Sunday, January 26, 2014

You Have to Punch Your Weight

So, with the fate of a few formerly well-known watch firms circling the toilet bowl of temporary inactivity/future insolvency, I find myself reflecting back to the 60s and 70s when things were not quite so vulgar, not quite so inflated.  A brand tried, failed, went into receivership and closed.  Simple.

Of course, most of us have memorized by heart the ballad of the Swiss watch rescue.  And if I am very, very honest about it, that was perhaps the blueprint of how these things should be handled.  Unfortunately, things are different now.  Now there is ego, there is too much easy money, and there is far too much impatience.

What do I mean?  Well, let's take brand X.  Brand X has come a cropper not once, not twice, but three times - that we know of.  I say that we know of, because in the modern day shell game of watch brands and branding, watch executives and owners of the smaller brands are always looking for the next mark to stroll down the boardwalk and walk into their tent, ready to flush more money down their brand's toilet.

I will never forget hearing about Brand X's marketing approach.  They were very cocksure.  And it was clear to me that they didn't know what the hell the idea of the brand really was.  And now, the entire brand has been turned on its head - management out, distribution (apparently) "deader than Julius Caesar".  The collection that was, we were assured by the brand ad nauseum, the epitome of luxury.  "And that's why it's worth $10,000!"  (Insert smarmy smile here).  That was less than four years ago.  And now the sound we hear from the brand is the sound of crickets - and no, not the good kind.  Those rare, desirable $10,000 horological masterpieces have now found their way to Ebay after efforts to offload them on the grey market didn't work.  Ebay, where people who once extolled the virtues of the brand are now flogging the remaining pieces through poorly disguised Ebay stores for 25 - 50 cents on the dollar.  Clearly, whoever is offloading these "rare and valuable timepieces" doesn't care if they are helping deal Brand X the death blow, as they are intimately involved with the liquidation.  This leaves me with a burning question -

How do you think that makes the person who paid full-pop for that watch feel now?
Probably like a dumb asshole.

So Brand X, and the rest of you watch companies out there reading this - You've Got to Punch Your Weight.  Turn down the volume on the Bullshit Machine.  And one other thing - Rome (and frankly any decent watch brand) was not built in a day.  Show some F^%*+ing patience!  Make sure you have enough pocket money to cover yourselves.  And maybe you could start by not shooting your wad on flying first class and staying at the most expensive hotels in town when you are essentially in start-up mode?  I know, you're important, you deserve it!  But I suspect that your investors are not too impressed when they discover how much of THEIR money you have poured into boosting your own egos, and ensuring your comfort.  Achieve buy through and SELL THROUGH, then we can talk about "Gordon Gecko" style perks.

Punch Your Weight.  When you start having turnover like the Richemont group - THEN you can blow your shareholders money on ridiculous waste like first class travel and brain dead partnerships.  And yes, when only four years into the proposition you are having the fire sale to end all fire sales, it is clear that your insistence on a luxurious lifestyle was not supported by your ability to market and sell watches - which was frankly the point of the whole exercise from the get-go.

So as Brand X swirls around the toilet bowl and heads for the sewer, don't worry.  The distributors, like any good hustlers, will move onto the next mark.  And have no doubt, someone else will be waiting to pump their hard earned money into a Potemkin Village, or watch brand like Brand X.  There are two things you can count on -

1.  Somebody will always have an ego that outstrips their abilities
2.  As Gordon Gecko famously reminds us, a fool and his money are lucky enough to get together in the first place!

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