Thursday, February 7, 2019


For Anima (Kronaby) the plug was officially pulled yesterday when they were declared bankrupt.  I reached out to the company and received this statement from the CEO, my comments follow after -

It is with sadness that yesterday the 6th of feb Anima AB who owns hybrid smartwatch brand Kronaby has been declared bankrupt. Our main focus is now to continue the positive ongoing dialogues we have with a number of investors, in order to secure the forthcoming growth of the company. Our main owner – Goertek, has changed their strategy going forward and therefore ended their investment with very short notice, which has resulted in lack of time onboarding new investors with high interest in the company. This has unfortunately significantly limited our chances of avoiding a bankruptcy. We see a considerable growth of the Sales of Kronaby hybrid watches and will work hard to secure a future for the brand.

For now the business sustains and the company operations continues. This also means that our app and watches are working 100% and there is no damage on the watches on our customers wrists nor the watches you and we have in stock and in stores. It is our belief that this, together with the strong interest from the market, indicates all the right conditions for the potential new investors. 
Okay, let's consider some basic points that are getting somewhat glossed over -

1.  Goertek is not just some other typical "Chinese fall guy" that the Swiss (and I guess in this instance) the Swedes like to blame for incompetence, lack of vision, etc.  In fact?  They are a pretty big TECHNOLOGY company.  They understand probably better than most that good things, sometimes, take time.  And the amounts that they have been investing in the Kronaby watch?  It's beer money to them.  I suspect that two things happened -
A.  They realized that the tech behind the Kronaby watch is already way, way behind the times.  Rather than recreate a wheel that is already rolling and working quite well in millions of other watches (for a shit-ton less money), they might as well become movement customers and simply buy stock from a company that can actually produce it consistently.  Wonder why the Alpina and Frederique Constant watches still haven't caught fire?  I don't.

2.  Leadership  - or in this case?  A lack thereof.  As continuing readers will note, I followed he build up and launch of the Kronaby watch.  I attended the launch in Malmo now two years ago.  And I came to learn that the four fellows heading up the efforts didn't really understand the watch business, and more importantly?  Had a very tough time recognizing, admitting and correcting some of their behaviors.  For a company that had no actual manufacturing overhead, and 60 or so employees, it is REALLY hard to understand how you could have an operating loss at the level that they did in 2017?  Per the article cited in yesterday's post, they had 37 million Krona in sales and managed a loss of 127 million Krona.  I'm sorry, but that is the kind of burn rate not disimilar to Internet companies just before the bubble burst.

Lastly, let's say you are the mom and pop retail store that bought in?  While it's all well and good to tell these folks that they shouldn't worry, that just isn't so.  They now have stock that may, and then again may not be worth anything in a few months time unless new, serious, deep pocketed investors are brought in.  And if you are the customer?  Well, let's hold a good thought.

Perhaps the greatest tragedy in all of this is the staff.  Good people doing their best in a ship piloted by people with out sized ambitions who were (and apparently still are) perhaps trying to punch above their weight.  Selling watches isn't easy.  If it were, BaselWorld would be growing, not shrinking.  

Kronaby is a beautiful name, the design is pleasing and the concept is a good one.  But sooner or later someone will have to step in who actually understands that it's all well and good to say that you are a lifestyle product, but ultimately that product is still a watch, and it might not be a bad idea to try and have a better understanding of that industry.   

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