What I've Learned - The 10th Anniversary Edition

So irony of ironies, the 10th Anniversary of Tempus Fugit arrived while I was busy writing grant proposals and ironing out budgeting issues at my day job! But I have had some time to think about this one, and as the odometer has officially flipped on ten years, here we go -

What I've Learned Covering the Watch Business:

The Real Meaning of Friend of the BRAND -
There really is no such thing. You might be a friend of a sales rep, you might be a friend of the marketing folks, but there is no relationship with the brand other than the one you ascribe in your own mind. Friend of the Brand gets bandied around by pr agency representatives as a palliative to make you not feel like such a loser while you are forced to wait beyond your appointment time in the reception area while someone from one of the bigger outlets is enjoying sushi with the CEO and head of PR in the big room. Don't get me wrong, I have made some very good friends in the business who I am still in touch with after they've moved on to other brands and even to other industries. But you will learn, in time, that the majority of relationships you have with brands are transactional. Keep that in mind, and you'll never be disappointed.

The REVOLUTION is, for the most part, over -
Ultimately, there is not a lot left to be discovered. Let me re-phrase that so I don't sound like such a "Henki-Raincloud". What I mean is that the days of wonder and amazement have probably gone the way of the rock-star CEO. There was only one Ludwig Oechslin, and without Rolf Schnyder to partner with him and coax out the Freak, or the Trilogy of Time he is the part owner of ochs und junior.  Nothing wrong with that, but while it would be wonderful to have him come back with another extreme complication, it does not seem highly likely. The Corum Bubble has not necessarily burst, but a lot of the air has been let out of it. The Big Bang has seen its day, and AP can only make so many reiterations of the Royal Oak.


A Cult of Personality might work in North Korea, but not so much in the watch business -
On the real side, Blancpain could not have been done by anyone other than Biver. And in fairness, Hublot went as far as he could carry it on his back. But even the sheer force of will that Biver brought to bear on Zenith could not really turn the tide. Inevitably, in the words of that other great commentator on watches, Chuck Yeager as played by Sam Shepard in The Right Stuff -
"Sometimes you get a pooch that can't be screwed, ya know?"

I guess my point is this - you don't really see Thierry Stern or Jean-Frederic Dufour mugging with "celebrity chums" at movie premieres and red velvet rope events. For a brand to really truly endure, it has to be more than just the face of the current boss. Patek and Rolex will continue to be here, continue to set the tone for everyone else. Zenith, among others, needs to resolve its revolving identity crisis, make a decision about who and what they are, and stick with it for more than 6 months at a time.

"My Friend" is still not so subtle code for "You Asshole" -
I still stand by this, and after more than 10 years my belief in this reality is stronger than ever.

Sincere gratitude is scarcer than a NIB vintage Daytona -
1. If you are writing for pay? Make sure you get paid.
2. If you are writing for personal pleasure and satisfaction? Then only you can provide that for yourself.
3. If you are writing with the hopes of praise and thanks? Refer back to points 1 and 2 or cease and desist.

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

Little known bit 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 those worn by 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 frustration and disappointment.

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

I find it ironic looking back that the first brand I ever wrote about here was NOMOS, and that last year they invited me on a press trip, assured me it was arranged, and then when I wrote to follow-up 3 weeks prior to the travel date, I was informed that I was "uninvited", no explanation, and some bullshit about the trip being "overbooked", which was false as at least one invitee had declined the invitation and I knew that they were scrambling to fill the space - apparently (and specifically) not with me ; )
Well then, NOMOS, fuck you very much.

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 and escort you out of your now former office. 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.”

Because it's Easy to Run 2 Brands!

As I sit and write this morning, I am reflecting on a conversation I had with Wendy last night.  Over the course of the past week, three brands repeated classic mistakes that they (and others) have made before, and yet continue to make them because they convince themselves that somehow, this time will be different!

The announcement has seeped out to Salem's Witchcraft Heights and finally over to Tempus Fugit HQ - 
the shot-callers at Kering have decided that the current head of Ulysse Nardin should now also take over Girard-Perregaux.  Now this is not really news.  And in fairness, I have held off on comment.  But the more people that I spoke with, the more I thought about it, the more I have come to believe that we are seeing the same sort of reactive (i.e. not proactive) thinking that (particularly) the Swiss industry has been stumbling around with for the recent past.

I am now firmly to the point where I don't know if these "double CEOs" are the result of careful decision making, or knee-jerk reaction.  It also sheds some very serious light on the real health of the watch industry.  If everything is as rosy as the export numbers would have us believe, then Kering wouldn't feel the need to bootstrap their executive functions in the watch industry.

But I've also noticed another shift, the business now is becoming less and less about the "personalities" running the brands.  On the one hand, this is good because it focuses us back more firmly on the viability of the product itself.  

On the other hand?  It lays bare the industry's refusal to evolve.  It is clear that many of the structures, decision making paradigms and, yes, attitudes are straight from the late 70s.  And we all know where that led us.

But back to the man of the hour, courtesy of Kering's announcement -

Kering has appointed Patrick Pruniaux, current Chief Executive Officer of Ulysse Nardin, as the new CEO of Girard-Perregaux. From today, he will manage the Group’s Swiss luxury watchmaking Maisons, within the Watches & Jewelry Activities. Patrick Pruniaux will report, as previously, to Albert Bensoussan, Chief Executive Officer of the Watches & Jewelry Activities of Kering.

 

Today’s luxury watchmaking sector is known for its accelerating product cycles, the increasingly global nature of its customers and the transformation of their expectations, both in terms of e-commerce and digital interactions. Patrick Pruniaux’s role will be to devise a coherent strategy for accelerating the development of the two Maisons in international markets, while at the same time maintaining their unique characteristics, their ability to innovate, and the excellence of their know-how.

 

Patrick Pruniaux has spent more than 20 years in the FMCG and Luxury industries, and in the watchmaking sector in particular. He spent nine years at TAG Heuer and several years at Apple, where he worked on the launch of the Apple watch before becoming MD of Apple in the UK and Ireland.

 

 

Albert Bensoussan, Chief Executive Officer of the Watches & Jewelry Activities of Kering, said: “I am delighted to give Patrick Pruniaux the mission of increasing the awareness and accelerating the growth of the Kering Group’s two iconic Swiss watchmaking Maisons. The dynamism he has shown over the past year as head of Ulysse Nardin convinced me that he was the best person to develop these two brands, and to capitalize on their respective identities, heritages and technological know-how.”

It is clear that Mr. Pruniaux didn't just fall off the turnip truck, and it is also evident that with his experience at Apple, he is prepared to "think different" (sorry, couldn't resist).  And if GP and UN continue to fester, in fairness?  I wouldn't hang the blame on him.  
We are (at least some of us) starting to realize that even during the last massive downturn, we were living in a gilded age.  Ultimately the brands will have to figure out what made them tick, and see if the magic can be recaptured.  But for the brands that were so dependent upon a cult of personality to drive them (and I say this with respect, not disdain), they will have to discover ways to make their watches attractive to actual customers without the help of celebrity CEOs and watch makers.  For UN the dynamic duo of  Ludwig Oechslin and Rolf Schnyder have left the building, and for GP the last connection to the romantic past of the family Macaluso is now living the life of a romantic poet/traveler/rally car driver.  

So some new magic will need to be found, because as that other great commentator on the watch industry, Slim Charles, would remind us:

 

The Marine Torpilleur

From Ulysse Nardin -

Available in three different versions:

Courtesy of Ulysse Nardin

A 42 mm stainless-steel Marine Torpilleur with a white dial.

Courtesy of Ulysse Nardin

 A blue dial with stainless bracelet.

Courtesy of Ulysse Nardin

And a 42 mm 18 kt rose gold model.

Here are the pertinents, straight form the source -

Movement

caliber UN-118, 13 3⁄4‘’’
In-house designed movement
Escapement, patented DIAMonSIL
Oscillator: patented inertial balance wheel I 10 with silicium hairspring

Power Reserve

approximately 60 hours

Winding

self-winding

Functions

chronometer COSC with power reserve indicator at 12 o’clock small direct seconds and round date window at 6 o’clock forward and backward date corrector

Case
18 kt rose gold or stainless steel

Bezel
fluted, 18 kt rose gold or stainless steel

Dial
white or blue with roman numerals

Crown
screw down security crown 

Diameter
42 mm

Water-resistance
50 m

Crystal 
anti-reflective sapphire crystal

Case-back
open case-back with sapphire crystal

Strap
leather strap with folding buckle or stainless steel bracelet

Revisiting the UN Sale Nearly Two Years Later

This is now coming up on two years.  And very little that should have changed has changed.  The US offices have cleaned house once again, a former Richemont loyalist has been brought into the frame with very few impressions made so far.  In fairness, he has only been in the saddle for a few months so the hope is that he will survive longer than his rather rapacious predecessor.  

Mr. Calce is still atop his throne, ruling over his fiefdom, but that fiefdom is shrinking as he fired most of the vassals.  Sorta' hard to run a fiefdom without vassals ; )  

If JEANRICHARD is not dead, we are clearly in a "Waiting for Godot" phase that seems set to drag on for the next several years.  

And Ulysse Nardin seems to be no closer to solving their own conundrum, yet free spending on luxury events and sponsorships.  Laid off staff always get a warm and fuzzy feeling when they see the latest spread about their former employer's excess while they are collecting their unemployment benefits.  

When times are tough, you have to dig into the fridge and eat leftovers.  So let's reheat this one -

Revisiting the UN Sale a Year Later

I originally wrote this a little over a year ago when the sale of Ulysse Nardin was announced.  Now a year on, and things not quite as rosy as might be wished for, I wanted to look back and see how things have changed (and haven't).

"I look at a hundred deals a day. I pick one."

So now with most of the dust settled and the press releases read, re-read, written and re-written maybe it might be a good time to have a look at the bigger picture.

Now many more revered and respected have held forth, many insisting that they saw the acquisition of Ulysse Nardin coming "a mile away!"  Well, hindsight by its very nature is often 20/20.  So I thought I would call on that all-time humanitarian Gordon Gekko to perhaps view this in a slightly more pragmatic light.


 "He's right, I had to sell. The key to the game is your capital reserves, If you haven't got enough, you can't piss in the tall weeds with the big dogs."

I think in light of all of the speculation, the one question I have not really heard asked is - maybe, just maybe they actually NEEDED to sell?  Ulysse Nardin was a media darling in the age of Schnyder, and by that I mean the age of Rolf Schnyder.  Like every brand re-boot, (and if we are very, very honest with ourselves, this is what it was) a charismatic, iconoclastic visionary is needed.  But that in and of itself is not enough (note Blancpain and Hublot in the "post Biver as Patron" era).  You need something more.  The meeting of Schnyder and Ludwig Oechlsin was perhaps not unlike the meeting of Smith and Wesson… or perhaps more appropriately the meeting of Lorenzo de' Medici and Michelangelo.  Two things happened that took the steam out of UN's engine - Dr. Oechslin opted to pursue a life of the mind and "museum curatorship", and tragically, Rolf Schnyder had a "standing appointment" with his creator.  As it is a privately held company, we can speculate all that we want, but if I am viewing things through "Gekko The Great's" perspective, they needed to sell.  And it is possible that maybe there weren't that many takers, so they took.

And in fact, that perhaps still seems to be the case.  What is interesting in all of this is that with the acquisition of UN, Kering has basically put JEANRICHARD on an ice floe to join it's ancestors in the great beyond.

UPDATE - the ice floe has been melted by economic global warming, and JEANRICHARD may or may not have been eaten by hungry polar bears.  Stay tuned.

"It's not bad for a quant, but that's a dog with different fleas."

The other popular thought out there is that there was a bidding war and that somehow Richemont, LVMH and the mighty SWATCH got pipped at the post by Kering.  Survey says……. NAAAAHHHHH!

The Ulysse-Nardin that got sold is not the Ulysse-Nardin that was.  Moreover, it is not on a level with some of the recent blockbuster acquisitions like Harry Winston.  It is a great brand, but it represents a truly niche market.  SWATCH does not want or need a charming brand like UN.  Richemont has a fairly full stable.  LVMH?  Well let's just say that although there is turmoil under heaven, the situation is not exactly excellent.  

Again, with the "leaked" (allegedly) news that Maurice Lacroix was looking for a buyer, and a lack of companies STAMPEDING to buy it, my bet is that UN was probably NOT exactly fought over.  

UPDATE - It seems that while Maurice Lacroix was "just kidding" about looking for a buyer, Glycine (also in the DKSH stable) has now been set adrift on an ice floe of its own.  If they aren't dead, they are certainly giving the public at large the undeniable impression that they are.  But one bright glimmer this year was the recent sale of Frederique Constant / Alpina / Ateliers Demonaco.  As Lou Mannheim reminded us in Wall Street - 
"Stick to the fundamentals. That's how IBM and Hilton were built. Good things, sometimes, take time."

"The most valuable commodity I know of, is information"

But more importantly is what Ulysse-Nardin represents - information and innovation.  With Unlysse-Nardin backing what is said to be up to 1/3 of ochs und junior (Ludwig Oechslin's dream factory), and with Dr. Oechslin said to be retiring from the museum, it is not outside of the realm of possibility that the magic could be returning to UN.  Let's be clear, ochs und junior is most likely never going to be a profit leader, (and if what Beat Weinmann has said, it is not intended to be).  But let's just say it is an inexpensive item to carry on the balance sheet to keep the sorcerer in the court.

And, well, it seems the writing might indeed be on the wall.  Let's hope for watch fans and for UN's profitability that there will be some more Oechslin magic.  

UPDATE:  Elvis, or Dr. Oechslin has left the building.  Now, it is entirely possible that he may come back, and then again, maybe not.  What really made Ulysse Nardin special was NOT sponsoring yachts, champagne fueled events or the current shitty sales numbers ; )  What made Ulysse Nardin special was Mr. Schnyder and Dr. Oechslin.  One of them is no longer with us, the other seems to be otherwise engaged.  Again - maybe that is changing, but it does not appear to be the case at the moment.  When you build a brand on personalities and one remarkable watch maker, there can be quite a void when one is gone and the other is not creating new pieces for you.

"You gonna tell me the difference between this guy and that guy is luck?"

Remember pals and gals, although we always think of Kering as the OWNER of Girard-Perregaux and JEANRICHARD - they are more accurately the majority stake holder with 51%.  So the fact that they have plumped for 100% of Ulysse-Nardin actually gives them a better, unfettered toehold in the luxury watch segment.  And it is not down to luck that they were the eventual buyers.  

Don't get me wrong, UN is going to be a project, but with the experience of working with Girard-Perregaux and completely revamping and "re-birthing" JEANRICHARD, Kering now has some good experience with updating and reviving an existing brand while not "throwing out the brand DNA with the bathwater".

And by putting a pillow over JEANRICHARD's sleeping face and smothering it, Kering has all but ensured more resources can now flow in the the UN budget sheets. 

UPDATE - Because sales still, well, SUCK, people are getting pink slips, and there does not seem to be much relief in sight.

"...bright but not bright enough,  Sherlock, roll the dice and play a little Monopoly… what box would Sir Lawrence land on in Erie, Pennsylvania?"

Those out there convinced that Richard Mille is next on the acquisitions list… maybe, but I don't think so.  Let's just say that there are too many hurdles.  Richard Mille first leaked that the acquisition would happen, and Kering (then PPR) disclosed that although those conversations had happened, it would not move forward until Mille untangled "personal affairs".  That was more than a year ago.  And it is possible that Kering spent most of it's pocket money on UN.

Nobody has bitten on much of anything - although DKSH is keen to "offload" their two brands and who knows, maybe even their share in Bovet.  I could be wrong, but given the general mood out there, the lack of Full Retail Buyers, the number of grey market watches sloshing around the "info-web", and the ever increasing number of calls and emails I am getting from brand reps, brand managers looking for an opportunity, and the brands those managers and reps work for calling and looking for new talent, I don't get the sense that anyone is in a mood to acquire.  BUT, and it's a big BUT - this could also be the moment when changes of ownership will happen.  Things will get so clearly bad that a fire sale might seem like the only solution.  And even though things aren't great out there, maybe some folks in China have been saving their allowance, Christmas and birthday money and are ready to swoop in.  

UPDATE - As previously mentioned, only one major shift this year and it was NOT for the two brands who went out to shake their "money-makers" in hopes of landing a deal.

Other pundits have posited Breitling, Chopard among others as being on the potential hit list.  Maybe, but instead of thinking high prestige, it might be time for Kering to think high volume.  Maybe, say, a brand making watches in the Mido price range? 

I could, of course, be wrong - I've been wrong before ; )

Finally, let's remember that although we are all passionate, for many people this is simply business -


It's all about bucks, kid. The rest is conversation.

Ultimately, this is the unknown territory we find ourselves in.  In the great "quartz crisis" it was all about technology and the somewhat stoic belief that to change was unthinkable so it would be better to die.

Thankfully an engineer/consultant was willing to suggest change and in changing rescue the Swiss industry, and a man who as a boy loved his steam machine was willing to roll the dice that there were others out there like him, and more than anyone else saved and helped to reestablish mechanical watch making.

We who write about this stuff are always asking ourselves - who is the next Hayek, the next Biver, the next Macaluso or Stas?  It seems unfair because these guys were (and are) giants.  Those that follow will struggle to step out of those shadows.  But in fairness, those that follow need to do more than just follow.  They need to actually lead.  And when you've been groomed and guided and mentored, it is hard to establish your own point of view.  Moreover, it can be daunting to voice an opinion that might be contradictory.

I would like to leave you with a bit of a "parable" -

Back before longitude was "knowable", it was not uncommon for groups of ships to sail together.  And as you can well imagine, you would not dare make your own changes or alter course without the consent of the Admiral.  As oftentimes the Admiral was on a different ship, communication back and forth would be slow and confused. Moreover, the communication could often be misunderstood in transmission.  

What we are seeing now, for better or worse, is that brand directors, managers and sales reps are not unlike those captains and midshipmen of years gone past.  They see that they are heading for the rocks, but are afraid to voice concern and change course.  Thus not just one ship is lost on the rocks, but several.

Sponsoring sailing teams, appointing DJs as brand ambassadors - these money splurges are not going to save your brand from ignoring the fundamentals of ANY business - be it your kid's lemonade stand or Boeing.  It boils down to a pretty basic idea of supply and demand.  With the exception of Rolex and Patek, nobody else in the watch world seems to have an understanding of:

1.  How many potential customers there REALLY are, and -

2.  How many of those potential customers will REALLY be willing to buy their watch at the price they are asking

Once we get that figured out, on to world peace!

Well, as we learned with Paris, Brussels, Orlando and unruly Russian and English football fans, we have not managed world peace, and the perceived value of brands like UN and GP is dropping faster than a football's air pressure at a New England Patriot's game.  So with the next results for Swiss watch exports due next week, we will all try to tread water a little bit longer.  But let's keep one thing in mind, sometimes a company starts to tank even after things had been good for a long time.  And what separates the "Champs" from the "Chumps" is the ability to see that your game plan is NOT working, and make the necessary adjustments.  Unfortunately, for many CEOs if it is a case of laying people off, or hosting fancy parties... well, there's always work at the post office...

Revisiting the UN Sale a Year Later

I originally wrote this a little over a year ago when the sale of Ulysse Nardin was announced.  Now a year on, and things not quite as rosy as might be wished for, I wanted to look back and see how things have changed (and haven't).

"I look at a hundred deals a day. I pick one."

So now with most of the dust settled and the press releases read, re-read, written and re-written maybe it might be a good time to have a look at the bigger picture.

Now many more revered and respected have held forth, many insisting that they saw the acquisition of Ulysse Nardin coming "a mile away!"  Well, hindsight by its very nature is often 20/20.  So I thought I would call on that all-time humanitarian Gordon Gekko to perhaps view this in a slightly more pragmatic light.


 "He's right, I had to sell. The key to the game is your capital reserves, If you haven't got enough, you can't piss in the tall weeds with the big dogs."

I think in light of all of the speculation, the one question I have not really heard asked is - maybe, just maybe they actually NEEDED to sell?  Ulysse Nardin was a media darling in the age of Schnyder, and by that I mean the age of Rolf Schnyder.  Like every brand re-boot, (and if we are very, very honest with ourselves, this is what it was) a charismatic, iconoclastic visionary is needed.  But that in and of itself is not enough (note Blancpain and Hublot in the "post Biver as Patron" era).  You need something more.  The meeting of Schnyder and Ludwig Oechlsin was perhaps not unlike the meeting of Smith and Wesson… or perhaps more appropriately the meeting of Lorenzo de' Medici and Michelangelo.  Two things happened that took the steam out of UN's engine - Dr. Oechslin opted to pursue a life of the mind and "museum curatorship", and tragically, Rolf Schnyder had a "standing appointment" with his creator.  As it is a privately held company, we can speculate all that we want, but if I am viewing things through "Gekko The Great's" perspective, they needed to sell.  And it is possible that maybe there weren't that many takers, so they took.

And in fact, that perhaps still seems to be the case.  What is interesting in all of this is that with the acquisition of UN, Kering has basically put JEANRICHARD on an ice floe to join it's ancestors in the great beyond.

"It's not bad for a quant, but that's a dog with different fleas."

The other popular thought out there is that there was a bidding war and that somehow Richemont, LVMH and the mighty SWATCH got pipped at the post by Kering.  Survey says……. NAAAAHHHHH!

The Ulysse-Nardin that got sold is not the Ulysse-Nardin that was.  Moreover, it is not on a level with some of the recent blockbuster acquisitions like Harry Winston.  It is a great brand, but it represents a truly niche market.  SWATCH does not want or need a charming brand like UN.  Richemont has a fairly full stable.  LVMH?  Well let's just say that although there is turmoil under heaven, the situation is not exactly excellent.  

Again, with the "leaked" (allegedly) news that Maurice Lacroix was looking for a buyer, and a lack of companies STAMPEDING to buy it, my bet is that UN was probably NOT exactly fought over.

"The most valuable commodity I know of, is information"

But more importantly is what Ulysse-Nardin represents - information and innovation.  With Unlysse-Nardin backing what is said to be up to 1/3 of ochs und junior (Ludwig Oechslin's dream factory), and with Dr. Oechslin said to be retiring from the museum, it is not outside of the realm of possibility that the magic could be returning to UN.  Let's be clear, ochs und junior is most likely never going to be a profit leader, (and if what Beat Weinmann has said, it is not intended to be).  But let's just say it is an inexpensive item to carry on the balance sheet to keep the sorcerer in the court.

And, well, it seems the writing might indeed be on the wall.  Let's hope for watch fans and for UN's profitability that there will be some more Oechslin magic.

"You gonna tell me the difference between this guy and that guy is luck?"

Remember pals and gals, although we always think of Kering as the OWNER of Girard-Perregaux and JEANRICHARD - they are more accurately the majority stake holder with 51%.  So the fact that they have plumped for 100% of Ulysse-Nardin actually gives them a better, unfettered toehold in the luxury watch segment.  And it is not down to luck that they were the eventual buyers.  

Don't get me wrong, UN is going to be a project, but with the experience of working with Girard-Perregaux and completely revamping and "re-birthing" JEANRICHARD, Kering now has some good experience with updating and reviving an existing brand while not "throwing out the brand DNA with the bathwater".

And by putting a pillow over JEANRICHARD's sleeping face and smothering it, Kering has all but ensured more resources can now flow in the the UN budget sheets.

"...bright but not bright enough,  Sherlock, roll the dice and play a little Monopoly… what box would Sir Lawrence land on in Erie, Pennsylvania?"

Those out there convinced that Richard Mille is next on the acquisitions list… maybe, but I don't think so.  Let's just say that there are too many hurdles.  Richard Mille first leaked that the acquisition would happen, and Kering (then PPR) disclosed that although those conversations had happened, it would not move forward until Mille untangled "personal affairs".  That was more than a year ago.  And it is possible that Kering spent most of it's pocket money on UN.

Nobody has bitten on much of anything - although DKSH is keen to "offload" their two brands and who knows, maybe even their share in Bovet.  I could be wrong, but given the general mood out there, the lack of Full Retail Buyers, the number of grey market watches sloshing around the "info-web", and the ever increasing number of calls and emails I am getting from brand reps, brand managers looking for an opportunity, and the brands those managers and reps work for calling and looking for new talent, I don't get the sense that anyone is in a mood to acquire.  BUT, and it's a big BUT - this could also be the moment when changes of ownership will happen.  Things will get so clearly bad that a fire sale might seem like the only solution.  And even though things aren't great out there, maybe some folks in China have been saving their allowance, Christmas and birthday money and are ready to swoop in.

Other pundits have posited Breitling, Chopard among others as being on the potential hit list.  Maybe, but instead of thinking high prestige, it might be time for Kering to think high volume.  Maybe, say, a brand making watches in the Mido price range? 

I could, of course, be wrong - I've been wrong before ; )

Finally, let's remember that although we are all passionate, for many people this is simply business -


It's all about bucks, kid. The rest is conversation.

Ultimately, this is the unknown territory we find ourselves in.  In the great "quartz crisis" it was all about technology and the somewhat stoic belief that to change was unthinkable so it would be better to die.

Thankfully an engineer/consultant was willing to suggest change and in changing rescue the Swiss industry, and a man who as a boy loved his steam machine was willing to roll the dice that there were others out there like him, and more than anyone else saved and helped to reestablish mechanical watch making.

We who write about this stuff are always asking ourselves - who is the next Hayek, the next Biver, the next Macaluso or Stas?  It seems unfair because these guys were (and are) giants.  Those that follow will struggle to step out of those shadows.  But in fairness, those that follow need to do more than just follow.  They need to actually lead.  And when you've been groomed and guided and mentored, it is hard to establish your own point of view.  Moreover, it can be daunting to voice an opinion that might be contradictory.

I would like to leave you with a bit of a "parable" -

Back before longitude was "knowable", it was not uncommon for groups of ships to sail together.  And as you can well imagine, you would not dare make your own changes or alter course without the consent of the Admiral.  As oftentimes the Admiral was on a different ship, communication back and forth would be slow and confused. Moreover, the communication could often be misunderstood in transmission.  

What we are seeing now, for better or worse, is that brand directors, managers and sales reps are not unlike those captains and midshipmen of years gone past.  They see that they are heading for the rocks, but are afraid to voice concern and change course.  Thus not just one ship is lost on the rocks, but several.

Sponsoring sailing teams, appointing DJs as brand ambassadors - these money splurges are not going to save your brand from ignoring the fundamentals of ANY business - be it your kid's lemonade stand or Boeing.  It boils down to a pretty basic idea of supply and demand.  With the exception of Rolex and Patek, nobody else in the watch world seems to have an understanding of:

1.  How many potential customers there REALLY are, and -

2.  How many of those potential customers will REALLY be willing to buy their watch at the price they are asking

Once we get that figured out, on to world peace!

"I look at a hundred deals a day. I pick one."

So now with most of the dust settled and the press releases read, re-read, written and re-written maybe it might be a good time to have a look at the bigger picture.

Now many more revered and respected have held forth, many insisting that they saw the acquisition of Ulysse Nardin coming "a mile away!"  Well, hindsight by its very nature is often 20/20.  So I thought I would call on that all-time humanitarian Gordon Gekko to perhaps view this in a slightly more pragmatic light.

 "He's right, I had to sell. The key to the game is your capital reserves, If you haven't got enough, you can't piss in the tall weed with the big dogs."

I think in light of all of the speculation, the one question I have not really heard asked is - maybe, just maybe they actually NEEDED to sell?  Ulysse Nardin was a media darling in the age of Schnyder, and by that I mean the age of Rolf Schnyder.  Like every brand re-boot, (and if we are very, very honest with ourselves, this is what it was) a charismatic, iconoclastic visionary is needed.  But that in and of itself is not enough (note Blancpain and Hublot in the "post Biver as Patron" era).  You need something more.  The meeting of Schnyder and Ludwig Oechlsin was perhaps not unlike the meeting of Smith and Wesson… or perhaps more appropriately the meeting of Lorenzo de' Medici and Michelangelo.  Two things happened that took the steam out of UN's engine - Dr. Oechslin opted to pursue a life of the mind and "museum curatorship", and tragically, Rolf Schnyder died.  As it is a privately held company, we can speculate all that we want, but if I am viewing things through "Gekko The Great's" perspective, they needed to sell.  And it is possible that maybe there weren't that many takers, so they took.

"It's not bad for a quant, but that's a dog with different fleas."

The other popular thought out there is that there was a bidding war and that somehow Richemont, LVMH and the mighty SWATCH got pipped at the post by Kering.  Survey says……. NAAAAHHHHH!

The Ulysse-Nardin that got sold is not the Ulysse-Nardin that was.  Moreover, it is not on a level with some of the recent blockbuster acquisitions like Harry Winston.  It is a great brand, but it represents a truly niche market.  SWATCH does not want or need a charming brand like UN.  Richemont has a fairly full stable.  LVMH?  Well let's just say that although there is turmoil under heaven, the situation is not exactly excellent.  

"The most valuable commodity I know of, is information"

But more importantly is what Ulysse-Nardin represents - information and innovation.  With Unlysse-Nardin backing what is said to be up to 1/3 of ochs und junior (Ludwig Oechslin's dream factory), and with Dr. Oechslin said to be retiring from the museum, it is not outside of the realm of possibility that the magic could be returning to UN.  Let's be clear, ochs und junior is most likely never going to be a profit leader, (and if what Beat Weinmann has said, it is not intended to be).  But let's just say it is an inexpensive item to carry on the balance sheet to keep the sorcerer in the court.

"You gonna tell me the difference between this guy and that guy is luck?"

Remember pals and gals, although we always think of Kering as the OWNER of Girard-Perregaux and JEANRICHARD - they are more accurately the majority stake holder with 51%.  So the fact that they have plumped for 100% of Ulysse-Nardin actually gives them a better, unfettered toehold in the luxury watch segment.  And it is not down to luck that they were the eventual buyers.  

Don't get me wrong, UN is going to be a project, but with the experience of working with Girard-Perregaux and completely revamping and "re-birthing" JEANRICHARD, Kering now has some good experience with updating and reviving an existing brand while not "throwing out the brand DNA with the bathwater".

"...bright but not bright enough,  Sherlock, roll the dice and play a little Monopoly… what box would Sir Lawrence land on in Erie, Pennsylvania?"

Those out there convinced that Richard Mille is next on the acquisitions list… maybe, but I don't think so.  Let's just say that there are too many hurdles.  Richard Mille first leaked that the acquisition would happen, and Kering (then PPR) disclosed that although those conversations had happened, it would not move forward until Mille untangled "personal affairs".  That was more than a year ago.  And it is possible that Kering spent most of it's pocket money on UN.

Other pundits have posited Breitling, Chopard among others as being on the potential hit list.  Maybe, but instead of thinking high prestige, it might be time for Kering to think high volume.  Maybe, say, a brand making watches in the Mido price range?

I could, of course, be wrong - I've been wrong before ; )

Finally, let's remember that although we are all passionate, for many people this is simply business -


It's all about bucks, kid. The rest is conversation.

Enjoy your watches!