Horological Meandering

Sure some were cool looking but it was the exact movement as the previous 20 limited editions.

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ironically Swatch Group and Nicolas Hayek can arguably said to have saved the high horology Swiss watch industry through consolidation...
but in general, and especially during "good times" I tend to agree with you.

You make tons of money in the good years to prepare for the bad years.  That's how business runs.  Sorry for this year, but you had great years for a long time, so what's the big deal?

This article from Magnus is important news, but the way people behave when reading this kind of news (and it is the same in politics or in the stockmarket for instance) is lacking of perspective.

Yes prices are very high and I won't deny that of course.

But comparing watches with cars is just a biased way to put a point and not the explanation of a consequence. The price is not just inherent value and is about what people want to buy and how many are available (offer/demand).

As in every business there are good times when it is good for a company to maximize profits inorder to prepare the moments when the market is low. It is good also to get some cash in reserve to be able to invest and to hire people. We are also happy about these.

And, as you say, there are naturally, period of times when things are more difficult. This doesn't mean what they've been doing during the last 10 years was wrong.

BTW, if volumes had remained the same than 10 years ago, what would the prices have been? Much higher and less affordable because of the demand from developping countries.

Today they have to make a correction. That's normal.

I think that theproblem isn't that prices were too high but people began to see their income and purchase power decrease in comparision to a new population with significant means. Are the prices too high or is the relative purchase power lower in the Western old countries?

It's been ten years that I read on the net that prices are too high and that companies will regret it. It didn't for a very long time and people kept on buying anyway. I just can conclude brands were right to do so. Now there is a normal correction, like when something is a little excessive.

Cheers, Mark

I am quite concerned that the state of the market will make it quite difficult for some of the Independents to stay viable. It will be a pity to see any of them disappear as they have all elevated watchmaking to an art form and put their selves into their creations.
regds

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Independents will be hit so hard-at least those that have excelled in something. Isn't the old addage that if you can't be number 1, find something to be number 1 at? So you've got the independents who speacialize in skeletonization, those who do moonphases, those who do complications for normal people. Sure, there will be corrections, but I think the true independents will be okay in their niche. If anything, maybe the over-the-internet-slap-an-eta-in-a-case start-ups will stop popping up like mushrooms. That and those multinational mid-tier brands with little innovation and no reissues left to hash up will suffer. My 2 cents.
Very interesting reading and I appreciate all of the comments from the members here. I've learned a lot, so I thank you.

Prices kept going up because people kept buying.  But what the brands - such as watch brands which have been in business for centuries - had forgot was that those "new" purchasing power would not stay long.  Not that they spent too much, but they are "travelers" who just buy one or two expensive one to be "in the league".  Core watch collectors are long term supporters and the brands forgot about them (they still do) and pay less and less attention to the long-term loyal supporters and pay more attention to the "new" purchasing power which are very quickly getting tired of watches.

This is actually something I would like (but don't think ever will) see: the split in revenue between 'core and repeat collectors' vs. fleeting customers. Also this figure now vs. the past.

Although totally different products, the stats (revenue) for airlines/hotels are HUGELY weighted towards a very small percentage, I believe higher than 80/20 although those with industry knowledge may wish to correct me.

This should be good news for buyers!

... Karma is a bitch.  Maybe Nick and the fam' shouldn't have screwed over Ludovic Ballouard on Opus XIII.  

and are inclined to side with the independents...
Magnus

I refuse to purchase any of their products, even on the secondary market. I would much rather support Ludovic and the other amazing independents.

also Ludovic might not be that innocent as we want to believe. I heard some of his indented colleagues voicing doubts of his claim that HW screwed him without reason.
Best,
Magnus

... Nick Hayek???
The Hayeks are a very rich and powerful family. Ludovic is a small, independent watchmaker who was contracted by Harry Winston to create OPUS XIII. Then the Hayeks bought HW and buried the watch... and Ludovic. How can you defend the Hayek's behavior? Their father would have simply written Ludovic a check to make him whole. But not the "nepots"... they will do whatever they can to keep from honoring Ballouard's contract with Harry Winston. It's just not right.
'Nuff said.
- Scott

I am just conferring some doubts that I heard from other AHCI members when asked about some insights about the case. There are always (at least) two sides of the medal. I think we here at PPro should be open to all of them and the make an informed judgement. This message has been edited by Ornatus-Mundi on 2016-07-18 09:47:49

... Things the same way. However, I have never heard of AHCI members taking a side on any issue unless it directly affects them. In fact, most of the AHCI members I have spoken with told me they would never do business with HW if they had any inkling SWATCH was looking to purchase it. Which then leads into a conversation about the bad taste SWATCH tends to leave in everyone's mouth.
And I hope you know I was only kidding about you being Nick Hayek... unless you are Nick Hayek in which case I do not understand the Blancpain debate whatsoever
Have A Great Day!
- Scott

Just as much as it is difficult, for the sheer difference in means, for a small, independent watchmaker (or other small supplier of any kind) to do business with an industrial conglomerate, there are watchmaking geniuses which are not completely free of doubt either. One of those comes to mind who took commissions/preorders on a truly outstanding hand wound watch. But the patrons still wait since a decade...
Best,
Magnus

... Disconnect here.  Let us not forget it was Harry Winston that contracted Ludovic Ballouard, not the Hayeks, or SWATCH.

Here in the U.S. there is a law on the books that clearly states any company intending to acquire a portion thereof and/or the entirety of an existing company, [the purchaser] MUST honor all current and future business contracts.  This is why companies engage in serious due diligence in order to vet any outstanding liabilities and to satisfy the necessities of any outstanding liabilities before the deal is done - whether it be contracts with settlements dispersed as necessary or debt the purchaser must absorb.  It is my understanding that Swiss corporate law is based on the same corporate case law foundations used here in the U.S.

SWATCH bought Harry Winston and did not honor an existing contract and an independent watchmaker, a true artisan of the craft, got crushed in the process.  Black and White.  Right or Wrong.  The outcome is still the same.  Talk to all the independents you like, I think it is very clear Ludovic would have never accepted the task of OPUS XIII if he had even the smallest clue SWATCH was going to purchase Harry Winston.  Frankly, that is the most important point of all.

- Scott

... The way in which the Hayeks behave is disgusting. Letting Ludovic twist in the wind is wrong. Simply wrong. This message has been edited by elliot55 on 2016-07-18 09:05:09

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