When Kering bought the Sowind Group in 2011, they had big plans for GP and it’s sister company JDR.
Veteran Michele Sofisti was parachuted in from Kering.
“Sofisti-cated” … he created a multi-pronged strategy. One centred around clarity of brand and model identity.
And yet, Sofisti lasted as group CEO for only a couple of years. He transferred back to Gucci and eventually left Kering.
We see that 10 hears later, Kering “gave up” and removed GP from its stable.
GP has been plagued by many different owners and changes in leadership from around 1980 to current. The 80 year or so ownership under the Graef family seems to have been the longest.
Thr Macaluso family ownership was for about 20 years and considered by purists to be the glory years for GP.
It would be interesting to interview the folks are at Kering to see what went wrong. In effect, Patrick the current CEO of GP (and UN) was part of the Kering group. From 2018 or so, he was responsible both GP and UN. If things looked great for both brands, Kering is not likely to have sold them.
The management team is effectively the same that was in place while Kering had ownership. There are new unnamed private investors now as well.
So Patrick and the team believe that being “independent” will yield a different result. What in specific will be done differently is not yet clear. We are yet to have an interview where a detailed strategy in outlined for GP.
Kering had trouble taking GP back to its rightful horological throne. They also had trouble with UN.
Now Patrick has BOTH brands to worry about.
IMHO …. Here is my personal opinion…
…. Something that I think both Kering and now Patrick seem to have failed to recognize the importance of is this:
The secondary market.
They are still making the same mistakes and thinking of their customers as the Authorized Dealers. They are thinking of themselves as “wholesalers”. Their eyes are focussed only on the primary market.
This is self-defeating because the secondary market is what fuels the primary market today.
Not the other way round.
Gone are the days when the secondary market is a bunch of small watch shops selling used items.
Treating the secondary market as an afterthought is tantamount to Hollywood moguls thinking that Netflix was just a fad.
I was told by a dealer in America that GP did some “secret” buyback of stock from the secondary market in 2021/22. I can not validate that to be true or not but we know that UN did indeed do a massive stock buyback. All this was done to “clean” the likes or chrono24 and such of stock that was going for pennies on the dollar. This excess stock would often come from the brands themselves selling to wholesalers like Jomashop and such.
So we know that GP was riding high in 2022. Massive demand. Sure, some would say it was all due to the COVID period and the huge demand for integrated sports watches.
I think there is another part too … the market perception of GP brand image was elevated.
Why?
Because you could not get one. On the secondary markets, they were trading at a premium over MSRP. And the the ADs would turn customers to long waitlists.
The fear of losing out. The brag value. The desire for a laureato was immense. The mitigation of risk was removed from value loss.
So what did GP do in 2022 and 2023 ? They got excited and overconfident. They also did not really understand WHY their watches were selling out. Nothing in the watch had changed. It was exactly the same watch as from 2017.
And so in this excitement, they said let’s ride this wave.
Let raise MSRPs.
Let’s tell all ADs no more discounts allowed to customers.
Let’s supply 5 x more Laureatos to thr market.
And they forgot one big thing …
…they forgot to monitor the secondary market. Soon more and more supply and lower prices stated accumulating on chrono24 and such.
They also failed to recognize the importance of auctions and the messaging it sends to collectors when the brand’s watches do not receive attention.