Second Lives – AP and Rolex CPO, Ebel Reboots, Bennahmias Returns – Episode 99

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I cannot tell you how many clients I've spoken to who wanted to trade an
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AP to me and begged and pleaded for us to place it
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in a way that the brand wouldn't know. I think they've done a really good
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job of, like, terrorizing their clientele in that regard, and now they
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want them to sell them their watches. This is Openwork,
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a look inside the watch industry, a podcast from Collective
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Horology. I'm Gabe Riley, co-founder of Collective, and I'm Asher Rapkin,
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co-founder of Collective. Collective Horology is an independent watch retailer
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based in Ventura, California. We carry a wide range of of independent brands
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including Bamford London, Gaga Laboratorio, Renaud Tixier,
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and more. To learn more about us and check out the watches we carry,
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visit collectifhorology.com. You're back! I am back in action.
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We missed you. Speaking of Renaud Tixier, that new
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Monday Skeleton— oh man, oh my, my.
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You know, the funny thing about that watch, we— I
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don't want to give the impression like we always know what's coming, you know,
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6 to 12 months in advance. I wish we did. That's, that's not always the
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way it was. Sometimes we find out whenever we're else does. Exactly.
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But with this particular watch, I remember
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sitting at our meeting with RT in the— their
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meeting space at Watches and Wonders. And, you know, the watch is miraculously
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beautiful, and it has a pretty big price tag that is equivalent
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to the quality. $145,000. I've never
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bought for inventory watches at that price so fast in my
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life multiples. Yeah. And they're gone now. I mean, it shows how,
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how, you know, it's a funny thing. This is the thing I learn every time
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we do inventory or buy inventory is like when I think I'm being
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ambitious, it turns out I'm being a little too,
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a little too, too short in what I order. And when I, when I'm
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ambitious, sometimes I end up with stuff around. The joys of buying, of being a
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buyer. But putting that aside, the— we bought the—
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we bought these watches off renders. They were that good. Yeah. Well, okay. So these
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are, if you know, there were no Tixier Monday, which has this amazing
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micro rotor mechanism, basically an inertia wheel that
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allows power to continue through the drive, the gear
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train of the watch, even after the micro rotor itself has stopped. That inertia
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is allowed to carry through, so it makes the winding efficiency of the micro rotor
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higher, essentially. Yeah,
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you know, there's 2 things going on with this watch. One is there's that,
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that mechanical ingenuity, a product of Mr.
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Dominique Renaud himself. But the other thing was the handwork of
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Julien Tixier, the Tixier in Renaud Tixier. And of course,
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Famously, he built by hand himself the initial prototype
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of the Monday. Do you remember when he showed us the, the Legos?
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Oh, yeah. Yeah. Of the inertia wheel. Yeah. One of the, one of the things
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that, that I love, you know, and maybe this is just me as a parent
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too, is when we were being shown how the specific
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inertia wheels in the Monday work, it was demonstrated to
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us using a much larger, so obviously not to scale,
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a version of that that was made in what looked like Lego Technics. Yeah,
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it was Lego Technics. Which is just awesome. You know, I love
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the idea that people prototype in that. It makes perfect sense.
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You know, if it was prototyped that way, but the concept was— the concept was
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executed with pretty, pretty— they've also since scaled up and 3D printed the
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mechanism. Yeah, but my point is, I just thought that was, that was so cool.
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It was charming, and it makes Plain really,
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in some ways, kind of like that bezel on the Ming World Timer, the daylight
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savings time offset bezel. When you look at it, you're like, how has no one
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ever done this before? It was— it's kind of— all good ideas are like that,
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right? Yeah, it's kind of like that with this, with this micro rotor.
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But, you know, of course,
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that's the Renaud part of the equation. The Tixier part
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of the equation is the handwork that goes into the watches and
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the hand finishing. And he set that standard obviously with the prototype
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of the Monday. But now to have it in skeleton does 2 things. One is
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it leaves fully naked and exposes fully the,
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the, the micro rotor, the inertia wheel, the dancer as they
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call it, and really the mechanical prowess of that watch,
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the watchmaking prowess of that watch. But it also fully shows what
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Tixier is capable of himself in terms of, you know, old-school watchmaking,
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skeletonization, hand-finishing. And it's the version
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of the watch that puts it all on the table. Yes, it's a lot of
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money. I can only ever dream of owning a watch like this.
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I'm not going to pretend that this is ever something I personally would own,
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but I'm just so happy it exists. So we got some great live photos.
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Blake took the live photos in Geneva, and I did a write-up on
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the watch itself, and that's on collectivehorology.com on our blog.
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So if you just want to see this thing, like, this is one of those
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watches that, like, if you're just into watches,
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it's really cool. So check it out. Hat tip to those guys
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and kudos. That came out after New York Watch
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Week, you know, I think, which was the one more thing. Well, it was the
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one more thing. Wise in a sense, I think, just to wait a moment and
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then fill, fill that void. But let's talk about some news.
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Well, just after we recorded today's episode, major news out of
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Switzerland. LVMH has announced that they are restructuring.
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Zenith. That means they're eliminating hundreds of jobs, maybe most of
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the jobs at the brand around the world. It also means that
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they are essentially shutting down the brand for a period of years.
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They're seemingly pulling out of retail and distribution from what we
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understand, and they're going to ultimately refocus the brand on the high
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end of the market. This isn't surprising. We see this
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happening all over the industry. We've talked about the boom in the high end of
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the industry and just how challenged brands are in the sub-$10,000
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price segment. We've also discussed trouble at Zenith. For instance,
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earlier this year, we talked about reporting that LVMH
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was exploring a sale of the brand. Now, of course,
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LVMH has denied that, but clearly there was trouble
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in paradise. We have a lot of thoughts on this, and we're going
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to bring that to you in our next episode, which is going to be actually
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episode 100 of Open Work. We had other plans for that episode,
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but this is an important story and one we have a lot of thoughts
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and feelings on. Zenith is a brand we know and love. We love the watches.
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More importantly, We love the people. Our first collaboration
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in the watch industry was with Zenith, as well as our 10th collaboration
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was with Zenith as well. So we have a lot to say, and we
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know a lot of other folks have things to say. So we plan to be
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speaking with people who are involved with and invested with the brand.
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We plan to do plenty of research to understand what exactly
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is going on here, both at Zenith and LVMH, as well as within
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the industry more broadly, and what the implications of all of
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this are. So you can expect that next week. The 100th
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episode of Open Work. Not the kind of news we would
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have wanted to cover, not what we had planned for episode 100,
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but this is important. So of course we will tackle
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that next week. Now in the meantime, this week we have plenty of
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other news and goings-on from within the watch industry,
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and we're excited to share those with you. So without any further ado,
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let's get on with the show. François-Henri Panamias
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has joined Hublot as an advisor. We're gonna talk about AP
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his alma mater as well. They're rolling out a CPO program. We'll talk about Rolex
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CPO as well. There's some interesting news there. And then we'll end
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on Ybel. Journe and Chanel take
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a stake in— a majority stake in Ybel, which is fascinating.
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I mean, that is my— that could be an episode unto itself.
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It probably will be. It is a tangled web they're weaving there
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and a lot to get into. But let's start with
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François-Henri Benamias, former CEO
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of AP. That's where, of course, he made his name, cut his teeth.
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But now he's also the CEO of the— is it the Honorable Merchants Guild
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or group or something? Exactly. It's some luxury holding company that he announced.
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And before we get into the Hublot thing, so he leaves AP,
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he starts this Honorable Merchants Group, which I guess is like a new age
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luxury holding company. They have investments in a number
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of brands. I feel like I read that they have like a luxury e-bike brand
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in there. In their stable. I think something like that. Don't quote me
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on it. There were rumors that they were gonna get either acquire De Bethune
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or maybe he would become CEO of De Bethune. That didn't pan out,
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although it appears that there were some discussions there. Now Antoine Pin
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has become the CEO of De Bethune, formerly of LVMH
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Bulgari. So now we hear this and
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it's fascinating. I'm curious on your thoughts about—
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now apparently the scope of this is he still remains
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at the honorable emergency Merchants Group. He still has a new watch brand.
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I think it's like Northeast West South News, something like that, that they're launching within
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that group. We'll see watches apparently next year. So he's
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still doing all that. And now he has a, quote, discreet project
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on which he's consulting Hublot. And Hublot's CEO
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remains in place, but yet they decided to publicize this.
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I, I don't know what to make of any of This is like
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Mark McGrath being assigned the CEO
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role at Ed Hardy in 2002. Did that
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happen? It should have. Yeah. I get, look, all right.
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So I think, I think there's a couple of ways to look at this.
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Actually, that's genius. There's a couple of— you could turn back
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time. There's a pretty, I think there's a, it's very tempting
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to look at this and like want to you
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know, be a cynic about it, but I think it's brilliant. The thing
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about— the thing about this guy is that no matter
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what you think about him, how he presents, like his
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vibe, he is able to,
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for a certain subset of client,
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develop some of the best pop art
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that appeals to them. Now, I'm not saying it's good art. I'm not saying the
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Spider-Man watch, you know, or any of the Marvel stuff from AP
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was like amazing watchmaking. Personally, it wasn't for me,
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but there are a lot of guys who bought that. And what Hublot
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basically is, is horological pop art. That's a good— okay.
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And if you— that's a good point. If you think about it that way,
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because as we've talked about in previous episodes, like, that's not all he did at
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AP. No, no, no. But that was— but that was where the— and maybe it's
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a better fit for Hublot than it ever was for AP. That's my point,
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which is If it is pop art of a
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certain type, this is the guy who knows how to do it.
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And I think we have to, we have to evaluate it purely.
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So you think that's his remit? That's your speculation. He's not coming in there
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to coach them on manufacturing scarcity. He's,
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he's figuring out how to be more hublot than they
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already are. I think if you think about it in that structure, it's ultimately
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what value he could provide to them. I don't
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think you can look at this horologically, and if you do, that's the
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wrong way to evaluate— in my opinion, is the wrong way to evaluate it.
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I think you have to look at it from the perspective of what can this
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man bring. And the— and to the vast majority of the watch collecting community,
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as like collectors, I don't think this is relevant.
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But as Hublot has made abundantly clear, they don't
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care about the watch collecting community because that's not who
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they sell their watches to. And that's okay. And in fact, it's more than
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okay because really what it does is it's a brand that LVMH owns that
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isn't consistently cannibalizing or sitting over everything else. Like sometimes
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I think people miss the point when they talk about the fact that like Hublot
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is now using a lot more Zenith movements. Like, that's great,
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but you're looking at it the wrong way. Like, sure,
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does that quote unquote justify the price of some of these pieces? Maybe, maybe not.
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I don't know. That's not why they're doing it. They're doing it
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because it's a better movement, I suspect, or they have better access to that movement
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at better costs. Maybe, who knows? Maybe helps Zenith more than it does Hublot.
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Yeah, it's an interesting way to look at it. So all this to say,
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you know, while I am not a huge AP fanboy,
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as I'm sure folks who listen to us know, I do
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think that if we pluck what his strategic
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vision was for AP and apply it, it is probably better applied,
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frankly, to Hublot than it was there. So honestly, whoever made
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this hire, bit higher. Okay, so let me ask you this. You mentioned Zenith.
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The current CEO of Hublot is Julien Tornayre.
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He came from Zenith. Yeah, that's where he cut his teeth and made
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his name, really helping that brand become what it is today.
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I mean, sort of plucking it from obscurity in the mid-2000s and setting
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it on a, on a more sustainable course.
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Is this a threat to him? And, you know, the other thing, what's interesting is
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in all the press I saw around the watch— sorry,
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around this announcement, it was kind of like it made it clear that
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LVMH was involved in this. And who's the Arnault that runs the,
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the watchmaking division of LVMH?
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Oh God, I'm bad at this. He's the younger one, one of the younger sons.
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You know, he was very much involved in the press and the images were of
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him with François Benamias. And I didn't
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see Julien Tornayre in any of the sort of the imagery around. I mean,
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it's a good look for him. Who knows? I mean, the, you know,
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the political intrigue of the LVMH palace is outside of my pay
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grade. I guess my point is, if whoever made the decision made
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a good choice, I seem to think it is unlikely
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that Bonamius would want to be the CEO of Hublot.
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Honestly, I think him coming in and sprinkling,
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you know, a little bit of Ed Hardy on it might not be the worst
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idea. But I can't fathom that this is a job that he wants.
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I mean, you know. Yeah, I think you're right. It's kind of like a Hollywood
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model where you're bringing in an outside producer or showrunner
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for a project or a particular remit and they do their thing, but the executives
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of the studio remain in place. And also,
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Julian Tournair is an exceptional CEO. So I think
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it would be weird, honestly, if you get rid of your bread and
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butter, everyday awesome leader. With someone who's a little bit more,
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you know, I'm a dude who wears cargo pants and I'm 60. Like that vibe
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is, that vibe is a very different energy, but it
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is the right vibe for the brand and he
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is the right guy for the brand. So look,
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I think about LVMH is like, you gotta respect what they're
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doing between the Zenith, like collabs with independent watchmakers,
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the Louis Vuitton and De Bethune stuff, you know, moves like
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this. You should ignore them at your own peril from a
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business standpoint. And then they got the, you know, with everything they're doing with Daniel
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Roth and Gerald Genta and all that stuff. I mean,
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relative to their competitive set of giant holding companies,
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there's a lot going on there. Yeah, there is. I want to dig more into
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the earnings. LVMH recently published quarterly earnings and they
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notably glossed over the watchmaking division, which I
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need to research that a little bit more
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carefully before we comment on it. But apparently maybe not everything
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is going so hot over there. And so to your point, this could be smart.
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Absolutely. Mix it up, bring it— bring in the guy who can— who
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has a track record of bringing brands into pop culture, which is exactly what
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Hublot does. That's in their— that's in their DNA. It's part of their character.
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Speaking of Mr. Benamias and AP,
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now what I'm hearing from WatchPro, they're reporting that AP is
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ready to roll out, and they're saying AP hasn't confirmed confirm this, but they've
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got, they've got details through their sources. AP is getting ready to finally roll out
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something that they first floated in 2018, which is their own certified
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pre-owned program. And apparently the structure is going to be a little
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bit different from what Rolex— Rolex does.
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Let's just call it Rolex from now on. It'll be
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a little bit different from what Rolex does, which is, uh, it's basically, as we've
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talked about, very decentralized, goes out to the authorized dealers. The authorized dealers
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are the one buying the watches and ultimately While they may lean on Rolex
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initially for service and certification, ultimately they're expected to take
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that on. This will be very different. AP, we've talked about their centralized retail
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model where they have closed retailers, they're bringing things in-house.
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So this will be a centrally controlled and run certified pre-owned
16:42.591 --> 16:46.392
program where the brand itself will be the ones buying back the
16:46.424 --> 16:49.601
watches and then reselling them. Interestingly, one of the things
16:49.617 --> 16:52.489
that, that's being floated here is that they'll be selling online.
16:53.948 --> 16:57.795
Yeah, that is interesting. I also— so look,
16:57.892 --> 17:01.450
if I think there's like 2 problems they're trying to solve here,
17:01.659 --> 17:05.009
right? One problem is that obviously they quote
17:05.509 --> 17:09.433
unquote don't have any watches. Leave that one open for interpretation. This is
17:09.933 --> 17:12.062
a way to address that same way Rolex does, right? Like, we don't have a
17:12.562 --> 17:15.012
Sub for you here, but I have a Sub for you for 50% more over
17:15.028 --> 17:18.378
there if you want it right now. And 2, you know,
17:18.795 --> 17:22.466
for most production APs, secondary value has been slowly
17:22.498 --> 17:25.706
declining. And this is, I think, one way for them to
17:26.206 --> 17:29.961
try to clean that up by buying up inventory and then resetting the market.
17:30.426 --> 17:34.183
There's no guarantee that will work, but it certainly gives them
17:34.215 --> 17:36.961
a little bit more control over the secondary value of their brand,
17:37.266 --> 17:39.963
which I think for a lot of people who collect AP is very, very,
17:40.076 --> 17:44.154
very top of mind given that the prices of those watches continue to climb
17:44.732 --> 17:49.019
and were climbing long before the CHF
17:49.308 --> 17:53.273
inflation and the tariffs caused a sort
17:53.322 --> 17:57.061
of, you know, industry-wide price increase. So, you know,
17:57.575 --> 18:00.878
if we look at this from, from like a boardroom perspective, I think there's
18:01.378 --> 18:04.582
a lot of, of good intention and strong strategy here.
18:05.416 --> 18:08.800
The question for me is less about whether this is the right choice for
18:09.300 --> 18:12.456
the brand, because honestly, I think it probably is. It is.
18:12.809 --> 18:16.016
The question for me is about the tone and the
18:16.516 --> 18:19.672
way that they're going to interact with their clients about it and the expectation
18:19.769 --> 18:22.687
a client will have about whether or not they are now an AP client.
18:23.232 --> 18:25.735
Just sort of an interesting thing. Oh, that's a good point. So if you think
18:26.235 --> 18:29.393
about the way that like AP operates and I'm not making this up, I mean,
18:29.409 --> 18:32.970
it's my own personal experience. It's stuff that we've seen from like recorded interactions.
18:33.019 --> 18:36.532
It's like it's very quid pro quo. You know, you must buy a bunch of
18:37.032 --> 18:39.644
things before you can get a thing that you want. We are explicit about stating
18:39.676 --> 18:42.131
that, you know, it just is what it is.
18:43.029 --> 18:46.254
And, you know, in defense of AP, that's the fact
18:46.754 --> 18:49.751
that they're kind of transparent about that is probably a little bit better than telling
18:49.783 --> 18:52.639
them than not being. So, you know, it is what it is.
18:53.457 --> 18:57.031
Well, the question will be, you know, are you an AP client now
18:57.464 --> 19:01.519
if you buy up a bunch of pre-owned stuff? Like, do you suddenly qualify
19:01.647 --> 19:05.286
for a 16202 if you spend— if you just drop $100K
19:05.414 --> 19:09.405
on some pre-owned Royal Oaks? I don't know. So it's
19:09.905 --> 19:12.996
sort of an interesting question there. And then the other one will be AP is
19:13.028 --> 19:16.201
notoriously aggressive with people who resell their watches,
19:17.019 --> 19:19.984
even if it's been years since you bought it. Oh, that's a good point.
19:20.080 --> 19:23.014
And now they're going to go out there and buy those watches.
19:24.072 --> 19:27.454
There is a part of that that does feel— that doesn't sit great with me.
19:27.791 --> 19:31.542
Yeah. Where it's like, you know, it's hypocritical. It's incredibly
19:32.042 --> 19:35.309
hypocritical. And, you know, and what I mean, like, let's be real, like, business is
19:35.389 --> 19:38.114
business. I don't think they're going to send an apology note to everyone that they
19:38.194 --> 19:41.240
demanded to know why they sold their watch to. Like, give me a
19:41.740 --> 19:45.392
break. But the hypocrisy is there. And I do think
19:45.568 --> 19:48.905
it's, you know, there's nothing to do about it. But I see it
19:49.563 --> 19:53.031
and it feels kind of crappy. Well, it's also— they've, they've made it
19:53.531 --> 19:56.643
very clear to clients that they don't want them selling their watches, and now they
19:57.143 --> 20:00.079
expect those same clients to turn around and sell them their watches. If I were
20:00.579 --> 20:03.755
an AP client, I would think twice about turning around and offering
20:03.788 --> 20:06.533
a watch back to the brand. Well, and I suspect that they're going to do
20:06.838 --> 20:09.551
kind of what Rolex does, which is set an event horizon on it. It's like,
20:09.567 --> 20:12.907
we can't sell me back something unless it's been 2 or 3 years or something
20:12.923 --> 20:16.469
like that. But then the question becomes, will that leave a bad
20:16.969 --> 20:19.004
taste in the mouth of the brand where it's like, oh, well, you clearly,
20:19.197 --> 20:22.454
you know, resell your watches back to us. Like, will we reallocate you another?
20:22.952 --> 20:25.423
I'm not like— the truth of that is probably, yeah, of course they will.
20:25.535 --> 20:29.514
But it's difficult to break. Like, I cannot tell you
20:29.530 --> 20:32.980
how many clients I've spoken to who wanted to trade an AP to me and
20:33.317 --> 20:36.382
begged and pleaded for us to place it in a way that the brand wouldn't
20:36.882 --> 20:40.778
know. Can't guarantee that, which of course we cannot guarantee, but that sort of like
20:41.278 --> 20:44.806
weird PTSD It's like being in this, like, abusive relationship.
20:45.046 --> 20:48.865
It's like they can't— they can't know, you know? And I think they've
20:49.365 --> 20:53.229
done a really good job of, of, of, like, terrorizing their clientele in that regard.
20:53.358 --> 20:56.631
And now they want them to sell them their watches. So without going too much
20:56.888 --> 20:59.663
further down that road, that's a thing. It's there.
21:01.139 --> 21:04.541
Let's see how this goes. You know, AP hasn't been making a
21:05.041 --> 21:09.258
lot of great executive decisions of late. So this does sort of feel like maybe
21:09.758 --> 21:12.930
it's like a pretty generic but maybe strong choice. So let's
21:13.430 --> 21:15.591
see how it works out. I'll be curious to see how it goes. I think
21:16.091 --> 21:19.599
the other question here will be, will they pay
21:19.615 --> 21:23.382
attention? Here's the other problem. Oh, I've got another problem too.
21:23.751 --> 21:26.989
There's several here. Let's, let's actually look up some data here.
21:27.678 --> 21:29.505
Well, let me, while you look that up, can I ask you a question?
21:29.602 --> 21:33.208
Yeah, sure. What do you think this does to the
21:33.708 --> 21:37.488
rest of their product line? Because you've pointed out someone goes into the AP house
21:37.988 --> 21:41.592
or boutique today, they want a new Royal Oak, they're a first-time client or,
21:41.881 --> 21:45.267
or whatever. And they're direct— and, you know, they're directed now to a
21:45.767 --> 21:48.944
certified pre-owned Royal Oak, and does it count, and blah blah blah. Here's the other
21:49.444 --> 21:53.359
thing: what does it do to the watches that AP currently directs people to?
21:54.017 --> 21:57.099
So currently, if you go into an AP house and you want a Royal Oak,
21:57.115 --> 22:00.487
you're directed to a Code 11. So this is exactly the data I just— what
22:00.987 --> 22:04.725
happens to the Code 11.59 in a world where AP has
22:04.821 --> 22:08.401
now Royal Oaks that are certified pre-owned that they can readily point
22:08.449 --> 22:11.460
you to? Well, Well, I think the problem's bigger than that. So let's look at
22:11.960 --> 22:15.800
a 15210ST. That's a base model white gold. Is that white
22:16.300 --> 22:18.940
gold? No, I'm sorry, steel. Pardon me. Obviously ST, duh.
22:19.990 --> 22:23.270
15210ST. That's an 8— that's a base model 1159. Okay.
22:23.620 --> 22:25.400
Retail price on that right now is $28,800.
22:27.160 --> 22:30.560
Market price is about $17,000, which means
22:31.060 --> 22:34.600
that wholesale on it, even ballparking here is like probably
22:35.100 --> 22:38.280
somewhere around— Well, are they wholesaling?
22:38.310 --> 22:42.010
It? No, no, no. I'm just saying if somebody buys it secondhand against
22:42.510 --> 22:45.150
that original price. So basically, if you called up a dealer today and you had
22:45.650 --> 22:49.560
a '15 210ST to sell, they'd probably give you around $11,000 for it.
22:49.990 --> 22:53.770
No way. Really? Yeah. That's brutal. So the depreciation is more than
22:54.270 --> 22:58.010
50%. Do you think they're going to list a '15 210ST
22:58.510 --> 23:01.790
for $18,000? No way. But they can't list it for more than
23:02.290 --> 23:05.940
$28,000. That's absurdity. So what are they going to do?
23:06.199 --> 23:09.747
Okay. Yeah, this is interesting because now they've said we're buying watches.
23:09.942 --> 23:12.469
People aren't necessarily going to want to turn around and sell them their,
23:13.485 --> 23:16.131
their Royal Oaks. They're going to want to turn around and sell them all these
23:16.163 --> 23:19.099
other things they got bundled on, like their Code 11.59s.
23:19.873 --> 23:22.487
That's definitely a possibility. And what's the brand going to do? Say we're not going
23:22.987 --> 23:26.487
to buy that? Well, I don't, I don't know,
23:26.729 --> 23:30.649
but I think my point is like the brand
23:30.826 --> 23:34.468
is, is currently dealing with some deflation
23:35.461 --> 23:38.010
in their secondary brand or secondary market pricing.
23:38.763 --> 23:41.728
And I mean, look, let's, let's also be realistic here. Let's say you buy a
23:42.228 --> 23:45.591
Sub, a current model Sub, right? And that, that's more
23:45.639 --> 23:48.620
than 2 years old now. As you go to trade that back into a dealer
23:49.120 --> 23:52.755
who sells pre-owned, you might get at or slightly
23:52.867 --> 23:56.714
below retail for that of
23:57.214 --> 24:00.112
what you paid. Yeah. And then they're going to mark it up to a little
24:00.144 --> 24:03.701
bit over you know, what you would've paid plus tax, 'cause that
24:03.765 --> 24:07.946
watch is quote unquote difficult to get from a dealer, but is certainly available.
24:08.667 --> 24:11.823
So, you know, if you, if you don't wanna wait 7 or 10
24:11.855 --> 24:14.579
months or however long it's gonna take, or years for some people to get a
24:15.079 --> 24:18.488
Sub, here's the shortcut. You pay an extra few thousand bucks, you get the
24:18.988 --> 24:22.380
warranty, you call it a day. Like, that's that. That doesn't really apply here,
24:23.374 --> 24:26.578
you know? And I think the question will then be like, are they gonna be
24:27.078 --> 24:30.214
selective? Like, are they only gonna take like 16202s and things that they know that
24:30.714 --> 24:34.399
they can sell for incredibly high secondary prices? And if they will,
24:35.170 --> 24:37.481
what message does that send to their, to their clients who are going to say,
24:37.561 --> 24:40.804
oh, amazing, I've wanted to sell a bunch of these watches. And then, right.
24:40.868 --> 24:43.324
And then they bring them in and they're like, oh, but sir, we don't want
24:43.356 --> 24:45.186
this one. We don't want this one. We don't want this one. And then they're
24:45.203 --> 24:48.317
sitting across from the table like, let me get this straight. This was pitched to
24:48.817 --> 24:52.041
me as the most desirable, quote unquote, watch ever. And now you won't
24:52.541 --> 24:55.942
even buy it back from me. Exactly. So I think,
24:56.760 --> 24:59.249
I think they're between a rock and a hard place here. It's going to be
24:59.749 --> 25:03.695
tough. Yeah. Because no one is going into the AP house looking for a
25:03.823 --> 25:07.271
CODE 1159, much less a used one. No.
25:07.576 --> 25:10.029
And I think— I mean, oh,
25:10.879 --> 25:14.054
can you imagine? Yeah, it's tough. Hey, it's Gabe, and no,
25:14.231 --> 25:17.566
I'm not gonna ask you to buy a watch. Instead, if you're enjoying
25:17.615 --> 25:21.271
this podcast, please take a moment, if you would, to give it a rate and
25:21.383 --> 25:24.847
review on your podcast player of choice. I know we
25:24.895 --> 25:28.038
ask for this all the time, but there's a reason we
25:28.538 --> 25:31.920
do. You know, it's pretty incredible Open Work has quickly risen to become one
25:32.129 --> 25:35.466
of the top watch podcasts in terms of downloads,
25:35.578 --> 25:39.348
but we still trail many other watch podcasts in terms of
25:39.848 --> 25:43.631
ratings and reviews on places like Apple Podcasts, Spotify,
25:43.840 --> 25:47.129
or wherever you get your podcasts. So if you'd take a moment to
25:47.193 --> 25:50.193
give us a rating and review, we would really appreciate it.
25:50.321 --> 25:53.530
It goes a long way to helping other people who would enjoy this content
25:54.030 --> 25:57.603
find it themselves. Back to the show. The Rolex model
25:58.100 --> 26:02.155
works for all sorts of reasons we've discussed. The— it just
26:02.203 --> 26:05.313
doesn't really work in the same way for so many brands. I think a
26:05.813 --> 26:09.384
lot of brands— and look, the problems you're pointing out with AP are only
26:09.400 --> 26:12.702
magnified once you get into other brands where nearly all the
26:13.202 --> 26:16.533
watches lose value, right? I mean, there's a reason most other watch brands
26:17.033 --> 26:20.796
haven't done this, is because they don't want to open that Pandora's box
26:21.296 --> 26:24.643
of secondary valuations and trade-ins with their clients. It's tough.
26:25.108 --> 26:27.497
It's gonna be interesting. So I'll be curious to see how it goes.
26:28.074 --> 26:32.322
That's, that's an interesting topic. Speaking of which, let's look at Rolex CPO.
26:32.482 --> 26:35.560
We had talked about this, this number, this benchmark coming up.
26:35.624 --> 26:39.022
Looks like it's coming. They're approaching a billion-dollar scale.
26:39.776 --> 26:43.639
Yeah. So it's a billion dollar— wow. So they will be at a billion-dollar
26:44.344 --> 26:48.079
run rate. So this year, 2026, they won't hit a billion
26:48.127 --> 26:51.221
dollars. They'll probably get somewhere just shy of $800
26:51.718 --> 26:55.389
million. So I guess the guess here is $780 million this
26:55.501 --> 26:59.188
year. But they'll be, if they hit that number, they'll be on a run
26:59.688 --> 27:02.939
rate for $1 billion in the final quarter of the year, meaning it's
27:03.439 --> 27:07.011
all but certain that, you know, nothing is certain, but it's looking very
27:07.043 --> 27:10.939
much like in 2027 it will truly be a billion-dollar business.
27:11.452 --> 27:15.283
Yeah. Which is remarkable for a company that produces a million
27:15.783 --> 27:19.547
watches a year. I mean, look, Rolex continues to be just
27:20.047 --> 27:23.574
an example of itself. It's difficult
27:23.622 --> 27:27.717
to express how much of an anomaly they
27:27.733 --> 27:31.040
are relative to their competitive set and
27:31.088 --> 27:33.641
also just the market. And honestly,
27:34.781 --> 27:38.410
I'm blown away. Like, this is such a gigantic
27:38.910 --> 27:41.686
number and what it shows, I mean, look,
27:41.702 --> 27:45.282
let's be honest. I mean, dealers would not be operating on shorter margins
27:45.315 --> 27:48.748
with these. I know there's this perception out there that like—
27:49.005 --> 27:51.922
and we see this in the comments sometimes— that people,
27:52.515 --> 27:56.427
you know, that dealers are making some obscene amount of money on these watches.
27:57.341 --> 28:00.226
I recognize that people are still gonna say it, but I can tell you for
28:00.290 --> 28:03.608
a fact that that is just not true.
28:04.715 --> 28:08.305
Dealers must be turning over very quickly to
28:08.805 --> 28:12.233
be making this into the business that it is, which means that the product
28:12.313 --> 28:14.574
is selling very fast.
28:15.602 --> 28:18.924
Otherwise, this is just not possible. Let me give you some numbers on this,
28:19.052 --> 28:23.097
please. Okay, so this is coming from Morgan Stanley and WatchCharts.
28:23.498 --> 28:27.334
So they are estimating that in Q3 of 2026,
28:28.297 --> 28:32.197
Rolex CPO did $229 million in sales.
28:32.390 --> 28:35.407
That's up 61% year over year.
28:35.455 --> 28:39.179
So if you looked at Q3 2025 versus Q3 2026,
28:39.757 --> 28:43.514
Up 61%, up 30% quarter over quarter.
28:43.562 --> 28:47.127
So just within the same year, just from Q2 to Q3,
28:47.143 --> 28:50.868
the business grew 30% by their estimates.
28:50.997 --> 28:54.079
I mean, absolutely mental.
28:54.609 --> 28:58.415
I mean, the growth here and the appetite for this program is
28:58.479 --> 29:02.060
wild. But let me ask you this. Yeah. Well, so a couple things
29:02.252 --> 29:04.789
are happening at the same time that that's happening.
29:05.703 --> 29:09.438
Growth in Rolex pre-owned prices is
29:09.951 --> 29:13.622
decelerating and is actually falling behind a
29:14.122 --> 29:17.774
lot of other brands. So let me give you a rundown of some other brands,
29:18.286 --> 29:22.134
and this is Q3 performance. So Q3 price
29:22.634 --> 29:26.382
index performance from WatchCharts. They look at all the brands, they look at their pre-owned
29:26.446 --> 29:29.604
prices, and they say who's up, who's down. Yeah, Q3,
29:30.389 --> 29:33.835
Longo was up 4.4% quarter over
29:34.220 --> 29:38.003
quarter. Vacheron was up 3.1% quarter over
29:38.503 --> 29:42.283
quarter. Patek 2.6%, Cartier 2.4%, AP 1.2%.
29:42.556 --> 29:46.211
Overall, the watch market, pre-owned watch market, in terms of pricing
29:46.579 --> 29:49.930
was up 1.2% quarter over quarter. Rolex was only up
29:50.250 --> 29:53.328
half a percentage point. So a couple things are going on here.
29:53.777 --> 29:57.175
One, the CPO program couldn't— and I think we talked about this
29:57.223 --> 30:01.055
on a previous episode in an earlier quarter— the CPO program could not
30:01.071 --> 30:05.158
have come at a better time. Yeah, it's sort of bailing out the Rolex pre-owned
30:05.658 --> 30:09.070
market, you know what I mean? It's like just as that market is decelerating because
30:09.102 --> 30:12.436
of what we know is the, the CPO premium that
30:12.532 --> 30:16.491
Rolex ADs are able to charge— they can sometimes go 20-30% over
30:16.991 --> 30:20.691
market on a pre-owned piece because it's certified and they're the ones selling
30:20.739 --> 30:24.779
it— that is, that has got to be helping buoy these numbers
30:24.875 --> 30:28.161
and certainly came in the nick of time. I guess my broader
30:28.401 --> 30:32.280
macro question about all of this is, okay,
30:32.328 --> 30:34.956
great, we've got this Rolex CPO program,
30:35.629 --> 30:38.818
and if you want a Submariner— let's take the example you just gave a couple
30:39.318 --> 30:43.145
minutes ago— you want a Submariner, you go into the store, you basically can
30:43.645 --> 30:46.751
choose now between if you want to put your name on the list, yeah,
30:46.831 --> 30:49.972
for a new one, or just not get a new one, or pay a few
30:50.472 --> 30:53.689
thousand dollars more and you get the certified pre-owned version. And you're right,
30:53.802 --> 30:57.110
most people will just say, yeah, screw it, okay, I'll do it. I don't know
30:57.610 --> 31:01.030
about most people, but enough. Plenty of people will say, I guess a casual
31:01.530 --> 31:05.090
buyer, you know, who just wants the Sub. Yeah. And honestly, it's probably
31:05.590 --> 31:07.810
the cost-efficient way to do it. Yeah. No, it is. If you don't want to
31:08.310 --> 31:10.710
deal with a, you know, non-CPO dealer. You don't want to buy a bunch of
31:11.210 --> 31:14.090
jewelry or, you know, watches. Or you don't want to buy from someone who's selling
31:14.590 --> 31:17.310
pre-owned, who's a trusted seller. Oh yeah. Which is that other sort of intermediary step.
31:17.810 --> 31:20.290
Yeah. But go on. But you're a casual buyer. Sure. The peace of mind is
31:20.790 --> 31:22.890
worth it for you and it's not that much over retail. You know, we're not
31:23.390 --> 31:25.530
talking about a Daytona here or something. Whatever. Sure.
31:26.573 --> 31:30.024
So this starts to make Rolex watches, in a
31:30.524 --> 31:34.100
sense— just forget new or whatever, but like legitimate
31:34.600 --> 31:38.433
Rolex watches bought from a Rolex retailer— more kind of available,
31:39.155 --> 31:42.734
you know? Does— is that sort of lower— so I think 2
31:42.750 --> 31:46.955
things could be going on. One is, is that gonna suppress demand for Rolex
31:47.099 --> 31:50.357
overall? Because now all of a sudden you've got a big segment of the market,
31:50.405 --> 31:54.080
the casual buyer, who's satiated. I'll tell you, I'll tell
31:54.580 --> 31:58.250
you what they want. Want. The other, the other point here is that the other
31:58.750 --> 32:02.724
dynamic that's going on in the market is tastes are shifting. So it's no coincidence
32:03.224 --> 32:07.117
that some of the brands we listed as improving while Rolex is flagging in
32:07.149 --> 32:10.517
terms of pre-owned values are Vacheron, Patek Philippe,
32:10.533 --> 32:13.932
and Cartier. You know, tastes are shifting, as we've said many
32:13.964 --> 32:17.701
times, to dress watches, more formal watches, gem-set watches,
32:17.957 --> 32:21.164
all of that sort of stuff, and away from stainless steel sports watches. I'll tell
32:21.664 --> 32:24.690
you why I don't think So I had a client once that wanted to sell
32:25.190 --> 32:29.180
an extremely rare Rolex. It was a rainbow Daytona.
32:30.310 --> 32:33.170
Rainbow Daytona. I don't exactly know the MSRP of that. It's somewhere in like the
32:33.670 --> 32:37.350
high hundreds. It's like $170,000, $180,000, something like that. I don't think it's a published
32:37.850 --> 32:41.010
price, but it's somewhere in that range. Is it like an off-catalog piece? No,
32:41.510 --> 32:44.670
it's on catalog. It's just on allocation. But, you know, you can't just
32:45.170 --> 32:49.070
buy a rainbow Daytona. Very few are made and you have to be relative
32:49.570 --> 32:52.185
to Rolex, and you have to be allocated one. And the demand for them is
32:52.217 --> 32:56.810
extraordinary, which is why the secondary value of them is often somewhere
32:56.939 --> 32:59.733
in the like $275,000 to $300,000-ish range,
33:00.568 --> 33:03.459
which is wild. Now granted, I will tell you, having put my hands on that
33:03.959 --> 33:07.233
watch, it's totally awesome. Not, you know, I can't imagine any world in which I
33:07.733 --> 33:11.007
would wear that watch, but it's just cool. Anyway, long story short, I knew
33:11.071 --> 33:14.636
of another client that wanted one, and I, and I called this client up to
33:15.136 --> 33:18.538
let him And even though this watch was more or less
33:19.038 --> 33:23.018
unworn, he didn't want it. Not because he didn't have the, the means
33:23.050 --> 33:26.004
to buy it at the price that was being asked. He did. He didn't want
33:26.504 --> 33:28.076
to buy it because that's not the way he wanted to get the watch.
33:28.975 --> 33:31.383
And I think that that's a part of it. And I think this goes— this
33:31.883 --> 33:35.654
speaks to the AP thing too. There is an intellectual
33:36.154 --> 33:39.797
structure that some of these brands apply of you have
33:39.829 --> 33:42.924
been chosen. And if what, you know,
33:43.213 --> 33:46.451
it, it's not a matter of money. There's plenty of people out there who have
33:46.547 --> 33:50.379
the money for a 16202, right? Just buy one
33:50.411 --> 33:53.441
used, whatever. Yeah. But they don't want that. Yeah. Yeah.
33:53.537 --> 33:56.519
And it's not, it's not the delta. It's not the amount of money between— it's
33:57.019 --> 34:00.928
how it's offered. That's right. So I think, I think that there will always be
34:01.553 --> 34:05.945
the person who wants to be allocated the 56
34:05.961 --> 34:09.408
or the 5811, you know, who always wants to be allocated
34:09.908 --> 34:13.915
the 16202 because because it feels like you won because that's
34:13.979 --> 34:17.124
the, that's the, like, the structure of, of, of the, the,
34:17.429 --> 34:20.573
the business that's been built. And I get that. I do.
34:21.054 --> 34:24.375
So I, I don't know that any of these pre-owned programs
34:24.953 --> 34:28.065
will drive down the demand on that sort of thing.
34:28.899 --> 34:32.621
And I do think that these programs speak to different clientele.
34:33.135 --> 34:36.359
AP, I don't know, remains to be seen, but I think with Rolex,
34:36.600 --> 34:40.532
that's what we're seeing. That's what we're seeing. Like, people debate all the time about
34:41.032 --> 34:42.811
like, oh, well, this price is so high, I could just get it from them.
34:42.859 --> 34:45.587
Like, yeah, totally. This program's not for you. Mm-hmm.
34:46.695 --> 34:50.306
Yeah, but I think this is my— this is my point, which is the— you're
34:50.806 --> 34:53.740
right about the example of that rainbow Daytona or any number of other watches,
34:53.933 --> 34:56.886
of course. And I can certainly— when like the client's like, oh yeah, I do
34:57.386 --> 34:59.325
want that watch, but I want it in this way, that, that makes sense.
34:59.534 --> 35:02.037
Absolutely makes sense. It's like, I want my name on the papers, you know?
35:02.198 --> 35:05.712
But how many— you did— how many people have reached out to us in our
35:05.728 --> 35:09.128
lifetime saying, Hey, I'm getting married in a couple of
35:09.628 --> 35:12.510
months and my husband has always wanted a Rolex and I want to buy him
35:12.623 --> 35:16.422
a Rolex Submariner. And then you have to explain to them all
35:16.550 --> 35:19.932
of the mishegas around getting a Rolex Submariner.
35:19.996 --> 35:23.667
Sure. And that has driven the desirability of Rolex
35:23.764 --> 35:27.018
and hence the secondary and the resale value of
35:27.034 --> 35:31.105
Rolex. Yeah. Now, however, we're entering a world where someone sends
35:31.202 --> 35:34.039
you the email and says, hey, I'm getting married, I want to get my husband
35:34.539 --> 35:37.036
a Rolex, how does that all work? And you say, well, you really can't get
35:37.069 --> 35:40.535
one new, but you can go and get a certified pre-owned. Most of them
35:40.583 --> 35:44.068
will just go and do that. And all of a sudden now, yeah,
35:44.598 --> 35:48.549
official Rolex watches are more readily available. And does that end
35:49.049 --> 35:52.147
up in the long term suppressing the value on the secondary market?
35:52.195 --> 35:55.841
No, because a pre-owned watch will never be the same as a new watch
35:55.938 --> 35:59.375
in any consumer's mind. It may not stop
35:59.875 --> 36:01.928
someone from buying. I think there are a lot of people for whom it is
36:01.960 --> 36:05.526
the same watch because they just want a Rolex. I don't, like I
36:05.558 --> 36:09.427
said, I don't think it will change whether people people buy it, but I don't
36:09.927 --> 36:12.700
think that the fact that you get the box and it's a different color,
36:13.502 --> 36:15.860
you know what I mean? It's, it's like, it's like when you're, it's like when
36:16.360 --> 36:20.256
you're freelance versus, you know, like a contingent worker at a tech company versus non-contingent.
36:20.480 --> 36:23.849
You go there, it's the same food, it's the same desk, it's the same office,
36:23.866 --> 36:25.293
but your badge is a different color.
36:26.737 --> 36:30.427
Yeah, but I think there's a lot of— for someone who's into watches and
36:30.636 --> 36:35.384
cares, sure. For someone who just wants a Rolex
36:35.884 --> 36:38.092
Which is, again, this is an unanswerable question. Again, they're selling a million a year.
36:38.685 --> 36:41.683
Most people just want a Rolex. They're not thinking about it the same way,
36:41.907 --> 36:45.594
and now they're more readily available. Yeah. Look, I think all of these things can
36:46.094 --> 36:49.826
be true, but bottom line, the part that's inarguable, the program
36:50.326 --> 36:54.074
works. The program does work and seems to be working in the nick
36:54.635 --> 36:56.815
of time. Indeed. Now, speaking of bailouts,
36:57.280 --> 37:00.775
let's talk about Ebel.
37:00.919 --> 37:04.702
So this is an interesting one. We did an episode, gosh, a year
37:05.055 --> 37:09.498
earlier. And like more comments on that one in terms of like people love
37:09.998 --> 37:13.266
and care about this brand. Yeah, the, the YouTube video clip
37:13.766 --> 37:16.384
on that is like the gift that keeps giving. People still comment on it.
37:16.449 --> 37:19.524
So Ebel, of course, back in the day, I think it was in the early
37:19.557 --> 37:23.269
2000s, they had been acquired— 2004, they were acquired
37:23.769 --> 37:27.081
from LVMH. You know who had Ebel before LVMH? No.
37:27.308 --> 37:29.339
Our good friends at Investcorp.
37:31.205 --> 37:34.664
They had, they had Breguet and Ebel sitting side by side. They sold Breguet to
37:35.164 --> 37:38.446
Swatch Group. They sold Ebel to LVMH.
37:38.574 --> 37:41.716
I thought they sold it to Innotrade. Yeah. Or was it Innotech?
37:41.780 --> 37:45.579
Who knows? LVMH sells it to Movado in, in,
37:45.787 --> 37:49.378
in 2004. And for the last 22 years, it's kind
37:49.878 --> 37:53.354
of languished. It went from a Swiss brand that I think stood
37:53.418 --> 37:56.928
side by side with peers like a TAG Heuer or
37:57.428 --> 38:00.150
an Omega and others. Now it's kind of turned into,
38:00.215 --> 38:03.565
unfortunately, sort of a mall brand. And it, you know, when you have a hammer,
38:03.581 --> 38:07.236
everything looks like a nail. And Movado's whole business we talked about is
38:07.428 --> 38:10.907
geared around distribution to malls and small
38:11.661 --> 38:14.869
jewelers. And so that's where Ebel sits, which is, you know, in some level,
38:14.965 --> 38:17.900
in some ways, kind of a shame. I love the old, the old watches.
38:18.333 --> 38:22.342
Now we hear that Journe, with investment from
38:22.566 --> 38:26.079
Chanel and Pierre Jacques, who will serve as the CEO of the brand,
38:26.431 --> 38:29.767
are buying it from Movado. Well, they're buying 95% of it.
38:30.184 --> 38:33.728
Movado will continue to owe 5%. How exactly
38:34.228 --> 38:38.331
the deal is structured and being financed and what percent Journe owns versus Chanel
38:38.540 --> 38:41.139
versus Pierre Jacques unclear,
38:42.134 --> 38:45.891
but I found this just fascinating on
38:45.939 --> 38:49.711
so— there's so much going on here. I think one question
38:49.920 --> 38:53.580
on a high level is like, does the world need another brand reboot?
38:53.628 --> 38:56.742
I mean, gosh, we just got through like Galley, you know,
38:57.400 --> 39:00.370
for instance, and now here comes another.
39:01.092 --> 39:04.351
But this deal is so unusual, it leads me to believe
39:04.463 --> 39:07.674
that these folks have an unusual solution. Yeah.
39:07.915 --> 39:11.095
For, for eBell, which I'm curious to see how it, how it will play out.
39:11.192 --> 39:14.388
Well, they're betting nearly $67 million on
39:14.436 --> 39:17.681
it. Look, I, all right, so a couple of things.
39:17.874 --> 39:22.146
Let's, let's look at the structure
39:22.452 --> 39:26.114
and, and the individuals versus what it could hypothetically be. Mm-hmm.
39:26.162 --> 39:29.487
Because we don't know. So when you look at the folks behind it,
39:29.519 --> 39:32.619
we have Chanel. Okay. Chanel has
39:33.373 --> 39:36.790
quietly taken stakes in some of the biggest powerhouses
39:36.983 --> 39:40.544
that are existing already, as well as those that they believe in on
39:40.576 --> 39:43.945
the independent side. Chanel is involved in far more.
39:44.041 --> 39:46.496
I don't even know if, like, some of the things that we know about some
39:46.528 --> 39:49.560
of their investments, I don't even know if they're public. So for instance, Cross Studio,
39:49.896 --> 39:52.960
Marco Tedeschi, that's public now. Oh, it is public. Okay. So there you go.
39:53.025 --> 39:56.522
So that's, that's news. But they've invested in, in Jordan, obviously,
39:56.714 --> 40:00.515
MB&F, Romain Gauthier, Canisi. They own
40:00.643 --> 40:04.136
Bell& Ross. Look, I don't think they fully own
40:04.168 --> 40:07.197
Bell& Ross. They have a stake. They have a stake. So my point
40:07.697 --> 40:11.138
is their first reboot, man. It is. But, but they don't strike me
40:11.638 --> 40:14.904
as fools. And the people and like the watchmakers that are
40:15.404 --> 40:18.957
involved in Chanel would not be involved if they didn't have good
40:18.989 --> 40:22.162
leadership. So that's number one. So very impressive there.
40:23.059 --> 40:26.889
Number 2, I'm very curious about Journe's
40:27.145 --> 40:32.209
interest here. That's— it's like if Journe weren't
40:32.353 --> 40:34.917
in the headline, this would make a lot more sense to me or be a
40:34.933 --> 40:38.346
lot less interesting. Yeah. And it's fascinating
40:38.378 --> 40:42.352
because I wonder in the way that like Romain Gauthier has provided watchmaking
40:42.448 --> 40:45.685
guidance for Chanel brands, I wonder if
40:46.185 --> 40:50.331
it's kind of like, you know, François-Paul Journe will give
40:50.460 --> 40:53.744
watchmaking guidance to Ebel. But then there's sort of this
40:53.760 --> 40:56.822
broader question of like, The man is older now.
40:57.848 --> 41:00.429
His, his own brand is untouchable.
41:00.797 --> 41:04.084
Well, this could be his legacy. Yibelle. Oh, yeah,
41:04.100 --> 41:07.626
exactly. And I think like the sort of the, you know, the like the
41:07.690 --> 41:11.441
easy, cheap answer is like, oh, well, this is going to be the Mad addition
41:11.634 --> 41:15.225
to the MB&F or like whatever. I can't see that.
41:16.058 --> 41:19.729
So honestly, like the thing that came to my mind was that like the
41:19.793 --> 41:22.102
brand meant something to him personally,
41:22.598 --> 41:25.660
kind of like the way that like, you know, the rich billionaire buys the coffee
41:26.160 --> 41:28.710
shop that he used to work at, you know, buys a newspaper. Yeah,
41:28.870 --> 41:32.178
exactly. Yeah. But my point is like, I have to imagine there
41:32.678 --> 41:36.079
must be some emotional connection to it. At least that's how I, what I
41:36.416 --> 41:39.884
imagine I'm spitballing here. I guess the bottom line though
41:40.384 --> 41:43.786
is you have a, you have a Pierre-Jacques who, you know,
41:43.802 --> 41:46.580
who has been a CEO in the industry for quite some time.
41:47.575 --> 41:51.252
Björn needs no introduction and Chanel is not messing around. Pierre-Jacques was CEO
41:51.752 --> 41:55.603
of Debitune, very different brand from Ybel. Same with, sure, same with Björn.
41:55.908 --> 41:59.582
This is what makes it so interesting though. Yeah. So I don't know what's going
42:00.082 --> 42:03.107
to happen here. I find this— I'll put it this way. When,
42:03.283 --> 42:06.696
when Galet, when the Galet thing was, was announced, I think we all kind of
42:07.196 --> 42:09.260
knew what was going to happen and exactly what we thought was going to happen
42:09.292 --> 42:12.624
happened, right? They relaunched a brand that sat below Breitling,
42:13.538 --> 42:16.694
as we talked about on previous episodes, like what you thought was going to
42:16.742 --> 42:20.171
happen happened. I think what makes this so fascinating is like, I got no
42:20.187 --> 42:23.408
idea what's going to happen here. None. Which is why, you know,
42:23.488 --> 42:25.523
I'm the Michael Jackson with the popcorn meme here.
42:26.935 --> 42:29.905
I'm excited. Let's see what happens. What do they have in mind? What are they
42:30.405 --> 42:33.679
going to do? And what's interesting is, you know, normally I'd say a brand
42:34.179 --> 42:37.533
like Ebel under the Movado Group had really fallen from
42:38.033 --> 42:40.873
grace, has really fallen from, from grace, unfortunately.
42:42.093 --> 42:45.224
But it's also faded into the background a bit.
42:45.401 --> 42:48.291
And, you know, usually I'd say a brand that's fallen from grace, it's going to
42:48.791 --> 42:51.535
be really hard to reboot them. Like, again,
42:51.647 --> 42:55.934
like Chanel has, has taken stakes in a lot of
42:56.434 --> 42:59.907
watch, watch brands and businesses, but all of those brands have taken investments in Chanel
43:00.407 --> 43:03.257
from a position of strength. You know what I mean? Yeah. This is a very
43:03.433 --> 43:07.248
different move for Chanel in their, in their playbook. Like, they're taking a
43:07.296 --> 43:10.390
big risk here. Yeah. They're not underwriting a business or giving
43:10.486 --> 43:14.125
some security or some liquidity to a business that's
43:14.625 --> 43:18.293
established. They were shown something that clearly interested them. This is a turnaround.
43:18.421 --> 43:21.852
Yeah. And so normally I'd say like, oh my gosh, a brand like this,
43:21.948 --> 43:25.731
that's going to be really tough because you don't— look, Chanel isn't taking a flyer
43:26.231 --> 43:30.004
on this, and Journe is not taking a flyer on this, and Pierre-Jacques
43:30.132 --> 43:33.410
is not taking a flyer on this for these watches to end up in malls
43:33.458 --> 43:36.012
again. Let me put you this way. Max— I'll put you this way. Max Busser
43:36.512 --> 43:40.060
is nobody's fool, and he has been offered money from
43:40.655 --> 43:44.012
so many people over the years, but he took it from Chanel.
43:44.526 --> 43:49.088
Yes. So that leads me to believe that if he thought that
43:49.588 --> 43:52.960
these were the right people to, to have a stake in the future
43:53.460 --> 43:57.113
of his company, company from now until forever, you got to imagine
43:57.613 --> 44:00.623
that whoever is making some of those choices over there, it's pretty
44:00.639 --> 44:04.983
exceptional. Pretty exceptional. But I typically
44:05.483 --> 44:08.975
say the deck is stacked against them because of the rocky road that
44:09.475 --> 44:12.486
Ebel has been on over the last 22 years. However, the fact that they've,
44:12.742 --> 44:15.483
as we discussed on the last time we talked about them on the pod,
44:15.724 --> 44:19.298
the fact that they basically faded from memory and into obscurity
44:19.795 --> 44:23.354
actually gives them some permission. Dude, F.P. Journe and De
44:23.854 --> 44:27.506
Bethune watches traded wildly under retail up until a couple of years ago.
44:28.291 --> 44:32.042
So this is— but yes, I'm not talking about watch quality.
44:32.138 --> 44:36.178
I'm talking about like brand management. But here's my point. Ebel is
44:36.678 --> 44:40.218
effectively, let's just say right now, at least in the US, it's a mall brand.
44:40.715 --> 44:44.017
Sure. Essentially. And typically I'd say like, good luck
44:44.517 --> 44:47.896
with that. I mean, like pulling a brand, pulling a brand out of that segment
44:48.024 --> 44:51.391
of the market, typically there's so much baggage. But what if they
44:51.535 --> 44:54.853
aren't? What if that's not the— what if that's not what they're trying to do?
44:54.997 --> 44:57.724
Maybe. I think, I think the impulse is to be like, you know, okay,
44:57.900 --> 45:01.433
FP Journe is involved, it's going to become haute horology. What if it's not?
45:01.497 --> 45:04.532
Oh, I don't think it's gonna become haute horology. Yeah, but what if it's— what
45:05.032 --> 45:06.876
if it is a mall brand? What if it— what if the goal of it
45:07.101 --> 45:10.986
is to— and I'm making this up— is to make it the most incredible
45:11.486 --> 45:14.728
mall brand that's ever existed? What if their theory is like, you know what,
45:14.888 --> 45:18.051
well, they should pick a different channel because malls are dying. Okay, fine. But I
45:18.099 --> 45:20.090
guess my point is like, what if they look at it and they're like,
45:20.107 --> 45:22.547
you know, the era of Seiko and G-Shock is over.
45:23.717 --> 45:27.340
Okay, that's an interesting brief. So I guess my point is we don't
45:27.840 --> 45:30.242
know what they're doing, and I want to be very careful that we don't make
45:30.742 --> 45:34.522
assumptions just because of where these people came from, you know? So,
45:34.955 --> 45:38.962
so maybe it is another matte edition. Well, no, I don't
45:38.978 --> 45:41.623
think those are mall watches. I think, I think my point is, like,
45:42.569 --> 45:45.422
I find it interesting when people cross over from,
45:45.679 --> 45:49.302
you know, from, like, could the CEO of Target become the
45:49.802 --> 45:53.453
CEO of Apple Retail? Like, potentially. They tried. Now, obviously, they tried
45:53.953 --> 45:56.631
that. Was there a JCPenney Yeah, they tried that and he failed miserably. And then
45:56.679 --> 46:00.356
ultimately they chose a different approach that worked better. But my point
46:00.856 --> 46:03.872
is, it just goes to show that you can't, you can't just make an assumption
46:03.985 --> 46:07.196
based on someone's history about whether that's the trajectory they're going to
46:07.696 --> 46:11.483
take the brand. So I'm curious about what the brief was here,
46:12.254 --> 46:15.690
but there's no way Chanel coughed up this much money and these guys coughed
46:16.190 --> 46:19.528
up this much money without a business plan. Like, they know what they're going
46:19.544 --> 46:23.041
to do here. Yeah, well, it's pocket change for Chanel,
46:23.185 --> 46:26.441
not so much for, for Jordan or an executive.
46:26.537 --> 46:29.745
Who knows, Jack? But who— and who knows where the actual money came from,
46:29.889 --> 46:33.193
you know? Does, does the, does the world need another brand
46:33.257 --> 46:36.866
reboot? No, it really doesn't. But my gosh, is this an interesting one.
46:37.107 --> 46:40.330
It's fascinating. This is one to watch. Like, there,
46:40.475 --> 46:43.715
there will be a case study written about this thing one way or another because
46:44.215 --> 46:46.570
it goes one of two ways, you know what I mean? Or it goes in
46:47.070 --> 46:49.040
a way that none of us can see, which is kind of what I'm hoping
46:49.540 --> 46:52.749
for, that there's a thing that they see that none of us do. Yeah.
46:52.989 --> 46:56.506
And then that's, that's what I mean. It's either wildly successful or it bombs.
46:56.699 --> 46:59.733
But either way, it's gonna be— is that how anything goes? It's gonna be a
46:59.749 --> 47:03.153
wild ride. Yeah. All right. Shall we leave it there?
47:03.587 --> 47:06.911
Yeah. Interesting times in the watch industry. That is for sure.
47:06.975 --> 47:10.443
Well, thanks for listening. Open Work is a production of Collective Horology.
47:10.587 --> 47:13.943
You can find us online at collectivehorology.com where
47:14.443 --> 47:18.292
you'll find tons dozens of independent watch brands and their watches.
47:18.729 --> 47:24.199
Get in touch with us, and to do that, you can email podcast@collectivehorology.com.
47:42.579 --> 47:43.881
They can't— they can't know!