Swiss Watchmakers Seek State Aid Amid Slump

this_hobby_of_hours · 2024-09-04T16:05:06Z

Explore the luxury watch market's downturn as Girard-Perregaux and Ulysse Nardin seek state aid. Experts discuss transparency, brand strategy, and collector relations.

this_hobby_of_hours

WPS member · Horological Meandering forum

75 replies19102 views1 photos

In a pivotal discussion, 'this_hobby_of_hours' brings to light the challenging economic climate impacting the luxury watch industry, specifically highlighting Girard-Perregaux and Ulysse Nardin's recourse to state aid. This post serves as a critical examination of the 'feast or famine' scenario that has long been predicted, prompting a wider community dialogue on brand strategies and collector expectations in an evolving market.

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Girard-Perregaux and Ulysse Nardin among brands getting help

“Girard-Perregaux and Ulysse Nardin have become the first brands to confirm they’re using a state program to retain jobs and avoid permanent cuts. Sowind Group, which owns the two manufacturers, has put about 50, or 15%, of its 320 workers on so-called short-time work or furlough, according to Chairman and Chief Executive Officer Patrick Pruniaux.”

Read more here:

https://www.bloomberg.com/news/articles/2024-09-04/swiss-watchmakers-including-girard-perregaux-seek-state-aid-amid-downturn

I have spoke extensively since 2022 about this coming “second crisis” … I’m not going to repeat it all again. I’ve detailed what I felt brands and Authorized Dealers needed to do more and less of.

Unfortunately, the “feast or famine” scenario seems to be coming true.

Do share you own thoughts about this situation and what you would like brands and ADs to do more or less of… if anything at all.

Should more brands of a smaller size consider going direct to consumers in certain markets for sales for example?

And to be fair, what do you think collectors should do more or less of as well.

🤝

Key Points from the Discussion

The watch industry suffers from a significant lack of transparency in product information, marketing, and sales, leading to collector indifference and a need for better buyer education in the digital age.
Girard-Perregaux and Ulysse Nardin, unlike some other luxury brands, were not typically associated with extensive waiting lists or price gouging, with many of their models, such as the Laureato and early Freaks, often selling below retail on the secondary market.
Many brands alienated their loyal, 'hardcore' collectors by shifting towards direct sales or bundling practices, chasing 'faux collectors' who are less resilient to economic downturns.
The use of 'short-time work' or furlough can be a valuable tool for healthy companies during economic difficulties, but it cannot solve 'home-made' problems stemming from inbred management practices that stifle innovation and make brands interchangeable.
Brands should consider radical changes, including firing existing management, drastically reducing their current lineup to focus on truly innovative and complicated movements, and learning from successful, well-timed launches like the MoonSwatch.
There is a polarization of attention in the market, with excessive focus on a few select models from brands like Rolex, Patek Philippe, and Audemars Piguet, overshadowing other deserving brands and creating a need for better marketing and image-building across the industry.

The Discussion

Aquaracer1

Sep 4, 2024

Nice foresight. Unfortunately when it comes to watches I don’t have such vision. However history has shown us time and time again that most things are cyclical (except death and taxes). As a smaller watch manufacturer , would cutting out the AD’s allow you control your own supply? Or would it make it more difficult since you have (in some situations) more pent-up demand coming directly from the consumer? A couple years ago, I knew I wasn’t in Kansas anymore when both private sellers and dealers

jp884

Sep 4, 2024

Give people the access to the watches they want instead of feeding everything to the same people. But what do they care I’m one of the few that are done with them and could care less if they stay or they go.

ChetBaker

Sep 4, 2024

It may sound harsh, but I wouldn’t mind a rigorous clean-up and if that means losing some brands it is what it is. Those sales will go to other brands, which will be stronger long-term and they will offer employment to the skilled watchmakers currently at the disappearing brands.

Uppersouth

Sep 4, 2024

“Back to the regularly scheduled programming”. The last few years have been extraordinarily good times for watchmakers. I’ve lived through several, similar business cycles in my own arena. When things normalize off of extreme highs, quality companies, products and people will still make it through. As for the marginal players, the reset is tough sledding. I hate to hear this, but it is part of the post boom culling process.

dedestexhes

Sep 4, 2024

Heritage is one thing, being nostalgic another one… But if you don’t create compelling offerings ( combination of a lot of different factors) you’re not going to survive.

VinnieD

Sep 4, 2024

from the picture, you can sort of guess who is the most financially exposed to their own brand. I believe Breitling did some sort of 'private' crowdfunding this year. This is always a bad sign for me

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Swiss Watchmakers Seek State Aid Amid Slump

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