Sunday, July 31, 2016

Field Trip in Search of Made in America - No, Really!

Okay, with all of the white noise as to who may (and possibly may not) be making things in the US of A in the world of watches,  I thought I would take a few wee field trips in search of things that were genuinely made here.  So yesterday afternoon found me speaking with Ian Hunter and Jesse Brenneman, the co-founders of Deacon Giles Distillery in Salem, MA.

Co-Founders Jesse Brenneman (left) and Ian Hunter (right)

Mr. Brenneman and Mr. Hunter did not set out with the goal of going into the business of making spirits.  They had met while working for the Harpoon Brewery in Boston.  I am a particular fan of Harpoon's IPA -

Courtesy of Harpoon Brewery

While working together at Harpoon, they talked about working together on their own thing.  Beer and the brewing of it seemed like a natural move.  But as Mr. Hunter shared with me during my visit yesterday, there was an even more unique opportunity afforded them in the distillation of spirits - particularly rum.  Ian had heard a legendary Salem tale of a distillery staffed by Satan's minions, and while on an anniversary trip to Bermuda with his wife, the idea gelled and it was "go time" for Deacon Giles Distillery.

And it is a pretty cool story, so here is a little historical information for you:
Salem, MA (my new hometown) was at one time a major manufacturing center for rum as were many coastal towns in the area.  You might say that these towns were to rum manufacturing and distribution as La Chaux de Fonds and Biel are to watches and parts.  Now it is also important to bear in mind that Salem was the location of a rather unfortunate chapter in colonial American history otherwise known as the Salem Witch Trials.

Now take those two competing interests - temperance/purity vs. commerce/fun and throw in some good old fashioned rivalry and jealousy?  Now you have the story of the Dream of Deacon Giles.

For a more in-depth telling of the tale, I will refer you over to Salem based professor and historical writer Donna Seger who writes the much admired Streets of Salemhttps://streetsofsalem.com

And here is a link to her piece on the story that inspired the creation of the Deacon Giles Distillery -
Demon-made Rum in Salem.



The tasting area of the Deacon Giles Distillery
A brief summary is that a local distiller (and deacon of the Unitarian First Church) named John Stone found himself the topic of a less-than flattering essay drafted by local man of the cloth  George Barrell Cheever.  I refer you to the retelling offered by Deacon Giles Distillery -


Who Was Deacon Giles?

The story of Deacon Giles was originally written as a temperance tract, here in Salem, circa 1835. This story inspired us to revive the art of distilling in a town once rich in both trade and spirits, but sadly devoid of distilleries for the last 100 years. As the story goes...

Cheever-circleAmos Giles was an impious man, distilling rum on the Sabbath, paying his employees with liquor and selling bibles from his counting room. After his employees finally walked out in anger, he unknowingly hired a gang of demons to operate his distillery. The demons decided to play a trick on Old Deacon Giles, secretly branding his barrels with messages of damnation that glowed with an unholy light when tapped. This story, first published in 1835, was purported to have been a vision of George B. Cheever, a young firebrand minister in Salem who went on to be a leader in both the temperance and anti-slavery movements. The story created a great uproar, as it was apparent to most that it was a thinly veiled lambasting of a popular local businessman. Cheever was whipped in the street and convicted of libel, but his story was reprinted numerous times under the title, “The Dream, or, the True History of Deacon Giles´ Distillery.”

Okay, so that's the background.  

On to the distillery -


Ian was kind enough to give me a personal tour of the facility.  And unlike some watch companies where it is more of a "don't ask, don't tell", I got to see the whole shooting match.


And believe me, this is not a garage operation. There is a pretty impressive array of equipment in a fairly expansive area.


Ian was also kind enough to give me a primer on how Deacon Giles makes both rum and gin. It was really interesting, and a bit too involved to go into in any detail here.  But I highly recommend the tour.


At Deacon Giles Distillery they offer a gin which was AMAZING, as well as a rum -



Which I highly recommend.

So I would encourage you to visit the guys at Deacon Giles if you are in the area.  After spending the past few weeks feeling more like an investigative reporter than a blogger while trying to obtain even a shred of verifiable information in the watch business, it was refreshing to meet two honest, straightforward guys working to build a business based on actual products, that they actually produced, and that they actually sell.  Pretty wild idea, huh?

Stay tuned, more field trips are being scheduled.

Saturday, July 30, 2016

The Rules of BaselWorld - PR Agencies, Do Your Homework

This originally ran back in February.  But it seems to still be relevant.
As we get ready for BaselWorld it seems that it is a good time to offer an update on the rules of BaselWorld and blend in some of the new unspoken language that accompanies it.

Rule 1 - PR Agencies - do you f*&cking homework!  In many instances you are receiving truly staggering amounts of money with the expectation that you just might INCREASE a brand's message.  One of the best ways that you can do this is to actually ENGAGE with writers, influencers, etc. who are NOT already on the list that you put together 5 to 10 years ago.  Believe it or not, there are more people covering watches than Hodinkee, A Blog to Watch and Timezone.  Moreover, consider that if you are representing a smaller brand, you will need to depend on as many different outlets as you can to get the message out and then continue to build and strengthen that relationship.  It is, of course, far easier to just hit the send button, but quite honestly a brand can do that on their own.  Earn your pay.

This is paired with our first entry in this year's unspoken language of BaselWorld -
From the head of a newly retained PR firm:
"Hi James!  Long time no talk to!"

True meaning -
No, you are not on my list, I have absolutely no idea who you are, and I'm only sending this because the brand that is paying me informed me that apparently I now have to communicate with you...
Yes, it truly has been a "long time" as FOREVER is a mighty long time ; )

Do your homework, be engaged - and be genuine.  Because I did receive that message from the head of a PR firm who has never met me, never communicated with me, and ignored multiple previous requests to be added to press lists, BaselWorld appointments,  etc.

A message like that only reinforces the impression that the agency has no idea who they are actually communicating with, and leaves the recipient of the message the strong feeling that they are incredibly disingenuous and the they will most likely have to constantly contact the brand to get any sort of press release, BaselWorld appointment, etc.

Why Settle for Ordinary?

I have been a big fan of Angular Momentum / Manu Propria since even before I started Tempus Fugit.

And I have written about Martin Pauli's work a fair bit.  In truth, the point of this blog is not to write about my personal collection, but there are three items of his creation that I personally own and continue to get great joy from so I thought I would share them.

Holding pride of place is the  Splendor Sangre -


This is from Mr. Pauli's Splendor collection.  The case measures 43 mm in diameter, the movement is a NOS hand winding movement. The dial is red lacquer and it is stunning.  It is warm, passionate, vibrant. And truly not every one's baby, but I adore it. And no, it is not political ; )

Apologies for the dust on the crystal, but that is what it actually looks like when it is actually on my wrist and actually being used.

A few years ago, Mr. Pauli diversified his offerings and began crafting pens.  And before you ask, no, these are not your typical pens.


Now it is important to understand that this is one of the earlier efforts - which I think is fantastic!  But like any true artist working with his hands, Mr. Pauli is constantly in pursuit of perfection and owing to this, he continues to push the envelope providing even more beautiful offerings with each pen he creates.

His latest creations can be found here -

And the last item is another story altogether. We have all heard of "wicked stepmothers" thanks to the folks at Disney, but I'm here to tell you that they do exist, although not necessarily in far off lands, but as near as Jackson, TN.  A pocket watch of museum quality that would make a wonderful addition to any institution's permanent collection that will probably never see the light of day again.  Promised to others it is held on to with grasping, clutching, unyielding hands, it will sadly likely end up in a pawnshop, hocked by a needy hillbilly relative of the aforementioned step mother. 

But sometimes you have to take the bull by the horns and create some new traditions. So step one was to find a pocket watch - which I did. A NOS model from the 70s/80s, branded Bucherer (as in the jewelry store, not the brand of today).  I showed it to Mr. Pauli at BaselWorld in 2014. I wanted something with the Martin Pauli aesthetic, but a bit "different".  And together we came up with the idea of doing the dial in blue with stainless steel indices and hands. And the result is truly unique, truly wonderful.


So this one will be passed on to a future member of "Team Henki", and will hopefully not end its days next to a tin of Skol in some backwoods meth lab.

Clearly, I'm not bitter ; )

I really treasure these three pieces because they remind me that this is the way things used to be, and frankly the way that they could still be.  Back before "sincerely authentic" heritage stores popped up and "fauxthentic" became the norm with hipster-hucksters trying to sell us a nickel for a dime.  And perhaps I am tired of all the bullshit being foisted on us in the name of "authentic" when I have no proof to balance against that claim.


The world needs more Martin Paulis out there, doing real things with their hands, creating mechanical treasures powered not only by gears and springs but by imagination. Taking the time to create unique, wonderful, timeless - and DURABLE watches and pens that will last more than just one lifetime. And I for one hope he keeps continuing to make wonderful things that have true quality, true beauty and true value. It helps balance all the "artisanal hyperbole" originating closer to home.

Friday, July 29, 2016

Back to Bauhaus

From Stowa -

Courtesy of Stowa
I did a review of the Stowa Back to Bauhaus nearly a year ago - http://www.tempusfugit.watch/2015/10/seven-plus-days-with-stowa-back-to.html


As I said then, it is a fantastic watcher the money.  So as it's summer, here is another look at the Antea B2B (Back to Bauhaus), in green.

Here are the pertinents -

Case

Diameter:

35,50mm

Height:

6,90mm

Strap width:

18,00mm

Lug-to-Lug size:

44,60mm

Waterproof:

up to 3ATM 

Weight:

41 gr. (leather strap), about 85 gr. (metal bracelet)

Materiality

Case:

Stainless steel, polished

Dial:

different colored printed

Hands:

black or white lacquered

Movement

Caliber:

Peseux 7001

Mechanism:

mechanical, manual wind

Specific features:

screwed caseback

Wednesday, July 27, 2016

In the Pocket

I get a lot of press releases, some more interesting than others, and this one definitely got my attention.

Courtesy of MeisterSinger

MeisterSinger refers to their new model as the Wallflower.  And while pocket watches can be found both old and new, the fact that this is a one-hand version 

Courtesy of MeisterSinger

It is available in 2 different versions, a white dial and an ivory dial.

Courtesy of MeisterSinger
The watch is manually wound, utilizing the Unitas (ETA) 6498-1.  

It is really quite special.







Tuesday, July 26, 2016

On the Shoulders of Giants

This piece started out life as an effort to get clarity on a new watch movement that the manufacturer asserts is 100% made in America (save hairsprings and jewels).  Questions on the specific origin of specific parts was met with -

We have no further comment at this time.


And fair enough, but then I thought it might be a treat to look at the watches of a true master watch maker working away without a great deal of hyperbole or hype -


Courtesy of RGM

Courtesy of RGM

Courtesy of RGM

The last one above is my personal favorite - the Model 222 

Here are the pertinents -

The Model 222 is a modern wristwatch with a vintage Hamilton 10 size pocket watch movement at its heart.  RGM was the first to use these wonderful classic movements in a wristwatch.  Unlike others, our movement is rebuilt using only parts that are in optimum condition, including a new mainspring we had made, then we hand polish the steel parts on a tin block to better then original condition. The movement is carefully reassembled and adjusted by one Watchmaker.   The 921 movement has 21 jewels and was made in large quantities, the 923 movement has 23 jewels and is rare with less the 4000 movements manufactured. The finish on the 923 is different then the 921.
Movement Caliber: American Made Hamilton (921 or 923) - 10 Size - Manual wind, 21 or 23 jewels,  18,000 vph. Rhodium, Circular Damaskeening.
Functions: Hour / Minute / Second 
Case: 316L Stainless Steel, 41.0 mm x 12.0 mm. Sapphire crystal front and back, 22mm lug width and water-resistant to 5-ATM.
Weight: 2.9 oz. 
So, we'll be saving some pennies for one of these beauties.



Monday, July 25, 2016

Don't Crack Under Pressure - Manchester United


Well, given the less-than-stellar performance of the Red Devils over the past few years post Sir Alex Ferguson, I'm afraid that Man U has already cracked.  But this is a new season, so hopefully things might turn around.

Courtesy of Tag Heuer
Partnerships are exciting and fun, and by all accounts Tag Heuer is looking to get into the consciousness of every football fan in the world through sheer force of will and Swiss Francs spent on partnerships and ambassador deals.

Well, it's their money and they can spend it as they see fit.  And I know I am an idealist, but here's hoping Tag Heuer will take, I don't know, maybe 1/1000th of what they spend on cozying up the the professional elite and spend it on a grass roots soccer program in a third world country that does not require millions of pounds in fees, tens of thousands in print and digital advertising, and champagne receptions.  And I know I'm naive, but wouldn't it be nice if they just did it?  Because really, it's the opportunity for young players that is exciting, and these kids (unlike United's first team this past season) don't crack under pressure.  So Tag - pitch some money to some people who actually need it. You can still throw millions around on vanity projects, but the goodwill you will gain will live on long after "the Special One" has moved on to his next managerial role ; )

Sunday, July 24, 2016

And the Bottom

Has apparently still not been reached -



Courtesy of The FH

As the numbers released last week indicate, there was an even sharper drop this past month than the previous ones.

So it is fair to say that the pain is not just with SWATCH Group, the pain is all around.  But what the export figures do not tell us (apart from actual sales) is the flow of watches coming back into Switzerland.  Because, dear readers, watches flow both ways.  

One of the negotiating tools used by the sales reps and brand manager is the "buy back".  Essentially, the proposal is this:

"Buy 25 pieces, and if you can't sell them, I will exchange them for different/new pieces".

And as we know from the dazzlingly poor sales figures, that means there are A LOT of watches being swapped out and exchanged for "new".  But what happens to these little orphans?  

Well, not to worry!  They are either gathered up and shipped off to the grey market, or they are returned home to Switzerland where a few possible fates await them -
1.  They are refurbished with the hope that they can be re-deployed to different markets as new.
2.  They become organ donors, with their constituent parts harvested so that new watches might live!

This is all by way of saying that as bad as things seem in light of the FH results for export numbers, they may be even worse than appears.

And this brings us back to the question - do the steely-eyed missile men and women heading up these enterprises really understand the seriousness of the situation?  With more and more money being dumped into vanity projects, yacht sponsorships, celebrity "Game Changer" partnerships and more and more money being lost in under achieved sales results how long can this plan continue to spool out before it becomes impossible to move forward?

Too Big To Fail is a wonderful motto, designed to provide comfort during stormy times.  But it is proving more and more to be a moral hazard of the first order - CEOs, brand manager, heads of marketing keep writing the checks, because frankly, it's not their money.  And until there is a "Come to Jesus" reality check, the very people who are meant to be the stewards of these August organizations will be the "idiot "sons and daughters who sail the boat right over the cliff, straight down to the rocks below.

So in closing, let's turn to Gordon Gekko in Wall Street for a better understanding how a lack of direct ownership and/or accountability can lead to failure -


Gekko: Well, I appreciate the opportunity you're giving me, Mr. Cromwell, as the single largest shareholder  in Teldar Paper, to speak.

Well, ladies and gentlemen, we're not here to indulge in fantasy, but in political and economic reality. America, America has become a second-rate power. Its trade deficit and its fiscal deficit are at nightmare proportions. Now, in the days of the free market, when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company!

All together, these men sitting up here [Teldar management] own less than 3 percent of the company. And where does Mr. Cromwell put his million-dollar salary? Not in Teldar stock; he owns less than 1 percent.

You own the company. That's right -- you, the stockholder.

And you are all being royally screwed over by these, these bureaucrats, with their steak lunches, their hunting and fishing trips, their corporate jets and golden parachutes.

Teldar Paper has 33 different vice presidents, each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents.

Saturday, July 23, 2016

Summer Re-runs - A Few Minutes with Lionel Ladoire

With the situation in the Swiss watch business getting worse every day, and some of the "fatter" cats still holding on through guile, misdirection, or a particularly large amount of cash, I thought it might be interesting to revisit a brand that had all of the potential to do something amazing, but sadly didn't catch the right breaks at the right time.  Lionel Ladoire offered some unbelievably cool watches that were in demand for a time, and much discussed.  Sadly, Ladoire could not keep going and he has since moved on.  But for a time he was right there on the edge, making exciting things.


So let's revisit this talented guy -

A Few Minutes with Lionel Ladoire

Professional snowboarder, watch maker, rock musician... Renaissance Man!
And now, a few minutes with Lionel Ladoire -



James Henderson What was your first watch?  Was it a gift?  Is there a story behind it?

Lionel Ladoire - My first watch was a gift.  I received a Casio Vintage Sport when I was 10 years old. There is no special story behind it.



JH - When you were a young boy, what did you want to be when you "grew up"?

LL - I wanted to be everything I am today.



JH - Where did you go to school?  What did you study?

LL - I am a graduate in jewelry of the SEPR in Lyon.  After that, I went to the Ecole Boulle, a major reference in the teaching of art, applied art, design and craft in France.



JH - How did you get your start in the watch industry?

LL - It came naturally as a combination of my early years/family exposure to micro mechanics on the one hand, and to jewelry (my family was also involved in this sector for the last 4 generations) on the other hand. Watchmaking borrows from both.



JH - So from working in the family business to professional snowboarding - that is quite jump.  How  did it happen?

LL - Working in the family business was something natural for me.  Then I became a professional snowboarder because I always loved this sport.  If I like to do something, I find a way to do it; I do things spontaneously. 



JH - What was the best part of competing professionally?  Are there any great victories that stand out?

LL - Among all activities that are available to professional snowboarders, I most preferred free riding contests as they are (almost) without rules, while Slalom is much more limited by the rigidity of its own purpose.  Once I won the parallel slalom Championship of France.  But I didn’t feel accomplished. Then I became a professional free rider.



JH - And it seems your interests extend beyond horology and snowboarding - how did you find the time to become such a successful drummer?

LL - My grandparents used to work while listening to music.  And during my learning years next to them I could already see how a working musical atmosphere can contribute to better deliverables, as somehow musicality enhances the creativity.  I started playing the guitar and smoothly moved to drums. I have a strong preference for Rock music.  When I reached 24, I realized that my body was asking me to slow down the snowboarding practice and competition.  I then focused on playing music, and again, mostly drums.  The real thing about being a musician is that I don't encounter any physiological limits - the body has nothing to do with it - with practice, I am still improving.




JH - So what drew you back to watch making?  Was it difficult to make the adjustment after the excitement and adrenaline of being a professional athlete?


LL - You can’t be a professional athlete all your life, and then at 24 I was becoming “old”.  Moreover, I love challenges.  Consequently, I naturally changed my way.  It was not difficult to make the adjustment. High performance sports build character.  If you desire to excel in sports you need perseverance.  To be on top you have to train every day otherwise you will never reach the level you want.  The perseverance I gained by being a professional athlete is an important skill now that I run LADOIRE.



JH - So what makes Ladoire LADOIRE?

LL - Among the brands having a modern approach, LADOIRE is one of the few brands that fully integrates the development and manufacture of its own automatic calibre for all its collections. LADOIRE is a true watchmaking brand, not only a futuristic watch design brand.

I also "imported" from jewellery a very unique technique of design.  At Ladoire we do not use CAD, but directly sculpt the shape of the watch in wax.  This technique enables us to create complex and well balanced 3D shapes.

All components, line and finishes are designed and thought of like a piece of art.  While working on metal, we are bringing balance between the design line and the material.  Lastly, the LADOIRE creations are 100 % Swiss made. 



JH - What is a typical day in the life of Lionel Ladoire?

LL - There is no typical day for me; there is a surprise every day. Some days are better than others but I always live like it is my last one.



JH - Who else out there is making watches that interest you?

LL - I appreciate URWERK and Richard Mille for their futurism.  In terms of neoclassical approach I like De Bethune and F.P. Journe.




JH - With so many talents, it might be hard to answer - but if you weren't doing this, what do you think you might be doing?

LL - I would open a motorcycle custom garage at LA! (laugh) 



JH -  I realize that it might be difficult, but what is your favorite Ladoire model?

LL - The next one.



JH - What has been the greatest challenge that you have faced so far?

LL - Hand making and working on metal for someone who comes from the world and practice of jewelry are relative tasks.  Crafting a nice dial and a nice case are not very complex things to do.  The real challenge is all about being perceived as a "good motorist", i.e., the ability to create stunning horological movements.


JH - What advice do you have for the next great horological iconoclast?

LL - To be spontaneous; if he thinks too much he won’t do anything different.  To not be influenced.  If you are influenced by the mass, you become the mass and then you don’t create exciting things anymore.  In short, I would advise him to be true to himself.

The Aquamariner

From Hager 
Courtesy of Hager
This is a new series of divers from the folks at Hager.

Courtesy of Hager
These are currently available for pre-order at a very aggressive (and fair) price - $330.00 US.  You can secure yours with a 50% deposit.  Here is a link to that section of their website if you wish to check it out yourself -  http://www.hagerwatches.com/aquamariner

Courtesy of Hager
If these are half as good as the watch that I reviewed earlier this year, they are a steal at the regular price of  $450.  Here are the pertinents, direct from Hager -


Movement


Caliber:  Miyota 8215 automatic
Self-winding mechanical movement with metal movement holder
Functions: Quick correction of day and date, hours, minutes and seconds date display at 3 o'Clock
Total Diameter: 11.5 linge (25.6mm)
Height: 5.67mm
Jewels: 21 Jewels
Power Reserve: 42 Hours
Beat Rate: 3Hz/21'600 vibrations per hour/ Novodiac Shock Absorber
Accuracy: -20/+40 seconds per day

Technical Specifications


Material: 316L Marine grade stainless steel, polished and satin finished
Diameter: 41mm without crown
Height: 12.75 with solid back
Length: 50mm lug to lug
Lug Width: 22mm
Finish: Brushed with polished sides and beveled edges and satin finish
Water Resistance: Waterproof to 300 m (1000 ft)
Case Back: Solid steel screwed
Crystal: Domed, scratch-resistant sapphire crystal with anti-reflective treatment inside
Dial:  Applied luminous indexes
Bezel: Unidirectional rotatable 60-minute graduated bezel with disc in matte midnight blue, matte black or matte burgundy anodized aluminum with engraved makers
Hands: Mercedes hands lumed with blue Superluminova
Crown: Screw-down winding crown, with HAGER logo and midnight blue, black or burgundy anodized aluminum winding crown tube
Bracelet: Stainless Steel with brushed screw links (instead of pins) and two button clasp and two button slidelock extension system (no need for half links)


Friday, July 22, 2016

The Japanese Watch Grand Prix

And Stowa is a big winner!

Courtesy of Stowa
For their Flieger TO2, Stowa was recognized as the winner in the Military Pilot Watch category.

And because it is a prize-winner, here's another look at it -

Courtesy of Stowa

Here are the pertinents -

Movement

Caliber:

ETA 2824-2, top version with blued screws

Mechanism:

mechanical, automatic

Specific features:

golden STOWA engraving

Case

Stainless steel, fine matte, ground by hand

Dial:

black matt coated with Superluminova BWG9 (white), Stowa Logo

Hands:

Superluminova BWG9 (white)

Diameter:

43,00mm

Height:

12,80mm (incl. sapphire crystal)

Strap width:

24,00mm

Lug-to-Lug size:

51,00mm

Waterproof:

up to 20ATM 

Weight:

115 grams with leather strap




Thursday, July 21, 2016

The Trainmaster Standard Time

From Ball -

Courtesy of Ball
The case is 39.5 mm and of stainless steel.  Sapphire crystal top and rear display crystal.  The hands boast 14 micro gas tubes (hour and minute) as well as the dial.  The crown is a screw-down to help ensure water resistance which is warranted to 30 meters or 100 feet.

Okay, those are the numbers, but let's talk about the warm n' fuzzy stuff.  The watch is simply wonderful to look at.  The dial is white enamel, the numbers reminiscent of the era when Webb C. Ball took up the challenge to try and avoid another disaster like the one that occurred in Kipton, Ohio.  Think about that for a moment or two - lives lost due to a slow moving watch.  As many of you may (and in fairness may not), I am from Oberlin, Ohio a little over 5 miles away, and have been to the site of the accident a few times on field trips.  So this one tugs a little on the nostalgic side of me.  And instead of Olympic or NBA timing, this is inspired by a watch that actually saved lives.




The Emperor is Less than Fully Clothed...

Okay, this is going to require a little bit of outside homework.  So I refer you to the good folks at Bloomberg for their article on the current state of affairs at SWATCH Group

Bloomberg's Coverage on the SWATCH GROUP announcement

Now part of this is what you read about before - that SWATCH group is going to miss their sales target.  In fact they are going to miss it by a pretty sobering percentage: 50 - 60%.

But what was interesting in this report from Bloomberg was what some of the feedback on Hayek the younger's lack of awareness and proactivity.  And a lot of that critique was harsh.  But it was fair.  And I think what it really spoke to (albeit not exactly directly) was that in the world that is SWATCH LAND although it is a publicly traded company, it is one that is controlled by one family.

On the positive side of this, it appears to be a somewhat benevolent one. (at least in terms of not firing it's employees).

On the negative side, it appears to be a company that is also a family dynasty.  And as we know from that paradise in Pyongyang, it is not always your best move to place all of your eggs (or egos) in one basket, or  family - whichever the case may be.

So fast forward to today and allow me to share with you (in case you haven't already seen it) SWATCH Group's half year report.  We already know what the bad news was.

And despite the facts staring everyone in the face, it appears to be a family, and group of brands that are in denial.  So here is the response from the Swatch group regarding the rest of the year.  Comments to follow -

You can find it online here -

http://www.swatchgroup.com/en/services/archive/2016/half_year_report_2016

Here are some pertinent portions -

Outlook second half-year 2016

Swatch Group anticipates clear growth in local currency in the second half of the year compared with the weaker second half of 2015, and thus an annual result closer or equivalent to the previous year. 
I'm a reasonable guy, but honestly that is a very, very vague answer as to how this very large ship is going to turn around.  Nobody wants to see SWATCH fail, but they need to wake up and smell the hairsprings.
The outlook for the Group, with its unique brand portfolio and its global retail and distribution network, remain good in all regions and segments in local currency. 
Sorry?.  Sales are down, and continue to slide as the latest report from the FHS confirms.  Period. 
In the mid to long term, there are many more opportunities than risks. In the first three weeks of July, very good growth was achieved in Mainland China compared with the previous year, especially by the luxury and prestige brands Breguet, Blancpain, Glashütte Original, Omega and Longines. Positive developments can be seen in Southeast Asia, too. Also, markets will continue to develop positively in parts of Europe, particularly in Italy, Spain and Great Britain. The situation in France and Belgium will remain difficult. Decisive growth factors in the coming months will be the normalization of tourism in parts of Europe as well as the further positive developments in China. On the other hand, third-party distributors in Hong Kong are still very uneasy, which will cause further delays in reorders. In North America and Japan, growth in local currency will be achievable.
Well, let's hope so, and I say this with respect, let's hope they are right.  But frankly I do not hold the same hopes for North American sales.  Retailers are getting their ASSES kicked by the grey market and many of them are turning to smaller, niche brands as well as pre-owned watches.  Many are not renewing/replenishing, and they are frankly sick and tired of being strong-armed.  And to be 100% clear - they are feeling this way about ALL of the big group brands - SWATCH, LVMH and RICHEMONT.

The Olympic Games in Rio de Janeiro, Brazil, will give an additional worldwide boost to the Omega brand, since the brand is the official Games timekeeper and is underway with nine watch models dedicated to the Rio de Janeiro Games. Omega will also launch the new Seamaster Planet Ocean Deep Black models and the Speedmaster Moonphase Master Chronometer in the second half of the year.
HMMM......I can only assume that the person who drafted this announcement is not a follower of current events.  Russia is starting to look less and less likely to be sending participants to the Olympics - 

One of the venues is impossibly polluted -
Guanabara Bay in Rio de Janeiro, Courtesy of the CBC
Granted that this was last year per the CBC's story, reports are that it is still pretty messed-up.  And yes, that is a dead cat floating in the flotsam.  And you know how I feel about cats.

Courtesy of Wikipedia

Mosquitoes - and full disclosure, this particular example (above) is not (to the best of my knowledge) native to Brazil in general and Rio in specific.

And mosquitoes mean...


While it is not hundreds (so far) the number of athletes opting out, and the notably reduced number of spectators coming is something else that does not bode well for a huge PR/Media coup.

And then there is the concern for safety -

‘The city should not be this way’: fears over violence in Rio with Olympics near


The Tissot brand currently accompanies the Tour de France as official timekeeper and is naturally represented by the new model Tour de France T-Race. Through the NBA, the North American professional basketball league and the WNBA, the women’s basketball league, Tissot will also achieve significantly greater international visibility, particularly with the new NBA collection and the Tissot Ballade Silicium Chronometer, the first wristwatch under one thousand francs with a silicium balance spring. 

I love the Tour de France, and basketball is amazing.  BUT - and it's a big but, so let me tell you about my big but - the NBA doesn't tip-off until October 25th.  So that leaves a little more than 2 months to get any traction out of the partnership before December 31st.  Another thing to bear in mind, NBA viewership is okay, but doesn't really tick up until near the All Star break which is February 19th, 2017.  I am not the smartest guy in the world, but February tends to come after December 31st, which is when the period closes.

Longines will further expand its position specifically in Asian markets with the new Equestrian and Symphonette collections. Swatch started selling its new Touch Zero Two with fan, fitness and timing functions on 7 July, and as of September, the new Sistem 51 Irony will be available as well as the Swatch Token launched in China.
Sales in all brands are supported through significant long-term marketing investment, the extensive retail network and also by the many new product launches in all segments. Since no structural changes were made to the production base and the entire workforce is highly motivated, the Group can rapidly meet increasing demand, also with regard to the new Swiss made. 

Which again failed to acknowledge the reality of TOO MUCH STOCK ALREADY SLOSHING AROUND.  Right now, there is no demand.  There is no demand because there is too much inventory.  And unless Mars does actually have life, and that life uses time the way we do, and just for the sake of argument, they are fans of the NBA, horse racing, the Olympics, etc., I do not expect that there is going to be a sufficient number of Martians coming down to Earth to purchase watches "duty free".  Short of that, I fail to see where the glut of over-supply is going to be absorbed quickly enough for there to suddenly be a demand again for new product.

Here's the thing, I WANT SWATCH GROUP to succeed.  But they have to start embracing the reality of the situation that they are in.  And so long as the outward message is - "everything will be fine in a few months", then it is clear that they are not fully aware of the circumstances that they are in.


Wednesday, July 20, 2016

You Get What You Pay For! Not Always...

Contrary to popular belief out there, Hanhart is apparently still in the business of making watches.  Based on their most recent newsletter you might be forgiven for not knowing this.  The news was all about -

Courtesy of Hanhart
The Abu Dhabi Desert Challenge (1 – 7 April 2016) is always the season start for the X-raid Team. The rallye is one of the most popular events of the year, because it takes place almost completely on sand and dunes of the Liwa desert. Moreover, it belongs to the most prestigious international cross-country races worldwide!

The Abu Dhabi Desert Challenge is the favourite event for the Hanhart fan and brand ambassador Stephan Schott and his long-time co-pilot Holm Schmidt, not least due to the success in the last year. There has been much rejoicing for Schott and his former co-pilot Andreas Schulz, who made the 5th position in the overall ranking. They made it into the Top 10 at all stages and got through the desert of Abu Dhabi without greater problems.  


This year, the Hanhart team respectably ranked 18th. Certainly, a bit more might have been possible, if the two pilots would have not received that much penalty time due to an accident in the third stage. Everything was going well so far until the Hanhart MINI suddenly frontally crashed into another vehicle, which was stuck in the dunes. The clutch of the MINI was damaged and the two pilots unfortunately had to finish the stage earlier. Nevertheless, they properly caught up to make up the lost time. Schott and Schmidt ranked 11th after the final stage and came in the 18th in the overall ranking.


So clearly Hanhart is not spending a lot of money on copywriting, but apparently does have money to throw at a vanity partnership like this.

But then, I guess, Hanhart blew all of their allowance money on this partnership because...

PRICE INCREASE 1 SEPTEMBER 2016

Over the past few years, the prices of high quality materials have increased significantly. Hanhart increases the price of the entire collection on 1 September 2016. The main reason are the increased purchase prices for base movements from Switzerland due to the exchange rate between the euro and Swiss franc. Since the release of the fixed exchange rate by the Swiss National Bank, Hanhart has not raised the prices. Now this development has to be taken into account.


Now this is particularly interesting when you take a few facts into account -

1. There is, in fact, an oversupply of movements out there. I am not a Nobel Prize winning economist, but I am somewhat acquainted with the idea of supply and demand.

2.  ETA is actively trying to shift as many movements as they can right now.  Again, it is safe to say that at this particular moment, it is not exactly a "seller's market".  Meaning I don't actually think the price of those things have gone up to the extent that Hanhart would have you believe.

3.  The entire industry is struggling right now with reduced orders, therefore it is reasonable to assume that the other contributors to the Hanhart watch (straps, cases, crystals, etc.) are most likely going to be offering better terms.


Essentially, what Hanhart would have you believe is that there is an inelastic demand for their watches.  Meaning that no matter what the price, people will still want them ; )

Sorry,  I'm calling bullshit on this one.

If I've said that GP and Eterna are cursed, I am starting to feel more and more that Hanhart was born under a bad sign.  For those of you not familiar with the expression, here is an explanation courtesy of our friends at Urban Dictionary -

A saying that relates to astrological signs. A person uses this saying when they believe they are unlucky. There are no 'bad signs' in astrology, but according to legend Capricorn and Scorpio are considered bad signs.
Ferris Bueller: I asked for a car, I got a computer. Hows that for being born under a bad sign?
by QueenofTheSouthside May 16, 2014


Hanhart has been passed around like a red-headed step-child from owner to owner, and it still does not seem to have decided what it is and how it will do things.  Spending money on partnerships and sponsorships while claiming that times are tough is not what customers want to hear when they are being asked to pay higher prices while looking at dusty rally cars and shiny airplanes.

But the good news is that those higher prices you are paying for your new Hanhart are  clearly justified and going to fund important developments in watch making, like this -

Courtesy of Hanhart




The Villeneuve Air Cup is the first French aerobatic contest of the season, organised by the Aéroclub of Villeneuve in the south west of France. It is particularly attractive for those ambitious pilots, who are willing to rise their level for major competitions.

Bastien LeRoux’ noticeable progress since the last training period was evident: Hanhart’s young and talented brand ambassador succeeded with his XA42 aircraft by XtremeAir in taking the second place in the overall ranking and even the first place in the unknown sequence. The competitors must not practice the unknown sequence, which is announced to them only about 12 hours before the competition.

Thus those results confirm not only Bastien’s promising talent and successful future, but also his solid position in the advanced group of French aerobatic pilots. The next challenge for Bastien will be the French National Championships, where he has the opportunity to receive his ticket to the 12th FAI World Advanced Aerobatic Championships 2016 in Poland (04 August to 14 August 2016).

We congratulate Bastien LeRoux and the aerobatic aircraft producer XtremeAir on the first achievements of this season and keep our fingers crossed for the upcoming contests!

So when you ask yourself what that extra money went for when you purchased your new Hanhart - you can feel warm and fuzzy inside because you helped support Bastien LeRoux's aerial acrobatics!

Customers deserve better.