Thursday, May 26, 2016

Hold your Breath, Make a Wish, Count to Three

So fresh off a phone call with Yasmina Pedrini of Frederique Constant / Alpina / Ateliers deMonaco I am now better informed about what today's news from Tokyo really means.  To re-cap, Citizen has agreed to purchase Frederique Constant, Alpina and Ateliers deMonaco.  One important note, the purchase does not include MMT.

And to help illustrate it, I am going to call on Willy Wonka himself:

The suspense is terrible... I hope it'll last.

For some of us, the notion that Frederique Constant might be looking for a strategic partner / buyer was something we had been chewing on for the last year or so. This was not to say that we felt that Frederique Constant's business was bad. In fact, it was just the opposite - things seemed pretty good! As we all recall from our high school economics class - the time to sell is when the price is high!  If you are going to sell, you want to do it when you are in a position of some strength.  Frederique Constant had been making moves that at least some of us viewed as strategic in what appeared to be a preparation for a possible sale/acquisition/merger.

So we waited, many theories were bandied back and forth during BaselWeek at the Ramada and other less savory venues as to who the potential buyer might be.  And in all honesty, the idea of an investor from the east was in contention.  But the idea that it would be one from Japan?  That had not really occurred to most of us, despite how clever we like to think that we are.

I can't go on forever, and I don't really want to try. So who can I trust to run the factory when I leave and take care of the Oompa Loompas for me? 

Now to be 100% clear, I am in no way, shape or form comparing the FC/Alpina/Ateliers deMonaco staff to Oompa Loompas ; )

But in our conversation, Ms. Pedrini shared some very interesting points with me that shed a great deal of light on why Peter and Aletta Stas felt that the time had come to sell, and why they have structured the type of arrangement that they have.  Frederique Constant is a company, but a company that was built by a lot of hard work and passion.  They wanted the company to not simply cease to exist after they retired, so in looking for a possible partner or buyer, they wanted to ensure that the brand would live on.  

It also was clear to them that their children were not really interested in carrying on the family business as they had other passions of their own.  And it is refreshing to know that the Stas parents felt that their children should pursue what they were passionate about - even it it wasn't the family business.  So as it seemed clear that there would not be a successor, it was time to ensure the continuity of the brands.

So shines a good deed in a weary world.

Ultimately, it should be about people.  No one individual builds a brand, a brand is built by a group of people working together towards a common goal.  And this came up in my conversation with Yasmina.  Peter and Aletta Stas wanted to be certain that in selling the company, they would not simply be leaving their team high and dry.  There is no shortage of people with money out there who want to own a watch brand, so the challenge really became finding a buyer who valued the same things that they did.  And in Citizen, they found the right fit.   So to be clear, no redundancies, no terminations - things stay as they are.  The agreement is that the Stas team will stay on for five (5) years to ensure continuity and continue the projects that are already in motion.  In addition, the people behind the scenes will be staying on as well.  Now I am fairly certain that the number I heard was five (5) but in fairness I was making an espresso just at that moment (it was early here at Tempus Fugit HQ), but I am fairly certain that was the figure.

So when you look at this news, it should send shock waves through the industry - but not for the reasons that my more "well-fed/well-rested" colleagues would posit.  In fairness they've had a grueling week of day trips and heavy meals, so it's understandable that they might be a bit groggy this morning ; )

The shock waves are that the days of the mighty, all-knowing, all-powerful Swiss group might be over.  At a time where brands are laying off staff then spending millions on America's Cup sponsorships and the inevitable wining, dining and gifting that go along with it to keep the retailers and press members purring, this is a completely different approach.  This is a brand that put its PEOPLE above its own vanity.  Moreover, they put their people above making a fast sale.  For this alone, they should be commended and frankly, they should be seen as the example for how this type of thing should be handled.

Moreover, it really shows that it is not always the shiniest bauble in the jewelry case that is really the most valuable.  Citizen is now poised to become one of the biggest, most influential groups in the world.  Yes, that's right, Citizen.  Citizen may not be sexy, but they are rational, careful and thorough.  They are perhaps the most ideal stewards for the Frederique Constant stable of brands.  

And more than anything else - Congratulations to Peter and Aletta Stas and the teams at FC, Alpina and Ateliers deMonaco!

But Charlie, don't forget what happened to the man who suddenly got everything he always wanted. 

What happened? 

He lived happily ever after.

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