Issue 147: A Brief Note On The Entire Watch Industry
My take on what's up with the big brands, the indies, the retailers, the pre-owned market and the media all in ONE SINGLE EMAIL!
Hello and welcome back to The Fourth Wheel, the weekly watch newsletter that as you may have noticed from social media is finally launching a podcast! It’s something I’ve worked on with my old colleague and friend Tim Barber, so rather than being ‘TFW does a podcast’ it has a slightly different flavour and approach. You will hear all about it over the next few weeks, but it’s called The Watch Enquiry and it’s series (or season) based. We’ll bring you 6-8 episodes on subjects that fascinate us, then go away and make some more. If you’re subscribed here you will get every episode the moment it’s live, but if you also felt like following us on Instagram it would be much appreciated.
For those that missed it last week, here’s a short note on how I’ll be ‘doing’ Watches & Wonders and what you can expect.
I’ll be in Switzerland from March 31st to April 4th. If you see me do please say hi! During the week I’ll use The Fourth Wheel Instagram for immediate reactions to new watches - you may even find me making videos - and my current plan is to put out a newsletter on Saturday 5th with my first-take summary of What It All Means. It’s the first newsletter of the month so it will be free to all: what that also means is that I will save some of the juiciest gossip and more in-depth analysis for paying subscribers the following week. I’ll also be active in the Substack chat at least once a day, so if you have a question, ask it there.
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Here’s a little taste of what you might have missed recently:
Where do we all stand?
As I write this, the entire watch world stands poised and ready to descend onto Geneva. The lines of battle are drawn. The embargoes are preparing to lift. The endless prediction posts are nearly behind us for another year, thank God (along with their latest meta-iteration, the “Why All The Predictions Are Wrong” article). Somewhere in a bunker in Geneva, Baume & Mercier’s CEO1 is emerging from his cryo-sleep.
With the dramatis personae assembled, the action can soon begin. We open on a scene of great turmoil and unease. Reasons to be confident are sparse, and everyone is looking over their shoulders. Let’s begin.
The big groups and prestige brands
The overriding narrative for big group brands as we head into Watches & Wonders has been change. It’s becoming harder to name a major watchmaker at LVMH or Richemont that isn’t fielding a new CEO, or going into bat without one at all. At LVMH, it will be a first W&W for TAG Heuer CEO Antoine Pin, while rumours around Bulgari CEO Jean-Christophe Babin’s long-term future will, I expect, continue to swirl. One wonders how - if at all - the various brand bosses’ lives have been changed by the abrupt exit of Frederic Arnault to Loro Piana. The quiet luxury brand is rumoured to be in fairly big trouble, so just a year after taking the reins at LVMH’s watch division to great fanfare, the second-youngest Arnault is off to hopefully spearhead a recovery. It leaves a vacancy that may or may not be filled at all, with Stephane Bianchi the calm hand at the tiller of the Watches and Jewellery division.
Richemont has rotated the top jobs at Vacheron Constantin, Jaeger-LeCoultre and Panerai in the last six months, most dramatically hoicking Jean-Marc Pontroué out of Panerai only a week ago. Those are three of the four main brands in the under-performing Specialist Watchmakers division, which makes me think IWC CEO Christoph Grainger-Herr might be feeling the pressure. Winning the big prize at the GPHG last year might have bought him some time, but with SWM brands looking likely to post double-digit decline for ‘24-25, picking up big prizes for hero calendars isn’t as important as shifting units of everyday watches. (The division was -16% in H1 2024 and rallied to -8% in Q3, but that’s Christmas, so you know it’s the best the year is going to get). Elsewhere in the group things may be worse than Morgan Stanley has calculated; word reached me this week that Montblanc’s annual production, far from the 68,000 the MS/LuxeConsult report estimates, could be down in the mid-teens. Ouch.
Patek Philippe comes into W&W with the Cubitus launch furore a distant memory for most. I would be extremely surprised if it adds to that range again so soon. Outwardly all will be serene but the question marks that whole episode placed over Thierry Stern’s design acumen and public relations management (aka ‘haters can do one, I’m in charge’) will swiftly return if this fair isn’t a knockout. Internally, the company is bound to be reeling from the bizarre and disturbing campaign of parcel-bomb attacks and other violence threatened against employees and related individuals over the last year, which were accompanied by increasing ransom demands. In March, Swiss police arrested a 61-year old man in relation to the alleged offences. Hopefully that’s the end of that; what was behind it, we may find out if it makes it to court but you never know.
Away from the fair, Brietling has just capped off a busy March with the announcement of its first ever in-house automatic calibre, the B31. It makes its debut in the Top Time 38mm automatic (a handsome watch for sure, and an interesting rival to Omega/Rolex/IWC’s entry-level models) and raises some interesting possibilities. Presumably it will be the base calibre for more complicated models in due course - perhaps the base calibre for Universal Geneve’s re-boot, although if this is the direction Breitling will have to work hard to differentiate it. I doubt it will be cheap enough to be used in Gallet watches, although maybe there will be a top-end Gallet that slightly overlaps with entry-level Breitling.
It also calls into question the deal set up between Breitling and Tudor back in 2017 to buy movements from each other; the B01 chronograph heading to Tudor and the MT5612 automatic heading in the other direction. The B31 and MT5612 are incredibly similar in spec: both 4Hz chronometer-certified full-rotor automatics with a quick-set date and decent power reserve (70hrs for Tudor, 78hrs for Breitling). The B31 has a free-sprung balance (which I promise you no-one buying a £4,500 watch is really going to care much about either way) and is decorated in a much more traditional way. Assuming this puts an end to Breitling’s purchases from Kenissi, my question is: will it still sell chronographs to Tudor? Or is Tudor about to unveil an in-house chronograph movement in a new Big Block, rendering the deal null and void on both sides? Unlikely given the Big Block of old was a 6-9-12 layout, but you never know.
Swatch Group will obviously be absent from Geneva - President Nick Hayek Jr recently told Der Speigel he had no regrets.
SPIEGEL: In two weeks, Watches and Wonders, the world’s largest watch fair, begins in Geneva. Do you regret that Swatch Group brands are not represented?
Hayek: No, we have said goodbye to these elitist fairs. These watch fairs, where so much money is spent to build palaces, were important in the past when you had to meet dealers. Today, things work differently. The end consumer is the focus. Most of our products are sold via e-commerce or our own stores. Besides, we don’t want to be tied to presenting novelties just once a year. We don’t need to be at fairs where everyone is trying to show they are the most beautiful.
It feels odd to me: Omega may be fine, but the likes of Breguet and Blancpain could surely do with the visibility. I’m sure the money saved is welcome, but can you put a price on the impression that you don’t matter? If you didn’t want to enter a beauty contest, the luxury goods sector maybe isn’t for you, and the idea that you can only launch new products at W&W is a straw man; literally only Rolex follows this strategy. Maybe this year we’ll see the Swatch Group brands actually take part in Geneva Watch Days. Hayek’s claim that Swatch Group does most of its retail online or via its own stores is interesting (by which I mean misleading) and I’ll come back to that shortly.
On the subject of Swatch Group, it doesn’t seem like any non-exhibiting brand has a pre-show spoiler up its sleeve this year. Dangerous to type that on a Thursday when there is still time, but I’m reasonably confident. A pink MoonSwatch isn’t quite going to cut it (although anyone wearing one in Geneva will still turn heads), but it’s nice that they’ve added quick-release bars. I know Audemars Piguet is announcing a few new watches on Monday 31st - can’t say what, obviously - but they’re not going to have you falling off your chair.
At this level, I am expecting a pretty conservative wave of new releases. Obviously I don’t have a clue about Rolex, Tudor or Patek Philippe, but as journalists we do get advance sight of almost everything else. I expect rumours to continue to circulate about a tectonic shift in the luxury group landscape; we see Breitling building a group by exhuming dead names but others will find it easier to simply purchase existing brands.
The second-tier / mid-market brands
The squeezed middle. It’s a tough time here. I’ve written before about how certain brands have been well-placed to step into the price vacuum left by the real premium brands - TAG Heuer, Omega, Breitling etc - moving upwards to mostly sell above £5,000. But the problem for an Oris or similar brand looking to occupy the £2,500-£5,000 gap is that being priced like TAG Heuer used to be isn’t the same as having the brand power and retail clout that TAG Heuer has. I think there are brilliant watches to be had from Oris, Nomos, Frederique Constant, Rado and so on - but that’s coming from me, someone who really knows about watches. To the high street customer, they see names that aren’t familiar. In the main, these brands can’t match the brands they’re trying to replace in terms of marketing expenditure - or if they can, like Tudor, they aren’t quite getting the story right (see last week’s issue).
You end up with an undesirable situation, which is that your brand becomes fixed in the consumers’ mind as one that’s always on sale - that is to say, not just available but available at a discount. This is a problem for Oris, Raymond Weil, Maurice Lacroix, Junghans, Bremont, Hamilton, Frederique Constant and others. (As discussed below, it’s a problem for more prestigious brands right now as well).
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