Tuesday, November 15, 2016

Winter Is Coming and the Curse of Baskin-Robbins

The news finally broke to the public that things at Richemont are, indeed, bad.

It was reported in several outlets, but the bottom line is that Richemont announced that, in fact, Winter is indeed coming.

Now what many people have seen coming for quite some time is what these same people were avoiding talking about.  The word around the campfire back at the turn of the year was that Piaget and Vacheron were both sucking wind.  And Piaget's response to that was to damn the torpedoes and push forward with an unfortunately underwhelming reload of the Polo.  The launch event no doubt cost a pretty penny, it was poorly executed and the biggest buzz that came out of it was not about the watch, or the celebrity "Game Changers", but rather the stifling heat, the delayed start, and what many writers referred to as privation and fear of dehydration.

Vacheron, a beautiful and wonderful brand is struggling as well, and so according to the folks at the  Unia trade union those are the two brands that are going to be wearing the prom dress.  

But in fact, if we are honest with ourselves, the problems at Richemont are a lot deeper than anyone is willing to talk about.  And they go far beyond the need to cut bait with some investment properties in Paris.  In the spirit of that other great "eye poker" Gregory Pons, here is a reality check supplied with some suggestions.

Now I want to be clear that several of these observations and suggestions were mined over lengthy conversations with my fellow road-dogs in the industry.  So these are not merely fanboy, media postulations.  I have actually sat on the other side of the table at BaselWorld, made forecasts and dealt with strong arm tactics from idiot sons with Napoleon complexes as the biggest watch retailers in LA.  I've been to the city and I've seen the rodeo.  And when I talk with my fellow watch dogs, it is not as the press.  So here's a cold cup of coffee.

Or in the case of Panerai, espresso.
Panerai should have sales like Rolex.  There, I've said it.  Panerai could sell a hell of a lot more watches.  But Panerai has tragically forgotten who or what Panerai is.  Panerai is not tourbillons.  Panerai is not 19 in house hand-wound movements and 13 self-winding movements.  And those are just the in house ones?!?  Back when dinosaurs roamed the earth, that would be 2003, I spent some time selling watches at Tourneau.  And as history will bear out, Panerai did not have 31 different references.  Baskin-Robbins, on their best day couldn't muster all 31 flavors!  Panerai had two versions, and your options were limited to that, maybe a hand wound, maybe an automatic.  Finding a Panerai in the wild was exciting, and finding one in an actual watch store was a bit like the "little red haired girl" saying yes to a date with Charlie Brown.  Panerai was, in the words of my recently adopted hometown - "wicked hot"!

What happened?  Ego, greed and bad decisions.

So Panerai, here are my suggestions:
1.  You need 31 references like Baskin-Robbins needs 32 flavors.
2.  Scarcity fuels desire, desire fuels purchase
3.  Cut back on the regattas - I've spent time in yacht clubs and I grew up as the "hired help" in a country club.  Interesting factoid - some of the cheapest people you will ever meet.  They are not your customers.
4.  Cull the herd.  Sorry, sounds harsh, but you have boutiques that have 5 different models.  Think about that - you have a Panerai boutique and it has fewer watches than regular retail stores?!?  You need a boutique in Florence, maybe in Zurich, Tokyo and NYC.  The rest of it? That is, believe it or not, what your retail partners are for.
5.  Take a step back and remember what it was that made you so "wicked hot" 

And I am available (as are my colleagues) if you need some unbiased, straight talk ; )

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