Against All Odds – How Richemont, LVMH and Swatch Recovered in Q4 2025 – Episode 79

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If you told me on that day that we would be looking at these kinds of results for
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the last quarter of the year, I wouldn't believe it. It's absolutely remarkable.
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This is Openwork, a look inside the watch industry. A podcast from Collective
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Horology. I'm Gabe Reilly, co-founder of Collective. And I'm Ash Arapian, co-founder
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of Collective. Collective Horology is an independent watch retailer based in
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Southern California. We carry a wide range of independent brands, including
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Arcanon, Czapek, Toledano, and Chan, and more. To learn more about us and check
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out our available inventory, visit collectivehorology.com. We don't
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get to announce new brands all that often. As listeners of the show know, we
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are very particular about who we work with because we want to make sure that
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we give everybody as much attention as we can and focus on bringing in the
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watches that we really admire. And both Gabe and I have had our eye on Toledano
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and Chan's watches for some time now. And when we finally were able to seal the
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deal in Geneva during Watches and Wonders and got a full look at the, not
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only what the vision for the brand is moving forward, but what they've
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accomplished to date, I think it was a bit of a no-brainer for us to be able to
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move forward. They're two wonderful guys making exceptionally unusual
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watches. And I am incredibly happy to say that as of this recording, we have a
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handful of the most recent release from Toledano and Chan in stock and ready for
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delivery. And moving forward, of course, as new watches are released, you will be
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able to find them at collectivehorology.com.
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Yeah, we had a fortuitous meeting with them at the Grand Duke Pub.
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We do a lot of business at the Grand Duke Pub.
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We do a lot of business at the Grand Duke Pub. We probably owe them a
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commission or something like that. But yeah, if you're meeting with a watch
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brand at the Grand Duke Pub, it's probably a good sign. I mean, that goes
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back to, man, our second collaboration with Zenith. We met with Roman Marietta,
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Grand Duke Pub, finalized that one. Saw some renderings, prototype dials, things
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like that. That was fortuitous. Holth & Ricks, that all went down at the Grand
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Duke Pub, Toledano and Chan. Yeah. So I was really blown away, not just by the
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watches. The watches are cool. And this is a brand that makes watches just speak
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for themselves. There's not much we have to say there, but both of the guys are
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lovely, Phil and Alfred. And what was Phil wearing? Was he wearing anything?
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Yeah, exactly. I believe he was wearing a denim jumpsuit.
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Oh, yeah, he was wearing a denim jumpsuit.
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Which is not a thing you get.
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What watch was he wearing?
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He was wearing some kind of geezer watch, of course. But what struck me the
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most is, just like Holth & Ricks, actually, what a clear, creative vision
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they have and how much runway it has. We saw some of their future collection,
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both in a format similar to what you've seen from the brand already, but also
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some new thoughts on approaches to case design, dial design, things like that.
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Crystal design.
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Crystal, yeah. We wax poetic all the time about watch brands and case design
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and movements and finishing and architecture. This is the brand where
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we'll wax poetic about sapphire crystal design.
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And packaging.
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The sapphire crystal changes the character of the watch as you look at it
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on your wrist and experience it and tell time. It's really cool. And yeah,
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their packaging is just awesome. One of the few brands that has packaging
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that's like, yes, OK, this is cool packaging. This has a reason for being.
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Gaga Laboratorio, another brand that does awesome packaging and likewise has
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a clear, creative vision and marches to the beat of their own drummer.
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So it was a no brainer. Toledano and Chan now at Collective.
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Welcome, guys. But we're not here to talk about the independents.
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We're here to talk about the big behemoth holding companies.
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And well, on this episode, on this episode.
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Yes, exactly. This episode is brought to you by the big behemoth holding companies.
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Slow may they turn. Slow may they turn.
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Yeah. So what's interesting is we now have a picture of where LVMH,
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Richemont and the Swatch Group ended last year, calendar year 2025.
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These holding companies, Richemont in particular, have their own financial year
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calendar that doesn't quite align with with the calendar year.
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So what we're doing now that we have the data has come in
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and the reporting has come in from the holding companies is we're looking
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at the period of October through December of 2025
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and how these holding companies perform, not for the sake of doing it,
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but because there's actually a lot of interesting data and insight
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in what we're seeing.
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I think in broad strokes, what we're seeing is a turnaround.
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We'll talk about the numbers and what that means.
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But underneath the surface of that turnaround,
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there are bigger macro forces at play that are driving that turnaround.
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And also, importantly, management decisions or lack of management decisions
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in some cases that are also affecting these companies
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and how they're adjusting to how they're adjusting to the current market realities
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and adjusting their their businesses, which I found really interesting.
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We talked about how Breitling is taking a very unique approach
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to the market in our last episode.
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I think what we're seeing from these brands is signs of recovery,
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but also clear signal on how they're operating in a really challenging market.
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I think it's also important to look at why this matters.
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I mean, look, we we are independent watch retailers,
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and this is a podcast about the business of watches.
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And sometimes I think, you know, we do talk about the holding companies
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probably more than you and I do just in our normal course of business.
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Yeah, because that's what we have the data on.
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It's harder to research some of the smaller players.
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I think there's sort of two things about that and why this this matters in that sense.
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One is that the availability of data and their bellwethers.
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Yeah, well, so their bellwethers for a few reasons, and we'll get into this.
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But one of them is that because these big holding companies
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are such voracious consumers of raw material and components
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and essentially are the large scale patrons of the supply chain,
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you cannot remove them from the conversation about the industry,
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especially independents, because a lot of the folks that operate
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in the long tail of the supply chain survive off of the revenue
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that they get from these holding companies so that they are also able to support independents.
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So when we look at this, we get a few points.
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One is that we get a bellwether of the industry,
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which helps us understand the health of that industry.
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And then the other thing that we get to see here is the success of these brands
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and these businesses ultimately can help us understand
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where the supply chain is going to be and how that will impact independents.
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So as we talk through all of this, good to have some context on this,
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because I can understand if you're an independent watch collector,
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you could sit there and be like, why do I care what's happening at Richemont or LVMH?
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Well, for these reasons, and I'm not saying you need to go out
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and do some like corporate, you know, like charity and be like,
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oh, you know, let me give you some money, Paul Louis Vuitton.
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Not suggesting that. No, no, no.
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But but important for us to understand in the same way that this is true
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about publishing or independent media or like, you know, indie menswear or whatever.
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Everything is interconnected.
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And we have to look at these things at a macro level.
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Yeah, exactly. These are the brands that stirred the drink,
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not just in terms of their overall revenue and market share and watch sales,
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but in the industry at large.
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Yeah, they're the biggest player when it comes to the production of Swiss
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watches and Swiss watch components and the supply chain in Switzerland and beyond.
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And so that's why this matters. Great point.
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So I don't want to get too much bogged down into the details.
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I'll put all the numbers for what the financial and the
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we got to get green visors for these.
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Oh, yeah. I should bring my calculator.
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You know, Asher knows my calculator.
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I stole this calculator from from my first job in advertising
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at YNR San Francisco in 2005.
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And this calculator had clearly been in the in the agency office since the 1980s.
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It's this giant Casio solar powered calculator.
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It looks like the kind of thing like you'd open up like a banker's drawer
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in the 1980s and you'd find it in there.
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Well, I still have the calculator to this day,
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so I should bring that in a green visor on here and we can crunch it.
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Our accountant has it even cooler set up.
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He's got the the, you know, the receipt. Oh, yeah.
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So and I didn't it didn't occur to me why you would want receipt
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paper on your calculator until recently, which is like, oh,
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you can see the numbers you just entered.
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So if you're like, oh, wait,
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did I just divide this or multiply it or write the right number? Wrong number.
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Why isn't this adding up?
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You go back and look at the paper.
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It's a great product development from the good folks at Casio.
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Yeah. All right.
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In any event, I don't want to get too much into into these numbers
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because it might be a little bit boring to go through it all.
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But let's look at the trends.
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I think suffice it to say, we'll put the details
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in in the blog post at collective horology dot com slash blog.
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But I think what we're seeing from Richmond, LVMH and swatch
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was in the end of the year.
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So this is October through December. Yeah.
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They're all telling us in one way or another, their watch
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businesses are stabilizing or improving.
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And this is both in terms of this is primarily in terms of revenue.
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So let's start with Richmond.
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So for Richmond, for the end of the year, for the final
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of those final few months, the year, what they're telling us is their watch business.
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And we've talked a lot on this podcast about how their watch business
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has really been a problem for them and a weight on the business.
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Jewelry has been driving the business.
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It continues to.
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But watches were actually up seven percent year over year
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for that final quarter of the of the calendar.
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That's meaningful.
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So that that's meaningful.
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Jewelry was up 14 percent.
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So jewelry remains the behemoth and the most important.
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And these are drivers numbers, right?
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Yeah, this is gross revenue.
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I did look at profitability for all three, which we'll talk about in a second.
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But suffice it to say, they're doing more business.
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They're doing more top line business at Richmond in watches.
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Yep. Great. Up year over year. Nice.
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LVMH, they actually lump watches and jewelry together.
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They're far more diversified holding company.
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But what they're telling us is the watch and jewelry business held up
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and is essentially flat year over year.
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They don't get into the the numbers in particular.
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They have said, however, that more broadly speaking in their portfolio,
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fashion is soft.
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So they're into the fashion.
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They have many maisons that play in fashion on a level
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that these other holding companies don't.
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And that's really accounting for the softness in their in their business.
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Overall, the business was up one percent in revenue.
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That's interesting.
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You're a decline in couture, but but some degree of stability.
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Yeah, they're saying watches and jewelry performed held up better than than fashion.
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And they point in particular to Tiffany and Bvlgari as the stars,
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the star players within the watches and jewelry division.
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Now, of course, both Tiffany and Bvlgari are in watches.
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Tiffany, not so much Bvlgari more so.
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But jewelry is really the driver there, as it is with.
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I mean, they don't break it out, of course.
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Hard to know how much one or the other is booing, you know, that number.
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But if they lump them together and they consider it one P&L
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essentially at the highest level, then maybe it maybe doesn't matter.
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And look, they're transparent enough to say, like, you know,
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fashion's not going so well for us.
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If watches was really down significantly, I'm sure they would point.
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It would stand to reason that maybe they'd point to that.
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They're pointing to fashion.
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Fair enough. Swatch Group, they claim that for the final quarter of the year,
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they were up 7.2% year over year.
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So that's consistent with what we're seeing
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from the watchmaking division of Richemont.
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And we've talked a great deal about Swatch.
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We'll chat a little bit more about some of the palace intrigue,
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the board drama that's happening there.
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There's news there, but they're they're up as well.
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Now, of course, Swatch is pure play watches, just like the watchmaking
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division of Richemont.
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So what we're seeing is top line revenue.
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There's growth.
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And Swatch is telling us that it's across the board.
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So Swatch is obviously diversified within watches across the low,
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mid and high end, whereas Richemont is focusing more and more on on the high end.
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I feel like shaking your head.
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Well, because I just wonder how much of that, since these are gross numbers,
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are tied to some of the pretty significant price increases
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that we saw at the Swatch Group.
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I don't know enough about I haven't paid enough attention
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to Richemont's price increases, as I have to say, Rolex and and Omega Omega.
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Yeah, we certainly have seen Omega and Blancpain, for sure,
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raising their prices quite, quite significantly
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over the course of the last 12 to 18 months.
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Tariffs and currency obviously being a factor in this.
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So I am kind of curious to see how those gross numbers
231
00:13:07,039 --> 00:13:09,559
play out against actual revenue.
232
00:13:10,039 --> 00:13:14,520
And also, you know, we've seen a lot of these sort of like,
233
00:13:14,799 --> 00:13:17,760
you know, hold and release moments over the last 18 months,
234
00:13:17,760 --> 00:13:21,799
especially with tariffs, where when, you know, when when the tariffs become chaotic,
235
00:13:22,239 --> 00:13:26,359
we see pullback when the chaos goes away or we have a taco moment.
236
00:13:26,559 --> 00:13:29,919
Then we tend to see sales, you know, flood.
237
00:13:30,400 --> 00:13:32,799
So it has been talk about the export data.
238
00:13:32,799 --> 00:13:37,000
And we saw a huge surge in exports from Switzerland to in general,
239
00:13:37,000 --> 00:13:39,400
but to the US specifically in December. Right.
240
00:13:39,400 --> 00:13:42,000
So that could be that could certainly be part of it.
241
00:13:42,000 --> 00:13:47,640
But keep in mind, many of these companies are exporting to themselves. Right.
242
00:13:47,640 --> 00:13:51,719
So that's a little bit different from like they make a sale into a retailer
243
00:13:52,039 --> 00:13:53,880
and then ship it the way independents do.
244
00:13:53,880 --> 00:13:55,359
So harder, harder to say.
245
00:13:55,359 --> 00:13:58,320
But, yeah, certainly there was more activity in terms of export.
246
00:13:58,479 --> 00:14:00,840
I guess my point is, when we look at some of these numbers,
247
00:14:00,840 --> 00:14:02,400
we could look at each other and say, oh, that looks OK.
248
00:14:02,400 --> 00:14:05,159
But I think there's probably a lot going on under the scenes
249
00:14:05,159 --> 00:14:07,799
that are behind the scenes there make these numbers.
250
00:14:07,840 --> 00:14:09,039
You think I just left it there?
251
00:14:09,039 --> 00:14:10,400
No, man, I dug deeper.
252
00:14:10,400 --> 00:14:11,359
Well, I'm setting you up.
253
00:14:11,359 --> 00:14:12,599
So a couple a couple of things.
254
00:14:12,599 --> 00:14:15,320
First thing I looked at was profitability.
255
00:14:15,320 --> 00:14:17,479
Like, it's great that sales are up.
256
00:14:17,679 --> 00:14:19,640
And so sales could just be up.
257
00:14:19,640 --> 00:14:24,760
Revenue is up. Sales, revenue, sales, receipts.
258
00:14:25,640 --> 00:14:27,760
So sales are up. That's great.
259
00:14:27,760 --> 00:14:29,000
What's what's going on here?
260
00:14:29,000 --> 00:14:30,760
What's the story with profitability?
261
00:14:30,760 --> 00:14:34,840
And in all cases, profitability is generally about flat
262
00:14:35,840 --> 00:14:36,919
year over year for this.
263
00:14:36,919 --> 00:14:38,080
So this is my point.
264
00:14:38,080 --> 00:14:43,359
So what? Well, no, this isn't your point, because look, if if you're saying like,
265
00:14:43,359 --> 00:14:45,880
look, let's attribute this to price increases, you know,
266
00:14:45,880 --> 00:14:48,400
maybe they're doing more sales because they've increased their prices.
267
00:14:49,080 --> 00:14:52,159
The challenge there would be like, well, if that was true,
268
00:14:52,159 --> 00:14:53,719
they're just increasing prices.
269
00:14:53,719 --> 00:14:54,840
Their margins would expand.
270
00:14:54,840 --> 00:14:56,559
Their profitability would expand.
271
00:14:56,559 --> 00:14:57,760
Well, that's not what I'm saying.
272
00:14:57,760 --> 00:15:00,559
What I'm saying is that the reason prices are increasing
273
00:15:00,559 --> 00:15:03,280
are because of a drag from currency and from margin.
274
00:15:03,280 --> 00:15:04,880
And from even though the right.
275
00:15:04,880 --> 00:15:10,280
So even though the the overall like like the the absolute number is bigger,
276
00:15:10,799 --> 00:15:13,640
it doesn't necessarily mean that that the margins are.
277
00:15:13,640 --> 00:15:15,679
No. And the margins really haven't improved.
278
00:15:15,679 --> 00:15:18,080
So we know there's currency pressure here.
279
00:15:18,359 --> 00:15:22,080
The reporting is base is adjusted for constant currency.
280
00:15:22,239 --> 00:15:23,679
OK, but. All right.
281
00:15:23,679 --> 00:15:26,479
But, you know, like there is currency pressure is real.
282
00:15:26,479 --> 00:15:27,520
It softens demand.
283
00:15:27,520 --> 00:15:30,880
It weakens demand and it may shift demand from a lower price segment
284
00:15:30,880 --> 00:15:33,080
to a higher price segment that's less price sensitive.
285
00:15:33,080 --> 00:15:35,520
Yeah. The other thing is tariffs, of course.
286
00:15:35,520 --> 00:15:40,400
And again, if these holding companies are self importing, which they do,
287
00:15:40,599 --> 00:15:43,200
they're absorbing a lot of tariff related costs.
288
00:15:43,200 --> 00:15:44,559
And that erodes that.
289
00:15:44,559 --> 00:15:47,760
Yeah. And there's another interesting thing with tariffs going on right now,
290
00:15:47,760 --> 00:15:50,200
which is that the Court of International Trade here in the United States
291
00:15:50,200 --> 00:15:52,799
has essentially mandated one of your favorite courts
292
00:15:53,840 --> 00:15:58,799
as these days has has mandated the refund of tariffs,
293
00:15:59,080 --> 00:16:02,280
which is a monumentally massive amount of money.
294
00:16:02,520 --> 00:16:05,359
And it will be interesting to see how some of these companies metabolize
295
00:16:05,359 --> 00:16:08,400
that money when it does eventually come back to them and how they categorize it,
296
00:16:08,640 --> 00:16:12,799
because that was OPEX and or revenue that they had access to previously
297
00:16:12,799 --> 00:16:15,840
that was taken from them illegally by the United States government
298
00:16:16,080 --> 00:16:19,799
and now is being returned to them with interest or presumably at some point
299
00:16:20,000 --> 00:16:21,400
returned to them with interest.
300
00:16:21,400 --> 00:16:23,400
And that money is going to go somewhere on the books.
301
00:16:23,919 --> 00:16:28,039
So it'll be interesting to see how how that that cash will be
302
00:16:28,039 --> 00:16:29,640
will be will be notated.
303
00:16:29,640 --> 00:16:33,719
I don't know that we'll see a huge turnaround in the in the financial
304
00:16:33,719 --> 00:16:36,919
performance of these businesses because of it, or at least in the trading
305
00:16:36,919 --> 00:16:40,359
of their their stocks on the open market, because all of this is baked in.
306
00:16:40,359 --> 00:16:45,440
But I'm sure that day to day basis will help their bookkeeping for the year.
307
00:16:45,440 --> 00:16:47,440
It will certainly pad their margins for.
308
00:16:47,440 --> 00:16:50,039
Oh, I know. I know that a return of our tariffs
309
00:16:50,039 --> 00:16:52,640
would make a material difference to us from an OPEX standpoint.
310
00:16:52,760 --> 00:16:54,239
It certainly it certainly would.
311
00:16:54,239 --> 00:16:57,200
So the, you know, revenue is up.
312
00:16:57,200 --> 00:16:58,200
Sales are up.
313
00:16:58,200 --> 00:17:02,679
But profit is generally for these guys about flat or where it had been before.
314
00:17:02,919 --> 00:17:07,640
And that's just because of all the pressures that they experienced in in twenty
315
00:17:07,640 --> 00:17:11,400
twenty five. And, you know, the cynical thing to say when prices go up
316
00:17:12,199 --> 00:17:16,520
or when, you know, the cost of tariffs get passed on to consumers
317
00:17:16,520 --> 00:17:20,880
to some extent is just to, you know, blame these companies for being greedy.
318
00:17:20,880 --> 00:17:24,400
And I think what we've seen is even if prices are increasing,
319
00:17:24,400 --> 00:17:26,959
even if the top line figure for sales are increasing,
320
00:17:27,319 --> 00:17:30,680
these companies still aren't materially making much more money.
321
00:17:30,680 --> 00:17:34,319
If if any more money at all, they're just treading water,
322
00:17:34,640 --> 00:17:38,000
at least when it comes to their at least when it comes to their watch businesses.
323
00:17:38,400 --> 00:17:40,479
Inflation is it? Inflation is a drag, man.
324
00:17:40,479 --> 00:17:42,319
Inflation is a drag. Tariffs are a drag.
325
00:17:42,319 --> 00:17:44,239
It's not fun for for anyone.
326
00:17:44,239 --> 00:17:46,760
And certainly when it came to that stuff, I don't think, you know,
327
00:17:46,760 --> 00:17:49,280
we can be cynical about these companies and how they operate.
328
00:17:49,280 --> 00:17:53,319
But when it comes to price increases and things like that in twenty twenty five,
329
00:17:53,319 --> 00:17:57,199
I think we need to give them some degree of benefit of the doubt here.
330
00:17:57,439 --> 00:18:00,160
Now, the other the other drivers of all this.
331
00:18:00,160 --> 00:18:02,880
So when we looked at, OK, well, why exactly is revenue up?
332
00:18:02,880 --> 00:18:04,400
What is driving it?
333
00:18:04,400 --> 00:18:07,199
We looked at the statements that these companies made in
334
00:18:07,199 --> 00:18:10,239
in their most recent financial reports, the financial reporting
335
00:18:10,239 --> 00:18:14,880
for this period of time, and they told us a few things.
336
00:18:15,359 --> 00:18:18,359
So first is China and travel.
337
00:18:18,359 --> 00:18:20,400
Good old travel retail.
338
00:18:20,439 --> 00:18:24,199
China, we've talked a great deal about the struggles
339
00:18:24,199 --> 00:18:27,520
that the holding companies and the watch industry has had in China
340
00:18:27,520 --> 00:18:30,760
in the last two years and how there's been nowhere to hide recently
341
00:18:30,760 --> 00:18:34,599
because of, of course, all the tariffs and trade issues in the United States,
342
00:18:34,800 --> 00:18:37,800
Europe being really soft and China pulling back massively.
343
00:18:38,119 --> 00:18:41,520
So what we're hearing now from these companies is that China,
344
00:18:41,520 --> 00:18:45,959
in most cases, is either now neutral, so it's no longer retreating
345
00:18:46,160 --> 00:18:49,199
or declining to positive, to mildly positive.
346
00:18:49,199 --> 00:18:52,319
So China seems to at least have stabilized or for some brands
347
00:18:52,319 --> 00:18:55,400
and companies in particular, it's doing a bit better.
348
00:18:55,400 --> 00:18:56,800
So that's helping.
349
00:18:56,800 --> 00:18:59,400
That's helping them travel retail as well.
350
00:18:59,400 --> 00:19:01,719
So this isn't just buying watches on cruise ships.
351
00:19:01,959 --> 00:19:05,239
This could be buying watches and, you know, major reports of call
352
00:19:05,239 --> 00:19:09,319
around the world. Hong Kong is a famous travel retail market.
353
00:19:09,319 --> 00:19:13,520
A lot of folks I remember flying out of Hong Kong years ago
354
00:19:13,520 --> 00:19:17,400
and just the number of people getting on the plane and stuffing
355
00:19:17,800 --> 00:19:21,400
the overhead bins with like luxury shopping bags.
356
00:19:21,400 --> 00:19:25,000
Yeah. Like major travel retail destination.
357
00:19:25,319 --> 00:19:29,160
So Hong Kong would would probably be part of that greater China market.
358
00:19:29,160 --> 00:19:33,000
Certainly it's part of China distinct in in some ways
359
00:19:33,959 --> 00:19:37,000
that travel retail picture is improving as well.
360
00:19:37,000 --> 00:19:41,239
So that's good news for the industry at large, especially given all
361
00:19:41,239 --> 00:19:43,520
all of the challenges they went through last year.
362
00:19:43,520 --> 00:19:48,839
And then another one is channel and product mix cleanup.
363
00:19:49,199 --> 00:19:51,680
And this probably impacts more of the bottom line.
364
00:19:51,680 --> 00:19:55,359
But to some extent, it does impact the top line as well.
365
00:19:55,400 --> 00:19:57,400
So cleaner inventory.
366
00:19:57,400 --> 00:20:02,839
So this means less, basically less overproduction of watches.
367
00:20:02,839 --> 00:20:04,160
This helps the bottom line.
368
00:20:04,160 --> 00:20:05,959
This helps financial health.
369
00:20:05,959 --> 00:20:09,920
It also helps the demand of new watches sold through primary channels,
370
00:20:09,920 --> 00:20:12,359
whether that's dealers, the other pieces.
371
00:20:13,359 --> 00:20:15,520
Increasingly or continued shift
372
00:20:15,520 --> 00:20:20,520
to their own company owned and operated retail that helps preserve pricing.
373
00:20:20,719 --> 00:20:23,560
We've talked in the past when a company like
374
00:20:24,359 --> 00:20:28,680
let's take a brand like Omega when they sell a watch through their own boutique.
375
00:20:29,239 --> 00:20:33,400
They realize the full retail revenue on that versus when they wholesale it.
376
00:20:33,599 --> 00:20:36,280
They they realize just the wholesale revenue.
377
00:20:36,280 --> 00:20:38,160
So it helps the top line number as well.
378
00:20:38,160 --> 00:20:41,760
So as companies shift to company owned and operated retail,
379
00:20:41,920 --> 00:20:47,680
they're capturing more retail dollars and that helps their top line revenue as well.
380
00:20:48,000 --> 00:20:51,439
The other thing in terms of of product mix and mix,
381
00:20:51,439 --> 00:20:56,000
whether it's channel mix or product mix that is happening is in the case of LVMH
382
00:20:56,000 --> 00:20:59,439
and Richemont, they are shifting their product mix
383
00:20:59,680 --> 00:21:02,680
to what they call like permanent luxury.
384
00:21:02,920 --> 00:21:05,719
So these are essentially more high end products.
385
00:21:05,760 --> 00:21:09,920
So these these permanent luxury items within watches would include
386
00:21:10,119 --> 00:21:13,839
not just like high price watches, but things like jewelry, watches
387
00:21:13,839 --> 00:21:17,800
and what are described as iconic time to heirloom kind of stuff.
388
00:21:17,839 --> 00:21:18,719
Heirloom kind of stuff.
389
00:21:18,719 --> 00:21:23,160
But, you know, that could be like the most desirable pieces in their collection
390
00:21:23,160 --> 00:21:25,719
versus, you know, just trying to probably like the Reggia
391
00:21:25,719 --> 00:21:29,040
Persepe collabs or the the Debutoon collabs, things like that.
392
00:21:29,040 --> 00:21:33,199
It could even be like in the case of let's take, I don't know,
393
00:21:34,079 --> 00:21:37,599
Cartier, you know, focusing on certain tank lines that.
394
00:21:37,839 --> 00:21:38,359
Oh, forgive me.
395
00:21:38,359 --> 00:21:40,400
I was thinking LVMH brands, excuse me.
396
00:21:40,719 --> 00:21:43,640
Yeah, I mean, LVMH is part of this as well.
397
00:21:43,640 --> 00:21:46,319
So they're shifting to these more permanent items.
398
00:21:46,319 --> 00:21:50,439
Well, in the case of Swatch again, they're claiming it's broad based
399
00:21:50,439 --> 00:21:53,239
and across the board and they're seeing demand across the board.
400
00:21:53,560 --> 00:21:57,640
I think that's because they do have some brands that do particularly well
401
00:21:57,640 --> 00:22:02,479
right now at the lower end, Tissot and the PRX in particular as a poster child
402
00:22:02,479 --> 00:22:06,599
for that. I don't know the state of the Swatch brand business,
403
00:22:06,959 --> 00:22:11,880
but I would guess thanks to things like the Moon Swatch and collaborations
404
00:22:11,880 --> 00:22:16,079
and things like that, they're maybe doing OK or better than usual.
405
00:22:16,079 --> 00:22:19,599
I guess the main takeaway that I I'm because I'm listening to all of this
406
00:22:19,599 --> 00:22:22,880
and I'm trying to just summarize in my head where we're landing.
407
00:22:23,880 --> 00:22:28,160
In the third quarter last year, Switzerland was in a bad way.
408
00:22:28,520 --> 00:22:31,719
They were under the they were they were being under heavy pressure
409
00:22:31,719 --> 00:22:33,880
from an illegal American tariff.
410
00:22:33,880 --> 00:22:37,439
Yeah. So the thirty nine percent tariff that was in effect
411
00:22:37,439 --> 00:22:41,520
essentially August through the beginning of December, essentially.
412
00:22:41,880 --> 00:22:46,160
So so basically for, you know, third quarter into fourth quarter, it was
413
00:22:46,599 --> 00:22:50,560
it was poor and a poor economic reality that was an invented scenario
414
00:22:50,560 --> 00:22:53,319
by the U.S. government
415
00:22:53,319 --> 00:22:56,119
that created cascading issues throughout the Swiss economy
416
00:22:56,520 --> 00:23:00,319
and through Europe really writ large, even though Europe was operating
417
00:23:00,319 --> 00:23:02,319
at a lower net tariff.
418
00:23:03,040 --> 00:23:08,160
We were seeing things like job eliminations, severe cutback in budgets.
419
00:23:08,479 --> 00:23:10,599
I mean, it was some serious stuff going on there.
420
00:23:10,599 --> 00:23:14,599
And the second and third order consequences of that are still in effect.
421
00:23:14,599 --> 00:23:18,560
I mean, it didn't just go away because the tariffs were negotiated lower
422
00:23:18,560 --> 00:23:20,839
and then ultimately found to be illegal.
423
00:23:21,760 --> 00:23:25,119
So what I'm really taking away from all of this as I look at it is
424
00:23:25,760 --> 00:23:28,880
we had an industry that was pretty heavily battered
425
00:23:29,439 --> 00:23:33,199
for the last 12 months, for sure, 18 months to a degree,
426
00:23:33,839 --> 00:23:36,479
and it's still somewhat resilient.
427
00:23:36,479 --> 00:23:39,160
I'd say remarkably resilient, given the context.
428
00:23:39,160 --> 00:23:44,640
Exactly. So on the one hand, you know, there's the economic
429
00:23:44,640 --> 00:23:47,520
there was the economic brutality that this this industry and this
430
00:23:47,520 --> 00:23:49,719
this nation was subjected to.
431
00:23:50,160 --> 00:23:54,479
And by this nation, I mean Switzerland, but also, frankly, America.
432
00:23:55,479 --> 00:24:00,920
And then there is the impressive nature of the resiliency
433
00:24:00,920 --> 00:24:04,520
and the bounce back of both the global consumer to a degree
434
00:24:04,800 --> 00:24:06,800
and also these businesses.
435
00:24:06,800 --> 00:24:09,760
The question for me then says, all right, well,
436
00:24:10,599 --> 00:24:13,119
you know, again, these things don't happen in a vacuum.
437
00:24:13,680 --> 00:24:17,199
So the pullback and some of the cost cutting
438
00:24:17,560 --> 00:24:22,680
that's going to start hitting on product that is coming in 2026 and 2027,
439
00:24:23,000 --> 00:24:28,119
because if you have to start cutting costs with suppliers or lowering production
440
00:24:28,119 --> 00:24:31,199
or you had to eliminate some jobs or things like that.
441
00:24:31,239 --> 00:24:31,959
Oh, yeah.
442
00:24:31,959 --> 00:24:36,920
The last quarter of the year, they're assembling watches from orders
443
00:24:37,400 --> 00:24:41,239
that placed with and were delivered by suppliers months prior. Correct.
444
00:24:41,280 --> 00:24:44,040
Yeah. So now we're going to start seeing the impact kind of like,
445
00:24:44,199 --> 00:24:46,880
you know, it's not it's certainly not a one to one analogy,
446
00:24:47,040 --> 00:24:49,640
but certainly to a degree what we're seeing in terms of, you know,
447
00:24:49,640 --> 00:24:52,959
oil shocks and energy shocks based on, you know, what's happening
448
00:24:52,959 --> 00:24:54,400
in the straight up or moves.
449
00:24:54,400 --> 00:24:59,599
So I think we are we're probably going to see some inventory constraints.
450
00:24:59,839 --> 00:25:04,119
We're going to see some pain and pressure on supply chain and suppliers.
451
00:25:04,520 --> 00:25:08,280
And then as the you know, the giant titanic, you know,
452
00:25:08,280 --> 00:25:12,439
wheezing beasts of these corporations start to return,
453
00:25:12,439 --> 00:25:16,359
you know, the ships towards, you know, reactivating partnerships,
454
00:25:16,359 --> 00:25:18,839
sending money to suppliers, that's going to happen.
455
00:25:18,839 --> 00:25:21,119
There's going to be a dip, I suspect.
456
00:25:21,119 --> 00:25:23,599
So I think part of what I want to see here is like, you know,
457
00:25:23,599 --> 00:25:25,160
first of all, like this is good.
458
00:25:25,160 --> 00:25:26,959
Like I don't want to see anybody's job get hurt.
459
00:25:26,959 --> 00:25:30,599
I don't want to see an industry suffer, let alone one that we're part of.
460
00:25:31,199 --> 00:25:34,319
But realistically, there's going to be a dip.
461
00:25:35,040 --> 00:25:36,040
I have to imagine.
462
00:25:36,040 --> 00:25:39,319
Well, first things first, if you told me when it was
463
00:25:39,839 --> 00:25:42,880
August 7th or something like that, when a day that would live in infamy,
464
00:25:42,920 --> 00:25:44,640
the day that I think that was it.
465
00:25:44,640 --> 00:25:48,359
And some like price seared into my mind the day that the U.S.
466
00:25:48,359 --> 00:25:52,079
government announced it would be a 39% tariff on Switzerland.
467
00:25:52,439 --> 00:25:58,040
If you told me on that day that we would be looking at these kinds of results
468
00:25:58,640 --> 00:26:01,880
for the last quarter of the year, I wouldn't believe it.
469
00:26:02,880 --> 00:26:06,040
Yeah, it's it's absolute, absolutely remarkable.
470
00:26:06,640 --> 00:26:10,239
On the other hand, the impact is real.
471
00:26:10,239 --> 00:26:13,839
So one of the things that I lost their job, they're getting it back right away.
472
00:26:13,880 --> 00:26:14,160
Yeah.
473
00:26:14,160 --> 00:26:17,959
One of the things I looked into is, well, how is this impacting
474
00:26:18,719 --> 00:26:21,400
the supply chain and suppliers in particular?
475
00:26:21,400 --> 00:26:25,719
You know, we were talking about Dubai Watch Week months ago.
476
00:26:25,719 --> 00:26:28,800
And and one of the panels that Dubai Watch Week
477
00:26:28,800 --> 00:26:33,319
and a number of brand CEOs at Dubai Watch Week were saying that their suppliers
478
00:26:33,319 --> 00:26:36,479
were under just tremendous pressure with orders canceled.
479
00:26:36,719 --> 00:26:39,920
We also talked about the fact that at the end of last year,
480
00:26:39,920 --> 00:26:43,920
I think it was 20% of the company's watch businesses in Switzerland
481
00:26:43,920 --> 00:26:46,839
were taking advantage of like a furlough program from the government
482
00:26:46,839 --> 00:26:50,160
or a part time working scheme from from the government.
483
00:26:50,160 --> 00:26:53,239
I mean, that's really high and unfortunate.
484
00:26:54,280 --> 00:26:58,400
We heard from a well-placed watch executive pretty recently
485
00:26:58,400 --> 00:27:02,160
that mainstream high end brand we both love and admire
486
00:27:02,160 --> 00:27:06,880
had basically stopped production and stopped their production lines.
487
00:27:07,160 --> 00:27:10,000
Not not entirely, but effectively, predominantly.
488
00:27:10,560 --> 00:27:14,359
So, you know, when I dug into this and I was like, well,
489
00:27:14,839 --> 00:27:19,319
if part of what I'm hearing here is that in some cases,
490
00:27:19,319 --> 00:27:22,479
at least in the case of Richemont and LVMH, we're telling us,
491
00:27:22,479 --> 00:27:24,079
you know, we're making fewer watches.
492
00:27:24,079 --> 00:27:26,920
We're focusing more on the high end and these permanent pieces.
493
00:27:27,359 --> 00:27:30,400
Well, that's fewer watches being made, fewer parts being ordered.
494
00:27:30,599 --> 00:27:33,400
The question I had was, well, how is this impacting suppliers?
495
00:27:34,040 --> 00:27:37,800
And I just expected it to be like a roundly disastrous
496
00:27:38,280 --> 00:27:40,599
kind of answer I would get on this.
497
00:27:40,599 --> 00:27:42,760
And it turns out it's actually a tale of two cities.
498
00:27:43,119 --> 00:27:48,520
So for suppliers who are supplying kind of the $10,000 and under segment,
499
00:27:48,520 --> 00:27:49,359
it's brutal.
500
00:27:49,359 --> 00:27:51,479
Their businesses are really, really hurting.
501
00:27:51,479 --> 00:27:53,280
Their orders are being cut.
502
00:27:53,280 --> 00:27:56,239
They're engaging in these part time work schemes.
503
00:27:57,119 --> 00:27:57,880
It's not pretty.
504
00:27:57,880 --> 00:27:59,719
You know, these are real, real people.
505
00:27:59,719 --> 00:28:03,359
When when the you know, the record stops.
506
00:28:04,319 --> 00:28:08,319
These are the people who get left holding holding the bag or without a chair.
507
00:28:08,839 --> 00:28:11,640
However, on the high end, it's having the opposite effect.
508
00:28:11,640 --> 00:28:16,119
So the shift to more jewelry pieces, the shift to more metier des arts,
509
00:28:16,119 --> 00:28:19,199
the shifts to more high craft pieces
510
00:28:19,800 --> 00:28:23,680
are requiring more of specialized suppliers.
511
00:28:23,680 --> 00:28:27,160
And it's actually creating a boon for specialized suppliers.
512
00:28:27,160 --> 00:28:29,680
So what's interesting in the last couple of years,
513
00:28:29,680 --> 00:28:31,640
what we've heard from the brands we work with,
514
00:28:31,640 --> 00:28:35,160
and we work with independent brands priced anywhere from,
515
00:28:35,359 --> 00:28:38,839
you know, $2,000 all the way up to $100,000.
516
00:28:38,839 --> 00:28:39,479
Yeah.
517
00:28:39,479 --> 00:28:41,800
What we've been hearing from them over the last few years
518
00:28:41,800 --> 00:28:45,959
as the covid bubble has unwound is that the bottlenecks
519
00:28:45,959 --> 00:28:48,199
they've had around supply have gotten a lot better.
520
00:28:48,599 --> 00:28:52,079
You know, what we would hear from them in the covid days was,
521
00:28:52,560 --> 00:28:56,040
oh, that watch that I promised you is going to be delayed another two months
522
00:28:56,040 --> 00:28:59,199
and another two months and another two months because I can't get dials
523
00:28:59,199 --> 00:29:04,079
or I can't get the person who does the, you know, the the code,
524
00:29:04,199 --> 00:29:06,560
you know, PVD coding of some component.
525
00:29:06,839 --> 00:29:08,560
They're backed up or whatever it is like.
526
00:29:08,560 --> 00:29:11,160
All it takes is one component for the whole thing to fall apart.
527
00:29:11,479 --> 00:29:14,439
This was a story we would hear over and over and over again.
528
00:29:14,640 --> 00:29:17,040
The last few years, it's gotten materially better.
529
00:29:17,040 --> 00:29:21,160
And in the last year in particular, my gosh, have the brands we carry
530
00:29:21,160 --> 00:29:23,280
never been better about hitting their deadlines?
531
00:29:23,280 --> 00:29:27,040
And it's so the pain that's inflicted
532
00:29:27,520 --> 00:29:32,439
by these major companies pulling back from the supply chain is real.
533
00:29:32,520 --> 00:29:36,359
It's helped the independents for some, in some instance, to get caught up
534
00:29:36,640 --> 00:29:40,199
on production, because what we hear from them is I'm the last in line
535
00:29:40,199 --> 00:29:44,959
because, you know, I use my word, my orders, 10,000.
536
00:29:45,160 --> 00:29:48,400
My handset supplier is the same supplier who supplies.
537
00:29:48,400 --> 00:29:53,000
I'm making it up, Breitling or whomever, like I'm the last in line here.
538
00:29:53,000 --> 00:29:55,599
And I have to hope they can squeeze me in between production.
539
00:29:55,760 --> 00:29:57,199
And the orders are only ramping up.
540
00:29:57,199 --> 00:29:58,719
Well, that went away.
541
00:29:58,719 --> 00:30:01,439
However, if what we're seeing now is a move in the industry
542
00:30:01,439 --> 00:30:07,040
towards higher end pieces that are putting more of a burden on smaller
543
00:30:07,319 --> 00:30:10,439
suppliers, more specialized suppliers, more high end suppliers,
544
00:30:10,439 --> 00:30:13,479
I wonder if the independents will end up in that crunch again.
545
00:30:13,479 --> 00:30:16,760
Well, yeah, it also opens up from an episode ago, you know, some of our
546
00:30:16,760 --> 00:30:20,839
conversation about how some of these newer, you know, I'm reluctant
547
00:30:20,839 --> 00:30:23,800
to call them holding companies, but like collections of brands are also
548
00:30:24,119 --> 00:30:27,040
keeping an eye on what those supply chains look like to create
549
00:30:27,040 --> 00:30:28,239
some degree of stability there.
550
00:30:28,239 --> 00:30:28,439
Right.
551
00:30:28,439 --> 00:30:31,959
So like we know that Otorology Dominique Renault has been investing in
552
00:30:31,959 --> 00:30:34,520
their supply chain significantly, and that will create some degree of
553
00:30:34,520 --> 00:30:38,079
stability, whether those suppliers are exclusive to them or not.
554
00:30:38,520 --> 00:30:42,640
This is certainly something that we've seen Parmigiani do for many, many,
555
00:30:42,640 --> 00:30:46,160
many, many years, you know, with how they've slowly brought in their own
556
00:30:46,160 --> 00:30:49,640
suppliers, we've seen this with Kari Pudilainen, you know, and the way
557
00:30:49,640 --> 00:30:52,959
that he has approached creating a supply chain for the various brands
558
00:30:52,959 --> 00:30:56,880
and manufacturers that he is responsible for managing, leading, or working at.
559
00:30:57,160 --> 00:30:58,719
So this goes in.
560
00:30:58,719 --> 00:31:05,640
Will we see a cycle of acquisition of suppliers where these holding
561
00:31:05,640 --> 00:31:09,079
companies or independents realize like, I need to lock down and have
562
00:31:09,079 --> 00:31:10,800
more control over my supply chain?
563
00:31:10,839 --> 00:31:14,640
Well, it leads you to see where, and this is what I was saying is a
564
00:31:14,640 --> 00:31:16,079
recurring theme in our conversations.
565
00:31:16,079 --> 00:31:18,959
Like this is a grand reorganization of the watch industry, right?
566
00:31:19,599 --> 00:31:22,760
Why does the alternative horological alliance exist?
567
00:31:23,079 --> 00:31:26,199
It exists for the sharing of intellectual property and resources, right?
568
00:31:26,439 --> 00:31:29,920
So the idea being that you have five brands that can come together and
569
00:31:29,920 --> 00:31:33,719
essentially say, we can shoot, you know, if we pool our resources creatively,
570
00:31:33,719 --> 00:31:37,719
intellectually, and on occasion from a production standpoint, then we, we
571
00:31:37,760 --> 00:31:42,479
insulate ourselves from some of the industry shocks that have hit this
572
00:31:42,479 --> 00:31:44,000
business over the last few years.
573
00:31:44,000 --> 00:31:45,640
And inevitably we'll hit it again in the future.
574
00:31:45,959 --> 00:31:49,920
That is the same logic that we see from an HHDR, the same logic we see from a
575
00:31:49,920 --> 00:31:54,280
Parmigiani, the same logic we see, you know, from even a Richemont buying
576
00:31:54,280 --> 00:31:57,880
a Val Fleurier years ago, you know, these or, or swatch, of course, and, you
577
00:31:57,880 --> 00:32:01,880
know, being the proto here with a fantastic example, because it's an
578
00:32:01,880 --> 00:32:05,839
independent brand, it's not part of a large holding company and they
579
00:32:05,839 --> 00:32:07,359
were very wise to acquire them.
580
00:32:07,359 --> 00:32:07,640
Yeah.
581
00:32:07,640 --> 00:32:09,959
And they make us, I have to imagine they make a part of
582
00:32:09,959 --> 00:32:11,560
the success of that brand.
583
00:32:11,719 --> 00:32:13,959
Well, and they make a good living, especially with like voucher.
584
00:32:14,000 --> 00:32:14,199
Yeah.
585
00:32:14,280 --> 00:32:17,079
You know, I mean, voucher supplies, caliber calibers
586
00:32:17,079 --> 00:32:18,439
to all sorts of folks, even Ming.
587
00:32:18,719 --> 00:32:23,319
So I think, I think it's an interesting reality check here when you see, okay.
588
00:32:23,319 --> 00:32:26,239
Industry shock, gut punch to the industry.
589
00:32:26,359 --> 00:32:29,000
Some businesses are now realizing what they need to do in order
590
00:32:29,000 --> 00:32:30,199
to create some more stability.
591
00:32:30,439 --> 00:32:35,160
Supply chain has been proven to be one of the weakest links in the, the
592
00:32:35,160 --> 00:32:40,040
revenue chain of the Swiss watch industry, the COVID proved that, you
593
00:32:40,040 --> 00:32:44,119
know, the, uh, the, the illegal tariffs that have been imposed and the economic
594
00:32:44,119 --> 00:32:48,520
brutality that came out of that has, has created a second, you know, example
595
00:32:48,520 --> 00:32:53,119
within one decade of why managing, supporting an incident and having a
596
00:32:53,119 --> 00:32:55,319
solid supply chain is so critical.
597
00:32:55,560 --> 00:32:59,439
So I think, you know, it, it, it begs these kinds of interesting questions.
598
00:32:59,439 --> 00:33:02,199
And to be clear, I'm not suggesting this is what Richemont did.
599
00:33:02,199 --> 00:33:04,959
This is complete conjecture, but it's an interesting thought to be like, well,
600
00:33:04,959 --> 00:33:10,400
what would you rather have a bomb on Mercier or a dial workshop, a hand
601
00:33:10,400 --> 00:33:11,560
workshop at, you see what I'm saying?
602
00:33:11,560 --> 00:33:12,199
Yeah.
603
00:33:12,199 --> 00:33:13,800
It's kind of like this interesting, very interesting.
604
00:33:13,839 --> 00:33:14,079
Yeah.
605
00:33:14,079 --> 00:33:16,359
Like if I were sitting there looking at it, I'm like, well, what would I rather
606
00:33:16,359 --> 00:33:20,760
have another brand that is dependent at high scale or take that money and
607
00:33:20,760 --> 00:33:24,359
reinvest it into my supply chain, reorient around the high end and make
608
00:33:24,359 --> 00:33:26,239
sure that I built a fortress of a business.
609
00:33:26,239 --> 00:33:26,520
Yeah.
610
00:33:26,880 --> 00:33:27,959
I'm not saying Richemont's done that.
611
00:33:27,959 --> 00:33:29,760
I mean, uh, Val Fleury is a good example.
612
00:33:29,760 --> 00:33:31,280
They also controlled their own foundry.
613
00:33:31,439 --> 00:33:32,000
Yeah, totally.
614
00:33:32,000 --> 00:33:33,920
And who, you know, supplies our cases.
615
00:33:34,199 --> 00:33:34,479
Yeah.
616
00:33:34,520 --> 00:33:35,319
It's, it's interesting.
617
00:33:35,319 --> 00:33:37,199
The market can also adapt.
618
00:33:37,280 --> 00:33:41,959
So when we were in, in the voucher example is a great one because you're right.
619
00:33:42,479 --> 00:33:44,760
Voucher owned by Parmigiani.
620
00:33:45,079 --> 00:33:48,719
Parmigiani seems to be doing remarkably well as a brand.
621
00:33:48,719 --> 00:33:53,479
So you have to imagine vouchers producing more, more calibers for, for them are
622
00:33:53,479 --> 00:33:57,079
certainly doing quite well supplying Parmigiani then they're supplying
623
00:33:57,079 --> 00:34:00,560
independence for years, you know, or work has used voucher calibers.
624
00:34:00,560 --> 00:34:02,719
Um, a number of Indies have used voucher calibers.
625
00:34:02,719 --> 00:34:04,680
Now Ming is knocking on their door.
626
00:34:04,680 --> 00:34:07,800
Most recently with the star field, that's got a voucher caliber and
627
00:34:07,800 --> 00:34:09,760
as voucher caliber as the market.
628
00:34:10,040 --> 00:34:10,360
Yeah.
629
00:34:10,479 --> 00:34:13,919
As the fact, if I'm not mistaken, I think even, uh, Richard meal
630
00:34:14,000 --> 00:34:15,320
uses some voucher calibers.
631
00:34:15,320 --> 00:34:18,479
Chapbeck uses their awesome, uh, chronograph caliber.
632
00:34:18,479 --> 00:34:23,040
So as the, as the market moves up, right.
633
00:34:23,040 --> 00:34:26,080
You would say like, okay, let's just take the movements and, and look at
634
00:34:26,080 --> 00:34:29,959
voucher, like, oh my gosh, this is going to create so much demand for voucher.
635
00:34:30,280 --> 00:34:33,479
Wouldn't you imagine what's going to happen is Parmigiani is first going to
636
00:34:33,479 --> 00:34:37,280
say, well, we have first right of refusal on these movements, number two, the
637
00:34:37,280 --> 00:34:40,479
partners who either place the biggest orders or who have been with us the
638
00:34:40,479 --> 00:34:45,360
longest, get, get access to our calibers and everyone else just
639
00:34:45,360 --> 00:34:46,479
needs to get in line and wait.
640
00:34:46,560 --> 00:34:49,439
However, the market will adapt when we are in Geneva.
641
00:34:49,439 --> 00:34:52,399
And I don't know, I'm not going to say who this was or what the watch was,
642
00:34:52,399 --> 00:34:58,239
cause I'm not sure it's announced yet, but I met with a young up and coming
643
00:34:58,239 --> 00:35:04,080
independent watch brand who showed me a prototype of forthcoming release,
644
00:35:04,080 --> 00:35:09,080
beautiful watch, and I turned the watch over and I was looking at the movement
645
00:35:09,080 --> 00:35:10,800
and I didn't recognize the movement.
646
00:35:10,800 --> 00:35:13,679
I figured like, you know, there's gotta be a Cronode movement in here,
647
00:35:13,679 --> 00:35:15,239
or maybe a voucher movement or something.
648
00:35:15,239 --> 00:35:18,479
I was like, it's a really pretty movement.
649
00:35:19,120 --> 00:35:21,000
It was beautifully architected.
650
00:35:21,000 --> 00:35:22,520
This brand have five letters in his name.
651
00:35:22,719 --> 00:35:23,280
I don't even know.
652
00:35:23,639 --> 00:35:28,199
Beautifully, it was beautifully architected, beautifully finished.
653
00:35:29,000 --> 00:35:33,679
Looked every bit a high horology movement you would expect to see in a
654
00:35:33,679 --> 00:35:38,719
watch, $20,000 and up the supplier of the movement was Salida.
655
00:35:39,120 --> 00:35:39,600
Oh yeah.
656
00:35:39,679 --> 00:35:43,840
There is a, and I had no idea they could make a movement like this.
657
00:35:44,000 --> 00:35:45,399
And I was like, Salida really?
658
00:35:45,399 --> 00:35:50,959
And he's like, yeah, there's a division within Salida that makes high end
659
00:35:51,439 --> 00:35:56,239
movements and supplies, high end movements, custom movements to independence.
660
00:35:56,760 --> 00:36:00,560
And this is a movement that was executed again on the level of something like a
661
00:36:00,560 --> 00:36:03,439
Cronode or a voucher or anything like that.
662
00:36:03,840 --> 00:36:04,560
You can beep it out.
663
00:36:04,560 --> 00:36:05,080
Who was this?
664
00:36:05,600 --> 00:36:06,600
This Havid Nagan.
665
00:36:07,239 --> 00:36:07,840
Really?
666
00:36:07,840 --> 00:36:08,040
Yeah.
667
00:36:08,639 --> 00:36:08,840
Yeah.
668
00:36:09,520 --> 00:36:09,840
Yeah.
669
00:36:10,000 --> 00:36:10,719
You saw the watch.
670
00:36:10,719 --> 00:36:11,320
Yeah.
671
00:36:11,360 --> 00:36:14,760
So that's a, that was, that was a Salida movement.
672
00:36:15,159 --> 00:36:21,159
And so my point here is if voucher is winning, that doesn't mean Salida loses,
673
00:36:21,199 --> 00:36:21,439
right?
674
00:36:21,439 --> 00:36:22,120
Yeah, no, for sure.
675
00:36:22,159 --> 00:36:25,679
Salida can adapt and the market can adapt and evolve around it.
676
00:36:25,679 --> 00:36:28,320
And of course the businesses that will win over time are the
677
00:36:28,320 --> 00:36:30,239
ones who can evolve and adapt.
678
00:36:30,280 --> 00:36:30,639
Yeah.
679
00:36:30,760 --> 00:36:36,120
So, I mean, look, if we, so to put a pin in all this, obviously we see, you
680
00:36:36,120 --> 00:36:40,719
know, there'll be some bumps in the road ahead and that's, you know, excluding.
681
00:36:41,320 --> 00:36:46,679
All of the various economic, you know, tomfoolery that we're currently
682
00:36:46,679 --> 00:36:48,120
experiencing, what will happen?
683
00:36:48,600 --> 00:36:49,040
Well, sure.
684
00:36:49,040 --> 00:36:50,760
I mean, there's other things too, that we haven't accounted for too.
685
00:36:50,760 --> 00:36:54,520
Like the cost of jet fuel, if it is even available will also impact the delivery
686
00:36:54,520 --> 00:36:57,919
of watches and timelines and things like that, like that's not a joke either.
687
00:36:58,439 --> 00:37:03,639
So all of these things are, are, you know, which is brew of, of challenges,
688
00:37:03,760 --> 00:37:06,520
but to the industry has proven it's resilient.
689
00:37:06,919 --> 00:37:08,399
The reorganization continues.
690
00:37:08,600 --> 00:37:13,360
The supply chain clearly needs to be bolstered and supported and, and nobody's
691
00:37:13,360 --> 00:37:20,120
position right now is really cemented and guaranteed, which might sound
692
00:37:20,159 --> 00:37:22,719
ominous and onerous, but I don't mean it too.
693
00:37:22,800 --> 00:37:26,719
No, the Salida example is a perfect example of how, you know, change
694
00:37:26,719 --> 00:37:30,679
and difficult circumstances can bring around really exciting developments.
695
00:37:30,719 --> 00:37:31,080
Totally.
696
00:37:31,120 --> 00:37:33,439
And it may end up creating, I mean, the other thing too, is if you think
697
00:37:33,439 --> 00:37:38,520
about it, if you have heavy upfront costs in investing in bolstering,
698
00:37:38,520 --> 00:37:41,959
maybe even buying your supply chain, sure that will impact, you know, near
699
00:37:41,959 --> 00:37:46,919
term costs, but over time amortized value will be significant, significant.
700
00:37:47,280 --> 00:37:50,000
And we'll create a, hopefully a more stable business.
701
00:37:50,000 --> 00:37:53,760
The question then of course, being if everything moves around and you do
702
00:37:53,800 --> 00:37:57,280
have a more bolstered system like that.
703
00:37:57,879 --> 00:37:59,679
Will it be harder to break in as a new brand?
704
00:37:59,919 --> 00:38:00,159
Yeah.
705
00:38:01,360 --> 00:38:04,719
I want to ask you a final question here about the swatch group.
706
00:38:04,800 --> 00:38:05,080
Yeah.
707
00:38:05,479 --> 00:38:10,479
So great for swatch group up 7.2% in the final corner of the year.
708
00:38:10,479 --> 00:38:12,600
We covered this in the past, their full year reporting.
709
00:38:12,600 --> 00:38:14,239
They were down for the year.
710
00:38:14,280 --> 00:38:15,439
Revenue is down.
711
00:38:15,439 --> 00:38:18,040
Profitability was really rough.
712
00:38:18,040 --> 00:38:21,479
I mean, it was essentially that they made a modest profit, but it was
713
00:38:22,479 --> 00:38:25,239
no, no profit compared to their, to their revenue.
714
00:38:26,000 --> 00:38:28,719
And if you zoom way out and you look at.
715
00:38:29,399 --> 00:38:35,399
Swatch group relative to LVMH and Richemont, it just isn't performing.
716
00:38:36,120 --> 00:38:38,199
They're not, they don't have the margins.
717
00:38:38,199 --> 00:38:39,840
They don't have the performance.
718
00:38:40,439 --> 00:38:44,080
If you're an investor and you're looking at how those two businesses
719
00:38:44,080 --> 00:38:48,800
perform, both in terms of their revenue, their profitability and their share
720
00:38:48,800 --> 00:38:54,239
price, you know, like an investment you'd want to hold swatch group
721
00:38:54,239 --> 00:38:56,639
leaves a lot to be desired.
722
00:38:57,360 --> 00:38:58,239
And we talked about that.
723
00:38:58,320 --> 00:39:04,239
Now the news here is that ISS, and this is a company that it's a research
724
00:39:04,239 --> 00:39:09,560
company that provides research analysis and recommendations for institutional
725
00:39:09,760 --> 00:39:12,919
investors on how they should vote in proxy votes.
726
00:39:12,919 --> 00:39:16,800
So if there's a shareholder vote, you know, and you're an institutional
727
00:39:16,800 --> 00:39:19,879
investor who has lots of holdings, you need someone to do the research
728
00:39:19,879 --> 00:39:23,320
to tell you like when the proxy statement comes in, how you should vote,
729
00:39:23,399 --> 00:39:27,919
whether you're, you know, black rock voting, you know, cause you have I
730
00:39:27,919 --> 00:39:32,360
shares or you're in a doubt, large endowment or whatever it is you need.
731
00:39:32,679 --> 00:39:35,840
Some, someone out there to do the research and give you some recommendation.
732
00:39:35,840 --> 00:39:36,120
Yeah.
733
00:39:36,120 --> 00:39:37,679
You know, you got any good stock tips.
734
00:39:37,679 --> 00:39:43,560
So ISS recently published a recommendation to give the activist
735
00:39:44,159 --> 00:39:46,800
who's going after the Hayek family.
736
00:39:46,800 --> 00:39:52,520
And we talked about this, I think it's woods capital to give them a board seat.
737
00:39:53,120 --> 00:39:55,239
And this is really unusual.
738
00:39:55,239 --> 00:40:00,520
Usually these, these analysts kind of stay out of proxy fights or, you know,
739
00:40:00,520 --> 00:40:05,080
they might say like, you know, the shareholder should vote for a board
740
00:40:05,080 --> 00:40:10,120
change or vote for, you know, addition of a board seat or a change, but they
741
00:40:10,120 --> 00:40:14,000
won't necessarily endorse like a specific candidate for a board seat.
742
00:40:14,439 --> 00:40:16,239
So this is very unusual.
743
00:40:16,239 --> 00:40:21,360
And it points to essentially the outside view that the performance of the
744
00:40:21,360 --> 00:40:27,600
swatch group is probably in their view, just not acceptable, comparable to,
745
00:40:27,919 --> 00:40:33,560
to competitors and that there needs to in particular be an aggressive shake up there.
746
00:40:33,959 --> 00:40:40,520
So my question for you is let's assume there, there needs to be a board shake
747
00:40:40,520 --> 00:40:43,760
up as swatch group, and we can make the argument against sure that, Oh, look,
748
00:40:43,760 --> 00:40:46,959
they're starting to turn things around and Oh, look, who knows the business
749
00:40:46,959 --> 00:40:48,520
better than the high X over the longterm.
750
00:40:49,040 --> 00:40:54,800
But if you were given a board seat at swatch, what would you advocate for?
751
00:40:54,800 --> 00:40:58,159
What would you want to change at this moment in time in the industry?
752
00:40:58,159 --> 00:41:03,159
If your thesis here is that these difficult circumstances force change
753
00:41:03,199 --> 00:41:06,000
and that can be a good thing, what would you change at swatch?
754
00:41:07,159 --> 00:41:11,080
I think that the swatch group for a fair amount of time with a few notable
755
00:41:11,080 --> 00:41:17,239
exceptions, like the moon swatch has suffered from a lack of clarity of vision.
756
00:41:18,239 --> 00:41:25,199
There are something like 700, maybe 600 in production skews for Omega.
757
00:41:26,280 --> 00:41:27,959
I can't understand why that is.
758
00:41:28,719 --> 00:41:34,120
Omega, as we've discussed in the past is an incredibly powerful brand and one
759
00:41:34,120 --> 00:41:37,000
with tremendous opportunity, heritage, and quality.
760
00:41:37,080 --> 00:41:37,760
I love Omega.
761
00:41:38,040 --> 00:41:38,239
I do.
762
00:41:39,000 --> 00:41:41,080
I'm wearing a Speedmaster here, here.
763
00:41:41,679 --> 00:41:45,320
And I think it lacks at this point focus.
764
00:41:46,840 --> 00:41:50,639
It is a surmountable problem, but I will think, I really think
765
00:41:50,639 --> 00:41:52,040
it would be a critical component.
766
00:41:52,199 --> 00:41:54,080
And then there's all sorts of like nitpicky stuff, but
767
00:41:54,080 --> 00:41:55,040
really I think it's that.
768
00:41:55,560 --> 00:41:58,840
And then on the high end for their high-end watchmaking with
769
00:41:58,840 --> 00:42:02,239
Blancpain and with Breguet, I'm wearing a, I'm wearing a
770
00:42:02,239 --> 00:42:03,360
Neo-Vintage Breguet right now.
771
00:42:03,679 --> 00:42:07,320
Oh, it turns out this podcast is sponsored to you by the swatch group.
772
00:42:07,360 --> 00:42:07,840
Exactly.
773
00:42:07,879 --> 00:42:10,120
Make sure to send in your proxy ballots.
774
00:42:10,120 --> 00:42:10,760
Let me tell you something.
775
00:42:10,919 --> 00:42:13,080
If we're ever going to be sponsored, I'm pretty confident.
776
00:42:13,080 --> 00:42:15,919
It's not by the swatch group, but I think AP might sponsor me.
777
00:42:17,000 --> 00:42:17,560
Jesus.
778
00:42:17,600 --> 00:42:18,159
Could you imagine?
779
00:42:18,800 --> 00:42:23,159
But I think Breguet is a perfect example, you know?
780
00:42:23,159 --> 00:42:27,239
And I mean, you and I both love Breguet different eras for different reasons,
781
00:42:27,239 --> 00:42:32,679
but like, you know, we, we do, and that's another brand along with Blancpain
782
00:42:32,800 --> 00:42:38,479
that just with some focus, all the ingredients are there, you know, it
783
00:42:38,479 --> 00:42:41,399
really could, I think, make a mean, and I'm talking obviously here in the
784
00:42:41,399 --> 00:42:44,320
United States, I can't speak to how these brands work in other markets,
785
00:42:44,320 --> 00:42:47,760
but here in the U S it really, really could benefit from, and I
786
00:42:47,760 --> 00:42:50,439
think would succeed with focus.
787
00:42:50,919 --> 00:42:55,159
And what I mean by that is, you know, where you have an overabundance
788
00:42:55,199 --> 00:43:00,800
of references from Omega with Breguet and with Blancpain far fewer watches
789
00:43:00,800 --> 00:43:06,520
being produced, far fewer references being produced, but I still maintain
790
00:43:06,840 --> 00:43:11,320
that, especially with Breguet, it's very difficult to understand who these
791
00:43:11,320 --> 00:43:17,879
watches are for at the prices they're being made at being sold at, I think
792
00:43:18,159 --> 00:43:21,360
under their new leadership, there are some signs of focus.
793
00:43:21,639 --> 00:43:24,959
Some of the experimental stuff we saw at the end of last year was, was very
794
00:43:24,959 --> 00:43:28,719
interesting, their acknowledgement that the tradition line is where the
795
00:43:28,719 --> 00:43:32,120
attention is and seeing some of those changes, you know, made to the, the
796
00:43:32,120 --> 00:43:36,439
classic line too, like the new case architecture they've introduced.
797
00:43:36,639 --> 00:43:36,840
Yeah.
798
00:43:36,840 --> 00:43:38,040
I think it's a good update.
799
00:43:38,159 --> 00:43:38,919
They are.
800
00:43:38,959 --> 00:43:42,679
And these are good choices, which is why I'm like, I'm optimistic, but I still
801
00:43:42,679 --> 00:43:48,000
need to see that get pushed a lot further with clarity of message to the
802
00:43:48,000 --> 00:43:53,719
market, and that's not there yet, yet with Omega, I don't know, but with,
803
00:43:53,760 --> 00:43:59,560
with Blanc and Blancpain, I don't know, but with Breguet, I have some degree
804
00:43:59,560 --> 00:44:03,280
of, of optimism and that might just be my own, just hope for, you
805
00:44:03,280 --> 00:44:04,399
know, a brand that I like.
806
00:44:04,439 --> 00:44:04,840
Sure.
807
00:44:04,840 --> 00:44:05,159
Yeah.
808
00:44:05,159 --> 00:44:07,479
You know, so maybe I'm on hopium as they say, but like,
809
00:44:07,479 --> 00:44:08,760
I gave you the board seat.
810
00:44:08,760 --> 00:44:09,919
You can do what you want with that.
811
00:44:09,959 --> 00:44:15,000
But that's, that's kind of where I would, I would focus and, you know, whether
812
00:44:15,000 --> 00:44:16,760
that would make much of a difference.
813
00:44:16,800 --> 00:44:20,760
I don't know, but just speaking from my perspective.
814
00:44:20,879 --> 00:44:21,000
Yeah.
815
00:44:21,000 --> 00:44:23,280
I'm going to go all the way back to the beginning of this episode.
816
00:44:23,280 --> 00:44:27,159
When we talked about Toledano and sham, which is a brand defined
817
00:44:27,199 --> 00:44:29,600
by a clear idea and point of view.
818
00:44:30,800 --> 00:44:32,959
I think that's what they need across the board.
819
00:44:33,080 --> 00:44:38,520
Swatch group credit to, to Nick Hayek senior for architecting the
820
00:44:38,520 --> 00:44:42,919
modern day watch and luxury holding company, essentially, you know, kind
821
00:44:42,919 --> 00:44:46,040
of he and Gunter Blumlein in their own ways, kind of, they created the
822
00:44:46,040 --> 00:44:49,320
template for this world that we know this ecosystem we've talked about.
823
00:44:50,199 --> 00:44:54,879
The master stroke of Nick Hayek and creating the holding company was to say,
824
00:44:54,879 --> 00:44:58,959
I'm going to diversify this holding company, not just with a collection
825
00:44:58,959 --> 00:45:01,479
of brands, but brands across different price segments.
826
00:45:01,479 --> 00:45:01,800
Sure.
827
00:45:01,840 --> 00:45:02,159
Right.
828
00:45:02,679 --> 00:45:05,879
I think that insight has worked for a while.
829
00:45:06,040 --> 00:45:11,080
It worked in a world where everyone needed a watch, you know, it no longer
830
00:45:11,080 --> 00:45:16,159
works, like what you need to do now is define your brands and your brand
831
00:45:16,159 --> 00:45:20,399
roster, not by price point, but by creative point of view, look at the
832
00:45:20,399 --> 00:45:24,320
brands that are succeeding in today's market, they're defined not by a price
833
00:45:24,320 --> 00:45:26,760
point, but by a creative point of view, a hundred percent, right.
834
00:45:26,879 --> 00:45:28,879
Ming is a great example of this.
835
00:45:29,159 --> 00:45:34,399
A Ming at $5,000 can be just as successful as a Ming at $50,000.
836
00:45:34,639 --> 00:45:38,360
Not because, you know, they own one segment of the market and other, but
837
00:45:38,360 --> 00:45:42,280
because they're divine defined by a creative vision and approach to watch
838
00:45:42,280 --> 00:45:46,959
making Toledano and Chan has moved up in price point as they've moved their
839
00:45:46,959 --> 00:45:47,280
production.
840
00:45:47,280 --> 00:45:48,360
These are all independents.
841
00:45:48,399 --> 00:45:51,800
So do you see anybody in the mainstream that you would categorize in that way?
842
00:45:52,320 --> 00:45:54,840
I think Cartier is a good example of that.
843
00:45:54,879 --> 00:45:56,439
It's a party has been doing this stuff forever.
844
00:45:56,479 --> 00:45:56,719
Yeah.
845
00:45:56,719 --> 00:45:59,760
But this is a brand part of the reason they're able to succeed.
846
00:45:59,760 --> 00:46:01,360
Rolex is able to succeed.
847
00:46:01,679 --> 00:46:05,639
I think they're, they've defined themselves not by a particular price
848
00:46:05,639 --> 00:46:10,879
point, but by a point of view, who they're for, what they stand for.
849
00:46:10,919 --> 00:46:15,320
I think Swatch needs to be less parochial about positioning brands around price
850
00:46:15,320 --> 00:46:19,479
point and do a brand audit and say, you know, first, first, first things first.
851
00:46:19,919 --> 00:46:26,080
Does each of these brands, Hamilton, Mito, Tiso, Sertina, the list goes on and on.
852
00:46:26,679 --> 00:46:31,879
Sertina does each of these brands have a clear point of view, a clear reason for
853
00:46:31,879 --> 00:46:35,520
being, are they just occupying a price point if they're just occupying a price
854
00:46:35,520 --> 00:46:40,639
point, we need to move on and we need to focus on a roster of brands where each
855
00:46:40,719 --> 00:46:43,560
brand fulfills a particular vision.
856
00:46:43,639 --> 00:46:47,000
And then they can activate the second creative vision, creative vision,
857
00:46:47,280 --> 00:46:49,879
because no, not everyone needs a watch anymore.
858
00:46:49,959 --> 00:46:53,959
You know, if you're a dude, when the high X created the Swatch group, if you're a
859
00:46:54,000 --> 00:46:57,919
guy or whatever it was called before it was called Swatch group, if you're a dude
860
00:46:57,919 --> 00:47:02,320
or a woman or whomever in the world in 1980, you need a watch.
861
00:47:02,840 --> 00:47:03,120
Yeah.
862
00:47:03,280 --> 00:47:04,520
You don't need a watch anymore.
863
00:47:04,520 --> 00:47:09,199
You wear a watch as a now, as purely as a manner of expression of
864
00:47:09,199 --> 00:47:12,719
self-expression, what you're interested in, who you are, what you stand for,
865
00:47:12,719 --> 00:47:14,600
what you like, all this kind of stuff.
866
00:47:15,120 --> 00:47:16,399
So they got to ask that question.
867
00:47:16,600 --> 00:47:18,439
Then they need to trim the brands accordingly.
868
00:47:18,439 --> 00:47:21,479
And then they need to activate what they have hiding in plain sight.
869
00:47:21,479 --> 00:47:26,280
You talked about how Richemont and other companies have widely, wisely brought in
870
00:47:26,280 --> 00:47:30,479
capabilities, like their own supply chain into their holding company.
871
00:47:30,560 --> 00:47:31,600
Swatch already has that.
872
00:47:31,600 --> 00:47:32,959
Forget just ETA.
873
00:47:33,239 --> 00:47:37,080
They own companies that do micro engineering.
874
00:47:37,239 --> 00:47:40,360
They own companies that do crazy things with Sapphire.
875
00:47:40,560 --> 00:47:45,120
They have a whole, they have just as many companies within their
876
00:47:45,120 --> 00:47:51,719
portfolio that are suppliers and parts makers and R and D R and D
877
00:47:51,719 --> 00:47:53,399
capabilities as they do watch brands.
878
00:47:53,959 --> 00:47:57,000
If each brand owns a clear, creative point of view, then all of a sudden
879
00:47:57,000 --> 00:48:01,840
you can activate all of this technology and all of this research and development
880
00:48:01,840 --> 00:48:05,360
capability that you have, because you're not so worried about, oh, well, we can't
881
00:48:05,360 --> 00:48:08,280
do something interesting with Sapphire here because it wouldn't fit the
882
00:48:08,280 --> 00:48:09,600
price point of this brand.
883
00:48:09,959 --> 00:48:14,399
Then you start to say, oh my gosh, this brand stands for X, Y, or Z.
884
00:48:14,520 --> 00:48:16,479
This is our experimental brand.
885
00:48:16,560 --> 00:48:18,399
It's avant-garde, you know, whatever it is.
886
00:48:18,760 --> 00:48:20,959
Well, of course we'll do something with Sapphire.
887
00:48:21,120 --> 00:48:22,080
That makes total sense.
888
00:48:22,320 --> 00:48:26,000
So I think they're not making use of the assets they have because they're so
889
00:48:26,000 --> 00:48:30,879
defined and limited by positioning each of the brands relative to price that they're
890
00:48:30,879 --> 00:48:33,080
leaving creative opportunity on the table.
891
00:48:33,840 --> 00:48:34,520
Very fair.
892
00:48:35,280 --> 00:48:35,919
You want a board seat?
893
00:48:36,360 --> 00:48:37,679
No, I do not want a board seat.
894
00:48:37,840 --> 00:48:40,520
And by the way, I had an idea for an episode I think we should do in the
895
00:48:40,520 --> 00:48:45,080
future, which is it's very easy for us to sit here and make pot shots at the
896
00:48:45,080 --> 00:48:48,080
Swatch Group and tell them how they should run their business and what they're doing.
897
00:48:48,080 --> 00:48:49,719
We have no idea.
898
00:48:49,719 --> 00:48:54,520
They have stakeholders and constraints and considerations we could never fathom.
899
00:48:54,520 --> 00:48:56,560
So it's very easy for us to do this.
900
00:48:56,560 --> 00:49:01,199
And I'm sure if we had that board seat, we would immediately be humbled.
901
00:49:02,199 --> 00:49:03,879
More importantly, we're not perfect either.
902
00:49:04,439 --> 00:49:05,439
We've made mistakes.
903
00:49:05,439 --> 00:49:06,320
Speak for yourself.
904
00:49:06,520 --> 00:49:08,600
We've made plenty of mistakes.
905
00:49:08,639 --> 00:49:10,600
I can't even make that joke without feeling guilty.
906
00:49:10,919 --> 00:49:11,199
Go ahead.
907
00:49:11,199 --> 00:49:13,600
We've, we've made plenty of mistakes in this business.
908
00:49:13,600 --> 00:49:16,600
I think it'd be interesting to do an episode on the, on the mistakes we've
909
00:49:16,600 --> 00:49:21,639
made and, and what we've learned from them, you know, as people in the watch
910
00:49:21,639 --> 00:49:25,000
industry, as business people in the watch industry, because I can tell you
911
00:49:25,000 --> 00:49:26,520
we've made plenty of mistakes.
912
00:49:26,760 --> 00:49:30,439
However, we've learned from those mistakes and all of them
913
00:49:30,439 --> 00:49:32,520
have actually made us stronger.
914
00:49:32,760 --> 00:49:35,800
So maybe we, we eat some, we eat some crow.
915
00:49:35,800 --> 00:49:39,199
We can do an episode on our mistakes because we are not perfect.
916
00:49:39,199 --> 00:49:39,719
Far from it.
917
00:49:40,159 --> 00:49:40,560
Right on.
918
00:49:40,719 --> 00:49:41,120
All right.
919
00:49:41,120 --> 00:49:45,199
Well, good luck to the, good luck to the holding companies.
920
00:49:45,239 --> 00:49:49,159
Seriously, we, we do wish you well, and that's not, that's not
921
00:49:49,159 --> 00:49:51,320
something we say sarcastically.
922
00:49:51,560 --> 00:49:55,320
Truly you are the straw that stirs the drink in this industry.
923
00:49:55,320 --> 00:49:58,600
You are the, the, the whale in this ecosystem.
924
00:49:58,840 --> 00:50:04,760
We all depend on these companies doing well and succeeding to continue to enjoy
925
00:50:04,760 --> 00:50:09,000
watches, whether they're from these companies or from other players in, in
926
00:50:09,000 --> 00:50:12,919
this industry, so we will see, and we'll continue to track how they
927
00:50:12,919 --> 00:50:14,959
navigate this period of change.
928
00:50:15,560 --> 00:50:16,639
Right on, right on.
929
00:50:16,639 --> 00:50:17,919
Well, thank you for listening.
930
00:50:17,959 --> 00:50:20,800
Open work is of course, a production of collective horology.
931
00:50:21,040 --> 00:50:26,320
You can find us online at collective horology.com and get in touch with your
932
00:50:26,320 --> 00:50:28,800
questions, your feedback, your comments.
933
00:50:29,239 --> 00:50:33,000
Tell us all the stupid mistakes we made and the things we should do differently.
934
00:50:33,080 --> 00:50:37,239
And to do that, you can email podcast at collective horology.com.
935
00:50:50,760 --> 00:50:52,040
A day that would live in infamy.