Numptys...

Per 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). numpty by Gerry K. April 26, 2005

Courtesy of Audemars Piguet

Unlike most of my colleagues in the Fourth and Fifth Estates of Watch Town, I have held off on commenting on Hayek "the Younger's" latest thirst trap. By and large, I like Swatch, own a bunch, and even plumped for a Blancpain x Swatch as well as a Mission to Mars. They're fun.

And without going into the pros and cons of whether or not $420 American is wisely spent on this latest outing, I want to reflect on the shit-show that was Swatch's lack of common sense regarding the launch of the Royal Pop. Or to paraphrase James Corder's bon mots - Is human life only worth $420?

You can read his insightful commentary here, it is well worth your time -

https://www.watchpro.com/corders-column-somebody-could-have-been-killed-today-over-a-400-swatch/

While seeing crowds buzzing is good for business, I would like to think we have moved on from the Bernie Ecclestine / Hublot "if it bleeds, it leads" approach to marketing -

Courtesy of Hublot

And while many of us are sharing our feelings, curious to relate? It appears that neither Mr. Hayek, or Ms. Resta have been particularly forthcoming with coments following a highly anticipated, partially aborted launch capped off with near riots. Think I'm being overly dramatic? Simply put, riot police aren't typically dispatched to your neighborhood mall over a parking dispute, or a getting the wrong order at Orange Julius... 

While some folks will hopefully get and truly appreciate their new pocket watch, my sincere hope is that in Biel/Bienne and Le Brassus there might be just a wee bit of reflection on how this was handled, and maybe (doubtful, I know) maybe one of these two leaders can put their egos aside and accept the responsibility for the situation and offer some sort of acknowledgement.

I know, this is about as likely to happen as me being invited on an AP press junket ; )

Or to paraphrase the closing scene in one of my favorite films -

"Forget it, Henki. It's Watch Town."

A Summer Day Dream - What If?

Author's note - what follows is purely fanciful speculation based on nothing other than the whimsical musings of an horological raconteur during the very slow summer watch maker's holiday. None of it is based on anything other than my rather vivid (and sometimes undernourished) imagination. It is intended solely and completely as entertainment.

What if...

Rolex Bought Patek 

I know, sounds pretty nutty, but as summer daydreams go, it's got a bit of a toothsome quality to it.  Remember a few years ago when Stern the Younger floated the idea of possibly selling Patek?  Well, in the interest of summer fantasies, what if Rolex sacked up, and bought Patek?  Now I don't claim to be any sort of authority on Swiss law or the rules of business governance, but as both are private companies, would either be required to acknowledge such a sale/acquisition to anyone other than their board/s?

More to the point, of ANY other independent brand out there, in terms of how they position themselves, communicate with the press, and do business, it's hard to imagine 2 corporate cultures that could be any more similar (and hence easy to integrate if even "unofficially").  

I know, it's a crazy idea...

What if...

The Hayek Family Ceded Control of the Swatch Group 

While the sky isn't necessarily falling, Swatch Group has not enjoyed the most "amazing" years recently. Moreover, as it is a publicly traded company/group of companies, it would seem that a leadership position in one of the "jewels" of the group seems to be predicated on a DNA Olympics of sorts, in which being born with a last name that starts with H and ends with K appears to be the surest path to running one of the world's 10 most important brands (Breguet, Blancpain). While Omega has a CEO swimming in a different genetic pool, Blancpain and Breguet were both being run by Hayek the Even Younger. I have never met Marc Hayek, but from all I've heard he's a perfectly nice guy and as far as I can tell, he did not crash Blancpain (in charge since 2002) or Breguet (in charge since 2010) during his stewardship of both brands. Which begs the question - why now? As there do not appear to have been any significant seismic shifts (either positive or negative) why now? Official news teased its way out initially on the 12th, and in depth on Friday that  Lionel a Marca would be taking the helm from Marc Hayek, who would be remaining as "President" of Breguet.  

There does seem to be a "Dear Leader" approach to succession plans within the group. Could this mean that Hayek the Even Younger is about to be kicked upstairs and take the big wheel? As there has been no clear or obvious attempts to develop any significant leaders within the group who are not named Hayek to take over some day, my Summer Daydream leads me to wonder if this is no daydream at all and Marc Hayek is about to be promoted again.

What if...

Swatch Group Returned to BaselWorld

In what would be perhaps the most "Baller" move ever, Swatch Group agrees to come back to BaselWorld, but only if they take a partial ownership in the fair and a few board seats at MCH. In some ways they might have already shown some of their cards. They had planned to bring three or so of their less "well-heeled" brands to Las Vegas (which if we're being honest, is a watch show that should be put out of its, and our collective misery). Now with the Delta variant spreading COVID faster than swinging couples spread syphilis, gonorrhea and unplanned pregnancies at Plato's Retreat circa 1976, it now seems unlikely that this will happen as Nevada is an exceedingly "Hot" location, and I'm not talking about the gambling, legal prostitution and all you can eat buffets. Several brands have already reversed course and are not going to be attending. So whether or not the three ships of the mighty Swatch regatta will dock in Sin City remains to be seen, but despite the power of my Summer Daydream, I tend to think maybe not.

Twice Again - Realistic Luxury

 

Courtesy of Swatch

I am, admittedly, a huge Swatch fan. And as much as I love the wild and whimsical, the one that really kicked it all off was actually pretty plain - black and white!  

I appreciate that if you are reading a watch blog, you are probably hoping for something a little more high brow, but in many ways, that original black and white Swatch was a powerful salvo in the way we looked at and thought about watches. Unless you were REALLY into watches, they were utilitarian, and not that interesting.  Hayek the Elder changed all of that with a relatively modest purchase price of $35 or so. And let's be honest, when compared with the MASSIVE price escalation of other watches out there, it is quite comforting to know that you can still lay hands to a Swatch for south of US $100.  

Now obviously Mr. Hayek is the one we all remember, but there were some other important players involved in the birth and growth of the Swatch, and if you want to go deeper, here is (my opinion as fact) great article -

https://www.mentalfloss.com/article/581875/swatch-watch-history

In the case of the Twice again? You're looking at $80!

Downsizing - Change Is Inevitable

Now it is not news at this point, SWATCH Group has made the difficult decision to permanently shutter several of its retail stores, and 2,400 jobs are now forfeit. More detail on this can be found in this Bloomberg article -
Swatch Cuts 2,400 Jobs as Watchmaker Trims Store Network

SWATCH Group is many things, and more than anything else, at this moment in time they are the canary in the coal mine of the watch industry as a whole. To put it simply, if SWATCH is hurting, how is everyone else doing? Well, the simple answer is that some brands are (at least by most accounts) doing okay - i.e. Rolex and Patek. But other brands (and sorry SWATCH, some of your babies are in this group) are suffering now from a lack of vision. 

And what do I mean by that? 
Back at the turn of the century, everyone was convinced that Hayek the Elder was the smartest man in Watch Town and (for the most part) incapable of error. And there were some very sharp ideas, and let's be honest, some that could have been better handled. And as it applies to the actions now being taken to close company owned stores, it underscores what had been a long simmering concern with the push to not only "control the means of production" but also to try and control the means of consumption. The amount of grey market products sloshing around doesn't exactly help. The move to exclusive boutiques was maybe (maybe) not the best advised. Here in Boston-Metro we have two pretty glaring errors, the Omega boutique in that (insert sarcasm here) highly visited Boston neighborhood - Natick! For those of you unfamiliar, Natick is actually a different town (yes, designated a town, not a city), in a completely different county, more than 20 miles away from Boston (depending on which route you drive, because... no convenient form of public transit goes from there to Boston unless taking two buses and walking just under a mile is convenient). Ironically, there was, and still is a lot of good retail opportunity in downtown Boston. 

And then there was the SWATCH boutique at Boston's Logan airport. Now logic would tell you that airports are natural choices. But... it was in the International Terminal, and another little factoid about flights in and out of Logan for the uninitiated?  A lot of international flights DO NOT leave from the International Terminal. Strange but true!

Curious to relate? There is a thriving (albeit, pre-COVID) retail neighborhood on Newbury Street, and a boatload of space in the Prudential Center as well as the adjoining Copley Place shopping center. My best sense of these two decisions is that they were taken by people who really did not understand Boston, and really did not put in much effort to do so.

And let's now connect the dots - the majority of watch retail is (for the foreseeable future) going to be online. Now also curious to relate - I can buy an Omega watch online from Omega, and I can buy a SWATCH directly from them. Come to think of it, I can buy a:
Tissot
Hamilton
RADO
but not a Mido, not a Longines... and both of those brands are priced more affordably than Omega. Why not join the 21st century?

SWATCH Group, it is time to pivot. 

The Big Payback - ETA

So it seems the words binding and final probably mean something slightly different in French and German ; )

I refer you, gentle reader, to today's news from ARCINFO:
https://www.arcinfo.ch/articles/horlogerie/le-gardien-de-la-concurrence-libere-swatch-group-de-l-obligation-de-livrer-ses-concurrents-956627

For those of you non-French readers, Google Translate gave a pretty fair English version.

ETA has essentially been given carte blanche to sell whatever they want to whoever they want for whatever amount they want.  COMCO essentially reversed their decision and now (if I have understood the translation correctly) ETA is free to sell, or not sell to whoever they see fit.

For those of you unfamiliar as to what carte blanche means, I refer you to that other great commentator on the watch business, Carroll Shelby as played by Matt Damon in Ford vs. Ferrari:
They said I had a carte blanche this time. I looked it up, it’s French for horseshit.  

Yes, I am well aware that is not a literal translation ; ). 
But just as in the movie, what is carte blanche one moment can shift depending on the intestinal fortitude of the regulators. Whether or not it turns out to be horseshit remains to be seen, but the message it sends to the competition right now is that they better get ready for the Big Payback. Payback not from ETA, but from their customers. Because sooner or later it's about sex appeal. And when it comes to buying movements for your watch brand, be it small or be it mighty? The letters ETA on your spec sheet give you the confidence of Popeye after a can of spinach. While other brands are going through their rebuttal books trying to explain that the movement they are using is just as good, or nearly as good as ETA, they are still not ETA. 

If you have positioned yourself as an available, viable solution, while pretty much sticking it to your customers as you fell down in terms of quality, late deliveries, etc., essentially telling them if they didn't like it, they could lump it? SWATCH is likely to open the floodgates. Get ready to say goodbye to a lot of your customers, and your dignity.

If you recently hosed a strategic partner on a newly developed movement, get ready to experience the irony as the karmic whirlwind is about to rock your world in a way that is probably best not discussed in a family outlet.

If you're ETA?  Get ready to start drinking from a fire hose, because your customers have you on speed-dial.

But then again, we need to consider some other factors - we are now in a different world than we were just 6 months ago. COVID-19 has knocked the watch industry's collective dicks in the dirt. So what this is all really going to look like in a few years' time is hard to know. 

COMCO is also drinking from a firehose.  The Swiss government at large has a lot of balls in the air, seeing as we're in the middle of both a global health and global financial crisis. And when you think about it, ETA represents a shit-ton of potentially out of work people that could be, well, working. Making more than a few people redundant is probably not so attractive a proposition.

But as mentioned previously - what is carte blanche today could be horseshit a bit further down the dusty trail. ETA is still being viewed as "dominant", so we shall watch, and we shall wait and see.

How The Statue of Liberty Play Could Save BaselWorld

Now for readers not familiar with American (i.e. not Association or Rugby or Australian) Football, take a quick moment to view the clip below before moving forward -


For those of you who want even more detail -
https://en.wikipedia.org/wiki/Statue_of_Liberty_play

In soccer (Association Football) you would probably compare it with the Cruyff Turn -

And for those of you unfamiliar wanting more background -
https://en.wikipedia.org/wiki/Cruyff_Turn

Essentially, it is a sleight of hand or misdirection to create an opportunity when your opponent is looking the other way.

So what do trick plays in sports have to do with what was the world's most important watch show?

Well, imagine if you will, a world where MCH (i.e. BaselWorld) realized that desperate times would require desperate measures.  And then, imagine, if you will, a group that has not been as successful in recent times as it had in the past.  A group that would say jump, and other groups, brands, retailers and pretty much every journalist in the world would ask - "How high?" that now is isolated and on its own.  Switzerland is a pretty large Monopoly board, and even though logic would lead you to believe that the natural choice would be to head to Geneva, the reality is that Hall 1 could sufficiently host SWATCH and all of the other independent brands that have now been left behind. 

This would, of course, be the ultimate Statue of Liberty play.  It would require MCH to reach out to SWATCH and offer a true partnership.  Now the obvious argument would be that without Patek, Rolex, and LVMH there is nothing left in the fair.  Well, maybe yes and maybe no.  Consider other groups (Festina, Movado) who left the fair in the past, that if the environment was a bit more inviting, and the associated fees more realistic, they might consider coming back.  I have gone to a LOT of BaselWorld fairs.  There have been a LOT of brands that have been in and out and in the fair again.  A fair with just the folks left behind is not going to attract much of anyone, particularly if BaselWorld sticks to the proposed dates of January/February.  

But, what if Hayek the younger has been sitting in Biel, quietly calculating just such a move? Stranger things have happened.  And in truth?  We passed strange globally about 6 weeks ago.

I realize it's a wild, hare-brained theory, but what if?

Watch Assemblers - Some Inside Baseball

This is a topic that has been touched on here before, but it seemed worth airing out again in light of an article I just read on a popular retail-cum media outlet regarding the ongoing ETA saga. The article pointed to statements that Hayek the Elder made prior to the launch of ETA's one-way express trip to crazy town. His statement was, essentially, that any asshole could go to a white label company and create their own watch, and by golly, that was WRONG! He referenced a conversation he had with a fashion house who approached him to make a watch for them, and he pulled an Enzo Ferrari on him, essentially telling him to stick to making tractors (or, in this case, suits). Now history will note that the Zegna watch was realized with the assistance of Girard-Perregaux/Sowind, and it fared about as well as could be expected - not very. But I would also remind you, gentle reader, that this bluster came from the fellow who brought us the SWATCH phone, sunglasses, and...

Who could forget that unforgettable fragrance -


                                                                     Courtesy of Omega

Yes, you too can smell just like a Co-Axial escapement! So it would seem that a call is overdue from the kettle to the pot regarding its hue.

While it's easy to look down your nose at someone and tell them to "stick to their lane", it is a bit ironic coming from the man who had his finger in so many pies ; )

It bears mentioning that A LOT of the brands you see out there are using white label companies to assemble their watches. Some quite old and literally dripping in hyperbolic watchmaking lore. So, does this mean that those are no longer real brands?

Now for me looking back? Hayek the senior's hyperbolic characterization about the gall that some brands had in calling themselves, well, brands was a little disingenuous. When we talk about the world of modern (meaning in the last 20 years) watch production, marketing and sales, private label assemblers are responsible for a much larger percentage of the Swiss watch industry than you might think. And I will pick my childhood favorite (and red-headed stepchild of the SWATCH group) Mido as a case in point.

A little over four years ago I found myself in Switzerland on other business and I managed to arrange a visit to Mido HQ in Le Locle. Now curious to relate, the HQ occupied less than a full floor of an administration building that was (at least at that time) shared with Tissot. I had asked if it was possible to visit the factory to see Mido assembly in action, and I received a fairly evasive response that essentially made it clear that for whatever reason, this would not be possible. When I asked where the assembly took place, this again was not anything that anyone was anxious or willing to share with me. Ever wonder why the factory pictures you see for some of the SWATCH brands are all "old timey"? Ever wonder why you don't see other heroic journalists visiting brand production sites other than Omega, Blancpain, and Breguet? Ever see leading horological luminaries of the Fourth and Fifth Estate visiting and reporting on the production facilities of some of the smaller, more affordable, less sexy brands in the SWATCH stable?

Yeah, not so much.

A reasonable assumption would be that the SWATCH group relies on a large internal facility or facilities to assemble these more mass market watches for several of the group's brands. In essence, a private label - private label.  We would all agree that these are real brands, would we not? And for the record, if I am way off base and there is a shiny (or even not-so-shiny) Mido or Certina factory churning out watches in the Alpine hinterlands? Well, I will sit in the corner and wear a funny hat.

But taken with Hayek Senior's hardline stance on what made a brand legitimate?

Well...

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.

Two to Tango

So I have to say that the past four days have been pretty fascinating.  And there is one set of bon mots from Hayek the younger that I find hilarious, and even more so when I consider the, well, earnest tone of some of my more well-heeled colleagues in the fourth and fifth estates as they fall into lock step.

I was halfway through a particularly tasty bowl of cereal on Tuesday when I was re-reading Mr. Hayek, quoted by another outlet, regarding the failures of the BaselWorld team.  Needless to say, I will be forever grateful that the milk had sufficiently softened the intertwined fibers of my shredded wheat biscuits, otherwise it would have doubtless "shredded" the tender portions of my delicate septum as it raced to find egress due to my unplanned fit of manic laughter -

"You must do something now. You don't have to act like you have been acting in the past: a little bit arrogant, a little bit snobby and not able to do something new."

I can only assume that Mr. Hayek has never been blacklisted by a particularly persnickety PR maven in his employ.  I also assume that he has never had to try to get a press appointment at some of the "Elite" SWATCH group brands without calling in about 20 favors?  And don't even get me started about the less than "warm and fuzzy" vibe given off at the Blancpain, Breguet and Jaquet Droz booths.  I'm sorry, but I've been on this beat now for nearly 10 years, and I'm not saying that I'm "the nuts", but I'm not buying Hayek's "man of the people" shtick. 

Do I think he was right to stand up to the fair organizers?  Absolutely!  But let's not kid ourselves.  This was not a decision quickly arrived at.  Surprising news for the rest of us to read about it, but I can't help but suspect that this move was in the offing for some time.

Mr Hayek is a SUPER smart guy, a tough negotiator, and is a truly good steward of his father's legacy.  And I have absolutely no doubt that he is making decisions that are in the best interest of the group's brands and the group's shareholders.

Having said all that?  Let's get real here.  The watch industry is not exactly booming (I know that I will always be viewed as "that guy").  There is a vast difference between exports and actual sales.  I walked around the two biggest watch retailers in downtown Boston the other day and it did not exactly inspire confidence in the resurgence of the watch business.  I'm not saying that the industry is dead, or anywhere near it.  But as we say at Tempus Fugit HQ - you can put a boot in the oven, but that doesn't make it a cake.

Elvis Has Left The Building... Maybe

Boy, you go to sleep the night before, you wake up and the world has gone crazy!


Unless you have spent the last several hours in an isolation chamber, you now know that Nick Hayek dropped the SWATCH bomb, and went with what American politicos term the "nuclear option".  As per too many news outlets to credit, SWATCH Group has announced that they will not be rolling out the red carpet for their retail partners, the press and the general public at BaselWorld 2019.

Now if we look at this on the surface, we can totally appreciate all of Mr. Hayek's reasoning.  The fair is way too expensive to participate in - tell me about it!  The returns don't justify the outlay, the watch making and buying world has become more transparent, yada, yada, yada...  

But there are a few things that, upon reflection, don't ring true to me.  First and foremost, harping about the cost of the building itself is nonsense.  Essentially, and I am paraphrasing here - that it is not up to the SWATCH group to help recover the cost of building the BaselWorld Halls in the first place.  Well, based on that logic, it should not be up to me, the customer, to help recoup the expenses of "maintaining" the Gerber-Crawford relationship, the massive construction project going on in Biel/Bienne, and the exorbitant rent for the New York City boutique/s with the purchase of a rather steeply priced Omega that I will likely find in the grey market at an equally steep discount a little later down the road.  So in fairness, to me this is a bit of the pot calling the kettle "less than shiny".

But if we go a little deeper, there are some other considerations.  Now on the one hand, SWATCH group posted fairly significant gains in their half year report recently.  On the front page of their half year report, SWATCH stated that "growth" in "America" had been particularly good.  Well, I can't really speak to that with anything specific, because I do not have access to the sales ledgers.  But I would point out a few key points.  For starters, SWATCH has a fully owned subsidiary in the US.  So what that means is that actual sales are a bit dicier to quantify from the outside.  The single biggest problem with trying to gain anything "knowable" from the Swiss export numbers is the realities of the new Swissness regulations - SWATCH Group and all of the other big (and small) dogs still have a shit-ton of components that were manufactured under the old standards, and they need to assemble and export them by the end of the year.  It is July 29th, which when you factor in the holidays (which essentially start in the second week of December) it's essentially four months.  Because when the clock strikes midnight, quite a few watches will turn into wrist-bound pumpkins.  So if you are running these brands, you know that by that date everything must be out of Switzerland as any of the remaining stuff can't be used anymore.  It's safe to say that this definitely leads to higher export volumes which (if we are being honest about it) don't really match up with what the real market demand is.  As a friend who knows about these things pointed out to me, Hong Kong‘s wholesale is dead but the export figures to Hong Kong continue to explode.  
Un petit mystere, nes pas?

So let me venture a few theories -

Paul is Dead

Borrowed from the world-wide infoweb

People of a certain vintage will remember this one.  It got their  attention, people were talking, until...
 

Courtesy of Life Magazine

So, maybe this is a lot of bluster.  Essentially, make the announcement, and make the BaselWorld organizers jump to the height you are requiring.  Simply put?  With the current state of the watch business, I do not think that there are sufficient numbers of deep pocketed brands to fill the vacuum that will be created by the SWATCH group's absence.  So it is possible that a spirit of détente will be reached by both sides.  Keep in mind, we still aren't even to September, if Hayek can go from a yes to no for BaselWorld, he can go back to yes again.  Stranger things have happened.

But let's say that, in Hayek's mind, to quote the Dude (The Big Lebowski) quoting President Bush (the first):

"This aggression will not stand, man."

And maybe, just maybe, he feels that there truly has been a seismic shift in the watch business.   Well, maybe yes.  But given the vast amounts of cash thrown into pr and media things for SWATCH group brands, I don't completely buy everything he is selling.  Because after everything has been said and done, while Omega can certainly manage without BaselWorld, the less glamorous brands in the group actually really need to be seen. 

My gut tells me something different (and in fairness, it is possible that my gut has shit for brains) but let me air it out for you -
I think that the reality is somewhere in the middle.  BaselWorld is crazy expensive.  If the feeling was that the fair was failing and that it's expenses couldn't be justified?  Well they would have walked away a few years ago.  But more than just the fees for participation, a big component of BaselWorld is the cost of the actual booth itself.  You budget for them, and the cost is amortized over time.  And every several years?  You build a new one (or in the case of SWATCH group - several).  Now I do not know this as gospel, but just a theory - what if the cost of the booths (yes, that is plural) has been amortized and it can go off of the books?  Well, then you have a perfect opportunity to walk away.  At least for one year ; )

Why might that be important?  Well, let's get back to that whole export / Swissness bugaboo.  The analysts would have you believe that the watch industry is experiencing a comeback of heroic proportions.  But the truth is far muddier than that.  Exports are up, but that is not necessarily a corollary to strong sales.  In many cases, this is just products being shunted out of the Swiss borders and over to subsidiaries overseas.  If and when retail stores start crowing about their record breaking sales (which in fairness, all of us would be happy to see), it is a dubious notion to talk about recovery.  So keeping that in mind, it also stands to reason that the actual number of watches departing Switzerland after December 31st might be, well, smaller.  Meaning that in order to keep shareholders and the analysts sweet, you need to find savings.  And although numbers like CHF 50 million are bandied about for expenditures during BaselWeek, I suspect that they could, in fact, be higher.  So if your sales numbers slump due to smaller production and export, you might want to find money wherever you can.

On the other hand -
You could cut some of your budgets, don't spend the amounts of money to fly people in and out, close the cafe, etc.  Savings could be found.  But that might not really be the point of all of this.

So whether this is hard hearted pragmatism, or Kabuki theater for the goofy, time will tell.

What I've Learned

Despite some pretty dubious watch coverage (i.e. you pay, we'll cover you), I still really enjoy Esquire and I am a big fan of their "What I've Learned" interview segments.  So given some recent interactions I've had both in person and online, and considering that if I count back to when I first stepped behind the counter at Tourneau in San Francisco, I've been "in the game" for 15 years now, I thought it might be fun to put out my own "What I've Learned" piece.  So, gentle reader, here is some of what 
I've learned -

While it is true that Hayek saved the Swiss Watch industry, Jean-Claude Biver would have still kicked ass with Blancpain and would have lived happily ever after either way.

I was there before Hublot became what they would become.  
I am still here now that it is a somewhat bumbling PR gas factory that, apparently, also makes watches.  Although I know that I have the ability to highly irritate him, I have a great deal of respect for Jean-Claude Biver.  But now is the time to start thinking about legacy.  About what happens when he is no longer there.  Jean-Claude Biver is a very, very impressive man.  He has done some very amazing things. Here's hoping it doesn't get washed away.

When a brand manager or CEO asks you "How are you my friend?"  The translation of that is - "how you doing, asshole?"

Brand managers, CEOs, PR people?  By and large,they are not your friends.  Don't delude yourself to the contrary.  You might get lucky with a few - and I have, but the true friends will reveal themselves over time, and they are the ones you should always make time for at BaselWorld.


Having said all that - sometimes you will, despite your compulsion to serve up cold cups of coffee, find some true friends and supporters in some very unexpected places.

You will learn to see when people are genuine.  Hold onto those people like a non-treatable social disease.  They have every reason to dislike you based on what you write or say, and yet they are your audience.  And they are your friends indeed.

Rich, famous, important people - are a lot less interesting when you finally meet them.

Little known piece of Henki lore, my father was a country club manager.  Translation?  He worked so that the more well-heeled could play.  I worked in the locker room of the club, my first job working as a shoe shine guy.  Believe it or not, in the 70s and 80s, there was an actual industry based upon shining the shoes of rich people while they walked around a park-like environment, drinking beer and whacking small white balls.  Rich people, famous people?  They are people.  George Steinbrenner was a titan of industry and master manipulator.  I can tell you from personal experience, his shoes smelled just as awful as an orthodontist, dermatologist or mid-level auto executive's.   The one thing all four of these guys had in common?  They were shitty tippers.

I have met some of the big swinging dicks of the industry.  It is all too often underwhelming.

When anyone tells you how amazing you are and how "just as soon as you take advertising, we're in!"  this person should be taken with about as much seriousness as you would take the drunk person asking for $3 on the commuter train so that they can "buy a healthy snack".

We all say a lot of highly dubious stuff when we've been drinking.  That's why your wife/husband/partner learns over the years to apply the bullshit filter.  Make sure you do the same, it will spare you a fair amount of heartache.

When you have made it clear by your actions, your writing, and your passion that you are predisposed to write nice things about a brand, and said brand treats you with a fair amount of indifference?  Take it on the heel and toe.  Love needs to be reciprocal.

I am still somewhat miffed by my interaction with a certain member of the SWATCH group.  I gave up a Thanksgiving holiday, spent several hundred dollars of my own money to interview their CEO, and then watched as the outlet that they were on retainer with got so-called "exclusives", review opportunities, etc., and I got the cold shoulder.   To this day, I have no doubt that the North American brand manager of SWATCH GROUP brand X just thinks that I am a difficult person.  But in fairness?  If someone is willing to give you so much for NOTHING?  You can spare a little time and a little effort.  And for what it's worth?  In speaking with retail partners of SWATCH GROUP brand X, they are not exactly selling like the waffle's sexier cousin - the hotcake.

Brands are made up of people.  The brand does not exist without the people.  If a brand has good people - I will do ALL that I can.  If a brand has people that just don't care?  Why should I care about them?

I get the odd comment - "I thought you were a fan of Brand A".  Well, I have come to learn that brands are made of people.  It's not as if the founders of Girard-Perregaux are going to make a special appearance in the physical world to tour me around the factory.  The brand?  The brand is the people who work there.  So put it in another context - do you like spending time with people who treat you poorly?  Of course you don't.  Molly Ringwald's entire career was based on this notion.  A watch is an inanimate object.  It can't speak for itself.  A brand is not simply products.  A brand is the people who make those products, and share that message.  

Brand ambassadors are about as worthwhile as what you wipe your backside with.

There is a reason why Hitler, Stalin and Pol Pot are not mentioned as customers of Brand X.  

Churchill, Napoleon, Lindbergh?  All flawed, all now "ambassadors" from the great beyond.  Well, they won, didn't they? They were all flawed, all had baggage. But they are a whole lot more palatable. 

Question - do you think that the Mario Batali Ernst Benz is a big seller right now?  

Sorry, too soon? 

A brand ambassador will not be there with you when they turn out the lights.  A former brand that was "ALL IN" can attest to that.

Remember everyone you meet when times are good.  You will see them again on your way back down.  

It is inevitable to fail.  The trick is not to make a habit of it.  More importantly?  Don't be a jackass when times are good.  Sooner or later, it is likely you will fail.  By and large, most of us want to help people and offer our support.  That is, of course, presuming that person behaved, well, like a person when times were good ; )

Don't fake the funk 

Because in the immortal words of that other great commentator on the watch industry Daryl Dawkins:
“When everything is said and done there is nothing left to do or say.”  

Just When You Thought It Was Safe...

to look at the export numbers again...

Courtesy of the FH

Talk about a kick in the dick.  These are the latest figures courtesy of the FH, and despite the codswallop the BaselWorld Fair organizers would like to shovel down your throats, the future's so bright you have to ... wear a raincoat and carry an umbrella.  We are now truly south of -10%!

And this is truly tough for watch executives who are unfamiliar with the philosophies of failure -



So being charitable, that is only a 4% decrease since last year...

But, and it's a big but, so let me tell you about my big but...

This is a SHIT-TON of money.  And  this is just not the Hayek's money, not just Biver's money, not just Rupert's money... this is a family's money, a teacher's retirement pension fund's money.  In other words?  People who deserve a bit more attention and care rather than another America's Cup sponsorship!

You know that watch maker who didn't start his own brand?  Right now he and his family are eating cup noodle because, well, apparently millions of dollars flushed down the sink-hole of vanity was a much better investment than salaries.  And why hold the CEO accountable when it is easier to make staff redundant?

In a way, it is strangely appropriate that this result came out mid-BaselWorld.  A BaselWorld that many of us have named Denial 2.0

So, I am sorry to be one of the few dissenting voices.  But all is not well.

So let's hope that this is the bottom, but I fear it is not.  So maybe stop the bullshit, and start dealing with the problems.

The House of Hayek...

Might about to be plundered.

A few others closer to the situation in Biel/Bienne have already commented in greater depth and detail, but something a wee-bit unusual was taking place in Hayek-Land yesterday.  Per Business Montres the share price had been up as much as 5% before trading closed.  But more interesting was what Business Montres reported as an increase in trade volume of 77%. 

The value of pretty much any watch brand right now is questionable, so for the small, individual investor you might be better off sticking your money in your mattress or under the floorboards.  I am no economist, but I have a difficult time believing that a large number of individuals would suddenly decide to purchase shares in SWATCH Group (or frankly any watch group) right now.  The sales continue to be poor, more brands and suppliers are on the cusp of insolvency, and it does not show any real sign of improvement.  For the individual investor it would be as sensible as taking bundles of cash and flushing them down the toilet.

But as I might have mentioned last night, what if there were some sort of "nudge" operating within the watch industry advising some major investment firms who DO NOT normally invest in things like the watch industry that perhaps, maybe, now might be the time?  This could not be some anonymous analyst sitting in the bowels of a Swiss bank.  No, this would be someone well-known, well-connected, someone whose voice would carry some weight and veracity when speaking with friends in Texas or the Silicon Valley.  Moreover someone that the investment firms could turn to to shepherd a transition.  Someone who has proven themselves, been around the block.  To quote a colleague, someone who did not magically achieve their position as a result of being born out of the same gene pool as the boss.

A few of us have our theories as to who this might be,  and for now they remain just that - theories.  And maybe, just maybe this is all a strange coincidence and those of us who have been kicking this theory around are merely looking for a story that isn't there.

Yes, a coincidence.

But the older I get, the less I believe in coincidence.

Mido, and Letting Go

So, regular readers will know that I have waxed poetic, and (in my own mind) even lyrical about Mido.  An emotional attachment is one that is oftentimes difficult to understand and even harder to explain to others.  In less than a year I have had the opportunity to visit Mido HQ, personally interview the CEO (very nice guy, by the way), and get a FANTASTIC presentation from a truly gifted PR person working there.

Sadly, this does not always transmit across the boards, or even across the Atlantic.  And I think this is where we get down to the "social contract" of social media.  As Guy Kawasaki proved, there is no better ambassador than an evangelist.  And there is no bigger waste of time and money than mindless marketing.  Mido has a lot of great evangelical ambassadors out there.  No, not a former Miami Hurricane, not a future Heisman Trophy winner (Marcus Mariota excluded).  Bottom line, not someone that is being paid or gifted to wear a watch for a "grip and grin".  Simply someone with a Mido story to share.  And there are thousands out there.

Time, inevitably, moves forward.  What made a brand great (at least in your mind) several years ago might not be what makes it great today.  And in fairness, the SWATCH Group is not a "mom and pop" business (although that might seem hard to believe as the name Hayek ensures a certain level of employment).  Omega, Blancpain and Breguet have enough latitude and marketing budget to be romantic.  But romance in and of itself does not sell watches.  

I will always have fond memories of Mido and my father's watch.  But as Barry Hearn said, life moves forward.  An evangelist has certain unreasonable expectations.  And it seems that now is the time to let those expectations go.  What spirit and uniqueness I might have felt about Mido were from a Mido of another era.  If I am honest , I am a lot more interested in the watches that Mido makes, I do not give a monkey's about football partnership.  My feelings for Mido are, to me at least, reminiscent of that first torrid love affair.  You say and do things that you wouldn't normally do.  And then after the break-up, once the dust has settled, and a few years on and you see the former object of your affections in the light of time's passage, you realize that the love that you felt was perhaps real, but in hindsight maybe it ended the way it did for a reason.

90 Days with the Withings Activité Pop

This is going to be a different sort of review.  I had reached out to several of the brands who have already released connected/smart watches - but nobody responded to my request for a review.  So in the end I went out and purchased a Withings Activité Pop to conduct a 90 day review.

Without going into too much detail, a few months ago I personally experienced a bit of a neurological scare. Everything now appears to be okay, but as someone reaching what has been kindly referred to by others as "a certain age" I took this as an opportunity to focus my energies on a healthier approach, more sleep, increased activity, and with a move to the Boston area on the cards and a pursuit of activities in addition to cycling that will help better wire the brain to the body (tai chi), etc., this seemed like the perfect chance to put the promise of a connected watch to the test. And 90 days seems like a fair amount of time to get a real feel for how the connected watch will really perform and how it will (hopefully) positively impact my health.

So for the next 90 days, I will be channeling the spirit of the Hayek men wearing a watch on each wrist - a mechanical on the left, the Activité Pop on the right. I will provide an update every 10 days so that you will have 9 installments a final review 90 days from tomorrow.

90 Days with the Withings Activité Pop starts now.

A "Smart Watch" that's Actually Smart

Okay pals and gals, there's been tons of talk about the "smart watch".  Some of it informed, some of it not so much.

Courtesy of Frederique Constant

This past Thursday evening, I had the opportunity to get a glimpse at a new platform for smart watches that just might have the opportunity to offer something that is actually, well, smart.

Courtesy of Frederique Constant

A little background - Peter Stas started thinking about creating a smart watch, and it was not really based on the "iPhone for the wrist".  He reached out to Philippe Kahn the CEO of Fullpower Technologies, who's "greatest hits" includes the invention of the camera phone.  In his "pitch" to Mr. Kahn, Mr. Stas set forth a very basic, very simple brief in terms of what would be wanted, needed and expected for this project.  The end result had to be a watch that:

1.  Had a minimum of 2+ years of batter life - just like current quartz watches.  The biggest challenge the raft of new smart watches faces is the need to re-charge the watch on a nightly basis.

2.  Could be termed as "Always on Time" - with the correct date as well to account for February and leap year, etc.

3.  Had a so-called "automatic cross timezone adjustment".  Meaning that just like your smart phone adjusts when you turn it on after landing in a new timezone, the watch would do the same thing.

4.  That it would not be chained to a single platform of smart phone - so this will work with both iOS and Android.

5.  That it offers a functionality that was referred to as "Quantified Self".  Now granted, this event did take place just across the bay from "The People's Republic of Berkeley", but this is not a new-age thing.  It is actually taking some of the most popular apps that people use in their daily lives to help promote better health.  The Quantified Self feature (at least in the pieces that were previewed) will monitor and track your sleep and evaluate it.  Think that sounds silly?  Well, you may think so but there are too many people out there using sleep analytic apps on their phones and tablets to dismiss it.  I personally would use this feature.  In addition it tracks physical activity not unlike a Fitbit.  

And I think we can all agree that this is an insanely popular item.  These are the first two pieces of "smart technology", and it is based on sane, rational market analysis.  If there are millions of Fitbits shipping as I write this, I think it is safe to say that this is technology that people want to have and presently use.

6.  A long term road map.  To paraphrase Mr. Stas's comments - we don't really know where the hell the future is going to take us, so it is important to establish a logical baseline, but then be ready to grow and evolve as the technology advances.

7.  "Eternal Beauty" - essentially to stay true to the traditional watch design, but one that can be updated and not need to be discarded after just a few years.

8.  Modular Electronics Always Updated - essentially that your MMT equipped smart watch will not become an ironic relic in a few years' time.  Much of the updating can take place virtually via cloud technology.  But also that the electronic components "under the hood" are modular, and therefore easily serviceable and replaceable.  Think that's no big deal?  Try getting your OMEGA watch serviced through OMEGA authorized service.  And that's just the time involved, think about those Texas Instruments watches from the 70s.  I had one of the first ones available.  It "lived" for about 2 weeks.  My father sent it for repair, and a brand new one was sent, which promptly died.  I have no idea what my grandfather paid for it, but suffice it to say that based on that experience my father stuck to his Mido.  Electronics and quartz technology have improved dramatically since those dark days.  But I couldn't help but think back upon that disappointing experience when Apple debuted their smart watch.  It is too much, more than you will ever use.  iWatch owners will not abandon their iPhone, or iPad for the watch.  But they will abandon their iWatch out of obsolescence.  But with the MMT platform, your beautiful timepiece will always be just that.  the "guts" will be the parts that if they become outdated will be replaced as part of a normal service interval.

Based upon these 8 requirements, a collaboration was born between Fullpower and what would come to be known as Union Horlogere Holdings began.  The result is the Manufacture Modules Technologies (MMT) platform.  And this is where it becomes interesting.  This is NOT an item just for Frederique Constant and Alpina.  It is a platform that will be made available to the watch making world at large.

Courtesy of Alpina

To that end both Frederique Constant and Alpina will be releasing watches with this technology.  In addition, the first "external"partner was announced - Mondaine.  Word around the campfire is that there will be more brand partnerships announced at BaselWorld.  

Courtesy of Alpina

Point of full disclosure - I am not a "tech" guy.  I still have a Filofax and always have a pen at the ready.  But I honestly feel that of all the smart watch ideas that have been floated so far, this one actually seems to be something that is practical and useful.  And the fact that this is intended to be a platform, it strips away the "one and done" problem that so many brands rushing to put out a smart watch will encounter.  I think that by making a "less is more" smart watch, Mr. Stas has reminded us of why he and Ms. Stas had so much success in breaking into the Swiss watch world where so many have failed before.   They picked an idea, they kept it simple, and they made sure it was adaptable.

For those of you out there crying foul, saying that this is a "bastardization" of a watch, consider some very salient points regarding the watch industry as a whole.  Per Mr. Stas's comments - there is currently a production annually of about 28 million watches.  60% of the world's total production takes place in Switzerland.  21 million of those watches are quartz.  So think about just that topic for a moment.  Despite what some dyed-in-the-wool, self-appointed experts will tell you - that it was mechanical watches that saved the Swiss industry, if we are being truly honest it was the SWATCH watch and the arrival of Mr. Hayek the Elder on the scene.  It was stripping away all of the many tiers and layers of the antiquated Swiss industry and simplifying it that saved the industry.  It was rationally adapting to the reality of quartz and learning to produce quartz pieces at competitive, rational prices that saved the industry.  

I personally do not think that mechanical watches will die, and I certainly don't believe that quartz watches will vanish.  And I would be less than forthcoming if I did not say that I think that the Apple Watch will be a player, but one that is tapping a completely different market.  The Apple Watch customer is not someone who will even care about these new MMT equipped watches.  That is the reality of the market place.

But I do think that in the same way that "team Stas" realized that there was an opportunity in the market for "affordable luxury", it seems that they have really looked into the smart watch market in a logical, pragmatic way and produced a smart watch that is actually SMART.

As with all new things, time will tell.

Here are the specs direct from Frederique Constant -

FREDERIQUE CONSTANT AND ALPINA

ANNOUNCE THE SWISS HOROLOGICAL SMARTWATCH,

POWERED BY MotionX®

The Horological Smartwatch: the bridge between Silicon Valley and the Swiss watch industry

Powered by MotionX®, the Swiss Horological Smartwatches are capable of bi-directional communication with iPhone and Android apps. The Swiss Horological Smartwatch is the synthesis of high-tech innovation and traditional Swiss watch craftsmanship; it is the link (no pun intended) between modern and classic, and the bridge between Silicon Valley and Switzerland. There is no digital screen on the Swiss Horological Smartwatch. Instead, the beautiful laser cut hands on the watch dial display information in analog form. The Swiss Horological Smartwatches retain their natural classic beauty and can deliver the benefits of the quantified self, all without ever having to recharge a battery.

The first Swiss Horological Smartwatches will support the following functionality:

- Always-on time & date

- MotionX® activity tracking

- Sleeptracker® sleep monitoring

- Sleep cycle alarms

- Get-Active alerts

- Adaptive coaching

- 2+ years battery life

- MotionX® cloud backup and restore

The beautiful Swiss watch that you love to wear that is now smart and connected, powered by MotionX®

The MotionX patented sensor-fusion engine tracks activity and sleep patterns with high accuracy. Activity and sleep information is presented in real-time on the Swiss Horological Smartwatch using beautiful traditional analog dials. The Swiss Horological Smartwatch synchronizes automatically with applications on Apple and Android smartphones. On the iOS and Android apps, simple and easy-to-understand graphics highlight how much one has moved and slept during the day, week, or month. This data will assist users to better understanding themselves, and along with appropriate goal setting and intelligent coaching, will improve their well being. Better sleep and a more active lifestyle are widely recognized as simple, but effective, positive behavioral changes. The Swiss Horological Smartwatch now combines the features and functionality of the MotionX® technology platform with a luxury timepiece.

MMT

MMT (Manufacture Modules Technologies Sàrl) is a new Swiss joint venture formed by Fullpower Technologies, Inc. of Silicon Valley and the owners of the Frederique Constant Group. Its mission is to bring the MotionX-365® Horological Smartwatch Open Platform to the Swiss watch industry. Fullpower creates and licenses the schematic design, firmware, smartphone applications, and cloud infrastructure to MMT. MMT manages the development and production of Swiss watch movements (also referred to as modules) incorporating Fullpower’s technology, and licenses, and provides support for, the MotionX-365® Horological Smartwatch Platform to the Swiss watch industry. MMT’s headquarters are in Geneva.

Peter Stas quote: “We love working with Philippe Kahn and his team, their approach to technology craftsmanship very much matches our company culture. Our intense collaboration and combined strengths have enabled us to realize the super exciting Swiss Horological Smartwatch today, and will lead to so much more that is still to come. The Swiss Horological Smartwatches released today truly show the strength of our partnership.”

Philippe Kahn quote: “We looked for innovative partners in the Swiss watch industry to collaborate with. Peter’s efforts to develop his own high caliber product were unprecedented, so we immediately clicked and went to work to help reinvent the Swiss watch industry.”

Frederique Constant and Alpina will launch 10+ different Horological Smartwatch models in 2015 in styles for both ladies and gentlemen.

MMT’s initial partners are Frederique Constant, the Geneva based luxury watch manufacturer of classical watches; and Alpina, the Swiss sports watch manufacturer founded in 1883. These leading brands will offer 10+ different models in designer collections for both ladies and gentlemen, powered by MMT’s MotionX® technology platform, delivering 24/7 MotionX® activity tracking and sleep monitoring, with over two years battery life, and compatible with Apple and Android smartphones worldwide. Swiss Horological Smartwatch in styles for both ladies and gentlemen will be available in stores worldwide starting in June 2015.