Saturday, January 13, 2018

Et Tu, Movado?

Yes, BaselWorld is shrinking.  And just like a certain orange-hued bloviator would insist that the polar ice caps aren't melting and we could all use a little "global warming" during the recent cold snap in the US, many in the industry would insist that everything is fine and the recovery is well underway.

And then you see news reports letting you know just who will be skipping this year's BaselWorld.  Yesterday news dropped in Switzerland that MGI is sitting this year's edition out.  And for those of you not acquainted, MGI is a small little operation out of Parasmus, New Jersey.  The M stands for Movado, the G for Group...  well, you get the picture.  Movado, Ebel and Concord are the shiny gems in the company crown, along with several licensed brands.  

Now interesting to relate, this is not actually new news as it was announced by the Movado Group CEO himself back in November during the company's third quarter call.  But sometimes, news isn't real until you read it in your hometown newspaper ; )

For those of you handy in French, you can read the article that I was referred to in the Tribune deGeneve here:

But I think this is important news to revisit (or for some to visit the fist time) because it underscores some pretty hardcore realities.  

1.  Traditional watch retail as we once knew it is gone.  And it shows no real signs of coming back.

2.  Very few people in the industry really seem to know exactly how to react.  And the export numbers are NOT the bright, shiny recovery that some would have you believe.  They represent the shipping manifests of doomed models that were over-produced and did not sell and will be washing up on the shores of Grey, Light Grey and Parallel market places for the foreseeable future.  In fairness, at least according to retail outlets who should know, there are a few bright spots.  So let's hope those bright spots multiply, collect and shine.  But the good old days are gone.  It is time to adapt, those who can't will join a long list of formerly successful brands, executives, distributors and retailers.

3.  But a few folks seem to be catching on.  And I give very, very high marks to Mr. Grinberg because it is clear that he called an audible that not everyone was ready to react to.  And ultimately, as the steward of a brand, you are responsible to your brand and your shareholders.  Not your ego. This is a lesson that many of Mr. Griberg's less successful peers could benefit from.

Now it bears mentioning, BaselWorld was, is, and for the foreseeable future will be a barometer for just how good or bad things are in the industry.  When times are good?  You'll spend the money and participate.  When times are bad but you're afraid of losing face, and not being able to piss in the tall weeds with the other big dogs if you're not there?  Well, you'll convince the board that you have to be there, because you don't want to look like some loser wandering around the Ramada with with some samples in your briefcase ; )

The business IS changing.  And I think it is changing for the better.  Don't get me wrong, I love free dinners, wine, endless espresso and swag bags.  C'mon, who doesn't?  But it is clear that very few people in the industry have made the necessary adjustments to understand what the new reality is, and where their place in this brave new frontier will be.

With SIHH kicking off in the next 48 hours, many of my colleagues and other bloviators will be winging their way to Geneva and will wax lyrical at a collective cost of mere millions.  And in the end, I don't know if the event will be any more of a success than last year.  To quote that other great commentator on watches, Gordon Gekko:

"It's all about bucks kid, the rest is conversation." 

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