Saturday, February 15, 2020

I Don't Always Enjoy Being Right

And for the record, I do not live under any illusions that I am always right.  Some of my high school teachers would have been shocked by even a 25% ratio for correct notions.  But today, while noodling around on some watch brand websites both mighty and wee, I came across this interesting tidbit of information -

15. February 2020
ochs und junior is moving to a new home 

We are happy to announce that this coming April we will be opening a new ochs und junior workshop in La Chaux-de-Fonds, in the Jura mountains. We will be located in the historic district of this ancient center of the Swiss watchmaking industry, since 2009 a UNESCO World Heritage site. The collaboration with our partners in the German-speaking part of Switzerland will continue, and our new manufacturing, purchase, and service offers remain continuously guaranteed. Images and background story will be provided in a later post.

We are looking forward to welcoming you soon to this historic and unique town at the center of the Swiss watchmaking industry!

Okay, so what I am about to say is in no way meant to be hurtful, offensive or snide.  
But honest - have you ever tried to visit La Chaux-de-Fonds?  I want to be clear, I am not trying to say it is exactly "land's end" but it is not what I would call "conveniently located" either.  Traveling via rail, the best travel times you will achieve are:
Zurich:  2 hours 10 minutes
Geneva: 1 hour 42 minutes
Lucerne: 2 hours 23 minutes
(You know, just in case you did not get the update about the company moving and had to now hot-foot it to pick up your watch before they closed)

Think you're going to simply pop into some watch brands for a look-see to make the trip to La Chaux-de-Fonds worth your while?  Guess again.  Even if you are rolling with Watch Media Outlet X, arrangements have to be made, and chances are good that you will be (at best) challenged) to get in.

And while La Chaux-de-Fonds is a Unesco Heritage Site (along with its sister city, Le Locle), it is not exactly what I would call a "happening" place.  I think my point is, if you were really trying to maintain the ethos of ochs und junior, this is perhaps one of the least likely places you would have picked.  Because for all of their posturing, and let's be honest, there was a fair bit, when you stripped away all of the hyperbole, the one thing that ochs und junior were pretty forthright about was that they were not making much of anything on site.  In other words, they had partners.  And as some know, for a very brief time (a little over a year) I collaborated with Beat Weinmann as a "counter-puncher" or someone to "spar with" over ideas, communication, etc.  In essence, to offer up the contrary opinion.  While I continued to stay in Lucerne during subsequent BaselWorld visits, I only visited the ochs storefront a few more times.  And at least at that time, while there were watch makers employed by ochs und junior, their activities (as far as I understood it) took place in workshops off site.  To be clear, they were, absolutely, assembling the watches.  The cases were made (at that time) by Peter Cantieni and I suspect maybe still will be, but you never know.  The movements were ETA (now UN supplies them).  Hands, crystals, crowns, dials, essentially everything else was created by trusted partners.  And fair play to ochs und junior, they identified their partners clearly on their site -

But when news first broke late last year that the entire crew had resigned (and a lot of that is still unclear, and subject to interpretation), what was clear was that by "force leaking" the information in the manner that he did, Mr. Weinmann had drawn a line in the sand that would (and let's be honest, will) make it very challenging for him to come back to the business side of watch making.  Typically the head of a brand takes the hit, has the fall, goes home to lick their wounds, then re-emerges later in a new, sometimes better role.  Some learn from the experience, many do not.  But Beat Weinmann was always a bit of a different type of dude who absolutely marched to his own drum beat, and I would say that, more than any other reason, was why we were friends for a brief while, and continued to be friendly for a short while after that.  

So in a Forest Gump sorta' way, I feel that I was there for a few key events in the "mid-story" section, and watched from afar for awhile after.  I do remember well when the cord was cut, and Beat left Embassy to make ochs und junior a full-time proposition, and he moved into the location they have been in for the past 8 years -

It was exciting to see.  And even as I moved on to pursue other things, it was always interesting to follow the happenings via the blog or the news section.  The news and blog became less frequent, and if I am honest I had pretty much turned my attention elsewhere until this past November -

So, as I prepare to embrace a cold New England morning this day after Valentines, I want to re-heat my theory about what is next.

Things are not great in the watch business. Moreover, they do not show signs of improving in the near future. Ulysse Nardin, and therefore Kering, essentially own ochs und junior. There really isn't much other way to put it. Yes, Ludwig Oechslin's name might be on the "deed" but the checks are being signed in Le Locle. And, not-so-coincidentally, the CEO of Ulysse Nardin also just so happens to be the CEO of Girard-Perregaux -
Patrick Pruniaux, which by strange coincidence is located in... La Chaux-de-Fonds.

The Thing About the Old Days
The curious thing about getting older, time (or at least your perception of it) seems to hyper accelerate once you hit your 40s.  

Courtesy of The Wire
While 2012 is a full 8 years ago, it still seems somewhat recent to me.  ochs und junior were more of an ongoing project that, if I am not mistaken, were funded primarily by the owner (at that time) of Embassy jewelers in Lucerne.  Up until 2010 they were really more of a very expensive piece that was not really selling much.  These were pieces that were priced at the level of starter homes in Southern Ohio.  They were not exactly inexpensive.  But between 2010 and I would say 2017, they managed to catch some lightning in a bottle and they steadily grew in notoriety.  It is not a coincidence that this time period was also marked by UN's increasing financial involvement.  And my fellow pundits in the Fourth and Fifth Estate have a tendency to gloss over this not so insignificant fact.  While it is a nice notion that like so many other followers of "the craft", they latch onto what simple economic realities are proving to be a millennial fantasy, the  numbers don't match up.  5 employees, technically 6 if we count Dr. Oechslin, rent, materials, etc... and a reported production of, well, not so many watches, per their own statement:

ochs und junior manufactures about 130 watches per year, which enables it to offer uncompromising timepieces that do not cater to mass taste  –  simplicity instead of complication, visible machining marks instead of polishing, no logo on the dial or the case  –  and to give every customer personal sales and after-sales service directly from the CEO. We aim to grow in terms of quality, not in terms of quantity. 

Not to be snotty, or sarcastic, but do you honestly mean to tell me that with overhead for rent, materials, utilities, assembly, and, oh yeah, salaries for that many people that you are going to cover that nut with 130 pieces per year when the majority of them are priced around CHF 6,000?  And please don't try to sell me on the "we took out the middle man" notion.  ochs und junior were the middle man in many ways.  

On more than one occasion during our "strategy boxing matches" I was called "charming" and I knew at the time, and more so in hindsight it was not always intended as a compliment.  As a mediator I have a tendency to try and keep the peace while trying to help the parties discover alternative points of view.  And there are times when an individual is so enamored of their own position, that they don't tend to see that left hook coming.  And I suspect that is what finally landed on the jaw of ochs und junior three months ago.

Reality Sucks
Every great brand needs a great creation myth.  And in the case of ochs und junior, it really wasn't a myth.  The creation part anyway.  The fallacy that everyone was laboring under was the sustainability.  It is safe to say that Ludwig Oechslin was, and is perhaps one of the most creative, and therefore most important watch makers of recent times.  But it is also safe to say that without Rolf Schnyder, the rest of the world would likely have never known.  Mr. Schnyder was a unique person with unrivaled abilities in terms of sales, marketing and persuasion.  And when the two of them worked in lock-step?  They were truly unstoppable.  In many ways, Beat Weinmann had a lot of the same positive qualities of Mr. Schnyder.  He was personable (I won't say charming as I do not wish to offend), attentive to his customers, and could create a seemingly magical atmosphere.  And in many ways I feel that Beat is a bit more savvy than even Mr. Schnyder was.  But there was one thing that Mr. Schnyder had that Mr. Weinmann had not fully mastered (at least in terms of ochs und junior) and that was cash reserve (lots of it), and large scale communication.  In the long run, even if we optimistically presume 50% net per watch (pre-tax), that would be a lot of thrift to pay everyone, the rent, etc., let alone grow.  

The New New
So what's next?  Well, it is safe to say that ochs und junior, at least as we knew it, is no more.  UN and if need be, GP have plenty of folks to handle pretty much every process that had been previously handled by the ochs und junior team.  What I expect we will be seeing in the not-too-distant future will be a more discernible outreach to the media.  You need more than a twice a year posting in Hodinkee to be known.  You will likely see an outreach to retail partners.  You will either see an increase or decrease in price depending on the following criteria -

Drop prices by 20% and aggressively pursue more mainstream retail.

Raise prices by 20% and aggressively pursue more mainstream retail.

Kering with UN and if need be, GP, have everything that ochs und junior needs to make and finally market and more effectively sell watches.  But there will be changes.  The big, open shop/meeting place with vintage espresso machine (at least the one we knew and loved) is now consigned to the dust bin of history.  What this new space will be remains to be seen, and we shall see.  But I think a few things are going to change.  

And we shall all have to wait and see what is coming next, because for the moment?  Nobody's talking.

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