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Tuesday, May 23, 2017

The Transfer Window Opens

At Corum and Eterna.

Davide Traxler has been relieved of his duties at both Eterna and Corum.  For many of us, the news was delivered by Karl Heinz Nuber through is well-regarded TICK-Talk site:

http://www.tick-talk.ch/city-champ-jewelery-watch-group-faehrt-eterna-an-die-wand-und-sucht-nach-neuem-corum-ceo/

I was able to confirm this news through a contact at Corum, Switzerland.  For those of you (like me) who do not speak or read German, Google Translate can give you a fairly decent version.  I want to thank Karl Heinz for tackling what many other writers would avoid, and I commend him for showing some willingness to take on a touchy subject.

Now, I have a slightly different perspective having worked on the "other side" of the BaselWorld counter, and I agree with a lot of what Mr. Nuber points out.  But I would add some layers that are based on what I have seen and heard not as a journalist, but from some brand management experience.

One thing that we can all agree on is that losing your job sucks. There are generally no good feelings engendered when you are informed that your services are now surplus to requirements.  But the problems at Corum and Eterna did not sprout up overnight and they were never going to be solved in any short-term fashion.  I know that there are a lot of folks out there who feel that the dysfunction is solely down to the incompetence or lack of cultural awareness of the Chinese ownership - Citychamp.  I would have to say that, with respect, I disagree.

The problems at Eterna have been going on for YEARS.  Long before I entered the industry, long before I started covering watches back in 2010.  And the one thing that has always rung true is that there has been a near perpetual lack of self-awareness at Eterna.  And let's be really, really honest, it is a Top - Down problem.  It's interesting to note that through several "regime changes", several key people who were, well, supposed to be responsible for little things like sales, etc. were kept on.  In other words, the head coach kept changing, but some of the key players stayed on.  The other piece at Eterna that continues to hamstring it is a fundamental misunderstanding of what kind of watch company they really are, and what exactly they should do, as opposed to what they could do.  In terms of products, pricing, and how they are perceived in the market place, this is something that has shifted and changed on a fairly constant basis over the last 10 years, leaving the brand identity to drift on an ice floe.

And as we are being honest with each other, let's be clear that Eterna has two solid cornerstones to build (or in this case, rebuild) their brand upon: the KonTiki and movements.  Everything else will only be noise and distraction.  Sounds sort of harsh, doesn't it?  Well, ask yourself - how many collections have been launched by Eterna and, well, sunk in the past few years?  How many marketing campaigns have been pushed away from the shore, only to be lost at sea?  What has hindered Eterna FOR YEARS is a fundamental inability to work on a project, and see it ALL THE WAY THROUGH to the end.  This was true when Calce oversaw both Corum and Eterna, it was painfully true under the tenure of Mr. Dreyfuss, and has been abundantly clear in this latest chapter.  And yes, that is a cultural dysfunction - but that is, regrettably, the Eterna culture.  It  has been there for YEARS.

While I am not the MOST informed person out there, I can tell you that I meet A LOT of former Eterna employees now working at other brands or in other areas outside of Eterna who are now FLOURISHING.  Doing amazing things!  But they all tell a similar tale, and that tale is really more about a culture that is not so good.  And the culture is not Swiss, and it is not Chinese.  The culture is the company culture.

Now consider the role of Citychamp in all of this.  They have come in, they have pumped, literally, MILLIONS of Swiss Francs into Eterna and Corum.  They have trusted the individuals recommended to them - insiders from the Swiss watch industry.  Keep in mind, these were not Citychamp or Chinese CEOs.   It is also worth noting that the key staff that was kept on despite their sometimes indifferent performance were not from Citychamp either.  The amount of debt racked up by the previous and recent administrations points to poor management and oversight.  Put another way, if it were not for Citychamp, there likely would not have been an Eterna for the past several years. 

I think what I find most fascinating in all of this is that what really underscores a somewhat xenophobic attitude of the Swiss watch industry.  I visited Eterna back in 2013.  I stopped at a bakery for directions to the factory and was asked if I spoke Chinese.  Meant as a joke, but to me really underscored a certain unwillingness to accept that a Chinese owner could ever hope to successfuly manage a Swiss company.  Now in fairness, it does seem that Citychamp is having some difficulties in getting these two houses in order.  But I am less and less convinced that this is a question of who owns the brands. 

My point is that sometimes brands just can't get their shit together.  And sometimes it is a question of changing the culture.  Not Swiss, not Chinese, but company culture.

So let's hope that Citychamp will find a team leader who will not only be focused on developing a brand, but developing a team.  A team with a strong identity and a positive, collaborative, and solid culture.


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