memory serves) a chronograph or two that were priced at dollar amounts not usually requested without the aid of a pistol and a getaway car. One abortive BaselWorld appearance in old Hall 2 was the high point.

And so now we have another "squad" set to be unleashed to put this all in motion.

Per World Tempus, Mr. Kern shared the following -

https://en.worldtempus.com/article/new-watches/house-brands-executive-leadership-breitling-82548.html

In the context of the creation of our House of Brands which includes Breitling, newly launched Universal Genève and upcoming Gallet, we have decided to further strengthen our executive leadership team and organization to drive continuous strong development of all three brands.

As CEO of House of Brands, I welcome Jean-Marc Pontroué to support the development of House of Brands as newly appointed CEO of Breitling. With an extensive career in the luxury watch industry at Montblanc and as CEO of Roger Dubuis (since 2011) and Panerai (since 2018), he brings long-standing experience in retail, wholesale and marketing.

Grégory Bruttin continues to build on the momentum created by the recent successful brand relaunch of Universal Genève and is appointed its Managing Director.

Erwan Rossignol is preparing with his team the relaunch of Gallet by the end of August 2026 and is appointed its Managing Director.

Antoine Loron (34) assumes newly the role of President of Breitling USA and Canada and joins the executive leadership board of Breitling and its product committee. His appointment follows a fast-tracked sales career first in our headquarters and his outstanding entrepreneurial successes in the Caribbean and Latin America. He will build on the strong foundations achieved by current President USA and Canada, Thierry Prissert, who has driven exceptional growth over the past fifteen years by successfully elevating our wholesale channel, establishing an extensive boutique network and securing our global NFL partnership. Thierry Prissert will continue to support Breitling’s brand expansion and the introduction of Universal Genève and Gallet in the American market and transition to chairman of the House of Brands USA board.

Renato Meier, currently Marketing Director of Breitling USA and Canada, having achieved strong momentum in marketing activations in the region, succeeds Antoine Loron as Managing Director of Breitling LATAM.

Together with our excellent current executive leadership team, we are well positioned to develop the full potential of our House of Brands. All changes will take effect in May 2026.

Georges Kern, CEO House of Brands.

As with all comings and goings in Watch Town, we won't really know anything until the dust settles, but we wish Mr. Kern and his squad good luck and Godspeed.

The Emperor is Butt Naked

All the talk this AM seems to be about the re/launch of Universal Genève. And let's just say, it's not all good...

Shamelessly borrowed from the worldwide infoweb

On the one hand, industry insiders (i.e. people who are never going to take out their own credit card to purchase a UG) are all patting their chum Mr. Kern on the back telling him how shrewd and clever he is.

And then we have, well, let's just say more than a few loyal fans who have been waiting for the new UG not unlike a 6 year old waiting for Christmas, who are now collectively recoiling at the price tag. For my part? In all honesty, Universal Genève never really turned my crank. It's perfectly nice, but nothing I've laid awake at night yearning for. So I don't have a dog in this particular fight.

For more than a few dollars more...

let's see what a shit ton of money will get you.

 

The Polerouter can be yours for a meare CHF 14,000 -

Courtesy of Universal Genève 

Let's put that into perspective... 

Actually, I can't. It is simply a stupid amount of money for what it actually is.

How about a chronograph?

Courtesy of Universal Genève 

A steal at CHF 15,500! 

As is the case with all things in Watch Town, we will have to wait and see. But when you take into consideration the ridiculously large sum that was paid to buy the brand out of mothballs, you might understand the desire to see at least some ROI. With that said, for those of us in the lower 48, you can do a lot with $19,622.81 (current conversion per XE as of 6:13 AM, Friday April 10). But then again, your kids don't need to go to college, you can take public transportation, and do you really need both kidneys?

JLC Reversal?

Not the hottest or freshest of news, but still interesting. If the reports from Miss Tweed and Mr. Zuccali are to be believed, Jérôme Lambert has possibly taken a page from his former sparring partner (Georges Kern) and might be working to pull together a management buyout to make Jaeger-LeCoultre independent and remove a second watch brand from the Richemont stable.

There are many different theories floating around watch town as to whys and wherefores motivating the heroes and zeros. But it does (to me) represent a few possible misconceptions as to the true value and long-term stability of JLC - no offense to the players in this little drama ; )

I was reminded recently (while listening to a watch podcast) that a lot of the folks opining on the machinations of Watch Town these days are, to a large extent, New Jacks. That doesn't make their opinion any less valid, but these are folks who did not go through the downturn of 08/09, nor experience the riches to rags saga of Basel World snatching defeat from the jaws of victory. What these pundits aren't really taking into account is that not so very long ago, the Richemont watch division juggernaut was just a gleam in the milkman's eye. Now granted, that milkman was one Günter Blümlein, but the one key reason why JLC became what it did was hard nosed cost cutting and consolidation prior to Richemont's acquisition. And, ironically, a lot of that lesson was lost in the succeeding decades. And a lot of that hit home with me when I recently visited the new JLC boutique in what locals are calling "Switzerland in Boston" on Newbury Street. Shit-tons of SKUs. And if I am brutally honest? There are only so many hard-core collectors who either live or visit Massachusetts's largest city. But this is more than just a question about local retail strategies. It becomes a much bigger question as to brand identity. I am a JLC owner. A fringe one, to be fair - an Atmos clock currently in off-site storage that is correct twice a day. When we consider how much money it takes to create, manufacture, and most importantly - to innovate? Without Uncle Rupert making it rain, JLC will not be such an easy lift.

Arguments can (and will) be made that this is a swashbuckling move that will once and for all firmly cement JLC's position amongst the all-time greats. I mean, c'mon! Just look at what Kerns did with Breitling! 

Well, yes and no.

Part of the feel-good love story of Breitling's triumphant reemergence is the part that most don't acknowledge - the not insignificant "re-ups" provided by private equity.  

And what about AP? Look at what Mr. B did? Again, that's a case of two things being true at the same time. He did bring the brand to new amazing heights, but that roll had already started, and was chiefly fueled by his on-again, off-again understanding that despite AP's at times deep catalogs, the real demand of any significance was the Royal Oak. Is there that much appetite for the Reverso out there? And while I'm sure that Mr. Lambert is a perfectly nice fellow, he doesn't exactly have the charisma of Mr. B, or even Mr. Kerns. Now in terms of personal dynamism, the same could be said of Mr. Dufour, but then again? He's in charge of Rolex. And JLC can paint as many pretty picutures as they like, but they are not Rolex.

So as is so often the case in Watch Town, we will wait, and will will see.

Confirmation - Gallet Is With Breitling

In their latest round of purchases, Breitling have now confirmed the rumors - they are the new owners of Gallet. You can read the Fratello interview with Georges Kern here -

https://www.fratellowatches.com/breaking-news-breitling-acquires-another-historic-watch-brand-its-gallet/

 

This was a move that was foretold by Miss Tweed -

https://misstweed.com/articles/breitling-to-unveil-gallet-revival-next-month

In truth, it is pretty hard to say how this will all play out for the brain trust in Grenchen. Breitling, in and of itself is doing well if the reports are to be believed. But trying to resuscitate two essentially defunct brands is a very different thing than reinvigorating an existing one.

As the quartz crisis, the downturn of '08, and countless other shifts have taught us, brands go dark for a reason. Some come back, others? Not so much.

We shall wait, and we shall see.

Nostalgia And Watch Town

If the news reported by Miss Tweed is to believed, it would seem that Mr. Kern has his eye on another mostly defunct brand - Gallet.

Now this is curious, and I suspect that it has been secured for far less than Universal Geneve. Gallet had been force fed through a drip iv for the past 20 years, including one ill-advised BaselWorld misfire many years back. Very expensive chronographs that by all accounts never really took off, the website went dark some time ago, and I suspect that the the person pumping the money in is somewhat relieved that someone else will take Gallet over.

So let's see if the Miss Tweed's sources have read the tea leaves correctly, and maybe Gallet will fly high again.

With the market space in Watch Town already becoming increasingly bloated, I honestly have to wonder if this would be the best move. From a strictly fiscal perspective, there are wiser ways to spend your money. It's a gamble. You go back to the well too many times, things can go South. But on the other hand, everyone loves a re-birthed watch brand.

The truth is Breitling's history, reputation, it's arc as a brand had already been written long before Mr. Kern decamped IWC for Grenchen. But with Universal Geneve, and now possibly Gallet, Mr. Kerns can truly state that these were his, and it will likely be his legacy. And fair enough. We all want to make our mark, and be able to say we were "there when"...

We shall wait, and we shall see.

Dear Breitling - Shop Your Closet!

There are a GAZILLION "Sleeping Beauty" brands out there. And seeing as Breitling just "whipped it out" to buy an (let's be honest) essentially dormant brand, let's take a moment and consider what US $69 million could have been directed towards given the presence of an  already existing red-headed step-child living somewhat ignominiously under Breitling's roof. I speak, gentle reader. of Kelek. 

Formerly located just around the corner from Eberhard in La Chaux-de-Fonds, it merged / was purchased by Breitling in 1997. Prior to this time there had been a few iterations, but the short-form is that Kelek focused on mechanical movements and had worked with Dubois-Dépraz. It is also worth noting that in the 90s, Kelek was one of the largest manufacturers of automatic, mechanical chronographs. It is also curious to note that Kelek developed a working relationship with one Seiko (Hattori at the time), thus perhaps foreshadowing the great Tag Heuer 1887 movement fiasco of 2009 ; )

In short? For the price of, well, ZERO, the brain trust in Grenchen could have directed time, effort and a much smaller amount of cash towards rebuilding and relaunching something that would only be on life-support for a short period of time, and out of the "recovery room" even faster. But is also, admittedly, not the stuff of nocturnal emissions (that's wet dream to you) from watch nerds swearing up and down that they would buy a Universal Geneve if it were ever revived. These folks are, by and large, the horological equivalent of the now infamous (and largely fictitious) 400 pound guy "hacking a political party" from his bed. Hypothetically they exist, but it begs the question as to why the supply of vintage Universal Geneve watches are not exactly thin on the ground. 

Okay, that's not fair. I am sure that there are some folks out there, but the majority of watch buyers with ready cash listening to Beyonce name drop AP and SPENDING said cash are not borderline or current AARP members with purchasing decision-making impulses driven by nostalgic erections.

Just saying.

So back to the earlier question - when you have a viable brand already in your house, why go out shopping for something that costs you a WHOLE LOT more money than you really need (or likely should want) to spend? A lot of it is sex appeal - be it real or (I suspect in this case) presumed. But a lot of it comes back to what that other great commentator on the watch business opined in Moneyball, fear of looking bad and an inability to objectively and rationally asses value (both perceived and real) -

“There was but one question he left unasked, and it vibrated between his lines: if gross miscalculations of a person's value could occur on a baseball field, before a live audience of thirty thousand, and a television audience of millions more, what did that say about the measurement of performance in other lines of work? If professional baseball players could be over- or under valued, who couldn't?”
― Michael Lewis, Moneyball: The Art of Winning an Unfair Game

What is known is that Kelek would have likely made for a fantastic Oakland A. It was, and continues to be a potentially wildly successful brand if the owner / operator would spend one one-hundredth of the time, energy, and money that Mr. Kerns and Breitling are ready to hurl at UG. But then again, when you consider floating an idea like Kelek, you are flying in the face of the marketing logic of a brand that has been worshiping at the altar of stardom (and its reflective glow) for many years. So we'll let Moneyball summarize why activating Kelek would have made a HELL of a lot more sense than spending the kind of money that usually isn't exchanged without the aid of a getaway car.

“The inability to envision a certain kind of person doing a certain kind of thing because you've never seen someone who looks like him do it before is not just a vice. It's a luxury. What begins as a failure of the imagination ends as a market inefficiency: when you rule out an entire class of people from doing a job simply by their appearance, you are less likely to find the best person for the job.”
― Michael Lewis, Moneyball: The Art of Winning an Unfair Game

And yes, it is a metaphor. The "certain kind of person" is a certain kind of brand - in this instance Kelek ; )

A Sincere Concern

So I understand that Tempus Fugit is not a big outlet. And I further realize and expect that the big dogs running the big brands are not necessarily habitués of Tempus Fugit either.  So perhaps I am just pissing into the wind here.

It seems that no amount of information and science was enough to persuade two large brands who decided to have big parties in two hot-spots for contagion (London and New York City) with some of the press lauding them for being bold and audacious. Let's just hope that the "goodie bag" was all that attendees left these parties with.

I have never (to the best of my knowledge) met Georges Kern and I suspect that maybe I never will, but when I read the news that he intends to re-open Breitling on Monday on WatchPro.com -(https://usa.watchpro.com/breitling-set-to-restart-production-on-monday/?fbclid=IwAR2sG_uosdq-08g_DDk8OQTN_Fcv6JDS0J2GPcJu5RRiX4MlaKeIXaiUyzw), 

I was actually quite concerned.

Mr. Kerns, if you are reading this, please reconsider what you are doing.  Please think about the health and safety of your staff,  your team, YOUR SQUAD.  

Contrary to the steadfast belief by a few colleagues in the Fourth and Fifth Estate and the brain trust at LVMH watch, I am not Satan.  I do not wish anyone any bad fortune and I actually would be thrilled to see Breitling come back WHEN IT IS SAFE, make a bunch of awesome watches and break every sales record in the world.  Hand to God, please make it so.

But what is currently being proposed is really concerning.  Not just to the people coming into work, but to their families and everyone that they will come into contact with from the time they leave home until they return at the end of their shift.

Believe me, I get it.  I want to be active as well.

But the truth is, unfortunately, that we are not days but really weeks away from any reasonable return to normalcy.  

We all want to be back in action, working, happy, back to normal.  

And we will be.  

But not yet.

The Last Man Standing

Well, at Richemont it would appear to be Jérôme Lambert.  For many of us, this had been a forgone conclusion for some time.  It was never going to be a tenable solution for the long term, putting two alpha males at the same perceived level with the ultimate prize only available to one of them.  Not unlike Thunderdome, two men went in, one man came out.

I know that sounds a bit dramatic, but when you are talking about getting the corner office after that many years of service?  Well, let's just say that if you felt strongly enough that you were not going to be at the final rose ceremony, you might set out for potential pastures greener in say, I dunno', Grenchen.  Put more simply, you don't tend to walk away from the biggest pot of your life if you think that you have the winning hand.  

It also bears mentioning, that it is entirely possible that this was not exactly the way it was planned, but Mr. Kern's surprise departure to play Head Pilot at Breitling might have forced Mr. Rupert's (and Richemont's) hand.  

It has been a drama full of twists, turns and palace intrigue.  But for now, it appears that Mr. Lambert has won this particular game of Powerball.

Never Drink Your Own Bathwater

This will be short, but hopefully to the point.
 
Whether you are powerful and mighty like the recently emancipated Georges Kern, or the scrappy upstart that has morphed into growing microbrand, always remember that your current situation is just that - current. 

I was speaking to some colleagues in the Fifth Estate and we all were sharing the latest "hello my friend" messages that we had received from either recently departed brand managers or those who had been "uncoupled" from their mother ship some time previously that had finally managed to find a new (decidedly less fancy) landing pad with a brand that they clearly feel is below their station. 

Oftentimes it is a brand that their former "besties" at the bigger sites, blogs and online magazines aren't falling all over themselves to cover unless the newly re-employed brand manager is ready to pony up advertising money (which they now have in incredibly short supply) or pay for "advertorial".  And let's be honest, the advertorial is only a step away from the kid who has to have his mother tie a pork chop around his neck to get the dog to play with him.  Not exactly validating...

They had another thing in common - they had fairly consistently never returned our messages, ignored us in public, and essentially acted as if many of us who write about them did not exist.  And no, that is not an exaggeration ; )

It is remarkable how a prolonged bout of unemployment and the cold shoulder from the great and the good who used to cover them exhaustively will suddenly instill a sense of fond reminiscence for previous interaction and a wistful desire to re-connect with their long lost friends from the press.  

So CEOs, brand managers and PR Mavens remember one important thing: 
All of the folks you meet on your way up the ladder?  You are very likely to encounter them on your way back down.

Or as that other great commentator on the industry observed at the end of the movie Patton:

“For over a thousand years Roman conquerors returning from the wars enjoyed the honor of triumph, a tumultuous parade. In the procession came trumpeters, musicians and strange animals from conquered territories, together with carts laden with treasure and captured armaments. The conquerors rode in a triumphal chariot, the dazed prisoners walking in chains before him. Sometimes his children robed in white stood with him in the chariot or rode the trace horses. A slave stood behind the conqueror holding a golden crown and whispering in his ear a warning: that all glory is fleeting.”

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.

 

The "New" Swissness and Overproduction

So what happens when you take an aggressive new stance on what "Made in Switzerland" means, mix in 2 cups of overproduction, and bake it for approximately 15 months in a major watch sales slump?

Well, suffice it to say, it is not going to be pretty.

Here are the "armchair" basics as I understand them.  As always, if I have gotten a fact wrong I welcome feedback and will correct it immediately -

1.  Introduction of the Swissness legislation will take effect finally on 1 January, 2017.

Meaning that a lot of the "semi-Swiss" watches out there still unsold that were produced before January 1, 2017 will need to be sold before the end of 2018.  Seems like a long time, doesn't it?  Well let's take a few other considerations into account.  It is closing in on the end of 2015 and several brands are still trying to blow out preexisting stock from the overproduction from previous years, which will be replaced by the need to sell the over production of this year and next year and on and on.  Think I'm kidding?  Check your favorite Internet/grey market source.  And that is just what you can see.  Like cockroaches, most grey marketers spend their time scurrying around in the dark.  In fairness, they are the creation of overly rapacious watch company CEOs.  

2.  If you can sell 4000 watches, then by all means you should double that production to 8000 because you can always dump those watches in Hong Kong and mainland China... not any longer.  Many retail giants in Asia are reporting deep stocks of unsold watches.  And they are PISSED.

3.  We are in the depths of one of the worst watch sales periods on record, and we still do not know where the "bottom" is.  But it is likely that we have not reached it yet.  Smart watches?  Cell phones?  Slowdown in China?  Those are all excuses.  What the brands are now learning in a very painful way is despite what IWC's Mr. Kern so boldly claimed - that essentially an IWC watch represented a somewhat inelastic demand - meaning no matter how high you jack up the price, the demand will still be there, they in fact do not.  

Wanna' revisit those talking points Mr. Kern?  While I agree with him that watches are emotional purchases, sooner or later rational thinking will collide with and surmount emotion.  And rational thinking is now governing watch buying decisions.

What I suspect we will see in the coming months?

Even greater numbers of watches flooding the discount/grey market at even more deeply discounted prices.  More and more retail stores struggling and ultimately giving up.  The brands that can't survive will either go broke or go "dormant" - which by the way is the suspicion that many people are starting to have about Zenith - it is their anniversary and it is being celebrated with all of the excitement of Arbor Day.  In other words, it is not being celebrated AT ALL.  

A person with a great deal of knowledge has described this gathering catastrophe as a tsunami.  I think that is probably a pretty apt analogy.  As we know, those who see the signs and make the adjustments will make it to a safe harbor.  Those who insist on going the same way as always will find themselves broken on the shore.  

Let's hope I'm wrong.

Telling the Truth is a Dangerous Business - IWC

Before we begin, please take a moment and view this video from IWC's Georges Kern -



Now, this presentation raised the ire of a LOT of people - several bloggers among them.  They found George's attitude a bit insensitive to the customer because he actually admitted that IWC and other "luxury" watches were ridiculously overpriced, and that the customer buying the watch was (perhaps) giving into irrational thinking when making the purchase.  Ever have that awkward conversation with your wife/husband/partner - "Do you really NEED that?"  Seems pretty accurate to me.

But unlike the other "Big Ballers" out there running Hublot, Zenith, AP and others who never met a partnership they didn't like, Georges had the intestinal fortitude to own up to the truth.

Don't get me wrong, IWC is one of the worst offenders in the "speed dating party" that is what has come to characterize the watch partnership.  I hope they find someone nice someday and settle down ; )

With a wink and a knowing smile the brand would have you believe that their watch is "priceless".  Well, in that you will often find that Zillion Dollar watch cunningly crafted of "Unobtainium", its dial varnished with the tears of Arcadian Nymphs taking up space in the grey market… they are absolutely right!  How could you put a price on mindless, inane and in the end inexplicable waste in terms of marketing dollars (and product) flushed down the toilet of ego?

Sure, Georges could have been a little more sensitive, and some of his comments were a bit "ill advised".  But the truth is, while it might seem to some that a sudden bout of Aspergers beset him, the truth is that he was doing something radical in the luxury watch market.  He was giving a very honest assessment - The Emperor is in fact, naked.

Did Mr. Kern break faith with the faithful?  No, I think what Mr. Kern revealed was something that has always been there but is hard for many of us to admit, and even harder to accept - the brands ultimately are here to do business, and to make money.  We all latch onto a brand because we feel some sort of unexplainable connection.  The Paneristi and his even more incurably romantic cousin the Anonimisti.  We feel that we are making choices with our heads - but we are making many of these choices and commitments with our hearts.

Think you're special?  Think again - you are a number.  You are replaceable.  And really, that's okay.
We are talking about watches, not curing cancer or feeding the homeless ; )

So was it sort of a "Dick Move" to say what he said?  Sure, but it remains to be seen if this will divert the sheep from the "shearer".

Enjoy your watches!