The Fourth Wheel, Issue 117

Fresh detail on Chanel's investment in MB&F, and a certain Geneva giant has been reshuffling its executives on the quiet

Hello and welcome back to The Fourth Wheel, the weekly watch newsletter that is, at the time of writing, fending off would-be investors with a stick. Sorry plutocrats, I’m taking my 100 per cent shareholding of this baby to the grave. Succession plan? Not for me. We can’t all be so short-sighted, however: you will most likely have heard the news that Chanel has bought a 25 per cent stake in MB&F this week. It’s all very well for a watch to be waterproof and shock-proof, but what a watch brand really needs to be is future-proof¹, and this deal makes it more likely that MB&F will still be here in fifty years’ time (putting the legacy in Legacy Machine, etc etc). The announcement prompted plenty of questions, so I’ve spoken to the brand to get a bit more detail on what might, and might not, be on the cards for the short, medium and long-term future. First though, I’ve got news from a rather bigger Genevan watch brand…

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The Fourth Wheel is a reader-supported publication with no advertising, sponsorship or commercial partnerships to influence its content. It is made possible by the generous support of its readers: if you think watch journalism could do with a voice that exists outside of the usual media dynamic, please consider taking out a paid subscription. You can start with a free trial!

Here’s a little taste of what you might have missed recently:

James Thompson: Not Just ‘The Lume Guy’
Unsung Heroes: The Best Watches You’ve Forgotten Exist
Five Things Hodinkee Should Do Now
Ask Me Anything: Vol. 11
World Exclusive: Horological Dicktionary On The Record

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Meet the new boss; same as the old boss

One of the biggest watch brands in the world appointed a new CEO recently, and you had no idea. Not a clue. Not a whistle from WatchPro, not a hint from Hodinkee, nothing. Even Wikipedia doesn’t have this scoop².

I’ll tease it out just a little bit more. Fifty watch nerd points if you know who Claude Peny is. Claude Peny is - or was - the answer to one of my favourite ‘trip-you-up’ questions: who is the CEO of Patek Philippe?

If you said Thierry Stern - unlucky. He’s the president, and unbeknownst to a great many people in the watch world, there’s a CEO beneath him. Until recently that position was held by Claude Peny, but in July Peny stepped down to make way for Laurent Bernasconi. There was no press release, no fanfare, no email - nothing. I found out because that’s my job, but to all intents and purposes this was a non-event.

That’s a weird thing to say about the most prestigious mainstream watch brand changing its CEO, but it’s true. Thierry Stern runs the show; he’s the figurehead, the public face of the brand as well as its outright leader. (In a statement, Patek Philippe said that “Patek Philippe is managed by a board of directors composed of Honorary President Philippe Stern, President Thierry Stern, CEO Laurent Bernasconi and Claude Peny member of the board.”)

That’s right - Peny hasn’t gone to another brand, but taken a seat on the board, which might just be a stepping-stone to retirement, I dare speculate. When Thierry Stern became president in 2009, as his father stepped back from the day-to-day running of the company, the brand’s ‘management committee’ was just the two Sterns and CEO Claude Peny.

Bernasconi, like Peny before him, has been with the brand a long time: he joined the company in 2004 from Richemont, where he briefly worked at Roger Dubuis and before that, Baume & Mercier (quite the step up, then). In 2023 he was promoted to general manager, which I think is more or less one rung below CEO, and now has moved up again. In 2023, Business of Fashion reported that Bernasconi’s promotion was “part of [Patek Philippe’s] succession planning process” - so I asked the brand if this was true. The answer came simply that “the position of President held by Mr. Thierry Stern is not to be filled.” Which is both answer and not, and no less than I would have expected. Mr Stern has spoken of his desire to keep ownership within the family, telling Forbes in 2019 that “In our family, we don’t just pass the watches down the generations. We pass the whole company.” However, his children may not be ready to run the brand by the time he decides to step down. His sons are, I believe, 21 and 23 right now³; Thierry himself was born in 1970 so could quite conceivably serve for another 10-15 years at least before handing on the baton, but nevertheless, an interim president might one day be needed. In the same Forbes article, Stern says “They have to decide what they would like to do; I’m not obliging them. I didn’t have children just so they could take over Patek.”

Of course, you can ask how much this matters, and I'll readily admit that it doesn’t, really. When the CEO isn’t the man or woman at the top of the pile, it’s just another job title, and executive moves below the big boss aren’t usually that notable, especially when we’re talking about one long-serving safe pair of hands taking over from another. I find it mildly interesting that despite all that, the ‘CEO’ can change and no-one be informed, but that’s all part and parcel of running a privately-held Swiss company - you don’t have to go around telling people what you’re doing if you don’t want to.

Eau d’Independence

Now, a short (but inevitably expensive) taxi ride from Plan les Ouates to southern Geneva and the MAD House of MB&F, which by the standards of watch brands is actually incredibly happy to tell people what it’s doing - mostly. Thanks to the team there for answering my questions so rapidly on what I suspect was a reasonably busy day.

It’s the LM Split Escapement, because why not?

You know the headlines: Chanel has bought a 25 per cent stake in MB&F, for an undisclosed sum. (I asked, and it is remaining very much undisclosed. SJX speculates that the deal values MB&F at CHF120m). This makes MB&F the third high-end independent brand in which Chanel is a minority investor, and the fourth brand overall - Bell & Ross being the first in 1998, followed by Romain Gauthier in 2011 and F.P. Journe in 2018. According to Bloomberg, MB&F sold CHF45m of watches in 2023.

The statement from MB&F says:

“Chanel’s minority stake ensures stability and resilience with a strong strategic shareholder, sharing the same values and guaranteeing that MB&F’s long-term strategy will be maintained.

Maximilian Büsser comments: “It was our responsibility, in today’s very favourable context and with our management team in its prime, to take this major step to ensure our long-term future – a natural evolution for a company celebrating its 20^th anniversary next year. In addition to allowing us to pursue our independent path, free of any pressure on growth, the investment by Chanel will strengthen our operations by providing access when needed to their wider ecosystem and network of specialized suppliers”.

It has been less than 12 hours since this news landed and I’ve already read a vast amount of blind speculation about what it could mean. I love a punt in the dark as much as the next man, but in a controversial move, I thought I’d actually ask MB&F themselves. Will this lead to a buy-out? There might not be pressure on growth, but will there be growth nonetheless? Is MB&F going to start making calibres for Chanel watches? Read on…