Fall Repeat - The Sales / Brand Manager

This first saw the light of day in "The Blog Formerly Known As Tempus Fugit" back before the COVID 19 Pandemic reared its ugly head. With the latest shenanigans of the current Presidential administration continuing to baffle one and all, I don't see any resolution coming any time soon to the current not-so-great state of Watch Town. But at least this time around people aren't dying by the truckload due to misinformation.

I Could Do It Better Myself - The Sales/Brand Manager

5:30 AM - The alarm goes off, and tempting though it may be to hit the snooze, you pull yourself out of bed, jump on your Peleton and commit yourself to another 30 minutes of fitness.

6:50 AM - Showered, you make yourself presentable, grab a coffee and fire up your laptop for the weekly video conference with HQ.

8:15 AM - your daughter calls to remind you that as it is your weekend, she will be waiting for you outside of school following STEM club at 4:00 PM.  You make a note in your phone and set the alarm for 3:45 to remind yourself.

9:05 AM - safely settled at your desk, you scroll through the "Butcher's Bill" to try and figure out why you got blindsided a few hours ago when HQ informed you that:

1.  You need to close Retail Partner A.  No real detail given.

2.  You need to continue to extend credit to retail partner Z, even though they have not paid their invoices for the past 5 months, hit you with $26,333 of "co-op" advertising expenses, and requiring you to arrange a "junket" for the owner, the owner's current (not his wife) girlfriend, their assistant manager and 2 of their "loyal" customers to visit the HQ, factory, and maybe, you know if there's time, ski a little...

While reviewing all of the internal and external communication, you happen to glance up at a map of Los Angeles and it all becomes clear.  Retail Partner Z is opening up a new "fuck you" store literally across the hall from Retail Partner A, and demanding (literally) that your boss in Switzerland cut off Retail Partner A.  You then remember one of the pictures on the wall at HQ in New York with your boss, the girlfriend (not wife) of your boss, Retail Partner Z and half of the Los Angeles Lakers, courtside at the Staple's Center.

And of course, it just so happens that you are based in (or at least near) Los Angeles...

10:00 AM - Retail Partner A's store has opened.  You meet the owner and the two of you head out of the mall to a nearby restaurant so that you can speak in private.  Retail Partner A was the first store you ever opened an account for your first brand, some 20 years ago.  To his credit, Retail Partner A says he totally understands, he has seen this coming.  You personally really like Retail Partner A.  He and his wife have always sent your daughter both birthday and Christmas presents.  They insist on picking up the check even when they are your guests, they are old-school, shook Sinatra's hand type of retailers.  You excuse yourself for a few minutes, go out to the street and call your boss.  You explain that as a sign of good will, you need authorization to buy back the product.  Considering that most of it is still untouched (as it was just delivered 3 weeks ago), in the wrapping, you can simply walk it across the hallway to Retail Partner Z when they open.  Your boss is in agreement so long as 90% of the pieces are re-sellable.  You do the mental math (you looked at the safe count while you were speaking with Retailer A, and there are 13 pieces that have some wear, which tips it to 15% of the inventory.

You go back in, tell them exactly what your boss told you, but suggest that they take 6 of the slightly worn pieces that are the most likely to sell, and blow them out at 40% off, ensuring that the store can make 10% profit off of them, and be in compliance for the buy-back.

You suggest an early lunch (it is now 11:45) and once again, Retail Partner A grabs the check and will not let you pay.

12:50 PM - You walk Retail Partner A back to their store, and take a moment to make some calls before your next appointment - 175 feet across the mall's "hallway" to visit the soon to be opened 5th location of Retail Partner Z.

Retail Partner Z makes you wait a good 20 minutes in the construction area.  Once done, Retail Partner Z excuses himself, and Junior (second born son) takes over the meeting.  In a very short timeframe (less than a year) Junior has managed to piss off every brand rep he has come in contact with, and driven out more than half of the sales staff at their flagship store in Beverly Hills.  You have resigned yourself to simply nodding and smiling.  But Junior wants to flex his muscles and decides to get pissy with you anyway.  He demands to know why Retail Partner A still is carrying your brand.  You explain that they (Retail Partner Z) will have the exclusive rights the day that they open - which is still 45 days out.

2:00 PM - Junior says - "Hey, I'm hungry.  Buy me lunch and we can talk about our order".  So off you go to lunch #2.  Junior, although he drove to work, decides that a few bourbons would be a good idea on a hot Los Angeles afternoon.  You pay the check (a little over $200 with tip), and Junior says that next time you need to go somewhere nicer - "You guys need to stop being so cheap!".

You walk Junior back to his car, send your best regards to his dad, and hope like hell he does not get stopped by the cops.  3:00 PM is a bit early in the day, but he insisted.

You walk back through the mall to pick up the book your daughter asked you to order on Amazon, and as you're walking to the garage, you hear someone calling to you.  You turn to see your fried Julia, who is the district manager for Unobtainium, one of the hottest watch brands that is finally going into independent retail.  She has just finished meeting with Retail Partner A, and is happy with the outcome.  She thanks you for the referral, and comments on how much people must love them as flowers and two gourmet baskets arrived along with 2 bottles of champagne during her pitch.  You make plans to see each other at the Las Vegas shows in June, and hop in your car.  You make a mental note that you will not be able to submit the gift baskets and flowers on your expense account as they are not part of your approved expenses.

3:45 - The alarm on your iPhone goes off, just as you are rounding the corner to pick up your daughter.  Yes, you are early, but you savor the moment, listen to the last 10 minutes of your podcast, and think about the weekend.

Reheated Leftovers - I Could Do It Better Myself - The Sales/Brand Manager

This first came out several years ago, but still rings true ; )

I Could Do It Better Myself - The Sales/Brand Manager

5:30 AM - The alarm goes off, and tempting though it may be to hit the snooze, you pull yourself out of bed, jump on your Peleton and commit yourself to another 30 minutes of fitness.

6:50 AM - Showered, you make yourself presentable, grab a coffee and fire up your laptop for the weekly video conference with HQ.

8:15 AM - your daughter calls to remind you that as it is your weekend, she will be waiting for you outside of school following STEM club at 4:00 PM.  You make a note in your phone and set the alarm for 3:45 to remind yourself.

9:05 AM - safely settled at your desk, you scroll through the "Butcher's Bill" to try and figure out why you got blindsided a few hours ago when HQ informed you that:

1.  You need to close Retail Partner A.  No real detail given.

2.  You need to continue to extend credit to retail partner Z, even though they have not paid their invoices for the past 5 months, hit you with $26,333 of "co-op" advertising expenses, and requiring a "junket" for the owner, the owner's current (not his wife) girlfriend, their assistant manager and 2 of their "loyal" customers to visit the HQ, factory, and maybe, you know if there's time, ski a little...

While reviewing all of the internal and external communication, you happen to glance up at a map of Los Angeles and it all becomes clear.  Retail Partner Z is opening up a new "f - you" store literally across the hall from Retail Partner A, and demanding (literally) that your boss in Switzerland cut off Retail Partner A.  You then remember one of the pictures on the wall at HQ in New York with your boss, the girlfriend (not wife) of your boss, Retail Partner Z and half of the Los Angeles Lakers, courtside at the Staple's Center.

And of course, it just so happens that you are based in (or at least near) Los Angeles...

10:00 AM - Retail Partner A's store has opened.  You meet the owner and the two of you head out of the mall to a nearby restaurant so that you can speak in private.  Retail Partner A was the first store you ever opened an account for your first brand, some 20 years ago.  To his credit, Retail Partner A says he totally understands, he has seen this coming.  You personally really like Retail Partner A.  He and his wife have always sent your daughter both birthday and Christmas presents.  They insist on picking up the check even when they are your guests, they are old-school, shook Sinatra's hand type of retailers.  You excuse yourself for a few minutes, go out to the street and call your boss.  You explain that as a sign of good will, you need authorization to buy back the product.  Considering that most of it is still untouched (as it was just delivered 3 weeks ago), in the wrapping, you can simply walk it across the hallway to Retail Partner Z when they open.  Your boss is in agreement so long as 90% of the pieces are re-sellable.  You do the mental math (you looked at the safe count while you were speaking with Retailer A, and there are 13 pieces that have some wear, which tips it to 15% of the inventory.

You go back in, tell them exactly what your boss told you, but suggest that they take 6 of the slightly worn pieces that are the most likely to sell, and blow them out at 40% off, ensuring that the store can make 10% profit off of them, and be in compliance for the buy-back.

You suggest an early lunch (it is now 11:45) and once again, Retail Partner A grabs the check and will not let you pay.

12:50 PM - You walk Retail Partner A back to their store, and take a moment to make some calls before your next appointment - 175 feet across the mall's "hallway" to visit the soon to be opened 5th location of Retail Partner Z.

Retail Partner Z makes you wait a good 20 minutes in the construction area.  Once done, Retail Partner Z excuses himself, and Junior (second born son) takes over the meeting.  In a very short timeframe (less than a year) Junior has managed to piss off every brand rep he has come in contact with, and driven out more than half of the sales staff at their flagship store in Beverly Hills.  You have resigned yourself to simply nodding and smiling.  But Junior wants to flex his muscles and decides to get pissy with you anyway.  He demands to know why Retail Partner A still is carrying your brand.  You explain that they (Retail Partner Z) will have the exclusive rights the day that they open - which is still 45 days out.

2:00 PM - Junior says - "Hey, I'm hungry.  Buy me lunch and we can talk about our order".  So off you go to lunch #2.  Junior, although he drove to work, decides that a few bourbons would be a good idea on a hot Los Angeles afternoon.  You pay the check (a little over $200 with tip), and Junior says that next time you need to go somewhere nicer - "You guys need to stop being so cheap!".

You walk Junior back to his car, send your best regards to his dad, and hope like hell he does not get stopped by the cops.  3:00 PM is a bit early in the day, but he insisted.

You walk back through the mall to pick up the book your daughter asked you to order on Amazon, and as you're walking to the garage, you hear someone calling to you.  You turn to see your fried Julia, who is the district manager for Unobtainium, one of the hottest watch brands that is finally going into independent retail.  She has just finished meeting with Retail Partner A, and is happy with the outcome.  She thanks you for the referral, and comments on how much people must love them as flowers and two gourmet baskets arrived along with 2 bottles of champagne during her pitch.  You make plans to see each other at the Las Vegas shows in June, and hop in your car.  You make a mental note that you will not be able to submit the gift baskets and flowers on your expense account as they are not part of your approved expenses.

3:45 - The alarm on your iPhone goes off, just as you are rounding the corner to pick up your daughter.  Yes, you are early, but you savor the moment, listen to the last 10 minutes of your podcast, and think about the weekend. 

The Reality of the Situation - A Christmas Miracle in Watch Town?

Shamelessly borrowed from the World-Wide Infoweb

As we move closer to the holiday season, a few undeniable truths are becoming more and more apparent. First and foremost? Sales in Watch Town suck. There's really no nice way to put it. Lots of exports going out, but as anyone who's been in the game a minute or two will tell you, exports do not equal sales. So as 100s of SKUs are piling up in various warehouses around the world, the problem of too much stock on hand is going hand in hand with supply chain issues. It's an interesting situation that started with the first domino falling - over production. Ironically, this is not a new thing. It seems that the CEOs of Watch Town still prefer their own bath water to to pretty much any other beverage.

Once it became clear that the supply was far exceeding the already weak demand, the same folks who couldn't have their teams build enough soon-to-be grey market watches then slashed or completely canceled their supply orders. Which, in turn, led the suppliers to make many of their workers redundant. This, in turn, put the squeeze on smaller brands that were living in Reality (a more modest, yet stable municipality that is Watch Town adjacent). This, in turn, meant that although they were selling, they could not fulfill the orders that they were receiving. 

And so here we are - counting down for the holidays, and the Grinch is firmly ensconced under the Christmas Tree.

But maybe, just maybe there's a Festivus Miracle waiting!

Just kidding, that's about as likely as an Arnault offspring being replaced by someone who actually has experience...

Happy Holidays!

I Could Do It Better Myself - The Sales/Brand Manager

5:30 AM - The alarm goes off, and tempting though it may be to hit the snooze, you pull yourself out of bed, jump on your Peleton and commit yourself to another 30 minutes of fitness.

6:50 AM - Showered, you make yourself presentable, grab a coffee and fire up your laptop for the weekly video conference with HQ.

8:15 AM - your daughter calls to remind you that as it is your weekend, she will be waiting for you outside of school following STEM club at 4:00 PM.  You make a note in your phone and set the alarm for 3:45 to remind yourself.

9:05 AM - safely settled at your desk, you scroll through the "Butcher's Bill" to try and figure out why you got blindsided a few hours ago when HQ informed you that:

1.  You need to close Retail Partner A.  No real detail given.

2.  You need to continue to extend credit to retail partner Z, even though they have not paid their invoices for the past 5 months, hit you with $26,333 of "co-op" advertising expenses, and requiring a "junket" for the owner, the owner's current (not his wife) girlfriend, their assistant manager and 2 of their "loyal" customers to visit the HQ, factory, and maybe, you know if there's time, ski a little...

While reviewing all of the internal and external communication, you happen to glance up at a map of Los Angeles and it all becomes clear.  Retail Partner Z is opening up a new "fuck you" store literally across the hall from Retail Partner A, and demanding (literally) that your boss in Switzerland cut off Retail Partner A.  You then remember one of the pictures on the wall at HQ in New York with your boss, the girlfriend (not wife) of your boss, Retail Partner Z and half of the Los Angeles Lakers, courtside at the Staple's Center.

And of course, it just so happens that you are based in (or at least near) Los Angeles...

10:00 AM - Retail Partner A's store has opened.  You meet the owner and the two of you head out of the mall to a nearby restaurant so that you can speak in private.  Retail Partner A was the first store you ever opened an account for your first brand, some 20 years ago.  To his credit, Retail Partner A says he totally understands, he has seen this coming.  You personally really like Retail Partner A.  He and his wife have always sent your daughter both birthday and Christmas presents.  They insist on picking up the check even when they are your guests, they are old-school, shook Sinatra's hand type of retailers.  You excuse yourself for a few minutes, go out to the street and call your boss.  You explain that as a sign of good will, you need authorization to buy back the product.  Considering that most of it is still untouched (as it was just delivered 3 weeks ago), in the wrapping, you can simply walk it across the hallway to Retail Partner Z when they open.  Your boss is in agreement so long as 90% of the pieces are re-sellable.  You do the mental math (you looked at the safe count while you were speaking with Retailer A, and there are 13 pieces that have some wear, which tips it to 15% of the inventory.  

You go back in, tell them exactly what your boss told you, but suggest that they take 6 of the slightly worn pieces that are the most likely to sell, and blow them out at 40% off, ensuring that the store can make 10% profit off of them, and be in compliance for the buy-back.  

You suggest an early lunch (it is now 11:45) and once again, Retail Partner A grabs the check and will not let you pay.  

12:50 PM - You walk Retail Partner A back to their store, and take a moment to make some calls before your next appointment - 175 feet across the mall's "hallway" to visit the soon to be opened 5th location of Retail Partner Z.  

Retail Partner Z makes you wait a good 20 minutes in the construction area.  Once done, Retail Partner Z excuses himself, and Junior (second born son) takes over the meeting.  In a very short timeframe (less than a year) Junior has managed to piss off every brand rep he has come in contact with, and driven out more than half of the sales staff at their flagship store in Beverly Hills.  You have resigned yourself to simply nodding and smiling.  But Junior wants to flex his muscles and decides to get pissy with you anyway.  He demands to know why Retail Partner A still is carrying your brand.  You explain that they (Retail Partner Z) will have the exclusive rights the day that they open - which is still 45 days out.  

2:00 PM - Junior says - "Hey, I'm hungry.  Buy me lunch and we can talk about our order".  So off you go to lunch #2.  Junior, although he drove to work, decides that a few bourbons would be a good idea on a hot Los Angeles afternoon.  You pay the check (a little over $200 with tip), and Junior says that next time you need to go somewhere nicer - "You guys need to stop being so cheap!".

You walk Junior back to his car, send your best regards to his dad, and hope like hell he does not get stopped by the cops.  3:00 PM is a bit early in the day, but he insisted.

You walk back through the mall to pick up the book your daughter asked you to order on Amazon, and as you're walking to the garage, you hear someone calling to you.  You turn to see your fried Julia, who is the district manager for Unobtainium, one of the hottest watch brands that is finally going into independent retail.  She has just finished meeting with Retail Partner A, and is happy with the outcome.  She thanks you for the referral, and comments on how much people must love them as flowers and two gourmet baskets arrived along with 2 bottles of champagne during her pitch.  You make plans to see each other at the Las Vegas shows in June, and hop in your car.  You make a mental note that you will not be able to submit the gift baskets and flowers on your expense account as they are not part of your approved expenses.

3:45 - The alarm on your iPhone goes off, just as you are rounding the corner to pick up your daughter.  Yes, you are early, but you savor the moment, listen to the last 10 minutes of your podcast, and think about the weekend.

Deja Vu All Over Again

Am I the only one who remembers the 70s and 80s?  

With the latest results from the FH, I am more and more convinced that maybe myself and a handful of other people are the only ones who do.  Right now according to the FH and some of the reporting from some very fine (sincerely) and respected writers in the industry it would be easy to keep sipping the Kool Aid and assume that everything is fine.

Shamelessly borrowed from the world-wide info web

Sometimes it is easy to go for and accept the simple answer without really looking in depth at what is hiding just below the surface.  So allow me to yank this particular band aid off.

To quote that other great commentator on the watch industry, Lily Tomlin -

Things are going to get a lot worse before they get worse

FACT 1 - Exports do not equal sell through.
Anecdotal evidence from several sources that I tend to put a lot of faith in report that the sell-through in Hong Kong has plunged in some stores by 80% over the past 8 weeks. Now the easy argument would be that this is the reason for the downturn in exports. But if you look at the graph from the FH over the past YEAR, you will note that the export numbers have consistently been trending DEEP SOUTH. That's right pals and gals, long before the protests started in Hong Kong. Now recent events have firmly planted the accelerator to the floor. So sorry great watch authority from Outlet X, you're not looking at the whole picture.

This is real boys and girls, and it will have a massive impact on future shipments over the next 6 to 12 months.
FACT 2 - The fewer watches you manufacture, the fewer you can sell (whether through authorized outlets or our old friend the grey market).
Based on the Swiss Federal Institute of Statistics and the Swiss Watch Federation the Swiss Watch Industry exported in 2014 28,582,190 MILLION watches. Now add to this quantity what was sold in the Swiss domestic market (which is estimated to 1.4 Million) and we're at around 30 million. 

Now for the Pepsi Challenge -

Shamelessly borrowed from the world-wide info web

Let's compare this to the current reporting of the Swiss Watch Federation. We are projecting to be slightly over 1/3 less in terms of manufacturing. 
Now, before you assemble a care package for your favorite CEO who treats you to that tasting menu each year during your visit... oh wait, that's right! You are NEVER going to be feted at one of these press carnivals.  Sorry...

At any rate, the CEO is covered, it's cheaper for the brand to keep paying him or her to do nothing. The sales manager and heads of pr and marketing will not have to start driving used cars or shopping at the Salvation Army. But let's talk about the people actually making those watches in (most typically) assembly houses, and some who work for the big brands. Believe me, those folks will get the axe long before brand x cancels their America's Cup partnership, their Wine Country press junket, or their brand ambassador from the Marvel Universe. You might not hear too much about these people in terms of the Swiss employment statistics. Why? Well also curious to relate, a lot of the people who assemble your watch in Switzerland are not, by actual definition, Swiss. Italian and French citizens cross the borders every day to work for Swiss companies making Swiss watches. It's not to say that they don't count, but in terms of Swiss employment figures, let's just say it tends to skew the graph plot.

As one Swiss insider stated, "the tissue is melting away!" But according to the Swiss Watch Federation, and the reporting of some tail waggers out there, things are even better now than ever before because, wait for it, the export value is increasing! 

Now I am 51 years old, and in fairness, I was not exactly engaged in the watch business at 11 years of age. But I do make a point of trying to understand the past and how it has influenced where we are now, and I also try to pay attention to where we're heading.

FACT 3 - And the one reality that should have the management at the SWATCH group up late nights and shitting themselves? Low priced Swiss watches where the big volumes are in production and (it stands to reason) sales are dramatically dropping again. While Hublot Big Bangs and Vacheron Constantin Overseas are sexy, they are not exactly owned and worn by the masses. And the Swiss watch industry is, well, industrial - meaning it involves thousands of people with thousands of jobs making (ideally) millions of watches. But just like 40 years ago there have been, and continue to be, warning signs that are being ignored.

Think about this basically, we‘re talking about millions of pieces that are not manufactured and assembled anymore. This inevitably leads to thousands of jobs lost already and thousands more that will be lost in the near future.
The shit's about to get even realer.