Breitling vs. Richemont – Opposite Bets on an Industry in Flux – Episode 78

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There is a grand reorganization of the luxury watch business, and it's happening in front
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of us.
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This is Openwork, a look inside the watch industry. It's a podcast from Collective Horology.
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I'm Gabe Reilly, co-founder of Collective.
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And I'm Asher Apkin, co-founder of Collective. Collective Horology is an independent watch
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retailer based in Southern California. We carry a wide range of independent brands,
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including Ming, David Cando, J.N. Shapiro, and more. To learn more about us and check
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out our available inventory, visit collectivehorology.com.
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Hey, you over your jet lag?
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I'm over my jet lag, I think, but you were up all night, so let's see how many times
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I have to edit you out to edit out the yawning on the video clips.
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Yeah, well, listen, my dearest-
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For those who've never watched the video clips of this podcast on YouTube, you may wonder
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why I sometimes, you know, cut to a smash cut to B-roll apropos of nothing. It may be
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because Asher is yawning.
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I was at the emergency-
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He has two small children at home.
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I was at the emergency vet with my geriatric dog last night.
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Fair enough.
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So, you know, she's fine.
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But when you texted me that this morning, and yes, Louise, bless her heart, when you
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texted me that this morning, I was like, how much yawning am I going to have to edit out
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of the podcast?
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Well, this is why I have a black coffee next to me.
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Yes.
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No, we're thoroughly-
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We're treading a little bit into like Marc Maron cat talk.
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Yeah, no, we are.
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This podcast is sponsored by Room Service Coffee.
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Room Service Coffee in Ventura, California, collective runs, not on Duncan, but on Room
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Service Coffee.
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But seriously, if you're ever in Ventura, visit us and visit Room Service Coffee.
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But-
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Room Service Coffee.
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Room Service Coffee.
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I'll send them an invoice shortly when we're done with recording.
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But look, when we were at Watches and Wonders, wandering the halls, you know, one of the,
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you know, of course we go to check out the watches.
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You made that very clear on one of our podcasts.
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We want to see the watches, don't hold back.
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But obviously we can't help but thinking about all the palace intrigue, who's in, who's out.
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And one thing became very clear, not just at Watches and Wonders, but wandering Geneva
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at large is we're seeing two different, what are now holding companies, two different holding
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companies taking two very different approaches to, you know, what we've already discussed
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is a time of change in the watch industry.
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There is a lot of change, there's consolidation, there are brand spinoffs.
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We all know that all sorts of global forces have really put the industry under pressure.
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And we have these two groups.
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One is Breitling, the other is Richemont.
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This is Breitling versus Richemont.
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Well, I think important to take a moment to, not everybody may realize that Breitling is
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essentially a holding company now.
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And before we even get into that structure, I think it's good to look at some of the personalities
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involved, because one of the significant drivers of the change in Breitling since it, I don't
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want to say relaunched, but essentially it was reconstituted in its modern form.
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P.E.
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Private Equity?
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Exactly.
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I know what you want to say.
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You want to say it?
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Due to my role, I can't, I can't say much more.
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Fair enough.
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But anyway, George Kern came in to, to revitalize that brand and wherever you may land on whether
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you like Breitling as a brand, whether you don't, you know, whether whatever, I think
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it is fairly indisputable that, that he has taken that.
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Brand to, to a much more active state than it was in before he touched it.
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And, you know, I believe he was at IWC immediately prior to that.
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Yeah.
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Yeah.
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I think he was actually at Richemont.
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He was head of the watchmaking, whatever they call it, the watchmaking division of Richemont,
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which we'll talk about.
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Yeah.
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And they, and they've, they've really brought together an incredible, you know, a cadre
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of talent in Sylvan Berneron, of course, was there up until recently and leading product,
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a former colleague of ours from Meta Morin Oluwole, who's an incredibly talented person
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is on the board.
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Right.
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Yeah.
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Yeah.
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You know, these are not, these are thoughtful, interesting, creative people.
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So again, wherever you land on, you know, the watches market for them, whatever, pretty,
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I think pretty easy to admit that there's been a significant amount of change there.
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Now, that said, we've also seen that company start to acquire other companies.
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And I think that's the general conversation we want to have.
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We have a holding company that is forming, you know, a young star, if you will, growing
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and taking a fundamentally different bet on the market than an established holding company.
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And by the way, not only did George Kern come up through, through the Richemont group, IWC
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and at the corporate level of a Richemont, but he's brought in executives from Richemont
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to build out Breitling.
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And so you have this contrast and you've got basically Breitling bulking up.
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We'll talk about that, bringing in talent and building essentially a new holding company.
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And then you have Richemont taking a very different tack.
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We talked about the fact that they've been consolidating brands, potentially looking
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to sell more, consolidating their presence at Watches and Wonders.
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And you have Breitling growing and not even participating in Watches and Wonders, but
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also very much in Geneva.
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So these are two brands that are almost taking these antithetical or polar opposite approaches
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to their business and to this moment in the market.
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And I find that fascinating.
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Yeah.
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So, and I want to get into that pretty much right now, but there's a couple other things
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I think we have to talk about our other sponsor, Neo Vintage Breguet.
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This episode is also brought to you by Neo Vintage Breguet.
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Who needs a new Breguet when you've got neovintagebreguet.com?
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Yeah.
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Look, when we zoom out and we look at the holding company landscape today, and I want
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to explore this on some future episodes too, because it's interesting.
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We have sort of the industry stalwarts, right?
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The Richemont and the LVMH of the world.
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And we're going to talk about Breitling as it relates to Richemont in this conversation.
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But we also have companies that have slowly built up over the last few years.
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They're in that sort of like mid tier of like strong establishment, but a real focus.
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I'm thinking of like Chanel, you know, where up until about a decade ago, I didn't really
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think about Chanel in this way.
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The whole episode on the watchmaking of Chanel.
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Well, this is what I'm getting at.
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So that's one interesting holding company with stakes in LVMH, in MB&F, in Romain Gaultier,
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in Bell and Ross, you know, like these are really interesting brands with very strong
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points of view.
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So it's one, another approach for a stake I think in Kinesi as well.
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And then there's what we've insinuated, you know, in previous episodes, which is this
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sort of very, very young, but fascinating structure that we're seeing with hotorology
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Dominique Renaud, for example.
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And you're also seeing Gerard Perregaux and Ulysse Nardin spun off from the Caring Group
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to the Soind Groups.
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That's another small up and coming, you know, holding company of sorts in the industry.
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So there's all sorts of action.
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Different paths and different approaches to financing, different approaches to marketing
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and how, and the types of brands that they're investing in and different approaches to how
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they're also investing in supply chain, et cetera.
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So today we're just going to look at Breitling, which is fascinating.
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As compared to Riesemont, but they're opposite bets.
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They are.
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But I do want to, I do want us to take a deeper dive on Chanel and Soind and to a degree,
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HH Dominique Renaud down the road.
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I just don't know if we can, we can only do so many episodes.
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Oh, are we capped?
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It turns out, yeah.
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Our episodes are limited production, each one is individually numbered, but yeah, no,
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I think you're right.
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I mean, Hermes is an interesting one to look at as well, similar to Chanel.
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So there, there's no shortage of interesting case studies, but these two in particular
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are household names and they're making opposite bets on the market, which I think is what's
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interesting to keep an eye on here.
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Okay.
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So let's take a look at Breitling.
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Yeah.
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Breitling has in the last few years acquired the rights to two other brands.
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One which was notoriously playing hard to get in the world of watches, which of course
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is Universal Geneve.
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And you know, on a personal level, my brand wasn't quite dead or dormant.
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It was under different ownership, which was sort of,
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Oh, it was dead.
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I mean, it was, there was no Universal Geneve watches in production, not for decades.
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That's not true.
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Absolutely.
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It's true.
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Universal Geneve was owned by Hong Kong-based Stellex Holdings International, Unlimited,
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from 1989 until it was sold to Breitling in 2023.
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Yeah, that part I know, but were there watches in serial production up until when?
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Yeah.
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So they were making watches.
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To your point, it was sporadic.
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It was essentially a rounding era, but there were, in 1994, there was a Golden Janus.
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Yeah, that sounds right.
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But what about in the last-
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There were several re-short attempts between that time in 1994 and 2023, but they were
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short-lived.
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The brand did go into hibernation for long stretches with sporadic, small-scale releases,
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but no real global push or distribution.
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So the brand was around, they made watches.
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But let's say for all intents and purposes, we're both right here.
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It was under different ownership, there were some watches made, but it was a non-factor
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in the industry.
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There we go.
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And then, of course, Galet.
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And it looks like the way that they're-
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Do you know who owned Galet?
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I don't.
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Interesting.
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The way that this was being structured, though, is it appears that they're positioning Galet
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as a more sort of entry-level piece.
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They're using Universal Genève as a more haute horology-
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Yeah.
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Tiered product.
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And then, of course, Breitling, which is the mass-market beast, which sits in between the
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two.
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So interesting to see how they're starting to structure that and how they're building
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it around some of these historical brands.
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And recently, of course, we've finally gotten some visibility into what the real product
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line is going to look like for Universal Genève.
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I thought it was really cool.
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They took a very different approach to what most brands do.
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I mean-
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The interesting thing about what George Kern is doing, I think this is a bigger theme here
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for Breitling, is he's betting big.
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But UG introduced a full product lineup across different collections.
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They didn't just start with, like, here's a pull router and a couple different dial
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variations.
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Well, I mean, they did in the sense that when they launched the brand, like, launched, quote
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unquote, the brand a year ago, there was only two references.
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But those were commercially available.
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Now that the brand will be commercially available, they've got a full collection of time-only
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watches, chronograph watches across multiple collections, case metal sizes, all sorts of
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things like that.
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Like, they will launch this brand sort of publicly and make it available publicly.
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And I think Breitling has to do it because of their size, the scale, and the retailer
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network and all of that.
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They can't just have, like, two watches in a box in a case, you know, at a retailer.
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But like, it's a very bold move to introduce full collections.
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Yeah, it's interesting.
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And what's also fascinating about how they're approaching it, you know, one of the, one
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of the liabilities and the assets of Breitling is an unbelievably massive retail network
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here in the United States.
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I mean, you know, in any major or secondary or probably even third-level DMA, there's
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a Breitling concession, which of course opens up a really interesting question, which is
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how they've chosen to market Universal Geneve through those channels.
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And there's been some discussion of this in, like, what I hear also from dealer colleagues,
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which is fascinating.
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They've decided that they, that they want to understandably present this as an upscale
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brand and that they're doing that by looking for very key partners within the existing
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Breitling network.
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So are they essentially initiating a tip ball and saying to their retailers, like, if you
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want this part of the business, if you want UG, for instance, you've got to pitch it?
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Essentially.
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Like they're setting it up as if it, as if it is the crown jewel that they wanted to
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be from the outset, which is a little bit of a dangerous game.
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Do you know what they're asking of retailers?
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Like do they have to build shop in shops?
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Do they have a Breitling boutique within their stores?
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I don't know about the Breitling.
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I don't know enough about that part, but I do know from some folks I've talked to that
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there is an expectation of like a bit of a shop and shop build out something to that
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effect that really heightens the Universal Geneve product.
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Because what's interesting there too, is where they've decided to price the entry.
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So a steel pole router is in that sort of 16 to $20,000 range, which is fascinating
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because of course a pole router for years up until recently was a watch that you could
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get a pretty good example of a real one, a vintage one for around two to 3000 bucks.
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That's gone up.
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You know, if you're looking for really good examples of that, but it's still a fraction
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of the price, which is an interesting dynamic.
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And we've seen this happen, for example, with like Omega and original 321s versus the Ed
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White where three, you know, actual 321 calibers tend to trade unless they're in incredible
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condition tend to trade at parity or below a modern 321, which is kind of interesting.
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Yeah.
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There's a lot of 321 derivatives out there and vintage watches.
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For sure.
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But I find that kind of interesting that, you know, that there is this sort of, you
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know, lionization of a particular vintage movement and then the actual product, like
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the real deal tends to be valued lower than the modern equivalent, which is sort of an
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interesting conversation separately, but a lot of people are griping.
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I think their price anchor to UG, to your point, sure.
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The brand hasn't fundamentally been in market.
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There's no price comp.
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So what people anchor to with the pricing is the, is the vintage stuff, but the vintage
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market is just so fundamentally different from the, the new market.
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Yes.
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I get why people are disappointed that like, you know, and I get why people would think
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like, Oh, like a vintage pull router, let's say I'm for argument's sake, I can get one
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for about $5,000 or less and good, good condition.
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And now the new, and I'm excited.
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The new one comes out and it's multiples of that.
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And I can understand why people would be frustrating.
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However, when you look at the quality of those watches, I think they do justify their, their
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pricing.
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I mean, these are not Breitling movements in them.
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They, they, these are in-house UG movements.
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They're herology movements, or at least certainly well-made, well-finished, beautiful movements,
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beautiful watches, the product intrinsics themselves of those new pull routers, I do
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think are in line with the pricing.
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I think the strategic question is, is it a problem that they decided to fundamentally
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reposition this brand to a new market segment than when it hit where it had been historically?
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I don't know the answer to that.
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Well, I think when we look at how they've chosen to distribute, it gives you some idea
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of how they want to position, right?
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Because one of the first questions that I had about this, and obviously like, you know,
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when you're a hammer, everything looks like a nail.
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So my first question was, why are they not looking at independent boutiques for this
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kind of product?
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And I think the answer to that can be found in who it is they think they're competing
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with and who it is they think they're building a product for.
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So that's an interesting question.
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Who do you think UG competes with or who do you think they think they're competing with
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00:14:58,719 --> 00:14:59,719
now?
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00:14:59,719 --> 00:15:06,039
I think that they want to be competing with Vacheron and Jaeger-LeCoultre and sort of
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00:15:06,039 --> 00:15:09,159
like the, the 20 to 30 to 50 K tier of those brands.
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Jaeger makes a lot of sense as far as who they'd compete with Vacheron though, you think
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00:15:12,880 --> 00:15:13,880
really?
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Yeah.
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I think that's who they're targeting.
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I don't know if that's ultimately where they, but when I look at like price class, maybe
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00:15:20,080 --> 00:15:23,479
it's not the same client, but I think like a broader competitive set, that's what you're
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looking at.
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00:15:24,479 --> 00:15:28,359
Now, when you look at the product line, the Cabriolet, the Polerouter, the Compax, these
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00:15:28,359 --> 00:15:32,840
align, you know, you could, you could mix these from a competitive standpoint against
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00:15:32,840 --> 00:15:38,039
JLC pretty well, I think, but that's sort of the price class that they're competing
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in, which means they're not really talking to the collect.
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00:15:42,119 --> 00:15:48,239
In my opinion, I don't think they're positioning this as a play towards the universal Genève
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00:15:48,239 --> 00:15:50,440
vintage collector.
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They're positioning this towards the clients of watches of Switzerland and Bucherer and
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that sort of set.
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That's right.
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And that these watches should be viewed against the backdrop of what they'll be cross shopped
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with.
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00:16:04,159 --> 00:16:05,159
Yeah.
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00:16:05,159 --> 00:16:11,479
So if you think of it in some ways, Breitling is following a very well-trodden path by building
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00:16:11,840 --> 00:16:14,799
products at different price points for different audiences that they believe that they can
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erode market share from other brands on.
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The question there then becomes, well, when you invest in a heritage brand like this,
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it comes with benefits and it comes with baggage.
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We discussed some of that baggage.
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Of course, the benefit is it's a name, you know, there's name recognition, there's name
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ID there that you don't have to, you know, like anyone who spends some time in watch
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00:16:33,599 --> 00:16:37,559
collecting for a couple of years, or even, even if they don't know that they've heard
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universal Genève out there.
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So there's something to that.
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But I think it's an interesting play because they are definitely trying to take on more
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established and entrenched competitors, which they wouldn't have had to do if they decided
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00:16:52,280 --> 00:16:56,400
to focus on an independent market, but that independent market would be a lot smaller.
321
00:16:56,400 --> 00:17:01,359
So to your point about ambition, the ambitions are clear and you can see what they're trying
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to do.
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I don't know that that success is guaranteed here by any stretch, but I can see the strategy
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as they're building it.
325
00:17:08,160 --> 00:17:10,599
The UG thing makes perfect sense to me.
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00:17:10,599 --> 00:17:15,319
I mean, and we'll talk about this certainly with Richemont, but in a market that we all
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00:17:15,319 --> 00:17:19,640
know is moving up in price point where the average selling price of a watch keeps moving
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up and up and up.
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00:17:20,640 --> 00:17:23,479
And many brands are trying to move up that way.
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00:17:23,479 --> 00:17:28,479
Positioning UG there, and it's like you have Breitling, it's an incredibly strong brand
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that sells very well.
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00:17:29,760 --> 00:17:32,599
You don't need something to compete with their own brand.
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So if you're George Kern, you can go down market or you can go up market.
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00:17:36,239 --> 00:17:39,920
And with UG, I think it was the brand that made sense to go up market with.
335
00:17:39,920 --> 00:17:44,280
It's a prestige brand in the mind of a lot of watch collectors, forget pricing aside,
336
00:17:44,280 --> 00:17:49,400
but Hodinkee and certainly Ben Clymer and that crowd have certainly given the Universal
337
00:17:49,400 --> 00:17:54,660
Geneve brand a lot of positive shine over the last decade plus.
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00:17:54,660 --> 00:17:59,599
It's viewed as an aspirational brand, an important historical brand, a brand that so many people
339
00:17:59,599 --> 00:18:01,800
love and are rooting for.
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00:18:01,800 --> 00:18:04,000
And then we talked about the product intrinsic.
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00:18:04,000 --> 00:18:06,760
So it makes sense you would position UG there.
342
00:18:06,760 --> 00:18:11,239
The question I have is about Galet on two levels.
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Before we get to Galet, I do want to just touch on the Pole Router because they have
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made some interesting product choices with that, which also I think speaks to who they're
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trying to hook into this line.
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00:18:22,319 --> 00:18:27,400
Look, it's easy to be cynical and to look at a product like the Pole Router and dismiss
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00:18:27,400 --> 00:18:31,319
it outright for pricing or whatever.
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00:18:31,319 --> 00:18:36,079
I will say that, and I haven't gone hands on with these watches, but from the photography
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00:18:36,079 --> 00:18:39,439
of them, I have to say, I do find these to be very attractive and very well thought out
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watches and the caliber in the Pole Router is very, very nice.
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00:18:44,599 --> 00:18:48,280
The people we know who have gone hands on with these products are impressed.
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Yeah.
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00:18:49,280 --> 00:18:54,920
So, you know, I do think that like if you were speaking to a client who had very vague
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00:18:54,920 --> 00:19:01,319
name ID on Universal Geneve and you put a 14,000 Swiss franc Pole Router date on a strap
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00:19:01,319 --> 00:19:06,119
in front of them, it's a $17,000 watch, give or take, that you could make a compelling
356
00:19:06,119 --> 00:19:11,400
case for that against, you know, a Jaeger-LeCoultre Master Control, which is, I think, a little
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00:19:11,400 --> 00:19:12,400
bit more affordable.
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But like in the same general gist, this, I think, actually, if I'm being frank, I think
359
00:19:16,520 --> 00:19:20,719
has a little bit more character to it than a JLC Master Control.
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00:19:20,719 --> 00:19:26,560
So you can really tell who they're building this for and how that's going out across the
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00:19:26,560 --> 00:19:27,560
product line.
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00:19:27,560 --> 00:19:33,599
The real question for me is less how could you position something like this in a cross-sell,
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but who they're going to partner with to sell it.
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00:19:36,959 --> 00:19:42,119
Because this brand, for it to live and to succeed, you're going to need retail partners
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00:19:42,119 --> 00:19:48,680
and a retail network that fundamentally gets it and sees a value in selling it.
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00:19:48,680 --> 00:19:51,400
And there's an interesting push and pull with that with holding companies, right?
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00:19:51,400 --> 00:19:56,400
Because what we're seeing here, I suspect, is a company saying, since you work with us
368
00:19:56,400 --> 00:19:59,439
already on Breitling, we're going to give you this incredible opportunity.
369
00:19:59,439 --> 00:20:00,439
Yeah.
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00:20:00,439 --> 00:20:03,400
Now keep in mind, we're not talking about UG for a retailer in a vacuum.
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00:20:03,400 --> 00:20:07,319
Like Breitling, I would imagine for dealers who carry them as a significant and important
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00:20:07,319 --> 00:20:11,560
part of their business, and they probably want to keep Breitling the company happy.
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00:20:11,560 --> 00:20:12,959
I'm sure that's part of it.
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00:20:12,959 --> 00:20:17,599
I mean, and to be clear, by the way, right now, they're not listing any retail partners
375
00:20:17,599 --> 00:20:18,599
on their website.
376
00:20:18,599 --> 00:20:23,719
All they're listing is that new boutique that we saw them building in Geneva.
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00:20:23,719 --> 00:20:28,479
So maybe they're just going to try to even keep it tighter like that and just have it
378
00:20:28,479 --> 00:20:30,760
be a really exclusive kind of product.
379
00:20:30,760 --> 00:20:33,839
So I think that they're trying to keep their powder dry.
380
00:20:33,839 --> 00:20:35,160
They're exploring different options.
381
00:20:35,160 --> 00:20:37,839
They're setting a competitive landscape, and they're going to figure out how they're going
382
00:20:37,839 --> 00:20:38,839
to roll that out.
383
00:20:38,839 --> 00:20:43,359
But if they do go into retail partners, as I know they were kicking tires on last year,
384
00:20:43,359 --> 00:20:45,760
it's going to be really critical that they find the ones that know what they're talking
385
00:20:45,760 --> 00:20:49,040
about and know how to position this in a way where it isn't sort of an afterthought
386
00:20:49,040 --> 00:20:53,800
and a salesperson doesn't default to a more easily known and more accessible watch.
387
00:20:53,800 --> 00:20:54,800
So, you know.
388
00:20:54,800 --> 00:20:57,959
But I think for a retailer, it's a no-brainer.
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00:20:57,959 --> 00:21:02,520
If Breitling is an important part of your business, not only do you want to make Breitling
390
00:21:02,520 --> 00:21:06,439
happy, but they're bringing you an opportunity, which is if you're a retailer, particularly
391
00:21:06,439 --> 00:21:11,359
in the United States where we see the market is moving up and up and up in terms of average
392
00:21:11,359 --> 00:21:15,239
transaction value, this has got to be very appealing.
393
00:21:15,239 --> 00:21:20,959
Plus, you know firsthand from Breitling, particularly under George Kern's leadership,
394
00:21:20,959 --> 00:21:23,439
that they're going to do it the right way.
395
00:21:23,439 --> 00:21:26,599
The watches speak for themselves, but you know that they're going to do the things that
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00:21:26,599 --> 00:21:30,359
they need to do well, which is marketing and branding in particular.
397
00:21:30,359 --> 00:21:35,319
I think George Kern gets that and understands the importance of that and has demonstrated
398
00:21:35,319 --> 00:21:39,280
over a long career that he will do that and invest there.
399
00:21:39,280 --> 00:21:43,400
So I think it's a very appealing proposition for a retailer.
400
00:21:43,560 --> 00:21:48,400
In fact, I can imagine there are brands they would happily eject from their store if they
401
00:21:48,400 --> 00:21:52,560
needed to, to replace it with Universal Genève.
402
00:21:52,560 --> 00:21:55,119
But this is what leaves me scratching my head.
403
00:21:55,119 --> 00:22:00,920
Everything I just said is what leaves me scratching my head about Galet, because it's a very different
404
00:22:00,920 --> 00:22:03,719
proposition on so many levels.
405
00:22:03,719 --> 00:22:09,880
Number one, it's a brand that doesn't have the cachet of Universal Genève.
406
00:22:09,880 --> 00:22:15,079
Now there are people who love Vintage Galet and collect Vintage Galet chronographs in
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00:22:15,079 --> 00:22:16,079
particular.
408
00:22:16,079 --> 00:22:21,199
I know our beloved, our friend Eric Wind, I know loves a good Vintage Galet chronograph
409
00:22:21,199 --> 00:22:25,000
and there's a market for it and there are people who are enthusiastic about it, but
410
00:22:25,000 --> 00:22:29,199
nowhere near on the level of Universal Genève.
411
00:22:29,199 --> 00:22:35,800
I mean, this Galet, Vintage Galet is very much a deep cut with its own kind of very
412
00:22:35,800 --> 00:22:38,479
small cult following.
413
00:22:38,479 --> 00:22:44,599
Number two, from a price positioning standpoint, this is an entry into one of the most crowded,
414
00:22:44,599 --> 00:22:48,520
difficult and declining market segments there is.
415
00:22:48,520 --> 00:22:55,719
So you talk about a Sisyphean task and pushing a boulder uphill, launching any brand in this
416
00:22:55,719 --> 00:22:57,640
category is tough.
417
00:22:57,640 --> 00:23:05,479
Now you're doing it with a brand that is very insidery and a big thing of what you need
418
00:23:05,479 --> 00:23:09,800
for a brand in the sub $5,000 price segment is brand.
419
00:23:09,800 --> 00:23:10,800
Yep.
420
00:23:10,800 --> 00:23:13,239
I mean, these watches are built on brand.
421
00:23:13,239 --> 00:23:16,920
There's so much competition from a product standpoint.
422
00:23:16,920 --> 00:23:19,439
There's a lot of good products in that segment.
423
00:23:19,439 --> 00:23:24,760
You really need to have a brand to break through and really need to invest in a brand there
424
00:23:24,760 --> 00:23:29,000
on a scale and at a level you probably don't even need to with Universal Genève.
425
00:23:29,000 --> 00:23:32,760
I mean, you're going to be competing with the likes of the brands that are spending
426
00:23:32,760 --> 00:23:35,359
the most money in the segment.
427
00:23:35,359 --> 00:23:39,599
You're competing with the swatch group brands and you're going to outspend Longines or you're
428
00:23:39,599 --> 00:23:43,439
going to outspend Tissot, you're going to outspend Tag Heuer.
429
00:23:43,439 --> 00:23:44,439
I don't think so.
430
00:23:44,439 --> 00:23:47,359
So to me, I'm sort of scratching my head over this one.
431
00:23:47,359 --> 00:23:50,599
I think what George Kern has done, I mean, it could also be for a different market.
432
00:23:50,599 --> 00:23:54,599
I mean, we're talking about what we know about that segment of the market in the United States,
433
00:23:54,599 --> 00:23:57,040
but that segment of the market we know is struggling globally.
434
00:23:57,040 --> 00:24:01,800
If you look at the export data from Switzerland, we know that this is a segment of the market
435
00:24:01,800 --> 00:24:02,959
under pressure.
436
00:24:02,959 --> 00:24:06,560
When we look at the brands, we'll talk about Richemont in a second, like this is why they're
437
00:24:06,560 --> 00:24:08,119
spinning off Baume and Mercier.
438
00:24:08,119 --> 00:24:11,000
They don't want to compete in that segment.
439
00:24:11,000 --> 00:24:12,000
It's difficult.
440
00:24:12,000 --> 00:24:16,280
And Baume and Mercier is a brand that does have more recognition certainly than Galais
441
00:24:16,280 --> 00:24:19,319
and it struggles, you know what I mean?
442
00:24:19,319 --> 00:24:24,640
The export data shows that we've talked about the swatch group earnings and they're really
443
00:24:24,640 --> 00:24:28,000
struggling in this segment of the market.
444
00:24:28,000 --> 00:24:30,000
You're launching a brand into a meat grinder.
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So this is either, hey, it's Gabe.
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00:24:33,239 --> 00:24:36,959
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447
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448
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449
00:24:43,439 --> 00:24:48,040
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00:24:48,040 --> 00:24:50,520
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00:24:50,520 --> 00:24:54,560
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00:24:54,560 --> 00:24:58,920
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00:25:07,040 --> 00:25:08,800
Now back to the show.
456
00:25:08,800 --> 00:25:10,680
I think there's two ways to look at it.
457
00:25:10,680 --> 00:25:15,040
Like one is to scratch your head like I'm doing and I'll play the devil's advocate.
458
00:25:15,040 --> 00:25:19,319
The other way to look at it is like what Breitling is doing is building a business for the long
459
00:25:19,319 --> 00:25:20,319
term.
460
00:25:20,319 --> 00:25:21,319
Yeah.
461
00:25:21,319 --> 00:25:26,959
And George Kern, you could argue has been methodical in his approach to the business.
462
00:25:26,959 --> 00:25:31,079
Step number one, he came in and he writed the Breitling brand.
463
00:25:31,079 --> 00:25:32,079
Yes.
464
00:25:32,079 --> 00:25:33,599
Got that on the rails.
465
00:25:33,599 --> 00:25:39,000
Then step two, he expanded into new market segments, starting with Universal Geneve.
466
00:25:39,000 --> 00:25:42,040
And he was, we didn't even talk about one of the things they did that was so clever
467
00:25:42,040 --> 00:25:47,880
with UG and speaking of Hodinkee, Ben Clymer, speaking of Eric Wind, like he had an advisory
468
00:25:47,880 --> 00:25:53,160
committee for Universal Geneve to guide the direction of the brand and the products of
469
00:25:53,160 --> 00:25:54,160
the brand.
470
00:25:54,160 --> 00:25:55,160
This was not done in a vacuum.
471
00:25:55,160 --> 00:25:59,079
This was done in close consultation with the watch community, which I think is very
472
00:25:59,079 --> 00:26:03,880
savvy when you're doing something like this, but he's been meticulous about it.
473
00:26:03,880 --> 00:26:08,479
It's like we're going up market as the, as, as the industry moves up market.
474
00:26:08,479 --> 00:26:14,520
And then the galley thing, I think is a right turn for me, for all the reasons I just articulated,
475
00:26:14,520 --> 00:26:21,400
except to say if your task as George Kern and the bigger move is even more long-term
476
00:26:21,400 --> 00:26:23,040
in nature than the last 10 years.
477
00:26:23,040 --> 00:26:26,160
He started at Breitling in 2017.
478
00:26:26,160 --> 00:26:33,040
My theory on this is he's building a holding company structure for the longterm.
479
00:26:33,040 --> 00:26:36,959
He's not only writing the Breitling ship and getting that thing on the rails.
480
00:26:36,959 --> 00:26:41,400
He's not only moving up market with UG, but he's building a full fledged holding company
481
00:26:41,400 --> 00:26:44,479
that's diverse across a variety of price segments.
482
00:26:44,479 --> 00:26:48,079
The sub $5,000 price class will ultimately come around.
483
00:26:48,079 --> 00:26:50,079
The pendulum swings both ways.
484
00:26:50,079 --> 00:26:55,400
And just like the market is running away for the $20,000 and up watches in a couple of
485
00:26:55,400 --> 00:26:57,439
years, the opposite will be true.
486
00:26:57,439 --> 00:27:02,000
And it will be the brands that are in that sub $5,000 segment that are showing strength.
487
00:27:02,000 --> 00:27:03,640
It's just, it's a cyclical business.
488
00:27:03,640 --> 00:27:04,800
That's the way this works.
489
00:27:04,800 --> 00:27:07,359
And he will have built a holding company structure.
490
00:27:07,359 --> 00:27:08,680
That's long-term in nature.
491
00:27:08,680 --> 00:27:14,800
That's diversified across price segments that has a global retail network and for private
492
00:27:14,800 --> 00:27:19,280
equity owners sets the company up for an IPO.
493
00:27:19,280 --> 00:27:25,239
Because private equity, we know, look, we don't know, but generally the trend with private
494
00:27:25,239 --> 00:27:28,719
equity, the way they approach this stuff is they make an investment and generally it's
495
00:27:28,719 --> 00:27:30,160
a long-term investment.
496
00:27:30,160 --> 00:27:36,040
I mean, gosh, if private equity has been backing Breitling for the last 10 years, that's significant.
497
00:27:36,040 --> 00:27:39,040
I'm sure they're happy with the performance, but they need an exit.
498
00:27:39,040 --> 00:27:42,920
They need to put that capital to work on the next thing that's going to grow to that level.
499
00:27:42,920 --> 00:27:47,800
And so what Kern is doing here is, you know, making a bet that in the current market, we
500
00:27:47,800 --> 00:27:52,119
may be scratching our heads at, but certainly sets up Breitling for the long-term to go
501
00:27:52,119 --> 00:27:55,160
public as a well-diversified holding company.
502
00:27:55,160 --> 00:27:57,560
That's my theory of the case there with the Gallet thing.
503
00:27:57,560 --> 00:27:58,560
Yeah.
504
00:27:58,560 --> 00:27:59,560
I mean, I think that makes sense.
505
00:27:59,560 --> 00:28:01,560
And obviously time will tell on this.
506
00:28:01,560 --> 00:28:06,680
You know, I find it interesting when we look at that relative to Richemont, right?
507
00:28:06,680 --> 00:28:11,040
Because on one sense, we're seeing some parallels, right?
508
00:28:11,199 --> 00:28:14,760
Different brands, different price classes against specific competitors that they believe
509
00:28:14,760 --> 00:28:16,640
that they can take market share from.
510
00:28:16,640 --> 00:28:17,880
Makes perfect sense.
511
00:28:17,880 --> 00:28:20,199
Basic business stuff, not a big deal.
512
00:28:20,199 --> 00:28:23,959
What is interesting to me is, you know, Richemont has had a number of divestments.
513
00:28:23,959 --> 00:28:25,719
You mentioned Balmain Mercier, YNAB.
514
00:28:25,719 --> 00:28:30,680
So that's a Ux Net-a-Porter, you know, they divested from as well.
515
00:28:30,680 --> 00:28:36,380
And of course they spend in a very different kind of way than Breitling does.
516
00:28:36,380 --> 00:28:38,479
They spend against these massive shows.
517
00:28:38,479 --> 00:28:42,400
They contribute to the foundations that support these shows.
518
00:28:42,400 --> 00:28:50,760
You know, they are active in the social, the media, and the commercial economies of these
519
00:28:50,760 --> 00:28:51,760
brands.
520
00:28:51,760 --> 00:28:55,160
Like Richemont is entrenched in the industry.
521
00:28:55,160 --> 00:28:57,880
And I think this is why when people think about holding companies, they tend to think
522
00:28:57,880 --> 00:29:02,280
Swatch, LVMH, Richemont, Swatch, LVMH, Richemont.
523
00:29:02,280 --> 00:29:03,280
That's it.
524
00:29:03,280 --> 00:29:08,479
There are these others that participate and are active.
525
00:29:08,479 --> 00:29:14,520
But they're also, because they are in that structure, they are anchored to some pretty
526
00:29:14,520 --> 00:29:17,680
heavy weights that they have to pull down the street, right?
527
00:29:17,680 --> 00:29:18,680
All of these brands.
528
00:29:18,680 --> 00:29:22,839
You know, Swatch pulled out, of course, after Basel went away, you know, they no longer
529
00:29:22,839 --> 00:29:27,599
participate in these major watch shows in Geneva in the way that we saw Breitling for
530
00:29:27,599 --> 00:29:30,239
many years used to do theatrical events.
531
00:29:30,239 --> 00:29:32,000
Out of the programming in Zurich.
532
00:29:32,000 --> 00:29:33,000
Yeah.
533
00:29:33,719 --> 00:29:37,000
They had to do immediately before Watches and Wonders to kind of capture people who
534
00:29:37,000 --> 00:29:38,359
were coming in for those shows.
535
00:29:38,359 --> 00:29:43,640
I mean, they've done crazy theatrical stuff like, you know, releasing watches while mid-flight
536
00:29:43,640 --> 00:29:48,439
on, you know, an aircraft and things like that, that do two things, of course.
537
00:29:48,439 --> 00:29:51,920
One, create a spectacle that garners press and media and interest.
538
00:29:51,920 --> 00:29:57,040
And two, also, you know, creates a draw and a magnet for their retail partners to want
539
00:29:57,040 --> 00:29:58,040
to participate.
540
00:29:58,040 --> 00:30:02,319
You know, it's tough being out there for these weeks and think they got the memo, though,
541
00:30:02,319 --> 00:30:05,400
which is as cool and theatrical as those events may be.
542
00:30:05,400 --> 00:30:09,680
Like everyone just wants to go to Geneva for that one week and then go home.
543
00:30:09,680 --> 00:30:13,319
That's like it's just it's just challenging for, you know, for individuals to really get
544
00:30:13,319 --> 00:30:14,319
that done.
545
00:30:14,319 --> 00:30:15,400
They had a presence in Geneva.
546
00:30:15,400 --> 00:30:16,400
Which hotel were they in?
547
00:30:16,400 --> 00:30:21,040
They took over, I think, an entire floor of it was maybe the Ritz or the Four Seasons,
548
00:30:21,040 --> 00:30:22,040
one of those hotels.
549
00:30:22,040 --> 00:30:23,040
Yeah.
550
00:30:23,040 --> 00:30:26,119
But my point with this is because they're flexible with that and because they've gone
551
00:30:26,119 --> 00:30:29,880
for a little bit of flamboyant flair, they can kind of do whatever they want.
552
00:30:29,880 --> 00:30:33,680
You know, it's not it doesn't look like news, quote unquote, that they're pulling in or
553
00:30:33,680 --> 00:30:34,680
out of something.
554
00:30:34,680 --> 00:30:35,680
You know what I mean?
555
00:30:35,680 --> 00:30:40,920
Like if if when we like we noted, for example, the Mont Blanc pulled out of Watches and Wonders
556
00:30:40,920 --> 00:30:43,560
like that's news, right?
557
00:30:43,560 --> 00:30:44,560
That's a big deal.
558
00:30:44,560 --> 00:30:46,520
They've been there for a long time.
559
00:30:46,520 --> 00:30:49,599
Speculation comes out of that, blah, blah, blah.
560
00:30:49,599 --> 00:30:54,199
If Breitling decides to show one year and not show another, it's just Breitling doing
561
00:30:54,199 --> 00:30:56,859
Breitling's George Kern being a maverick.
562
00:30:56,859 --> 00:30:59,900
So in that sense, you know, they have a lot more flexibility.
563
00:30:59,900 --> 00:31:03,819
And that stuff matters when you think about the manpower, the time and the cost involved
564
00:31:03,819 --> 00:31:04,819
in that sort of thing.
565
00:31:04,819 --> 00:31:08,020
So it gives them the ability and the flexibility to say, we're going to lean in hard on a year
566
00:31:08,020 --> 00:31:09,020
where it really matters.
567
00:31:09,020 --> 00:31:12,459
And we might pull back a little bit in a year where it doesn't and it doesn't make it look
568
00:31:12,459 --> 00:31:17,660
like we need to talk about whether or not, you know, there's there's trouble at home.
569
00:31:17,660 --> 00:31:22,260
So this is the challenge, of course, of being a much bigger, much more entrenched industry
570
00:31:22,260 --> 00:31:24,300
giant of which Richemont is.
571
00:31:24,300 --> 00:31:27,939
Anything they do, you know, people like you and me are going to are going to polish our
572
00:31:27,939 --> 00:31:30,819
glasses and like poke at anything Breitling does.
573
00:31:30,819 --> 00:31:34,420
We're going to sort of look at it in a different way because they're a much younger company.
574
00:31:34,420 --> 00:31:36,619
They've given themselves the right to pivot.
575
00:31:36,619 --> 00:31:38,300
That's a real strategic advantage.
576
00:31:38,300 --> 00:31:39,300
Yes.
577
00:31:39,300 --> 00:31:44,300
On one hundred percent, one hundred percent, it is, which is, again, why I'm a little bit
578
00:31:44,300 --> 00:31:49,819
perplexed by like building the traditional holding company diversified across price segments
579
00:31:49,819 --> 00:31:52,339
because it's giving them less flexibility.
580
00:31:52,339 --> 00:31:55,839
It's like, couldn't they just hold on the galley thing and wait until the market moves
581
00:31:55,839 --> 00:31:57,339
that way, then be ready for it?
582
00:31:57,339 --> 00:31:59,660
But I mean, another question would be like, you know, look, I mean, there's plenty of
583
00:31:59,660 --> 00:32:03,180
Breitling's that existed in that in that price class for many, many years.
584
00:32:03,180 --> 00:32:04,699
Why not just keep them there?
585
00:32:04,699 --> 00:32:07,979
Unless they're trying to do that, you know, making those cool quartz watches like the
586
00:32:07,979 --> 00:32:09,579
Colt.
587
00:32:09,579 --> 00:32:10,579
The Colt.
588
00:32:10,579 --> 00:32:11,579
No, the endurance.
589
00:32:11,579 --> 00:32:12,579
I think they are.
590
00:32:12,579 --> 00:32:14,939
I think those are like the most affordable kind of ways in.
591
00:32:14,939 --> 00:32:19,160
But putting that aside, they may be trying to do the Rolex Tudor thing where they're
592
00:32:19,160 --> 00:32:23,719
trying to bring the basement up on Breitling so that they can make space for another brand,
593
00:32:23,719 --> 00:32:27,599
which of course is, you know, what Rolex and Tudor have been doing for the last decade.
594
00:32:27,599 --> 00:32:29,640
So they could very well be trying to take that approach.
595
00:32:29,640 --> 00:32:35,400
Now, granted, Tudor obviously has a much stronger brand than than Gallet, you know, obviously.
596
00:32:35,400 --> 00:32:39,119
But maybe that's the play they're trying to trying to activate.
597
00:32:39,119 --> 00:32:43,599
Look, I think the other side of it, too, and this is kind of an interesting question.
598
00:32:43,599 --> 00:32:49,520
We talk about sometimes like the Tudor test at like the $4,000, $5,000 watch, which is,
599
00:32:49,520 --> 00:32:50,520
you know, a lot.
600
00:32:50,520 --> 00:32:51,520
And we hear this a lot.
601
00:32:51,520 --> 00:32:52,520
You know, we see it.
602
00:32:52,520 --> 00:32:53,520
Don't tell the audience our trade secrets.
603
00:32:53,520 --> 00:32:54,920
I mean, it's true, though.
604
00:32:54,920 --> 00:32:58,199
There are a lot of folks who will look at a watch in that price class and go, well,
605
00:32:58,199 --> 00:33:00,280
for that money, I could just go buy a Black Bay.
606
00:33:00,280 --> 00:33:04,760
Well, we buy watches in that price segment and we have brands we carry that are in that
607
00:33:04,760 --> 00:33:05,760
price segment.
608
00:33:05,760 --> 00:33:13,359
The question you and I ask repeatedly is, can I justify this watch relative to a Tudor
609
00:33:14,119 --> 00:33:15,119
Black Bay?
610
00:33:15,119 --> 00:33:20,199
That is like the benchmark in the category for a smart way to spend $5,000 or less for
611
00:33:20,199 --> 00:33:22,959
a lot of people, for a lot of people, for for me even.
612
00:33:22,959 --> 00:33:23,959
Right.
613
00:33:23,959 --> 00:33:27,839
So now the answer doesn't have to be, does this watch compete with a Tudor Black Bay
614
00:33:27,839 --> 00:33:29,439
on price and on specs?
615
00:33:29,439 --> 00:33:34,800
It could be like, does this is this another interesting way to spend that money?
616
00:33:34,800 --> 00:33:39,199
Because it's an interesting design, but that's how we feel like there's a beautiful object
617
00:33:40,199 --> 00:33:45,079
or Gaga Laboratorio, you know, where it's like they exist as design objects unto themselves
618
00:33:45,079 --> 00:33:46,959
that the comparison is moot.
619
00:33:46,959 --> 00:33:53,699
But if you're but if you're introducing a watch and a brand in the sub $5,000 segment
620
00:33:53,699 --> 00:33:58,119
that's going to be in the same stores as a Tudor, that's going to be sitting in a case
621
00:33:58,119 --> 00:34:03,979
somewhere between a Tudor and a Tag Heuer, then you got to make sure you're delivering
622
00:34:03,979 --> 00:34:09,939
a product at a very high standard, particularly if you're a new entrant to the category.
623
00:34:09,939 --> 00:34:12,379
So to me, you know, so fine.
624
00:34:12,379 --> 00:34:14,419
So we see this asymmetric structure, right?
625
00:34:14,419 --> 00:34:16,739
Why Baum and Mercier struggles.
626
00:34:16,739 --> 00:34:17,739
Yeah.
627
00:34:17,739 --> 00:34:20,300
Well, so to me, this is where the interesting question comes up.
628
00:34:20,300 --> 00:34:21,300
So fine.
629
00:34:21,300 --> 00:34:25,260
So we've painted the landscape of these two, you know, the industry behemoth and the, and
630
00:34:25,260 --> 00:34:30,739
the, the, the challenger, if you will, you know, multi-billion dollar, but, but still
631
00:34:30,739 --> 00:34:34,300
challenger brand of the Breitling holding company.
632
00:34:34,300 --> 00:34:37,580
We see this, let's say Breitling succeeds.
633
00:34:37,580 --> 00:34:38,699
Okay.
634
00:34:38,699 --> 00:34:40,300
George Kern is successful.
635
00:34:40,300 --> 00:34:42,179
Universal Genev picks up speed.
636
00:34:42,179 --> 00:34:45,739
You know, these pieces, you know, the, there are some halo pieces from within universal
637
00:34:45,739 --> 00:34:51,679
Genev that collectors actively seek, you know, let's say that they've, they've got it figured
638
00:34:51,679 --> 00:34:56,939
out with Gallet and they create a, you know, several hundred million dollar business there
639
00:34:56,939 --> 00:34:59,100
and it's all humming along.
640
00:34:59,100 --> 00:35:06,739
And now that holding company is, is a multi-billion dollar holding company and they IPO.
641
00:35:06,739 --> 00:35:08,699
I see why that's good for the private equity.
642
00:35:08,699 --> 00:35:10,379
I see why that's good for George Kern.
643
00:35:10,379 --> 00:35:11,699
I see why that's good for the board.
644
00:35:11,699 --> 00:35:16,899
He'll go down as one of the great watch executives of all time up there with Jean-Claude Biver
645
00:35:16,899 --> 00:35:17,899
and Gunter Blumlein.
646
00:35:17,899 --> 00:35:18,899
Sure.
647
00:35:18,899 --> 00:35:22,199
Kern will be on the Mount Rushmore of watch executives in that world.
648
00:35:22,199 --> 00:35:29,760
So here's the question then, if they do that, are they going to trade away the dynamism
649
00:35:29,760 --> 00:35:34,719
that they currently have access to the ability to pivot and move and participate when they
650
00:35:34,719 --> 00:35:37,239
want to and not when they don't.
651
00:35:37,239 --> 00:35:41,800
And all of those things, another behemoth holding company that loses that agility.
652
00:35:41,800 --> 00:35:42,800
Yeah.
653
00:35:42,800 --> 00:35:46,560
Years ago when I worked at them dynamism and excitement years ago, when I worked at MTV,
654
00:35:46,560 --> 00:35:49,679
there was a guy who worked in MTV news who had been there for 25 years.
655
00:35:49,679 --> 00:35:50,679
Kurt Loder.
656
00:35:50,679 --> 00:35:51,679
I actually did meet Kurt Loder.
657
00:35:52,159 --> 00:35:53,159
No, it wasn't Kurt Loder.
658
00:35:53,159 --> 00:35:54,159
Tabitha Soren.
659
00:35:54,159 --> 00:35:55,159
Sway.
660
00:35:55,159 --> 00:35:56,159
Yeah.
661
00:35:56,159 --> 00:35:57,840
Tabitha Soren is married to Michael Lewis.
662
00:35:57,840 --> 00:35:58,840
Really?
663
00:35:58,840 --> 00:35:59,840
Yeah.
664
00:35:59,840 --> 00:36:00,840
Yeah.
665
00:36:00,840 --> 00:36:01,840
Today I learned.
666
00:36:01,840 --> 00:36:03,439
No, it's got a guy who used to run the entire news division.
667
00:36:03,439 --> 00:36:08,520
Lovely guy named Ben has a great, great documentary he made about Mr. Rogers because he literally
668
00:36:08,520 --> 00:36:10,000
grew up next door.
669
00:36:10,000 --> 00:36:11,959
He was, he was Mr. Rogers neighbor.
670
00:36:11,959 --> 00:36:12,959
Interesting.
671
00:36:12,959 --> 00:36:13,959
Yeah.
672
00:36:13,959 --> 00:36:19,679
My wife as a child grew up in Pittsburgh and her family bought their home from Mr. Rogers.
673
00:36:19,679 --> 00:36:24,399
So she literally grew up in Mr. Rogers house as a neighborhood.
674
00:36:24,399 --> 00:36:32,179
So Ben grew up next door to him anyway, anyway, Ben used to talk about moving the giant wheezing
675
00:36:32,179 --> 00:36:37,639
beast of an animal that was MTV, you know, and like, in order to like, if you wanted
676
00:36:37,639 --> 00:36:43,679
to change any element of MTV news, there is this, you know, just, and it's an amazing
677
00:36:43,679 --> 00:36:44,679
mental image.
678
00:36:44,679 --> 00:36:45,919
It's moving an aircraft carrier.
679
00:36:45,919 --> 00:36:46,919
Yeah.
680
00:36:47,199 --> 00:36:50,280
Everything has to pivot and move and slow, you know, go slowly.
681
00:36:50,280 --> 00:36:51,800
And what, what are they building?
682
00:36:51,800 --> 00:36:57,479
Like they're feeding this giant wheezing beast and build to me a successful holding company
683
00:36:57,479 --> 00:37:02,979
is like, have you had, is the beast still nimble enough to move, but vicious enough
684
00:37:02,979 --> 00:37:08,719
to consume its rivals or have you fattened it up to such a point that like even getting
685
00:37:08,719 --> 00:37:14,360
it to pivot is full of so many internal meetings and Google, Google docs and investor, you
686
00:37:14,360 --> 00:37:17,879
know, pitches and blah, blah, blah, that by the time you've pivoted the business, the
687
00:37:17,879 --> 00:37:19,560
pivot is no longer relevant.
688
00:37:19,560 --> 00:37:23,600
So that's going to be the challenge I think for, for a company like, like Breitling as
689
00:37:23,600 --> 00:37:25,860
they continue to avoid that fate.
690
00:37:25,860 --> 00:37:30,419
But this is what, this is exactly what Richemont is doing.
691
00:37:30,419 --> 00:37:32,560
They're getting fit as a holding company.
692
00:37:32,560 --> 00:37:38,080
So they are shedding the businesses that are low margin and low return for them.
693
00:37:38,080 --> 00:37:41,159
And some of the segments and the categories that are low margin and low return.
694
00:37:41,159 --> 00:37:46,080
So obviously Balmain Mercier, they're like, this segment is tough.
695
00:37:46,080 --> 00:37:47,439
It's a, it's a knife.
696
00:37:47,439 --> 00:37:48,439
It's a dog fight.
697
00:37:48,439 --> 00:37:49,439
We're out.
698
00:37:49,439 --> 00:37:50,439
Yeah.
699
00:37:50,439 --> 00:37:51,439
They sold it.
700
00:37:51,439 --> 00:37:55,679
They're focusing on the brands that, you know, Cartier sells at a similar lower price point,
701
00:37:55,679 --> 00:37:59,679
the average, but I mean, that business is a, is a juggernaut.
702
00:37:59,679 --> 00:38:00,679
That's a no brainer.
703
00:38:00,679 --> 00:38:04,760
It's untouchable, but moved away from Balmain Mercier.
704
00:38:04,760 --> 00:38:08,879
I do think this is my conspiracy theory, my opinion.
705
00:38:08,879 --> 00:38:15,360
I think they're moving Montblanc out of watchmaking and I'll tell you why.
706
00:38:15,360 --> 00:38:19,239
They didn't participate in watches and wonders this year.
707
00:38:19,239 --> 00:38:24,719
They haven't launched, had a significant launch since product launch Montblanc watch product
708
00:38:24,719 --> 00:38:31,020
launch since watches of wonders, watches and wonders in 2025, like I can't think of anything.
709
00:38:31,020 --> 00:38:36,959
The latest watch they did launch coming out of the Minerva Maison, they took the Montblanc
710
00:38:36,959 --> 00:38:37,959
name off the dial.
711
00:38:38,040 --> 00:38:45,719
I think with Montblanc, they've decided Montblanc is an incredible brand, a global brand, especially
712
00:38:45,719 --> 00:38:52,120
in pens and fine leather goods and all many categories, it's an incredibly strong brand.
713
00:38:52,120 --> 00:38:57,080
But I think they've decided in the watch category, the sec, again, the segment Montblanc watches
714
00:38:57,080 --> 00:39:01,840
are competing in is this really difficult segment that they've decided to walk away
715
00:39:01,840 --> 00:39:07,199
from with Balmain Mercier, a brand that is dedicated to and focused on watchmaking.
716
00:39:07,199 --> 00:39:13,080
I think they're doing the Homer Simpson slowly backing into the hedge with Montblanc watches
717
00:39:13,080 --> 00:39:17,239
and slowly walking Montblanc away from that, from that business.
718
00:39:17,239 --> 00:39:20,780
It's just too tough to compete there.
719
00:39:20,780 --> 00:39:25,679
And as nice as those Montblanc watches are like those ice divers are very nice watches,
720
00:39:25,679 --> 00:39:30,120
but do they offer a fundamentally different point of view than a Tudor Black Bay or a
721
00:39:30,120 --> 00:39:34,399
fundamentally better value proposition than that or an Aquaracer or anything else?
722
00:39:34,399 --> 00:39:35,399
No, not really.
723
00:39:35,399 --> 00:39:37,280
I think they're walking away with that.
724
00:39:37,280 --> 00:39:41,760
So now they're getting fit in the, just in watches in general, they're trimming up, they're
725
00:39:41,760 --> 00:39:42,760
getting fit.
726
00:39:42,760 --> 00:39:47,679
They're focusing on the things that sell and the focusing on the things that drive margin.
727
00:39:47,679 --> 00:39:52,520
And so what they're doing in a sense is exactly what, what you're, you're saying, you know,
728
00:39:52,520 --> 00:39:55,500
you got to be careful of, it's just like, they're slimming down.
729
00:39:55,500 --> 00:39:56,500
They're too big.
730
00:39:56,500 --> 00:39:57,500
They're too bloated.
731
00:39:57,500 --> 00:39:58,500
There's too many SKUs.
732
00:39:58,500 --> 00:39:59,500
There's too many brands.
733
00:39:59,500 --> 00:40:01,479
There's too many stakeholders there.
734
00:40:01,479 --> 00:40:06,840
They're getting fit and making it easier to operate and not trying to do everything
735
00:40:06,840 --> 00:40:11,040
in watches, but instead focusing in watches on what works.
736
00:40:11,040 --> 00:40:18,840
And so this is, I think it's a fascinating moment and it shows as slowly as these businesses
737
00:40:18,840 --> 00:40:24,760
move to me, it demonstrates that, you know, Richemont, well, two things.
738
00:40:24,760 --> 00:40:29,199
One is they have a level of self-awareness and they're willing to get fit and tune up
739
00:40:29,199 --> 00:40:30,879
their business and good for them.
740
00:40:30,879 --> 00:40:35,360
I mean, how many bit, forget just the watch industry, but in how many industries in general
741
00:40:35,360 --> 00:40:40,360
do businesses go in into denial about their terminal decline, right?
742
00:40:40,360 --> 00:40:44,080
You know, like, so I think it takes a level of self-awareness and they're, and they're
743
00:40:44,080 --> 00:40:45,439
taking action.
744
00:40:45,439 --> 00:40:49,600
Two, it's a very different bet from what Breitling is doing.
745
00:40:49,600 --> 00:40:55,280
Not only are they slimming down while Breitling is bulking up, they're moving with the market.
746
00:40:55,280 --> 00:40:59,199
They're moving away from the segment of the market that's the most difficult.
747
00:40:59,199 --> 00:41:03,159
They're not trying to compete there or introduce new products there.
748
00:41:03,159 --> 00:41:04,159
They're just, they're out.
749
00:41:04,159 --> 00:41:09,800
Look, I, I think as a final thought here, you're, you're right.
750
00:41:09,800 --> 00:41:11,639
It's interesting to look at that evolution.
751
00:41:11,639 --> 00:41:17,000
I mean, time will tell on both of these fronts, but I think just as I said, like the Breitling
752
00:41:17,000 --> 00:41:19,879
thing may be really smart over the longterm.
753
00:41:19,879 --> 00:41:23,600
People may say Richemont was really short-sighted for walking away from this segment of the
754
00:41:23,600 --> 00:41:29,040
market, but potentially, but what I think we are continuing to see, and we saw this
755
00:41:29,040 --> 00:41:32,639
in person at Watches and Wonders, we've been talking about this for years and it's happening
756
00:41:32,639 --> 00:41:39,040
now is that there is a grand reorganization of the luxury watch business and it's happening
757
00:41:39,040 --> 00:41:44,000
in front of us, you know, like market share is up for grabs.
758
00:41:44,000 --> 00:41:48,159
Certain things are forever, you know, protected by an incredible fortress business, like,
759
00:41:48,159 --> 00:41:50,959
you know, the Rolex and the Patek and blah, blah, blah.
760
00:41:50,959 --> 00:41:57,600
But the vast majority of other brands, it's a lot of opportunity for moving here.
761
00:41:57,600 --> 00:42:05,360
And as client preference changes, as vector for purchase changes, as pricing evolves,
762
00:42:05,360 --> 00:42:12,159
as all of these things change, the Kings of the industry no longer are just guaranteed
763
00:42:12,159 --> 00:42:13,959
their place there.
764
00:42:13,959 --> 00:42:18,340
So, you know, I look at this and I'm like, be what, you know, right off Breitling at
765
00:42:18,340 --> 00:42:23,320
your own peril, right off Richemont at your own peril, you know, we can't predict the
766
00:42:23,320 --> 00:42:24,320
future.
767
00:42:24,320 --> 00:42:25,320
No.
768
00:42:25,320 --> 00:42:29,360
What I'm saying is that each of these individual companies, you know, a little bit less so
769
00:42:29,360 --> 00:42:33,800
for the Swatch Group, but certainly for everybody, at least this is what we've seen.
770
00:42:33,800 --> 00:42:35,159
We don't know what's going on behind the scenes.
771
00:42:35,159 --> 00:42:36,159
Yeah.
772
00:42:36,159 --> 00:42:37,159
Swatch Group seems like a mess.
773
00:42:37,159 --> 00:42:40,159
I mean, you can look at Breitling and say, very clear strategy.
774
00:42:40,159 --> 00:42:43,000
You can look at Richemont now and say, very clear what they're doing.
775
00:42:43,000 --> 00:42:44,360
Swatch Group, it's like, you're scratching your head.
776
00:42:44,360 --> 00:42:47,639
LVMH, very clear what they're doing, but whatever, let's putting that aside for a minute because
777
00:42:47,639 --> 00:42:50,800
who knows what's going on behind closed doors in Hayek land.
778
00:42:50,800 --> 00:42:59,280
But we do have evidence that, you know, prior success is not necessarily being counted on
779
00:42:59,280 --> 00:43:02,600
for future opportunity and that is pivoting and changing.
780
00:43:02,600 --> 00:43:06,840
So I think we got to keep our eyes on some of these nascent holding companies and the
781
00:43:06,840 --> 00:43:10,040
pressure that they're going to put on the industry stalwarts.
782
00:43:10,040 --> 00:43:12,919
Or if they get gobbled up.
783
00:43:12,919 --> 00:43:17,639
Which is also, I suppose, possible, but, you know, if these businesses continue to build
784
00:43:17,800 --> 00:43:22,520
what they're building, their market cap, like their actual value, whether they're public
785
00:43:22,520 --> 00:43:28,199
or just their internal value, if they're not, is going to be significant.
786
00:43:28,199 --> 00:43:33,159
And I'm really curious to see how that also changes the retail landscape because as different
787
00:43:33,159 --> 00:43:36,879
brands move to different holding companies, different holding companies are going to have
788
00:43:36,879 --> 00:43:39,719
different relationships with different kinds of retailers.
789
00:43:39,719 --> 00:43:44,760
You know, Hodorology Dominique Renaud is working in a very specific narrow niche, but they're
790
00:43:44,760 --> 00:43:48,040
developing a retail network there that is formidable.
791
00:43:48,040 --> 00:43:50,840
LVMH has a formidable retail network.
792
00:43:50,840 --> 00:43:53,919
Rolex owns a retail network.
793
00:43:53,919 --> 00:43:59,239
And all of these are changes that have happened in the last five years.
794
00:43:59,239 --> 00:43:59,760
Yeah.
795
00:43:59,760 --> 00:44:04,919
So we're seeing a grand reorganization of this industry in a way that we've never seen it
796
00:44:04,919 --> 00:44:08,919
before. And when you look at it on a narrow level, sure, there's like, you know, how brands
797
00:44:08,919 --> 00:44:10,760
compete against each other, market share, blah, blah, blah.
798
00:44:10,760 --> 00:44:16,399
When you look at it on the scale of the business, continents are moving.
799
00:44:16,399 --> 00:44:18,040
Yeah. It's interesting about Rolex.
800
00:44:18,040 --> 00:44:21,040
You're right. I mean, they've moved into retail.
801
00:44:21,040 --> 00:44:26,000
I guess Richemont has as well with Watchfinder and company to some extent pre-owned retail.
802
00:44:26,000 --> 00:44:30,199
But Richemont got out of Ux Net-a-Porter, right?
803
00:44:30,199 --> 00:44:33,760
So that's and obviously, I guess Mr.
804
00:44:33,760 --> 00:44:35,479
Porter did some watch retails.
805
00:44:35,479 --> 00:44:38,360
Mr. Porter did a lot of watch retail, but they never quite cracked that.
806
00:44:38,360 --> 00:44:39,159
Get out of that.
807
00:44:39,159 --> 00:44:39,679
Yeah.
808
00:44:39,679 --> 00:44:40,719
It never really worked.
809
00:44:40,719 --> 00:44:42,320
So let me ask you one final question.
810
00:44:42,320 --> 00:44:47,360
This is a brand we've talked about a bunch lately, and it's been in the news lately.
811
00:44:47,360 --> 00:44:54,159
We went out to drinks with a Swiss watch executive, very well-connected Swiss watch executive
812
00:44:54,159 --> 00:44:59,840
while we were in Geneva, who told us that from what he hears, JLC is very much in play
813
00:44:59,840 --> 00:45:01,639
as far as a management buyout goes.
814
00:45:01,639 --> 00:45:04,760
Now, I don't know that we've heard from Richemont or JLC on this.
815
00:45:04,760 --> 00:45:05,560
This was reported.
816
00:45:05,560 --> 00:45:06,199
Rumors out.
817
00:45:06,199 --> 00:45:06,800
We've talked about it.
818
00:45:06,800 --> 00:45:07,520
Rumors out.
819
00:45:07,520 --> 00:45:08,479
It's been reported.
820
00:45:08,600 --> 00:45:16,239
I believe in this tweet and maybe business launch, but what did you see from JLC at the
821
00:45:16,239 --> 00:45:21,719
show in terms of the way they showed up as a business and where they're making bets and
822
00:45:21,719 --> 00:45:24,320
where they're moving from a business standpoint?
823
00:45:24,320 --> 00:45:29,639
Because of course they did those master controls on, on bracelets, which are quite, quite nice
824
00:45:29,639 --> 00:45:30,479
looking watches.
825
00:45:30,479 --> 00:45:35,600
And we read a lot into the presence of other brands at the show or lack thereof.
826
00:45:35,679 --> 00:45:39,040
What did you make of how JLC showed up?
827
00:45:40,000 --> 00:45:45,919
Look, I, I mean, there are some things about JLC and we've talked about this, where
828
00:45:45,919 --> 00:45:49,360
we've been frustrated because we felt like this is a brand that, you know, has
829
00:45:49,360 --> 00:45:52,159
permission to do anything and largely chooses to do nothing.
830
00:45:52,159 --> 00:45:53,360
Oh, there's that old chestnut.
831
00:45:53,360 --> 00:45:53,600
Yeah.
832
00:45:53,600 --> 00:45:55,439
But that, that's been largely true of them.
833
00:45:55,439 --> 00:45:59,320
However, I think we have to, we have to give credit where credit is due in terms
834
00:45:59,320 --> 00:46:01,719
of some of the product releases this year.
835
00:46:02,120 --> 00:46:07,479
You know, the Memovax travel clock that they released with Mark Newson, like that
836
00:46:07,479 --> 00:46:10,840
is a stupendously cool object.
837
00:46:11,080 --> 00:46:12,439
And the thing that I like about it,
838
00:46:12,439 --> 00:46:16,879
We know that they've turned down others on clock collaboration, very significant
839
00:46:16,879 --> 00:46:20,479
folks in the industry turned down on, on Atmos collaborations in the past.
840
00:46:20,479 --> 00:46:24,280
So that surprised me that suggested that there's a fresh management.
841
00:46:24,280 --> 00:46:24,560
Yeah.
842
00:46:24,560 --> 00:46:29,000
And you know, travel clocks notoriously don't land so well in the modern day with
843
00:46:29,239 --> 00:46:33,239
with the collector class, but there's two things that I think are important to take
844
00:46:33,239 --> 00:46:35,280
away from the Mark Newsome collaboration.
845
00:46:35,320 --> 00:46:39,919
You know, one is a, first of all, God respects, it's ballsy to release a clock.
846
00:46:40,159 --> 00:46:45,040
Number one clocks are not like, you know, a thriving segment of the
847
00:46:45,040 --> 00:46:46,600
hoterology industry at the moment.
848
00:46:46,600 --> 00:46:46,840
No.
849
00:46:46,840 --> 00:46:49,879
And, or, or a segment of the industry where if you're trying to make
850
00:46:49,879 --> 00:46:52,080
waves where you'd place a bet.
851
00:46:52,399 --> 00:46:53,000
A hundred percent.
852
00:46:53,199 --> 00:46:53,800
So there's that.
853
00:46:53,800 --> 00:46:56,919
And the second is the design of that clock.
854
00:46:57,560 --> 00:47:02,040
To me, I look at that and I go, okay, imagine it, that as a watch.
855
00:47:02,600 --> 00:47:08,399
Well, a imagine as a watch, but also imagine what would happen if you took Mark
856
00:47:08,399 --> 00:47:13,120
Newsome's reductive design approach and applied that to a broad, the thing about
857
00:47:13,120 --> 00:47:16,199
that, that clock that's so cool is how vibrant it feels.
858
00:47:16,199 --> 00:47:21,760
Well, it's both quintessentially JLC, but very fresh and contemporary in its design.
859
00:47:21,760 --> 00:47:22,360
And that's what I meant.
860
00:47:22,360 --> 00:47:26,280
Imagine if you apply that design aesthetic to, so I look at that.
861
00:47:26,320 --> 00:47:27,280
That would be exciting.
862
00:47:27,320 --> 00:47:30,320
Well, this is the thing about the IWC Venture that we saw too.
863
00:47:30,360 --> 00:47:32,399
Uh, again, from a, from another major house, right?
864
00:47:32,840 --> 00:47:36,719
Part of what makes IWC successful in my mind is that Christian
865
00:47:36,719 --> 00:47:41,000
Knoop finds like a, like he can squeeze blood from that stone every
866
00:47:41,000 --> 00:47:43,439
year in a way that you just do not expect.
867
00:47:44,120 --> 00:47:46,040
And it keeps the design language.
868
00:47:46,040 --> 00:47:48,879
If someone was like, check out this experimental watch, you'd
869
00:47:48,879 --> 00:47:50,199
be like, oh, that's an IWC.
870
00:47:50,280 --> 00:47:50,840
Exactly.
871
00:47:51,120 --> 00:47:54,560
It sort of feels like it's in the IWC vernacular, but it's also a brand
872
00:47:54,600 --> 00:47:56,360
new, completely interesting, vibrant watch.
873
00:47:56,560 --> 00:48:00,239
When I look at that from JLC, that travel clock, I feel the same.
874
00:48:00,360 --> 00:48:03,360
And I have not felt that way from JLC in a long time.
875
00:48:03,479 --> 00:48:05,280
So respect, love that.
876
00:48:05,719 --> 00:48:08,639
And then when you look at like, you know, some of the high complication pieces.
877
00:48:09,399 --> 00:48:12,320
And I mean, look, JLC has been doing high complication pieces for years,
878
00:48:12,600 --> 00:48:16,399
doing some really incredible stuff, but they really did.
879
00:48:16,719 --> 00:48:21,639
And a lot of those grand comps, they weren't reversos, you know, like
880
00:48:21,760 --> 00:48:24,919
they were their own thing doing really exceptional stuff.
881
00:48:25,040 --> 00:48:28,360
And we see that for example, with like the grand traditions, like the, the, the
882
00:48:28,360 --> 00:48:32,199
tourbillon jumping date, for example, like that is a really, really good
883
00:48:32,199 --> 00:48:35,639
example of them showing like, we are a legitimate hotorology house.
884
00:48:35,840 --> 00:48:38,800
We always have been, and we're showing that to you now.
885
00:48:39,000 --> 00:48:44,360
And then making a more, I think, reasonable and competitive sport,
886
00:48:44,399 --> 00:48:47,879
you know, sporty, if you will watch in what they did with the master
887
00:48:47,879 --> 00:48:49,439
control line on the bracelet with the perpetual.
888
00:48:49,439 --> 00:48:50,000
What do you think of those?
889
00:48:50,679 --> 00:48:51,280
I think they're fine.
890
00:48:51,280 --> 00:48:54,080
I mean, like personally, like, I'm not like, I'm not the target for it.
891
00:48:54,080 --> 00:48:57,639
So like, whatever, but I mean, from like a business standpoint, it's a great idea.
892
00:48:57,719 --> 00:48:58,879
It's a hundred percent the right move.
893
00:48:59,080 --> 00:48:59,760
Absolutely.
894
00:48:59,840 --> 00:49:04,000
And you think if they launch those in a vacuum, maybe without the calendar,
895
00:49:04,000 --> 00:49:08,879
maybe without the clocks, maybe without the super complicated stuff, it would
896
00:49:08,879 --> 00:49:13,520
have been easy to be cynical about what they were doing, but they came correct this year.
897
00:49:13,560 --> 00:49:13,840
Right.
898
00:49:13,840 --> 00:49:19,080
I mean, they had, if you think about it, I really had a raft of, of novelties.
899
00:49:19,080 --> 00:49:19,479
They did.
900
00:49:19,679 --> 00:49:24,320
And I think, you know, if, if this is the first step in a new cardinal direction,
901
00:49:25,000 --> 00:49:28,320
I'm honestly the thing that re like, as I said, the thing that really
902
00:49:28,320 --> 00:49:30,679
demonstrates opportunity for me is the Mark Knudson stuff.
903
00:49:30,719 --> 00:49:30,959
Yeah.
904
00:49:31,159 --> 00:49:31,840
Well, it's a good point.
905
00:49:31,840 --> 00:49:32,040
Okay.
906
00:49:32,040 --> 00:49:35,959
So let's take the biggest creative risk they've taken in a really, really long time.
907
00:49:36,040 --> 00:49:41,159
So let's take the ownership speculation of JLC and put it to the side, whether
908
00:49:41,159 --> 00:49:45,879
they remain part of Richemont or not, or whatever, maybe they're getting their
909
00:49:45,879 --> 00:49:50,600
mojo back as a brand and that's good regardless of, of who owns them and, and
910
00:49:50,600 --> 00:49:51,159
where they sit.
911
00:49:51,159 --> 00:49:55,679
It also, I think if we go back just as a final thought to, you know, universal
912
00:49:55,679 --> 00:50:01,280
Genev, universal Genev started by, by, you know, playing by, by doing base hits.
913
00:50:01,439 --> 00:50:01,800
Right.
914
00:50:02,439 --> 00:50:04,439
We're going to nail, we're going to nail the pole router, which
915
00:50:04,439 --> 00:50:05,280
by the way, I think they did.
916
00:50:05,840 --> 00:50:07,800
Oh, on those limited pieces that.
917
00:50:07,800 --> 00:50:09,840
No, no, I'm talking about like their, their initial product
918
00:50:09,840 --> 00:50:11,000
release just a couple of weeks ago.
919
00:50:11,040 --> 00:50:11,199
Yeah.
920
00:50:11,560 --> 00:50:14,520
You know, I think the compact pieces are okay.
921
00:50:14,520 --> 00:50:15,040
They're fine.
922
00:50:15,239 --> 00:50:18,080
They're not, you know, they're not great in my life.
923
00:50:18,080 --> 00:50:19,840
I feel a little bit too du jour.
924
00:50:19,919 --> 00:50:20,239
Yeah.
925
00:50:20,600 --> 00:50:23,439
Well, they just don't feel differentiated at the price point that they're at,
926
00:50:23,639 --> 00:50:24,840
but the pole router is pretty good.
927
00:50:24,879 --> 00:50:25,040
Yeah.
928
00:50:25,320 --> 00:50:27,959
So the real question there is going to be, you know, okay.
929
00:50:28,679 --> 00:50:30,280
Making an, you're making a nice watch.
930
00:50:30,600 --> 00:50:31,639
What are you going to do with this?
931
00:50:31,760 --> 00:50:32,520
How are you going to grow it?
932
00:50:32,639 --> 00:50:33,560
What's your roadmap?
933
00:50:33,600 --> 00:50:34,679
Why do you need to exist?
934
00:50:34,719 --> 00:50:37,239
If they can answer those questions effectively, and I think they have the
935
00:50:37,239 --> 00:50:39,679
leadership to do it, then they could be in an interesting spot.
936
00:50:39,840 --> 00:50:42,959
And this is where we start to see the tectonic shifts and the tectonic shifts
937
00:50:42,959 --> 00:50:46,719
will hopefully not just result in interesting business changes, but, and
938
00:50:46,719 --> 00:50:48,959
it's what we all hope for good watches.
939
00:50:49,120 --> 00:50:49,360
Yeah.
940
00:50:49,520 --> 00:50:52,159
Part of what's like, the reason we were all so irritated with Jaeger
941
00:50:52,199 --> 00:50:57,199
LeCoultre is because we want them to make good watches, you know, not just
942
00:50:57,199 --> 00:51:01,080
like a watch with a nice enough movement, like an interesting watch.
943
00:51:01,479 --> 00:51:02,280
They finally did it.
944
00:51:02,679 --> 00:51:04,199
It's a clock, but they did it.
945
00:51:05,399 --> 00:51:06,199
I'm serious.
946
00:51:06,600 --> 00:51:10,280
I don't mean that as, as like shade, like they did it good for them.
947
00:51:10,679 --> 00:51:14,520
The best thing we can all do now is go out and tell everybody how awesome
948
00:51:14,520 --> 00:51:18,280
that clock is and get people to like put eyes on the brand.
949
00:51:18,479 --> 00:51:21,679
And then, and then the brand, you know, you shove the brand into the spotlight.
950
00:51:21,840 --> 00:51:24,800
If Jerome Lambert decides to take it out and do something with it,
951
00:51:24,919 --> 00:51:26,520
he's got our attention now.
952
00:51:26,840 --> 00:51:27,719
So do it.
953
00:51:27,959 --> 00:51:31,919
And if they stay within Richemont, they have our attention as well.
954
00:51:32,000 --> 00:51:32,479
Exactly.
955
00:51:32,479 --> 00:51:36,280
And, and just as, uh, just as Richemont has clearly gotten the memo
956
00:51:36,679 --> 00:51:40,639
and tightening up their business, maybe they've gotten the memo on JLC.
957
00:51:40,800 --> 00:51:41,239
We'll see.
958
00:51:41,360 --> 00:51:41,800
We'll see.
959
00:51:42,040 --> 00:51:44,800
But this creates all sorts of interesting dynamism in a market
960
00:51:44,800 --> 00:51:46,000
that is pivoting and changing.
961
00:51:46,080 --> 00:51:46,719
I love it.
962
00:51:47,000 --> 00:51:48,919
This is good news for the business.
963
00:51:48,919 --> 00:51:50,280
This is good news for collectors.
964
00:51:50,520 --> 00:51:51,360
Yeah, all of this.
965
00:51:51,360 --> 00:51:51,760
You're right.
966
00:51:51,760 --> 00:51:53,679
I think it's easy to say, oh, well.
967
00:51:54,320 --> 00:51:58,479
Breitling, Richemont, two very different approaches to the industry.
968
00:51:58,479 --> 00:52:00,560
They're polar opposites and all these ways.
969
00:52:00,560 --> 00:52:01,560
One is getting big.
970
00:52:01,560 --> 00:52:03,879
The other is trimming down, blah, blah, blah, blah, blah.
971
00:52:04,159 --> 00:52:04,719
But you're right.
972
00:52:04,719 --> 00:52:09,639
If you back way, way, way out, these are just two businesses in the wider
973
00:52:09,639 --> 00:52:13,840
spectrum of the industry and represent what's going on in the industry in
974
00:52:13,840 --> 00:52:18,399
general and what makes it so fun to follow the industry at this moment,
975
00:52:18,399 --> 00:52:21,320
which is, this is an industry going through a period of
976
00:52:21,320 --> 00:52:23,479
massive and accelerated change.
977
00:52:23,520 --> 00:52:23,719
Yep.
978
00:52:23,719 --> 00:52:27,080
Thank God we've got a podcast about exactly that.
979
00:52:27,320 --> 00:52:27,520
Yeah.
980
00:52:27,959 --> 00:52:28,679
So we leave it there.
981
00:52:28,719 --> 00:52:29,560
Let's leave it there.
982
00:52:29,600 --> 00:52:29,879
All right.
983
00:52:29,879 --> 00:52:31,439
Well, thank you so much for listening.
984
00:52:31,439 --> 00:52:34,560
Open work is of course a production of collective horology.
985
00:52:34,560 --> 00:52:39,600
You can find us online at collective horology.com and please do get in
986
00:52:39,600 --> 00:52:43,600
touch with your questions, feedback, suggestions, all that good stuff.
987
00:52:43,600 --> 00:52:49,199
And to do that, you can email us at podcast at collective horology.com.
988
00:53:01,439 --> 00:53:02,520
I assume we're going to cut this.
989
00:53:02,520 --> 00:53:02,800
Yeah.