Dressed for Success? – Rolex's Padellone, Breguet's Retail Purge, and Swiss Exports – Episode 95

WEBVTT
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This is what successful brands do. They close their retailers and they open their
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own mono-brand boutiques. Those brands were all able
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to do that because of the strength of their business, the desirability of their product,
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and the demand for their product, and the leverage they had over retailers.
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Breguet isn't there yet. This is Open Work,
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a look inside the watch industry. It is a podcast
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from none other than Collective Horology, and I am Gabe Riley,
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co-founder of Collective. And today I'm playing the role of 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 independent brands including Czapek,
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Toledano& Chan, Ressence, and more. To learn more about
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us and check out our available inventory, visit collectifhorology.com.
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Quick plug on the Ressence front, which is
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Blake Bettner has produced a really useful
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guide to their, to their watches, to their complication,
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their whole approach and philosophy of time
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telling and how exactly they execute it mechanically. So if you're curious
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to learn more about Ressence and how they approach kind of
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the watchmaking of watchmaking, great, great article. So he— watchmaking
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of watchmaking? Well, you know, watchmaking writ large is
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an interdisciplinary— you would never let me get away with saying
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the watchmaking of watchmaking. It's an interdisciplinary arena
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without the necessary means to unnecessary means to an education, which encompasses many,
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many things. But here we're talking about really kind of the engineering of these
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pieces, the, the module design of what they call the Rock System,
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which is their time-telling system. It's, it's fascinating, it's educational.
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I learned a ton. And so if you're curious and you're wondering
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like what makes these things so special aside from them
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just kind of looking cool, what makes them interesting and
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unique under the hood, check this out. So it's an article on collectivehorology.com.
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He's also done a YouTube video with an overview of this stuff so you can
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actually see the inner workings of a Résence watch and how they achieve
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from a watchmaking standpoint, the time-telling layout that they have. And so
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those are both worth checking out if you're Ressence curious.
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Very cool, very educational, and thank you, Blake. It was, was quite
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an undertaking to get into all that. It's an interesting
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thing that you say too, about like, you know, like what's under the hood,
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which is funny because Ressence watches are one of the few watches, if maybe the
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only watch that we sell, where what's under the hood kind of doesn't matter.
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I mean, it's impressive, it's unusual, and it's a lot more
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interesting and I think forward-thinking
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than you would imagine. But you don't have to know about
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that to appreciate why those are so interesting from a time-telling standpoint,
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which is not true about so much of
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watchmaking. And for somebody who's been following the
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brand, and they're not trying to show it off— no, yeah,
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exactly. You know, there's nothing in the, in the watch that makes a big deal
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of it the way— and there's nothing wrong with these things, you know,
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similar watch spiritually you know, you have a pretty rudimentary base
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caliber, but then while modules would be Urwerk, sure, a lot of that
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watchmaking is shown, the mechanics are shown off, but in Ressence,
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the mechanics are intentionally exactly put away. Exactly. Just kind
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of cool. So the complexity of the watches is almost impossible to see.
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It's, well, it's like nothing else that's out there. So that's why it was educational
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to me, because I think you look at a Ressence watch, you take it at
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face value, and like, oh, these are just really cool. They're design-driven. These are sort
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of like clean-sheet modern watches in their, in their approach kind of to design
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for sure. But the watchmaking underneath is, is impressive
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and extremely thoughtful in a way I had never really considered. So eye-opening to
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me. We'll definitely talk to Benoit at some point in the near future about this
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too. But today, enough shilling. But hey, it's free content.
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It's educational. Check it out if you're, if you're curious. If you're just into
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watches, it's cool. But speaking of being into watches,
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the world is into watches. So there's a lot going on in the watch industry.
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You have said this time and time again. Which is the— over
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the last 18 months since good old Liberation Day,
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Swiss exports in general, not just to the US but around the world, because there's
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been a lot of— I'm sorry, you mean the day in which Donald Trump
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imposed illegal tariffs on the world and the United States?
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That's right. The tariffs that are illegal. Yeah, those ones. Go on.
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So a lot— there was a lot of action
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in terms of Swiss exports and that, like, you know, things were being shipped
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to the US ahead of increasing tariffs. And then when tariffs would rise,
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deliveries would be shifted to other parts of the world. And this has been basically
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going on the last 18 months, have been very erratic
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in terms of trade policy and therefore export from Switzerland,
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import into the US, and import into all these other markets around the world.
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So we're going to take a look at that because you yourself have said we
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need 18 months at least to have a sense of where things
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are. And then within that whole change and that whole
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system and all that tumult of watch sales and exports and all
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that sort of stuff is changing preferences and watches and
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what what's happening in the arena of dress watches. But let's
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talk about those export numbers first. Yeah, so that
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bullwhip effect that we've been talking about, it's playing out, and we're
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seeing that. We're seeing reallocation of inventory/decrease
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in exports to the United States. So for example,
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Europe and South America are up significantly year
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to date. Europe is up about 6.2%. South America
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is up a whopping 17.2%.
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And this is something that we anecdotally have also been seeing in the industry.
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There's a lot more travel from reps into Central
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America and South America. There's obviously a robust watch market there.
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It's not like that's new or anything, but there's definitely a lot of attention
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that we're seeing being paid to those markets in particular.
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North America on the whole and the Americas
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in general are down. But the number that we're going to focus on
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is the United States specifically, which is down 8.3%.
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That is a Very significant number. Now,
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it's important to look at these things contextually always, which is to
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say, though we are down 8.3%— in terms of imports
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of watches into the country from Switzerland. Correct. We're still
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up 8.8% versus 2024.
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So what does this mean? Well, if we look at from 2024
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to 2026 where we are, that erratic the
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erratic impact of tariffs and the fluctuation and depression of the US dollar
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against the Swiss franc. Well, that's what we're seeing play out. Now,
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the last time we looked at these numbers a few months ago, they were up.
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Remember? Yep. This is what we talk about when we mean an erratic
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watch market. Sometimes it floods up, sometimes it goes down.
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And it's not just driven by one specific
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economic pressure. I suspect we're also going to see at some point
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the effects and impact of fuel costs. Yeah. You know,
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currency exchange rates too. Exactly. Yeah. If it gets cheaper or
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more expensive to sell watches in US dollars, well, that will have an impact as
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well. Yeah. So the bottom line, like the
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key for me, at least the key takeaway here is not to say like,
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oh my God, everything's on fire. Like the industry is depressed.
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No, I think what we're saying is This is an industry like so many
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other industries right now that's just like all over the map.
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Yeah. It's also sort of self-healing in the sense that exports for the
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year overall globally out of Switzerland are up 1.7%.
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That's not, that's not nothing, especially when you consider the export
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boom in 2025 and having to lap that. So the
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industry's doing well, it's resilient. Some markets slow down, others pick up, things like that.
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The one spot of real weakness, and I mean, this is
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shocking. I'm glad you brought up the 2024 numbers for context because
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you're right, 2024 was such an anomaly because of the trade environment,
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is mainland China. So exports from Switzerland
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into China, so imports into China of Swiss watches are
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down 4.8% year-to-date. That doesn't sound bad. Hey,
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they're doing better than the United States. But if you roll that back and
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you look at imports into China going
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back to 2024, it's down 23.2%.
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So that gives you an idea And look, you know,
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the US and mainland China have been the number 1 and 2 watch markets for
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a long time. Mainland China typically has surpassed
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the US until recently. So the world's number 1 watch market,
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look at going back 2 years, is down 23%.
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Nearly a quarter of the sales into China have
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just dried up. I mean, that is bad.
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I mean, that's like, you know, depression-level statistics if you
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just look at that, you know, that one segment of of the market. So all—
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now, if you take that into account, you know, the gaping hole
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from China, and you still consider that year-to-date Swiss
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exports of watches in terms of value are up 1.7%,
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the industry is remarkably resilient and self-healing. And you're right,
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whether it's India or South America or Latin America more broadly,
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Mexico is booming from what we hear. The industry
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does remain resilient and is able to find demand to pick
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up what's been left behind with China. Which is,
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I think, is remarkable. Yeah. I mean, both the UK
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and India are showing pretty insane numbers. The UK is up about 10.5%,
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which is incredible year to date. India is coming from a much
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smaller base. So this number is going to sound a lot bigger than it actually
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is in terms of absolute numbers, which is plus 31.7%.
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But still, that line goes up. So,
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you know, that's, that's, that's, that's an important note. UK,
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UK is interesting though. Well, they had a tough, tough 4 or 5 years
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in the UK. They did. But it's— it is interesting to
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see, like, right now, like the British pound against the Swiss
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franc is pretty strong. Oh, interesting. Like the British pound right now, like £100 sterling
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is equivalent to just about 109 Swiss francs. So a pound
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buys more watches. Pound buys more watches. Yeah. So then
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in the past few years. Oh, yeah. I mean, it's— it's— I mean, when we
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look at it, it's— it's— I mean, let me put it this way.
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The Swiss franc has been growing in strength against
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the pound pretty consistently for the past 6 months.
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However, when you, however, it took a pretty heavy dip and
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is now slowly climbing back up, but it's still pretty strong. Like the
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pound is still pretty strong against the franc, right? Certainly relative to the US dollar.
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Yeah. Which has been hanging out at around somewhere between 1.22 to
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1.28. Yeah. Which is a pretty big spread. It needs to be 1
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to 1. They're close to it. Pretty much 1 to 1. Yeah. So the
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US continues to bear a pretty significant 20%
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increase in just, or decrease in buying power. Yeah. In addition to
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all of the other stuff. So all of this to say, we continue on this
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super bumpy road with not a great suspension, and we'll
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see what the next 6 to 12 months brings. But I'd say
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the suspension is pretty good if exports are basically flat
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to up. It's a bumpy road for the good suspension. There you go. You're messing
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with my metaphors. But all that to say,
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this does, and you pointed this out, demonstrate some shifts in demand.
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That collector demand is sort of moving away from this hype era sports
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watch towards more elegant, more design-driven,
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more individual, and in our case, certainly a meaningful increase
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in independent interest outside of just the core independent
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collector group. Yeah, so we've talked about the, the numbers
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behind this in the past, but to be clear, what's really driving the growth of
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the industry in terms of sales and revenue are watches
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over $50,000 US, right? That is— it's
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not in the, you know, the, the, the kind of the center
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of the, of the market, which is kind of the $1,000 to $10,000
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range. Like, that, that market is very challenged. In fact,
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that market in many ways— you've pointed this out to me— is getting priced out
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You know, you want, you want an Omega Seamaster now,
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it's damn near $10,000 for a Seamaster.
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You know, it's knocking on the door. Well, that's not fair. It's, it's that if
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you're looking at a Planet Ocean or if you're looking at a Bond. If you're
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looking at— I was looking yesterday with you at one of the standard
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Seamasters. No, the wave dial on the mesh bracelet,
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it was like 8-something. You're confused. You're thinking of the Bond Seamaster.
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That's a specific limited edition. The average price is closer to 6-ish.
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A Planet Ocean on a bracelet is $9,500.
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Correct. Got it. Okay, cool. We're, we're in alignment on that.
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A Seamaster on a mesh bracelet— oh, it's the Bond one.
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Sure. $9,400. But I mean, right. So that's
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a— I mean, I think what you're saying is you're wrong. Nothing, nothing. But it's
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a standard one. A standard one is $6,700
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on a strap and $7,100 on a bracelet. Okay.
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Your larger point, though, stands, which is the
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$10,000 market is challenged. It's more expensive and watches are beginning—
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watches and brands that were in that market are beginning to price themselves
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out of it. Sure. Right. Like that you were talking to me about that reverse
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panda Speedmaster. That's over $10,000 unless you want to correct.
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That's $10,400, I believe. I think that one's just
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under $10,000. That one is $10,400. There you go.
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Haha. So you're wrong. Well, I guess my point is like I'm throwing
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just like you are. We're both throwing darts at a board here and being like,
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I guess that's what that costs. Yeah. Because, you know, that's that part of the
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market is the most challenged. It's thinning out in the sense that a lot of
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the players that were traditionally there, whether it's Omega or Rolex, certainly has all
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but exited that category, with exceptions around
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Datejust and OPs and things like that. Not Datejust, but OPs. Okay,
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so there you go. This part of the market is being hollowed out both from
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a consumer demand standpoint and from a brand price positioning
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standpoint. So there's that. The other end of the market that's doing well
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in terms of revenue growth are the sub-$1,000 watches and digital
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watches in particular. Are doing very well,
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apparently. Go call— go call up Moser and ask them. Yeah,
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so it's a very bifurcated market. And now when you think about
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the fact, to your point, that the part of the market that is growing the
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fastest is this $50,000 and up segment of the market,
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and that's driving the growth of the watch industry— what's in that market?
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There are some sports watches in that market, but you start to get
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into things that are in precious metal, you start to get into things that are
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more complicated, you start to get into things that are more handmade, that are gem-set,
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And so what's really happening here is taste is expanding. And the thing
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that is driving the growth of the market isn't the stainless steel sports
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watches. It's the things that are more unusual. It's the things that
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are more handmade. And that is both, you know,
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there's the financial reality of this polarized market, but there's also a
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matter of taste shifting towards, you know, and we see this in the sub-$10,000
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market, by the way, with Cartier. I mean, they have, they have been and continue
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to be on a tear now, the number 2 watch market, watch brand in the
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world by, by revenue. Knocked Omega out of that position.
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Tastes have changed, and there's some really
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interesting things going on in this world of dress watches.
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And there's 2 brands in particular who are doing some really interesting things
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that I think are worth looking at from a business standpoint.
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That is Rolex with the new Padellone. I want to talk about that from a
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business standpoint. And then there's Breguet, which has essentially rebooted
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and reset the brand. Definitely want to talk about Breguet. So let's start— you don't
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want to talk about Rolex? Not particularly. Okay, I want to separate
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out my personal feelings. I'll let you get— I mean, we can talk about the
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Padellone because it's news, but I think we talked about the Padellone because it's news,
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but I think it's also emblematic of the times
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and the business environment for Rolex and their evolving strategy, which we've
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talked about in the past. But I'll let you get it off your chest.
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What are your personal feelings? I mean, I'm not terribly interested in
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the watch. I mean, look, I think— I mean, I Well, let me, let me
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separate that. Personally, I'm not terribly interested in the watch. As an industry professional,
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it is of course an important thing to note because, as you mentioned, it continues
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to demonstrate that they see Rolex's future as a competitor
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to the Vacherons and the Pateks of the world.
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More specifically, the Pateks of the world. You know,
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I maintain that Rolex is very good at making Rolexes
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but continues to demonstrate that they're not that great at new designs.
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And even when they had one handed to them on a platter like the Padellone,
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they couldn't even sort out things like font differences or dial
17:05.514 --> 17:08.674
balance. Like, it's very bizarre to me that the dial balance is all messed up.
17:08.722 --> 17:12.331
Very strange. And it's a technically impressive watch. The fact
17:12.831 --> 17:16.085
that you could have the, the date change that happens automatically,
17:16.181 --> 17:19.726
instantaneously. Well, that's what Rolex is good at. The Dynapulse escapement.
17:19.775 --> 17:23.464
Like, you have all this technology in there, but you can't necessarily figure
17:23.964 --> 17:27.363
out how to set up your movement in a way that allows for an elegant
17:27.476 --> 17:30.926
display. But doesn't this— doesn't this speak to something that we talk about a lot
17:31.426 --> 17:34.664
though, which is that watchmaking and watch design are 2 very different
17:35.164 --> 17:38.323
schools and they rarely come together? The part that
17:38.823 --> 17:41.564
I find confounding though is that Rolex has made, in my opinion, one of the
17:42.064 --> 17:45.432
most beautiful dress watches that anyone could have ever bought, which was
17:45.528 --> 17:48.866
the Cellini Moonphase, which was perfect in
17:48.914 --> 17:52.764
many, many ways. So anyway, I find this bizarre. But whatever,
17:52.845 --> 17:56.053
there, you know, plenty of people will want the watch. They're not going to make
17:56.553 --> 18:00.063
a ton of them. It'll do great. It's more important, I think, to look at
18:00.563 --> 18:04.025
it contextually as we just discussed. You're not going to give us your Titanic meme
18:04.314 --> 18:08.500
reference? Huh? You told
18:08.549 --> 18:12.158
me that the Patalone was like a bad version of My
18:12.658 --> 18:16.024
Heart Will Go On. Oh yeah, like the flute, like the bad flute. You can
18:16.524 --> 18:18.767
cue that, I'm sure.
18:26.580 --> 18:30.532
Yeah, no, I mean, that's— I just— I— here's an annual calendar,
18:30.968 --> 18:34.194
and then they show up with the flute version of My
18:34.694 --> 18:37.177
Heart Will Go On. I don't know, man. I just look at that watch and
18:37.677 --> 18:41.010
I just— I think there's a lot of other watches at that price that are
18:41.123 --> 18:44.795
interesting. And more importantly, I think there's plenty of other Rolexes
18:44.972 --> 18:47.993
at that price that are interesting, that are more akin to what makes Rolex a
18:48.493 --> 18:51.860
Rolex. Like, if I was going to spend that kind of
18:52.360 --> 18:55.000
money, I would buy a Daytona. Well, let me ask you this question. Yeah,
18:55.500 --> 18:58.440
you've got— so one thing you were— but that's a personal thing, that's not a
18:58.940 --> 19:01.840
business thing. Sure. One thing you were confused on was, is this a perpetual calendar?
19:02.340 --> 19:05.750
Because perpetual, y'all, name, but it refers to the rotor. It's an annual calendar.
19:05.920 --> 19:09.520
I think actually if you exclude the Sky-Dweller, it's their first
19:10.020 --> 19:13.240
annual calendar. The Padelloni, originally those watches were triple calendars.
19:13.740 --> 19:15.980
Yep. So it's— look, I think horologically,
19:16.780 --> 19:20.240
mechanically, there's a lot going on under the hood there that's impressive,
19:20.740 --> 19:23.240
and they're getting a lot of coverage for that. But if anyone else released those
19:23.740 --> 19:27.380
watches, they would be dogs. Yeah, because it's Rolex, everyone,
19:27.880 --> 19:30.800
you know, praise. Well, the Padelloni and the Cubitus can go on a little honeymoon
19:31.300 --> 19:34.080
together and everyone will say how great a couple they are. It's a, it's,
19:34.580 --> 19:37.640
you know, the final execution leaves something to be desired. It's a bit dog ate
19:38.140 --> 19:41.640
my, dog ate my homework. But irrelevant though,
19:42.140 --> 19:45.920
in the, in the sense of what it demonstrates for the brand.
19:46.420 --> 19:49.600
Yeah, yeah. But I want to ask you a question. So these start at $59,000.
19:49.940 --> 19:52.980
They go up depending on case material and whether you throw a bracelet on there.
19:54.277 --> 19:58.196
The bracelet is quite nice. What other annual calendar would you buy for that money?
19:58.935 --> 20:01.249
What do you think represents a more compelling proposition?
20:01.939 --> 20:05.457
Neo-vintage Patek, 5146. Okay.
20:05.843 --> 20:10.003
Any number of stainless steel annual calendars. The handwritten
20:10.036 --> 20:13.586
dial, I forget the specific reference. Oh yeah, from Patek. From Patek.
20:13.650 --> 20:16.782
That's also— what about that classic moon from Laurent Ferrier?
20:16.847 --> 20:20.686
That's more expensive. But if you upgrade your Padellone
20:20.798 --> 20:23.543
to precious metal, all of a sudden they're in spitting distance.
20:23.751 --> 20:26.382
Yeah, totally. I mean, it's also a much— it's also a much better design.
20:26.510 --> 20:29.734
It's a more elegant watch. But I guess my point with all of this,
20:29.863 --> 20:33.424
though, is like us debating the
20:33.472 --> 20:36.776
design of the Padellone is an irrelevant conversation.
20:36.856 --> 20:40.738
It's a business decision. Yeah, because the guys who are going to buy that watch,
20:41.091 --> 20:44.315
they're brand loyal. You know, they're excited to see it.
20:44.364 --> 20:47.989
They're going to buy it. The folks who are making a considered purchase decision
20:48.489 --> 20:51.676
of an annual calendar, probably not looking at Rolex,
20:51.917 --> 20:55.652
even though Rolex wants them to. And Rolex is not making the watch because
20:55.764 --> 20:59.724
they're like, I feel compelled as a watchmaker to explore this high
20:59.852 --> 21:03.459
complication, and I must express my vision of
21:03.959 --> 21:07.226
high horology and, and give it to— it's like they see a business
21:07.726 --> 21:11.426
opportunity, and so they're, they're making, they're making the watch. And to
21:11.458 --> 21:15.080
your point, I think it's definitely a shot across the bow at Patek. It also
21:15.580 --> 21:18.944
confirms, or is another brick in the wall of my conspiracy theory,
21:19.409 --> 21:23.705
that they're leaving Tudor behind to deal with Omega while Rolex focuses
21:23.897 --> 21:27.440
on Patek Philippe and Audemars Piguet. Yeah, exactly. Although I'm sure
21:27.940 --> 21:31.014
I'll be debated on that one, which is fine. I'm open to—
21:31.447 --> 21:34.092
I'm open to the debate. But I think there's a little bit for me of
21:34.592 --> 21:38.228
a chicken-or-egg question here. In what regard? So is Rolex
21:38.728 --> 21:42.300
making this Padellone because they see that tastes are evolving
21:43.277 --> 21:46.628
and moving toward more high-end watches,
21:46.724 --> 21:50.956
$50,000 and up, complicated watches, classical watchmaking,
21:51.132 --> 21:54.646
things like that? Are they— are they catching up with the trend, or is
21:54.742 --> 21:58.244
this the kind of thing that now Rolex has entered the market with
21:58.276 --> 22:01.552
a classical complicated dress watch? Is this now going
22:01.584 --> 22:05.792
to create yet more demand for classical high-end
22:05.840 --> 22:08.940
dress watches because Rolex has entered this market and sort of
22:09.116 --> 22:12.650
opened people's eyes to this notion, like a more casual watch buyer, of like,
22:13.148 --> 22:17.387
oh, there's this thing called an annual calendar. Oh, there's other companies who make better
22:17.468 --> 22:21.017
annual calendars than what Rolex is offering. There's this whole new universe.
22:21.483 --> 22:23.873
So I'll put you this way. It can't be both.
22:25.187 --> 22:28.730
I don't know. It can't hurt that Rolex
22:29.230 --> 22:32.321
is in the space now too, because of course, you know, we exist in this
22:32.821 --> 22:36.697
tiny little capsule of the watch world, and the greater watch world largely
22:36.713 --> 22:40.031
exists in the space of, you know, like luxury watch world largely exists in
22:40.531 --> 22:43.926
the space of like Rolex, Omega, blah blah blah. Omega does have annual
22:44.426 --> 22:47.790
calendars, by the way. But Rolex— you take a—
22:47.854 --> 22:51.428
the thing is like now you have some awareness of this thing called a
22:51.477 --> 22:54.670
perpetual annual calendar, and And then you're all of
22:55.170 --> 22:58.090
a sudden you're like, well, huh, IWC makes some really cool ones.
22:58.590 --> 23:01.300
Jaeger-LeCoultre makes some really cool ones. These are more interesting. They're more refined.
23:01.830 --> 23:05.250
They're more elegant. The design, the proportions are better. I don't think that's how Rolex—
23:05.750 --> 23:08.950
You don't think it'll help the market overall? No. I wonder if it will hurt
23:09.450 --> 23:13.130
it. Yeah. But I don't think it will. Because the thing is,
23:13.630 --> 23:17.190
man, if you think about the majority of brand-loyal
23:17.690 --> 23:21.564
Rolex collectors, and I want to separate out,
23:22.189 --> 23:24.818
like watch collectors who have Rolexes,
23:25.331 --> 23:27.703
from brand-loyal Rolex buyers.
23:29.098 --> 23:32.913
This is largely net new, I suspect, to the majority of them,
23:33.746 --> 23:36.856
but their interest in it comes from the fact that it's a Rolex.
23:37.754 --> 23:40.880
You know what I mean? So, because by that argument,
23:40.944 --> 23:43.797
every time, you know, Rolex updates the Sub, people will be like, how about them
23:43.845 --> 23:47.661
Fifty Fathoms? Yeah, you're right. If I was a collector of beautiful,
23:47.933 --> 23:51.828
complicated dress watches, right? And I had some amazing
23:51.925 --> 23:55.535
vintage in my collection, maybe I have some, some Vacheron stuff,
23:55.551 --> 23:59.562
maybe I own a Laurent Ferrier Classic Moon, I probably look at
24:00.062 --> 24:02.707
the Padellone, the modern execution, and just sort of shrug.
24:03.093 --> 24:06.510
Yeah, you know, it's not for me. But if your watch collection is
24:06.607 --> 24:10.859
like, you know, a Sub and a GMT-Master and Explorer and,
24:10.875 --> 24:15.416
you know, and gold Daytona— exactly— then this is like actually pretty
24:15.432 --> 24:18.834
exciting and new to you. But if it was presented to you and the
24:19.334 --> 24:22.172
name on the dial was, you know, any other brand, you would be like,
24:22.252 --> 24:26.182
I mostly am a Rolex buyer. Yeah, I just wonder. And again, the answer—
24:26.198 --> 24:29.854
not— I'm talking about mass-market Rolex, right? Exactly. But there's
24:29.950 --> 24:33.334
a— there's— I wonder, is— I guess my question is, could this be a gateway
24:33.834 --> 24:37.198
drug? Could we look back in 5 years and say the Padellone marked
24:37.698 --> 24:41.480
a time when the attention of the collecting community and,
24:41.832 --> 24:45.440
and maybe watch buyers more generally moved to
24:45.940 --> 24:49.353
dress pieces and more complicated pieces? Could be. I don't think so,
24:49.369 --> 24:53.430
and I'll tell you why too. I think Rolex learned its lesson from Cellini,
24:53.623 --> 24:57.364
which— look, I love Cellini watches. I've owned several.
24:57.476 --> 25:00.864
I think they're awesome. The Cellini product line. Yeah,
25:00.977 --> 25:04.782
but the problem with Cellini was that they overproduced them relative
25:05.282 --> 25:08.266
to demand. Oh yeah, and they learned in the box. Yeah, and they learned that
25:08.378 --> 25:12.071
lesson, or from that, and adjusted how they do it with the 1908
25:12.087 --> 25:15.507
and the Padellonia. Yeah, but my point is now they make these desirable at
25:15.604 --> 25:18.970
retail design that help interest in the category? No,
25:19.470 --> 25:22.470
because they're not— everyone wants what they can't get, I guess, man. But again,
25:22.970 --> 25:25.890
we're talking about like a couple of these. Like, dealers are going to get one
25:26.390 --> 25:30.370
of these, maybe 2. So it'll be like, ooh, we sold 400.
25:30.870 --> 25:34.310
Cool. Yeah, I think I'm saying the same. I don't think that could sell
25:34.810 --> 25:38.330
40,000. I'm opposite side of the same coin. Yeah. All right. I, I'm just wondering
25:38.830 --> 25:41.410
if by, you know, taking it away, they make it more desirable. Who knows?
25:41.910 --> 25:44.530
We'll see where— maybe. But let me put you this way. 1908s are still under
25:45.030 --> 25:48.274
very, very, very tight delivery and there's still several on the secondary,
25:48.867 --> 25:52.217
and they trade for modestly above their retail prices. Oh,
25:52.377 --> 25:56.161
interesting. So I think that people look at it, it is desirable because they keep
25:56.661 --> 25:59.976
the allocation— allocation piece— they keep it on allocation to people that genuinely
26:00.088 --> 26:03.935
want them as opposed to delivering them into stores. I don't think
26:04.435 --> 26:07.382
there's a lot of them out there. I think that this— I think that Rolex
26:07.882 --> 26:11.325
is trying to make its own market within its own community. I do not think
26:11.373 --> 26:14.900
what happens inside of Rolex is going to change anything outside of
26:15.400 --> 26:18.870
Rolex. So maybe it's a matter of them just rather than looking at the broader
26:19.370 --> 26:21.989
market, because we know how long these things take them to develop. Maybe it's a
26:22.489 --> 26:24.510
matter of like them saying, how do I put more runway in front of my
26:25.010 --> 26:28.550
clients? That I 100% sold them platinum Daytona. And now what
26:29.050 --> 26:32.430
do I have to offer them? Well, I have something new. Okay. That I'm
26:32.930 --> 26:36.010
totally on board with. Distinguished gentleman Daytona collector.
26:36.510 --> 26:39.810
There you go. Forget that off-catalog piece you'll never get. Here's a
26:40.310 --> 26:43.350
Padellone, which you'll also never get. You're also never getting. All right.
26:43.850 --> 26:47.070
Let's talk about Breguet because Breguet to me is, is even more fascinating.
26:47.340 --> 26:50.615
Yes. Breguet is a many levels. 100%. Yeah. Now you and I,
26:50.904 --> 26:54.542
uh, we need to announce our bias here. Of course, Breguet boys. We are
26:54.655 --> 26:58.005
Breguet boys. Um, we are, we are huge fans of,
26:58.261 --> 27:02.349
of Breguet all told, particularly vintage, neo-vintage Breguet,
27:02.509 --> 27:05.924
Roth era and on. Roth era through Investcorp era.
27:06.036 --> 27:09.338
I, I think the Investcorp era is, is probably my favorite
27:09.838 --> 27:13.073
because it's this weird no man's land of opportunity. But that's just me. The watches
27:13.105 --> 27:16.247
are funky. You and I both have Investcorp era sort of
27:16.311 --> 27:19.165
Marines. You've got a, a Horomundi. Do you have a, do you have any,
27:19.261 --> 27:22.484
uh, Inateck or Inatrod era? I do. I love Investcorp.
27:23.448 --> 27:26.997
But, you know, well, you know, when I first—
27:27.382 --> 27:31.044
everyone knows the name Breguet, everyone knows the story of Abraham-Louis
27:31.140 --> 27:34.754
Breguet. What do they know about Abraham-Louis Investcorp? But look,
27:34.834 --> 27:38.110
the Breguet brand, the company, was in the hands
27:38.287 --> 27:41.804
of the Breguet family for centuries. Yeah. And then it passed
27:42.382 --> 27:45.786
to— I forget who the owners were who brought in— I believe
27:46.286 --> 27:50.685
in the late '70s they brought in new owners. They brought in Daniel
27:51.185 --> 27:54.464
Roth. And Daniel Roth is the guy who really codified the design codes of Breguet.
27:54.592 --> 27:58.552
Now, of course, the modern design— yeah, like, yes, of course, like guilloché
27:58.680 --> 28:02.495
was always associated with Breguet. The sort of observatory
28:02.591 --> 28:06.070
hands have always been observed, you know, associated with Breguet.
28:06.118 --> 28:09.228
I think details like that. But Roth really codified,
28:09.260 --> 28:13.171
like, how you take the ingredients of Breguet and put them together
28:13.268 --> 28:16.730
in a package where you have sort of the coin edge or the rolled gold
28:16.858 --> 28:20.593
case profile, you have the Breguet lugs, the sort of almost wire
28:20.963 --> 28:23.855
lugs. You have, you know,
28:23.999 --> 28:27.711
the guilloché used in particular ways. Like, the ingredients all
28:28.211 --> 28:32.210
came together under Roth in a recipe that we recognize today
28:32.692 --> 28:36.130
as kind of modern, modern Breguet. And he was there, I think, through the
28:36.630 --> 28:40.613
late '80s. The brand then changed hands again. It was owned by 2 gentlemen,
28:41.031 --> 28:44.598
European guys. They sold it then to Investcorp.
28:44.823 --> 28:48.402
Investcorp, as it sounds, it was like a private equity equity company who then
28:48.499 --> 28:51.656
in turn, I believe in the early 2000s, sold it on to
28:52.156 --> 28:55.215
the Swatch Group. I think a lot of people now think of like Breguet as
28:55.311 --> 28:58.598
like really part and parcel with the Swatch Group,
28:59.078 --> 29:04.112
but Swatch Group's ownership of Breguet is pretty modern, is modern.
29:04.384 --> 29:07.703
And 2, it's preceded by that
29:07.815 --> 29:11.374
Roth era and that Invescorp era where the codes of the brand
29:11.742 --> 29:14.900
were really gelled and where they really came together. And when you close your
29:14.948 --> 29:18.619
eyes and imagine a Breguet mentally, you're really thinking
29:18.651 --> 29:22.230
of Daniel Roth kind of design and philosophy of watchmaking.
29:22.567 --> 29:26.195
Although that's true, and we can wax poetic about like the watches that we
29:26.695 --> 29:30.063
like, but the reality of Breguet as a business has not been very
29:30.563 --> 29:34.364
good. Right. And that's why I give that context. Yeah. Because when you think about—
29:34.380 --> 29:38.312
like, most people think about Breguet and they're like, man, why is this brand
29:39.099 --> 29:42.453
not the shit? You know what I mean? Like, why? They have
29:42.630 --> 29:45.968
all of the ingredients. They have the watchmaking savoir-faire,
29:46.097 --> 29:50.182
the know-how. They have the they have the people, the equipment,
29:50.198 --> 29:52.066
the heritage, the designs,
29:53.740 --> 29:56.951
decades of innovation. Why are they not killing it?
29:57.678 --> 30:01.294
And really, I think the sort of the kind of the downfall of the Breguet
30:01.374 --> 30:04.990
brand was under the Swatch Group leadership. Oh, 100%. I mean,
30:05.022 --> 30:08.601
the Swatch Group absolutely mismanaged the brand for
30:08.634 --> 30:12.728
a significant period of time. I think this current era under Greg Kisling notwithstanding,
30:13.710 --> 30:16.467
because jury's out on that. There's a lot to talk about. How do you think
30:16.967 --> 30:20.206
they mismanaged it? Well, several things. First of all, the Swatch Group
30:20.414 --> 30:24.007
often bundles brands together to dealers, and that means
30:24.104 --> 30:27.617
that there are certain doors that are both massively disincentivized
30:27.633 --> 30:31.226
from promoting the brand to also brand— to
30:31.242 --> 30:34.787
doors that were drowning in the brand, which creates perverse incentives to
30:35.287 --> 30:38.925
devalue the product. Here's what I mean. Let's say you
30:39.102 --> 30:42.454
are a door in Chicago. It's 20—
30:42.647 --> 30:45.743
it's 2011, and you just read, you know, 2012,
30:46.096 --> 30:48.325
economy's recovering. You just redid your store.
30:49.287 --> 30:52.620
And you finally got that Omega boutique. Well,
30:52.748 --> 30:56.883
guess what else is in the contract from the Swatch Group? Now congratulations,
30:57.219 --> 31:00.408
you're gonna be selling Blancpain, you're gonna be selling
31:00.905 --> 31:04.575
Glashütte Original, and you're gonna be selling Breguet.
31:04.831 --> 31:07.940
Now pause for a moment. All 3 of those
31:08.036 --> 31:11.466
watchmakers produce great watches. The watchmaking of all of
31:11.498 --> 31:15.050
those brands you mentioned is unbeatable. But here's the thing.
31:15.550 --> 31:18.780
If you are a dealer and you are already buying $400,000 to $500,000,
31:19.610 --> 31:23.290
if you're a boutique of Omega, you gotta sell those.
31:23.790 --> 31:26.970
You gotta sell those. And then stapled on top of that is another $300,000 to
31:27.350 --> 31:30.670
$400,000 of all these other brands for which you have to work. And those are
31:31.170 --> 31:33.950
different clients. Not only are they different clients, you're gonna have to work a lot
31:34.450 --> 31:38.410
harder to sell. So what do you do? Well, you do 2 things.
31:38.910 --> 31:41.310
Make 'em go away. You make 'em go away by either shoving them out the
31:41.810 --> 31:45.864
back door to gray market dealers, which 100% happened.
31:46.089 --> 31:50.789
Yep. Or you discount the ever-loving hell out of the watches and
31:50.966 --> 31:53.356
you get a call or someone walks in the door, you get a bite on
31:53.468 --> 31:55.762
one, you just move it. Just move it because you have to, because you can
31:55.794 --> 31:58.473
get another one in like 3 weeks and you got to pay the bill.
31:58.537 --> 32:01.729
So, and probably your priority from a brand standpoint,
32:02.114 --> 32:05.675
volume and revenue standpoint is Omega. Yeah. Like that, that you're really— you
32:06.175 --> 32:09.236
can't put that Omega relationship at risk. So, oh, you got to sell those watches.
32:09.285 --> 32:12.350
So now you're under, you're under a, let's just make up the number, but let's
32:12.431 --> 32:16.637
say $750,000 to a million-dollar bill monthly that
32:17.137 --> 32:19.222
you gotta pay the Swatch Group, you're gonna do what you gotta do to get
32:19.722 --> 32:23.526
there. And the Swatch Group, it's difficult to interpret that behavior as anything
32:23.622 --> 32:27.058
other than we don't care about sell-out, we just care about sell-in.
32:27.732 --> 32:31.169
We meet our numbers by shoving this down the gullet of whoever's gonna take
32:31.669 --> 32:35.183
it. And, and then, you know, whatever the market is, is whatever
32:35.683 --> 32:38.490
the market is. That's very depressing. Yeah.
32:38.876 --> 32:42.103
And I think in the meantime, the watchmaking was pretty good. I mean, we can—
32:42.603 --> 32:45.266
we're not talking about the watchmaking. The watchmaking is excellent. But I think that— but
32:45.314 --> 32:48.895
like, I think that's important context. Breguet made some amazing watches in
32:48.943 --> 32:52.588
the last 20 years. Breguet has never stopped making good watches in
32:52.684 --> 32:56.763
modern memory. Some people might say some things got a little too big in
32:56.859 --> 33:00.616
modern memory. I would say, generally speaking, the watchmaking
33:00.665 --> 33:04.325
is phenomenal. Yeah, watchmaking maybe wasn't the problem.
33:04.822 --> 33:08.611
No, I wouldn't— I would even argue that in many cases aesthetics were
33:09.111 --> 33:11.307
not the problem. There are a lot— I mean, like, look, Breguet has a very
33:11.807 --> 33:15.866
distinct look, and again, we'll come back to that because what's happening under Kissling is
33:16.043 --> 33:19.799
evolving that look. Yeah, but for a long time, Breguet had a very consistent
33:19.831 --> 33:23.026
look. You and I are both wearing traditional Marine— or I'm sorry,
33:23.042 --> 33:26.525
like transitional Marine watches with a very particular case shape,
33:26.637 --> 33:30.570
with a very particular case band, with a very particular lug architecture.
33:30.651 --> 33:34.080
People might argue that the design got so stuck. Okay,
33:34.580 --> 33:38.840
tell that. And those are the same guys that thought, you know, 5196s and 3196s
33:39.340 --> 33:42.660
are evolutions, right? Yeah, but I guess with— it's tough with Breguet, right? Because like
33:43.160 --> 33:46.340
you could argue that like the Classique got stuck. Yeah, but then look at the
33:46.840 --> 33:50.080
Marine, they really evolved. We can debate about it, right? I'm wearing an era of
33:50.580 --> 33:53.500
the Horomundi I like. I don't like the modern era of the Horomundi. It'll eventually
33:54.000 --> 33:57.560
come back around. So what we're saying here is the mistakes were primarily
33:58.060 --> 34:01.687
in retail and distribution. I think the mistakes were in retail, distribution, and marketing,
34:02.136 --> 34:05.169
not in product. Overproduction, maybe? Well,
34:05.683 --> 34:09.663
overproduction fits into this larger problem, which is we view Breguet as
34:09.775 --> 34:13.033
a vehicle for revenue as opposed
34:13.065 --> 34:16.500
to a high horology house where we
34:17.000 --> 34:20.095
think we could really not only command the prices we're asking,
34:20.672 --> 34:24.412
which frankly for a long time were pretty damn competitive relative
34:24.912 --> 34:27.778
to the market, For sure. Less so now, but, but certainly there.
34:28.852 --> 34:32.603
And they had an opportunity, as Lange did, and Lange really
34:32.619 --> 34:35.329
grabbed the brass ring on this one. We'll come back to that too.
34:36.643 --> 34:40.394
They had that opportunity to erode some of Patek's
34:40.894 --> 34:44.514
market share. And they just— and I think even more opportunity, frankly, than Lange,
34:44.578 --> 34:48.137
which is a much more austere design brand in
34:48.185 --> 34:51.119
many ways than— Vacheron's been successful. So it's interesting.
34:51.456 --> 34:55.079
Everyone's been successful. Vacheron and Lange have been incredibly successful relative
34:55.579 --> 34:58.687
to Patek, Breguet, struggled. But I think this— this boy has been successful. I think
34:59.187 --> 35:03.223
this boils down to how the Swatch Group operates, which is they just
35:03.255 --> 35:07.022
force this— sell as many watches as possible. Absolutely. The quarterly number,
35:07.503 --> 35:10.613
which frankly they're not even all that good at anyway. Yeah,
35:10.645 --> 35:14.124
these days, which probably put more pressure on them to keep doing
35:14.300 --> 35:17.249
the same bad they created. And of course,
35:17.362 --> 35:21.497
these are— these are— these are like not only self-fulfilling prophecies,
35:21.529 --> 35:24.703
but they become worse with day as every day passes,
35:24.800 --> 35:28.311
right? Because the more you shove this down the throat throats of
35:28.327 --> 35:32.033
dealers, the more they're devalued, the more the market
35:32.533 --> 35:35.274
is saturated, the more they have to be devalued to sell the next one.
35:35.466 --> 35:38.579
And then you end up where Breguet was
35:38.707 --> 35:42.317
about 3, 4 years ago, where I,
35:42.461 --> 35:45.959
you know, I bet if we polled Breguet dealers all across the country,
35:46.697 --> 35:50.146
like authorized dealers, and you ask them like, what percentage of Breguet
35:50.243 --> 35:52.264
do you sell at full price? They'd all look at me and be like,
35:52.328 --> 35:56.660
what's a full price Breguet? And that's at
35:57.160 --> 36:01.538
that point you have a brand that's on, on life support, which I think
36:01.618 --> 36:05.453
arguably we can fairly say it was, which is sad
36:05.951 --> 36:09.192
on many levels because the watches are
36:09.657 --> 36:12.561
great. So what happens?
36:13.043 --> 36:16.765
A couple of things. Collectors start to pay attention because
36:16.958 --> 36:21.097
at the time and even today, I would say it was such a great opportunity,
36:21.130 --> 36:24.335
they started buying up traditions in particular. Yeah. Now,
36:24.416 --> 36:28.037
we heard when we were in Geneva, we heard from Roy Davidoff that
36:28.165 --> 36:31.515
vintage Breguet— he's only relatively recently talking
36:31.547 --> 36:34.639
about now. I'm talking about 4 or 5 years ago. Oh, well, I'm,
36:34.896 --> 36:38.742
I'm saying that it's vintage Breguet is still getting off the ground. Well,
36:38.822 --> 36:41.642
let's come back to that. Let's just look 4 or 5 years ago. We start
36:42.142 --> 36:44.767
to see tradition begin to pick up. I mean, there was a period of time
36:45.267 --> 36:48.969
where you could be buying traditions in various levels of complexity starting
36:49.017 --> 36:52.551
at like $12,000 or $13,000, maybe even a little less if you, if you
36:53.051 --> 36:55.475
got a crazy screaming deal on it. That's changed now.
36:56.150 --> 37:00.246
Yeah, like the collector community has like caught wind of the tradition and
37:00.327 --> 37:04.327
it's picked up. There's still good value there, and there's a ton of value in
37:04.359 --> 37:07.716
the original Marine stuff. Totally. But my point is, that's kind
37:08.216 --> 37:10.785
of— to my mind, that was the kindling of where, of where we're headed with
37:10.849 --> 37:14.335
Breguet. Okay, so starting to start to look at the brand because the vintage is
37:14.835 --> 37:18.167
such a screaming deal? Or no, no, because modern pre-owned production is
37:18.667 --> 37:22.222
such a screaming deal. Modern pre-owned— oh, like I could get this level of watchmaking
37:22.254 --> 37:25.700
for pennies on the dollar. Correct. So ironic. So in that instance, we start to
37:26.200 --> 37:28.489
see a little bit of kindling coming out of like all the watches being shoved
37:28.989 --> 37:32.496
out the back. But, but it still had saved the brand. It was the
37:32.996 --> 37:36.375
right strategy. Well, maybe,
37:36.439 --> 37:40.190
but I mean, the problem of course now is, you know, a modern tradition—
37:40.206 --> 37:43.459
you'd rather be desirable than a screaming deal. Exactly.
37:43.540 --> 37:47.248
Breguet. Exactly. But that starts to like get people's interest
37:47.748 --> 37:50.218
here and there. Gets my interest, you know. And then they go out there and
37:50.718 --> 37:53.990
they try to capture people again by reissuing the Type XX, you know, at a
37:54.490 --> 37:58.485
sub-$20,000 price point. Can debate whether that was— that was in the stainless steel sports
37:58.985 --> 38:01.600
watch era. Sure. And we can debate whether that was— whether that's a good watch,
38:01.648 --> 38:05.212
not good watch, whatever. Bottom line, it got a lot of attention for Breguet
38:05.485 --> 38:07.941
and it was priced competitively at the time. Totally.
38:09.338 --> 38:13.187
And then we start to head into this new era.
38:13.331 --> 38:17.291
And there's 2 things that are happening in this era. There's a product
38:17.595 --> 38:20.930
pivot and shift, and there's a distribution and sales
38:21.042 --> 38:24.425
pivot and shift. Company management or brand management leadership.
38:24.553 --> 38:28.176
Well, I think those, those changes are happening out of that management change.
38:28.352 --> 38:31.783
So that's October. Which, by the way, is also really interesting because the,
38:32.007 --> 38:34.845
like, the Swatch Group does not strike me as a company that, like,
38:34.989 --> 38:38.468
empowers their CEOs. So it makes me wonder who
38:38.933 --> 38:42.475
is actually driving this. I did a little research. Who is driving it? So a
38:42.523 --> 38:45.345
couple things happened. So Mr. Investcorp? Mr.
38:45.393 --> 38:49.224
Investcorp, he's back. No, October 2024, Gregory Kisling
38:49.320 --> 38:52.831
is promoted to be the CEO of Breguet. He came from
38:52.959 --> 38:56.357
Swatch where he had various like product positions.
38:56.550 --> 38:59.660
He was like head of product or sorry, not Swatch. Well, within the Swatch Group
39:00.160 --> 39:03.042
from Omega. So he had various like, he was like head of product at Omega
39:03.542 --> 39:07.370
at one point. He started at Omega in 2004.
39:07.450 --> 39:11.378
So he was a 20-year veteran of Swatch Group and of
39:11.878 --> 39:14.504
Omega. And so clearly this is a company guy.
39:15.770 --> 39:18.800
He had earned over decades the trust of the Hayeks.
39:19.954 --> 39:24.362
But the Hayeks are actually directly involved with Breguet
39:24.923 --> 39:27.696
to this day. You might be surprised to know. No.
39:27.969 --> 39:31.335
So Marc Hayek remains the
39:31.835 --> 39:34.942
president of Breguet. Now, Kissling is the CEO.
39:35.487 --> 39:39.703
Hayek is the president. His sister and brother
39:39.831 --> 39:42.995
are both involved in the brand because they sit, of course, on the Swatch Group
39:43.043 --> 39:47.460
board. But Mark is like installed in the brand as president and works
39:47.766 --> 39:51.701
closely with, with Kissling. So the Hayeks
39:52.201 --> 39:55.829
are involved, and it would seem that they're bought in on this move
39:56.329 --> 39:59.683
as well. I don't know what got them there. I don't know how they changed
40:00.183 --> 40:03.362
a philosophy— speaking of decades of management, decades of, to your point,
40:03.843 --> 40:07.522
trying to milk and harvest the brand— to now trying to elevate
40:08.022 --> 40:11.482
and protect it. But They, they put someone in they clearly trust.
40:11.786 --> 40:14.959
They're still involved in the brand and they make some changes,
40:15.055 --> 40:17.426
to your point, in their product,
40:18.275 --> 40:21.528
their brand and their marketing and their retail and distribution.
40:21.784 --> 40:25.854
Yeah, I'd love to figure out someday some actual reporters
40:25.886 --> 40:29.811
should report on this because it is an interesting story. But let's
40:30.311 --> 40:34.154
talk about the decisions they're making. So from a product standpoint, we have
40:34.654 --> 40:38.627
seen, I think, really 2 main areas that have gotten attention that they
40:39.127 --> 40:42.994
deserve. One is around Tradition. They leaned into the popularity of
40:43.026 --> 40:46.670
the Tradition by paying attention to the secondary market, and they came out with some,
40:46.734 --> 40:49.993
I think, very vibrant variants. Now, the Tradition is a Swatch
40:50.089 --> 40:54.424
Group era product line. Yeah, but I'm talking about the modern updates.
40:54.504 --> 40:58.052
Yeah, I know, but that is one, I think, positive thing Swatch
40:58.552 --> 41:01.214
Group did with the product. Sure. The introduction of the Tradition line.
41:01.503 --> 41:05.257
Absolutely. Killer watches. Very, very impressive watches. That are a wonderful
41:05.273 --> 41:08.606
reinterpretation of the core of the brand. And if I'm not mistaken, that's the modern
41:08.638 --> 41:12.322
product line that really got your eye. Yeah. Yeah. So they
41:12.822 --> 41:16.151
focused on that and did some tweaks. You know, reality there is that those watches
41:16.651 --> 41:19.964
are in the 40s and 50s now. I think they deserve to be.
41:20.573 --> 41:23.970
I question if the market— if they went a little too fast on that one,
41:24.098 --> 41:27.190
but we'll see. Then the super high end,
41:27.302 --> 41:30.907
they started introducing both some experimental watches as well as some
41:31.407 --> 41:34.479
watches that really, from a proportion standpoint,
41:34.560 --> 41:38.086
point, and even though there's some very dramatic changes to the lugs,
41:38.503 --> 41:41.885
are evocative in many ways, I think, of Roth-era Breguet.
41:43.312 --> 41:46.486
And that's where we start seeing some of their quarter-million-dollar tourbilles and things of that
41:46.534 --> 41:51.022
nature, which objectively are beautiful. Yeah, the Classique tourbillons
41:51.522 --> 41:55.655
that they released this year are absolutely— well, and they also imply, I think,
41:55.832 --> 41:59.054
a future update to the overall Classique line, which I think
41:59.554 --> 42:02.965
is welcome and will be awesome to see. Well, that started with the subscription piece
42:03.465 --> 42:07.102
that won at the GPHG. That's where they introduced the— those redesigned lugs, which in
42:07.214 --> 42:10.861
profile look very much like the Roth era lugs. But then
42:10.973 --> 42:14.411
when you look at the watch head-on, they look much more like kind
42:14.427 --> 42:18.153
of conventional. Yeah, it's a beautiful design, really well done. I think
42:18.653 --> 42:22.040
a smart way of evolving the, the aesthetics of the line
42:22.072 --> 42:25.574
that feel more, more contemporary. But here's,
42:26.184 --> 42:30.457
here's the thing: they deserve a ton of credit for what they're—
42:30.650 --> 42:34.169
the rapid approach that they are taking with, or the quick approach
42:34.185 --> 42:38.186
that they're taking with their product. They are clearly paying attention
42:38.218 --> 42:42.048
to collector interests by focusing on the terps and by focusing on the
42:42.412 --> 42:46.489
tradition. But I think
42:46.505 --> 42:50.523
they might be moving a little too quickly to correct the former problem.
42:51.088 --> 42:53.299
The retail problem, the distribution problem.
42:54.235 --> 42:59.876
They moved very quickly to close 44
43:00.376 --> 43:02.587
4 of their retailers in the last 16 to 18 months. Yep.
43:03.517 --> 43:06.643
And I wanna preface by saying, you could say like, well, Asher, you just
43:07.143 --> 43:10.395
said that was the problem, man. Like you just said that, that those
43:10.428 --> 43:13.843
guys are shoving everything out the back door. You're saying that they discounted heavily.
43:14.276 --> 43:17.226
Why wouldn't they? Well, the flip side of that coin is those dealers are the
43:17.242 --> 43:20.497
ones paying their bills and keeping the lights on for them for decades.
43:20.577 --> 43:23.688
That's one. The other is, for better or for worse,
43:24.361 --> 43:26.670
that's where Breguet clientele lived.
43:27.569 --> 43:30.922
So that entire book of business, I'm sure every
43:30.954 --> 43:34.147
product otherwise was from a multi-brand retailer. 100%.
43:34.243 --> 43:37.660
Yeah. Yeah. So they're doing
43:37.693 --> 43:41.704
that thing that we've seen brands do where they're torching purchase
43:42.204 --> 43:45.939
relationships and history because they want to follow
43:46.439 --> 43:50.175
the path of Lange and bring all of those
43:50.608 --> 43:54.560
clients and Rolex And well,
43:55.060 --> 43:58.140
bring all of those clients into— it's Paul Bucherer, man. They're opening up— yeah,
43:58.640 --> 44:02.340
but they didn't close everybody else. They're closing people. They're not closing the
44:02.840 --> 44:06.160
majority of their retailers and bringing it all in-house in the course of 12 months.
44:06.660 --> 44:09.260
No, no, no, no, no. But they're gradually doing something. So my point is,
44:09.760 --> 44:11.880
a brand like— no, this is not the same. Rolex will do this over the
44:12.380 --> 44:16.420
course of 20 to 30 years. Has Rolex— hold on. Has Rolex closed dealers?
44:16.920 --> 44:20.200
Not nearly in the percentage amounts that these people— no, that's not what I asked
44:20.700 --> 44:24.449
you. Has Rolex closed dealers? Sure. Yeah. Okay. Have they opened their own company-owned
44:24.949 --> 44:27.334
and operated stores, not necessarily in those same markets.
44:27.815 --> 44:31.422
I'll give you the Rolex flagship store in New York. What exactly is the
44:31.922 --> 44:34.772
point you're making? I'll tell you the point. This is going somewhere.
44:35.173 --> 44:37.882
Let's take the example of New York, which we talked about. They closed Wempe.
44:38.138 --> 44:41.216
Yeah. And they're opening a Bucherer-owned and operated largest Rolex
44:41.986 --> 44:45.240
boutique in the world. Sure. They're literally doing the same. They also did
44:45.256 --> 44:48.542
not close London. They did not close any of the others. The scale different
44:48.558 --> 44:52.533
for sure. But Rolex is borrowing from this playbook. Lange has
44:52.646 --> 44:55.868
done this playbook. AP has done this playbook where they— I I
44:56.368 --> 44:59.620
think you're conflating things. I think AP is a much closer analogy. You're not
45:00.120 --> 45:04.157
letting me make my point. Okay. There's a trend going— there's this trend going
45:04.253 --> 45:07.941
on with these brands. And it's funny that we named Lange,
45:08.743 --> 45:12.334
AP, and Rolex. These are all brands that are desirable at
45:12.366 --> 45:16.262
retail, where— to varying degrees. To varying degrees.
45:16.855 --> 45:19.966
Now, Rolex and AP, certainly. Lange,
45:19.998 --> 45:23.910
maybe less so, but compared to where Lange was 10, 15, 20 years
45:24.410 --> 45:28.030
ago, for sure. All of these brands did this out of strength.
45:28.880 --> 45:33.256
In other words, why can AP close their multi-brand retailers
45:33.352 --> 45:36.190
and open up AP boutiques? If you just started with that, then why wouldn't it
45:36.690 --> 45:40.101
have irritated me? Yeah, but why? What?
45:40.261 --> 45:43.468
And I'm like, why hasn't Patek done this? But why has Lange
45:43.932 --> 45:47.876
closed multi-brand retailers and opened company-owned
45:48.376 --> 45:52.812
and operated boutiques? Yeah. And why is Rolex able able to close some retailers
45:52.844 --> 45:56.305
and open some of their own company-owned and operated boutiques because of the strength of
45:56.805 --> 46:00.774
the brand and the demand for the brand. Sure. I think
46:01.575 --> 46:04.715
what Breguet is doing here is a little bit cart before the horse. It's like,
46:04.763 --> 46:08.240
it's 100% cart before the horse. You're trying to borrow the playbook of these brands.
46:08.304 --> 46:12.068
You're like, oh, this is what successful brands do. They close their retailers and they
46:12.568 --> 46:16.041
open their own mono-brand boutiques. Those brands were all able
46:16.137 --> 46:19.197
to do that because of the strength of their business, the desirability of
46:19.697 --> 46:23.846
their product, and the demand for their product, and the leverage they had over Breguet
46:24.346 --> 46:25.997
has none of that. Well, I would argue that part of the reason it worked
46:26.497 --> 46:30.010
for Lange too was that it happened in the, in the middle of the pandemic
46:30.510 --> 46:34.794
watch bubble. And like that— same, same. Yeah, the demand and the desirability.
46:34.842 --> 46:37.025
But that gave them, that gave them a little bit of a turbo boost.
46:37.089 --> 46:40.011
Yeah, I think what you're— you and I are both saying is Breguet isn't there
46:40.059 --> 46:43.510
yet. No, it isn't. And they've done a few things in
46:44.010 --> 46:47.250
this. Number one, they, they're in the same position Grand Seiko was
46:47.282 --> 46:50.653
when Grand Seiko started opening boutiques, where you'd call up a Grand Seiko boutique and
46:51.153 --> 46:52.901
you're like, I want that watch, you know, what can you do for me on
46:53.401 --> 46:56.113
it? They're like, Well, nothing. You'd be like, what are you talking about? When I
46:56.613 --> 46:59.149
bought it from the shoe store down the block where it was available— it was
46:59.649 --> 47:02.844
actually available in a shoe store, by the way, in Redwood City— you know,
47:02.924 --> 47:05.591
they would give me whatever I asked for off because they were just happy to
47:06.091 --> 47:09.912
make the sale. You know, why, why am I suddenly expected to pay full price
47:10.412 --> 47:13.623
here? Like a cigar store too that sold Grand Seiko, like in
47:14.123 --> 47:18.040
Arizona or something. But my point is that there was a period of education
47:18.540 --> 47:21.973
there. Again, Grand Seiko, to your point, was a ascendant. Yes,
47:22.150 --> 47:25.883
exactly. So I, I, you know, Breguet from a product standpoint—
47:26.383 --> 47:29.953
Breguet is ascendant, but Grand Seiko was like proven and established.
47:30.146 --> 47:33.607
No, I don't think Breguet is ascendant. I think Breguet is just beginning to like
47:34.107 --> 47:37.357
emerge from— We're saying the same thing. Maybe, but Grand Seiko
47:37.857 --> 47:42.036
had really proven the business model. Yes, 100%. So now
47:42.228 --> 47:45.016
we're in this scenario, right? So you got a couple of things happening. One,
47:45.673 --> 47:48.661
you have a bunch of dealers that are They're like, oh, oh, oh,
47:48.887 --> 47:52.203
okay. I mean, on the one hand, like, I bet
47:52.703 --> 47:55.309
there's a little bit of relief there, but on the other hand, it's also like,
47:55.471 --> 47:58.787
well, what the heck? I built this business for 20 years. Well, and the other
47:59.287 --> 48:01.051
side of it too is like, I figured out how to build, how to make
48:01.132 --> 48:03.865
this business work now, and now it's gone.
48:04.285 --> 48:07.987
Oh, and, or, you know, screw you just when you've,
48:08.004 --> 48:10.849
you know, figured out how to get your house in order. Right. You know,
48:11.075 --> 48:13.721
after I supported you for decades when you were in disarray.
48:14.787 --> 48:18.650
Now you're taking it away from me. Right. I'm, so I'm punished
48:19.150 --> 48:22.801
when you're in disarray and I'm punished when you are, when you're,
48:22.881 --> 48:27.241
you know, on the brink of success. So now who do authorized
48:27.741 --> 48:30.927
dealers talk to all the time? Each other. Yeah.
48:31.296 --> 48:35.223
And their clients. Sure. So now, you know,
48:35.303 --> 48:38.508
client of 15 years of said retailer calls him up and is like,
48:38.524 --> 48:42.724
hey man, I really, I think I actually want that $225,000
48:43.550 --> 48:46.620
Turbillon, that retailer is gonna be like, yeah, man, I'm sorry, but Breguet like kind
48:47.120 --> 48:49.700
of screwed us here. Not only can I not get that for you, but— or
48:50.200 --> 48:53.040
they closed me. That's what I'm saying. Yeah. Like, not only could I not get
48:53.540 --> 48:56.220
it while I was still open, you know, what am I gonna do, refer you
48:56.720 --> 49:00.880
to the Breguet boutique? Yeah, come on. So what's
49:01.380 --> 49:03.800
gonna happen there? That's terrible for the client. It's terrible for the client. So the
49:04.300 --> 49:07.400
client's now pissed. Yeah. Do you think a client would be like,
49:07.900 --> 49:11.260
well, I don't— I'm losing interest now because I'm— I've invested in
49:11.760 --> 49:12.820
this brand myself as a collector, and now I'm being told I can't get it,
49:13.320 --> 49:16.678
and my dealer won't even help me and my purchase history
49:17.178 --> 49:19.294
doesn't even matter with the Breguet boutique. Well, that's what we saw with AP.
49:19.503 --> 49:23.435
That's what we saw with Grand Seiko. That's what we saw with Lange.
49:23.820 --> 49:27.030
You're right. And they're going to go in and with Breguet, it used to
49:27.530 --> 49:30.689
be like any Breguet you were interested in, you could figure— forget discounting or whatever—
49:30.882 --> 49:33.691
any Breguet you were interested in, you could get, right? And now,
49:34.397 --> 49:38.554
right, it's like they're going to go into the Breguet boutique on Rodeo Drive
49:38.650 --> 49:42.647
and they're going to get obnoxious. And it's like, I bought 10 watches
49:42.760 --> 49:46.196
from you and you're, you know, telling me you don't know anything about
49:46.696 --> 49:49.921
that and treating me like the guy who just walked in asking about a strap.
49:49.986 --> 49:53.502
Like, come on. In fairness, the Rodeo Boutique was very nice
49:54.002 --> 49:56.778
when I needed a strap. But yes. But well, there, but there's a difference between
49:56.810 --> 49:59.749
the guy who's looking to buy a strap and the guy who's coming in looking
49:59.781 --> 50:03.458
to buy a, you know, rose gold tourbillon. I think, I think
50:03.474 --> 50:07.071
this is the core, the core challenge, right? And this is also, I think,
50:07.103 --> 50:11.133
exemplifying so much of what collectors find distasteful
50:11.824 --> 50:15.404
about collecting, which is ultimately,
50:16.158 --> 50:19.915
if I buy a Breguet, I think about as a collector,
50:19.995 --> 50:24.265
I bought a Breguet, right? Then my relationship is with the brand via
50:24.765 --> 50:28.761
the retailer. And my retailer facilitates me getting access to
50:29.261 --> 50:32.421
the brand, but the brand values the purchase no matter what. Totally. And that,
50:32.453 --> 50:35.824
that, and that is without— they don't. And that is the story of which
50:36.324 --> 50:39.100
it is told, right? Your name is written in the grand book in Breguet.
50:39.582 --> 50:43.259
Your name is written in the grand book at Patek. Is that true?
50:43.435 --> 50:47.514
There's like a grand book? Oh yeah, there's records, of course. But a grand
50:47.546 --> 50:50.099
book? Yeah, I hope— that's how I always picture it. It's like, you know,
50:50.115 --> 50:52.684
there's that— there's some guy who like— scribe. He's like, yeah,
50:53.166 --> 50:56.232
engrave you. But, but of course,
50:56.859 --> 51:00.439
and that matters, right? Like your name is there until you need a new retailer.
51:01.258 --> 51:05.017
Then it doesn't matter anymore. Ironically, until you want to buy from the brand
51:05.114 --> 51:08.584
itself, it doesn't matter. Then it matters least. And here's why. So messed
51:09.084 --> 51:12.278
up. It's weird, right? But of course, here's why that happens that way.
51:13.146 --> 51:16.664
Well, there were 44 doors. Every one of those
51:16.696 --> 51:20.519
doors had at least one big Breguet client,
51:20.632 --> 51:23.700
right? Now that gets shrunk down to,
51:24.182 --> 51:27.378
you know, 12 to 15, maybe maximum 20.
51:27.523 --> 51:30.909
I can't even fathom 20, but let's call it, you know, Breguet boutiques around
51:31.409 --> 51:34.904
the United States. Their goal is to have 6 to 8 boutiques, company-owned and
51:35.404 --> 51:38.738
operated boutiques in the United States. I know they're in Beverly Hills
51:38.771 --> 51:41.899
and New York now. They just moved actually their New York boutique,
51:42.316 --> 51:45.718
so they have an upgraded facility in New York. But my point is,
51:45.814 --> 51:49.071
do the math. Now if you have the top 3 clients from each of those,
51:49.103 --> 51:52.761
now you have 120 top 3 clients that all think that they qualify
51:52.873 --> 51:56.726
for because they do in terms of spend, a piece for
51:57.226 --> 52:00.419
which maybe only 10 come to the United States. And now we are in oh,
52:00.435 --> 52:04.048
but sir territory for clients that have done nothing but support
52:04.548 --> 52:08.207
the brand. So what happens in situations
52:08.707 --> 52:12.012
like this? A few things on the— let's look at the bright side,
52:12.381 --> 52:15.496
right? Like what could happen in the rosy picture that's probably in some
52:15.528 --> 52:19.205
deck, you know, at Swatch Group. There will be a period of instability.
52:20.087 --> 52:24.159
There will be some grouchiness. Yeah. 2 things will— could potentially
52:24.175 --> 52:26.740
happen. There will be a fall-off of resentful clients.
52:27.557 --> 52:30.939
Meanwhile, new clients may approach the brand who are now— never were
52:31.004 --> 52:34.723
interested in it before. They believe the strength of the new product line will attract
52:34.771 --> 52:38.041
them. The boutiques will own those client relationships and
52:38.057 --> 52:41.167
the revenue will increase. And the argument will be, well, we're going to
52:41.667 --> 52:45.864
focus more on these quarter-million-dollar, $150,000 pieces. Volume can decrease.
52:45.992 --> 52:49.663
That's okay. Our net revenues may increase because our margins will go
52:49.743 --> 52:52.436
up and we can manage that through 6 in a way that we weren't before.
52:52.884 --> 52:55.897
And everyone else who was, you know, looking around for a good deal in Breguet,
52:55.993 --> 52:59.391
we don't actually want or need those clients anymore. And we're just going to say
52:59.439 --> 53:02.949
goodbye and we'll let them go buy a gold Longines. You're painting
53:02.981 --> 53:06.971
a pretty compelling picture there. I think it sounds pretty good in the PowerPoint
53:07.471 --> 53:10.882
deck, right? I think that's possible. Yeah. It is by no means
53:11.298 --> 53:15.080
guaranteed because in order for that to work,
53:16.042 --> 53:19.616
the brand has to be ascendant. Well, they have— everyone
53:19.712 --> 53:22.180
has to believe this grand illusion illusion,
53:22.597 --> 53:26.170
which is that all of a sudden Breguet is desirable and, and somehow
53:26.362 --> 53:28.830
ignore decades of,
53:29.984 --> 53:32.355
decades of neglect. Well, now again,
53:32.868 --> 53:36.778
counterargument to that is AP. AP had decades
53:37.278 --> 53:41.473
of quote-unquote neglect before, but they got there brick by brick. They got—
53:41.585 --> 53:45.014
Breguet is doing something, to your point, that, look, they deserve a ton of
53:45.046 --> 53:48.299
credit for how quickly they're moving, both on the product front, but I'd say on
53:48.331 --> 53:51.445
the front. Like, we can disagree with it. We can say, I think this is
53:51.945 --> 53:55.363
the right strategy. It is bold and it is aggressive and it's risky. This is
53:55.459 --> 53:58.333
the right strategy for probably 5 to 10 years too soon.
53:59.408 --> 54:02.780
Exactly. And so what, as with Rolex,
54:03.021 --> 54:06.890
to your point, it's very slow and deliberate. They're not just wiping
54:06.938 --> 54:10.197
out every retailer they have out of hand. They're getting into,
54:10.486 --> 54:14.324
they're getting into retail themselves very deliberately. Lange did it
54:14.824 --> 54:18.835
deliberately. They had their own boutiques and retailers side by
54:19.335 --> 54:23.042
side. And then certainly AP did it slowly as well.
54:23.652 --> 54:27.104
So this feels like maybe too much too
54:27.604 --> 54:30.926
fast. That's what I'm saying. Like, I don't necessarily disagree with the strategy.
54:31.504 --> 54:34.940
I disagree with its execution. It feels like they're
54:34.972 --> 54:37.910
doing this the way I play Call of Duty, which is I go running into
54:37.926 --> 54:40.559
the room and shoot everything, and then a sniper just knocks me right out.
54:41.716 --> 54:45.249
And that, I fear, is the biggest risk here. Got it. Which is that they're
54:45.749 --> 54:48.911
going to make— that they— that all of the incredible work that they are doing
54:48.944 --> 54:51.995
in product development is going to run into the wall of reality. Yeah. And the
54:52.060 --> 54:54.935
reason why is that I don't think they know how to sell their watches.
54:55.834 --> 54:58.485
What do you mean by that? Have you been into a Breguet boutique?
54:58.966 --> 55:02.147
I don't think I ever have. They're very nice
55:02.918 --> 55:06.820
and they'll tell you all about A.L. Breguet, but generally speaking,
55:07.655 --> 55:11.793
the guys and gals that they want, that they need
55:11.826 --> 55:14.745
to grow this, are educated, serious,
55:15.178 --> 55:18.435
like dedicated watch collectors who know watches with big— with
55:18.483 --> 55:21.884
like means. Yeah. They don't need to learn about who A.L.
55:21.932 --> 55:25.141
Breguet is. They need to be— they need to
55:25.641 --> 55:28.991
be told why Breguet's modern watchmaking, right,
55:29.151 --> 55:32.520
is great. Do you think when you go into a Lange boutique, they sit you
55:33.020 --> 55:35.490
down to talk about the man? No.
55:36.614 --> 55:40.323
So my point is they moved too fast.
55:40.869 --> 55:44.610
Now, what could they have done? Well, they could have
55:44.882 --> 55:48.142
done exactly what they were doing with product, trimmed the lines.
55:48.254 --> 55:51.674
So you think the product strategy here is bang on the
55:52.174 --> 55:55.190
money. Product was never the problem and it's certainly not the problem now.
55:55.559 --> 55:58.209
Correct. In fact, it's a bright spot now. In fact, I think the product may
55:58.709 --> 56:02.349
very well get them to where, where they want to be because it's so good.
56:02.621 --> 56:06.151
Yeah. Okay. But they're— it's
56:06.651 --> 56:09.986
like they're, they're just fumbling it at the 10-yard line. The product's
56:10.486 --> 56:12.136
good. The interest— like I said, when we were— or at least let me rephrase
56:12.636 --> 56:15.665
that. I think they are fumbling it at the 10-yard line. I, I can be
56:15.697 --> 56:18.890
wrong. Yeah. No, look, the demand and the interest is there. Like I said,
56:18.906 --> 56:21.826
when we were in Geneva and we went to Roy Davidoff's, he said like,
56:21.890 --> 56:25.468
I've only just started to get into Breguet, the vintage and neo-vintage
56:25.968 --> 56:29.398
market for Breguet. But because it's a screaming deal. Yeah,
56:29.478 --> 56:32.925
at the moment, yes. But one of the things we talked
56:33.425 --> 56:36.902
about was how much prices have been going up. Sure, but there's still
56:36.966 --> 56:39.675
a screaming deal. Like, I'll give you— no, there's still a screaming deal, but my
56:40.175 --> 56:43.972
point is there's growing interest there. Absolutely. That's an important signal, just as
56:44.068 --> 56:47.627
the way, like, you know, winning at the GPHG is an important signal.
56:47.676 --> 56:50.898
Sure. The interest and the increasing values
56:51.398 --> 56:55.275
of vintage Breguet, I think, is another input to say there's genuine interest
56:55.371 --> 56:57.905
in this brand. Yeah, man, people are willing to pay a up for it.
56:58.113 --> 57:01.849
Look, I, I want Breguet to succeed.
57:02.908 --> 57:05.970
After everything I just said, I would even say it might be the only mass
57:06.470 --> 57:09.514
market brand that if they ever approached us, I would even consider— not that the
57:10.014 --> 57:13.267
Swatch Group is ever going to approach me, but like, not if I publish this
57:13.767 --> 57:17.436
podcast. Exactly. Well, I'll put it to you this way. If they
57:17.936 --> 57:20.274
ever did, after hearing what we had to say, I would be interested in talking
57:20.774 --> 57:24.107
to them. Fair enough. Yeah. But I think that the mistake here
57:24.315 --> 57:27.513
is that if they had stuck with their plan.
57:28.348 --> 57:31.273
So this is product— this is what you would have done differently. Correct. If I,
57:31.385 --> 57:34.394
if I was, if I was looking at this brand and I was, you know,
57:35.024 --> 57:37.579
congratulations, you're the CEO of Breguet. Yeah.
57:38.484 --> 57:41.911
I would probably begin to trim the product line heavily.
57:43.500 --> 57:47.120
I would reduce the number of pieces and this would hurt initially
57:47.152 --> 57:50.740
because it would reduce my revenue. I would reduce the number of pieces I'm
57:50.870 --> 57:54.560
delivering to specific retailers, doing my best to make sure that they
57:54.576 --> 57:58.410
have modest stock, but that the majority
57:58.426 --> 58:01.811
of what's arriving are sold orders. And then I would
58:02.311 --> 58:05.678
slowly follow where
58:05.742 --> 58:09.898
those orders are coming from, what regions, and I would begin to reward
58:10.398 --> 58:14.213
those with specific higher order allocations. And I would use this
58:14.406 --> 58:17.967
to understand the market, meaningfully where my clients
58:18.079 --> 58:21.622
are who are going to pay full price, why they're doing that.
58:21.686 --> 58:25.390
I would spend time there. I would have collector dinners with
58:25.890 --> 58:29.848
those people. So I begin to have a relationship, I, the brand,
58:30.200 --> 58:33.599
with those clients more directly. Then I would
58:33.712 --> 58:37.031
open my new boutiques. Then I would start to
58:37.531 --> 58:40.766
move things to boutique exclusives. Then the,
58:40.863 --> 58:44.711
then the inventory would start to slow. And then I would say 5
58:45.211 --> 58:48.913
to 7 year plan. Correct. Maybe 5 to 10, depending on how
58:48.961 --> 58:52.858
it goes. But by the time— starts with the one thing Swatch
58:52.954 --> 58:56.146
Group has always had trouble doing. It starts with
58:56.739 --> 58:59.674
not cutting doors, but cutting production.
59:00.732 --> 59:04.004
Yeah. Look, there are some
59:04.116 --> 59:07.324
people— there are good people at Breguet. We know some of them. But it's,
59:07.468 --> 59:10.756
it's easier to call up a retailer and say, I'm closing your door than it
59:11.256 --> 59:14.060
is to tell your employee, I'm sorry, but we're cutting our product line and I
59:14.124 --> 59:18.084
can't employ you anymore. There's that too. But, but listen,
59:19.029 --> 59:22.123
I want Breguet to be successful because I
59:22.316 --> 59:25.522
think the brand is phenomenal and deserves it. Yeah, I think
59:26.022 --> 59:29.497
the watches are excellent. I think this is
59:29.513 --> 59:32.991
why I said the jury's still out on where we are with this new CEO,
59:33.056 --> 59:36.678
because it sure looks like he's making some really great decisions.
59:37.528 --> 59:41.215
And from the outside, it looks like he's moving too quickly on some
59:41.295 --> 59:43.749
other decisions. Decisions from the outside.
59:44.583 --> 59:48.095
You and I don't have whatever data is in that deck. They know
59:48.192 --> 59:51.239
better than us what to do with the brand, presumably. Maybe. Yeah.
59:51.961 --> 59:55.634
They have more information. I hope so. They have more information and context. Again,
59:55.746 --> 59:58.970
I hope so. But they certainly have more information than we do. Come on,
59:59.034 --> 01:00:02.691
man. Sure. But I guess my point is I
01:00:02.787 --> 01:00:05.899
want them to succeed, but for them to succeed,
01:00:06.653 --> 01:00:09.876
there is a lot of work on the relationship side that they have to do.
01:00:10.181 --> 01:00:13.051
And earn that they are not automatically entitled to.
01:00:14.028 --> 01:00:17.411
And my— and what I— and that is the distillation of the, of the,
01:00:17.475 --> 01:00:20.905
of the challenge here. Yeah. Is that they appear to be making the
01:00:21.405 --> 01:00:23.919
assumption that they are simply entitled to the business. Well,
01:00:25.250 --> 01:00:28.600
who knows? But I don't know. But look, the environment is in their favor
01:00:28.872 --> 01:00:32.143
as well. We've talked about the fact that at the top of this episode,
01:00:32.159 --> 01:00:35.813
the watch industry is remarkably stable. Breguet, to some extent,
01:00:35.829 --> 01:00:39.212
has nowhere to go but up. They're in and operating in
01:00:39.276 --> 01:00:43.124
a segment of the market that is growing, which is watches $50,000 and
01:00:43.624 --> 01:00:47.504
up and traditional classical dress watches.
01:00:47.680 --> 01:00:51.049
I mean, if there was ever a time for them to figure it out
01:00:51.065 --> 01:00:54.113
and get it right, this is their moment. And this is the moment in the
01:00:54.177 --> 01:00:57.707
broader industry for them, for them to do it. I want
01:00:58.207 --> 01:01:01.701
it for them. I really do. I just, I beg, I beg whoever is
01:01:01.814 --> 01:01:05.872
listening at Breguet, do not abandon the people
01:01:05.889 --> 01:01:09.000
who have kept this brand alive for the last 20 years.
01:01:09.913 --> 01:01:13.262
And for the love of God, don't play games with them. Yeah.
01:01:13.502 --> 01:01:16.562
Well, amen to that. I will say to the people at Breguet, hey,
01:01:16.643 --> 01:01:19.847
thank you for at least keeping it interesting. Amen. Yeah.
01:01:19.927 --> 01:01:22.410
You know what, actually, I'll go one step further than that.
01:01:23.356 --> 01:01:26.816
For years, you and I have talked about like the
01:01:27.316 --> 01:01:30.710
sleeping giant of Breguet or brands that could do anything but choose to do nothing.
01:01:30.806 --> 01:01:34.427
This isn't a brand that has that problem. Absolutely not. These guys are
01:01:34.927 --> 01:01:37.807
not wallflowers. They're taking a big swing. And look,
01:01:39.137 --> 01:01:42.422
actions have consequences. And you, like you like to say,
01:01:42.503 --> 01:01:45.611
you can't, you can't make a Tomlette without breaking some Gregs.
01:01:46.044 --> 01:01:49.569
You know, like they're, they're trying, they're going for it in an industry
01:01:50.069 --> 01:01:53.960
that generally doesn't go for it. Yeah. Right. So they deserve
01:01:54.460 --> 01:01:57.117
a hat tip, a hat tip for that. Let's see what happens.
01:01:57.165 --> 01:02:00.835
We'll see what happens. We'll leave it there. Thanks, of course, for listening.
01:02:01.011 --> 01:02:04.639
This is Open Work. It's a production of Collective Horology. You can find
01:02:04.704 --> 01:02:07.405
us online at collectivehorology.com.
01:02:07.713 --> 01:02:11.385
You won't find any Breguet watches there, but you'll find independent
01:02:11.433 --> 01:02:14.119
watches from over 20 brands. And look,
01:02:14.670 --> 01:02:17.891
we would love it if you would email us and get in touch with your
01:02:18.391 --> 01:02:22.585
suggestions and your feedback, your questions. And to do that, you can email podcast@collectivehorology.com.
01:02:34.887 --> 01:02:36.214
Yeah, I engrave you!