The best limited editions announced for British Watchmakers' Day 2026; Watches of Switzerland UK's latest figures; something in the water from Toledano & Chan, Baume & Mercier's sale and more
I can't help but wonder if B&Ms new owners are betting on selling the brand mostly through their own retail arm, allowing them to retain more of the sales margin than if they sold to distributors. That would, in theory, give them more flexibility with pricing, assuming moving out of Richemont's supply chain doesn't spike their production costs high enough to counteract the higher margin for the final sale (because now they're paying 'retail price' for movements and parts rather than whatever internal costs Richemont's accountants use for inter-group transactions).
Becoming a house brand for one retail chain in one region of the world may seem like volume suicide, but if B&M wasn't selling enough watches to justify it's existence as part of Richemont anyway, then the new volume targets for financial viability may not be too far off from what they're producing now, just with different overhead costs.
I'm really, really curious how the manufacturing logistics are going to work. That's what will make or break the transaction, IMO, because setting up your own watch assembly location isn't a trivial amount of money and Richemont only committed to one year of continued logistical support if I remember right.
You're right: one year of support as a transition period. Fairly unusual, I think, but I suppose it says a lot about Damiani's lack of watchmaking infrastructure.
Let's assume you're right and turning it into some kind of glorified 'house brand' is the plan. Leaving aside how bad I think that is as an idea, could it be a viable business?
Rocca - Damiani's multi-brand retailer - operates 37 stores in Italy and one in Albania (and a H. Moser boutique in South Korea, bizzarrely). Morgan Stanley's most recent estimate had B&M producing 78,000 watches a year. Even if that number turned out to be vastly inflated - let's say out by a factor of two or three, and I doubt it is *that* inaccurate - for Rocca to be the primary sales channel for the brand each store would have to shift somewhere in the region of 500-1000 watches per year. Given that Baume & Mercier is currently stocked in thousands of stores around the world, I can't see it making sense. Rocca is such a comparatively tiny piece of the retail market. Of course, the brand wouldn't cease to be stocked elsewhere, but we're talking about flipping the business model from predominantly wholesale to predominantly own-channel retail - I can't see it.
But maybe that's the wrong starting assumption. Untethered from Richemont's production setup, Baume & Mercier doesn't have to make 78,000 watches a year. Maybe the plan is to dramatically reduce volumes, focus on appealing primarily just to one market - Italy - and try to carve out a niche. The problem I see with this is the economies of scale that work against you - like you say. Making 5000-10000 watches a year is hard, because you're a bit too big to outsource everything but not big enough to justify the investment in your own production/assembly facilities. Most brands that operate in this volume bracket are either there against their will - i.e. they've seen sales fall in the last decade or so - or they charge significantly more for their watches. We're talking about a Baume & Mercier that's by common consensus going to cost less than they do now, going it alone, in one market... you put it neatly: volume suicide. Hard to reach a different conclusion.
God, they make 78k watches a year? I didn't realize the volume was quite that high!
You're right about the volume flip and how untenable it is, but I do think the logistical challenges of divorcing from Richemont's production infrastructure is going to dramatically cut their output. I literally just finished the Hodinkee podcast interview with their CEO and didn't realize they had as much volume in the US, Japan, and the Middle East as they do. They definitely have the legs to be more than a pure house brand so scratch that. Should've listened to the podcast before commenting here.
I do think they're going to have to close lots of doors and shrink the number of markets they make a play in between logitical limitations and less marketing/sales resources. 1000+ watches sold through Rocca might be a decent chunk of their profit if production drops to 10k or 15k watches and the rest are going through distribution in whatever markets they're strong in. Should've listened to the podcast before commenting here.
The Hodinkee podcast was full of bold proclamations about growth. I wonder if any of that changed now that the sale is occurring. I can't imagine the owners will follow the Richemont's plans exactly, but they also must have approved of the plans as part of the due diligence during the purchase process. I'm really curious how they're going to drive prices down and manage the production logistics at the same time.
There's something about the design of the Mermont that's quite interesting, namely that the curved slant of the Breguet numerals is echoed in the spiral dial brushing and the "twisted" railroad ten-minute track (breaking it into ten-minute and half-hour delineations is in itself quite a thoughtful detail). Almost feels like the single hand should be curved to some extent to match it.
I can't help but wonder if B&Ms new owners are betting on selling the brand mostly through their own retail arm, allowing them to retain more of the sales margin than if they sold to distributors. That would, in theory, give them more flexibility with pricing, assuming moving out of Richemont's supply chain doesn't spike their production costs high enough to counteract the higher margin for the final sale (because now they're paying 'retail price' for movements and parts rather than whatever internal costs Richemont's accountants use for inter-group transactions).
Becoming a house brand for one retail chain in one region of the world may seem like volume suicide, but if B&M wasn't selling enough watches to justify it's existence as part of Richemont anyway, then the new volume targets for financial viability may not be too far off from what they're producing now, just with different overhead costs.
I'm really, really curious how the manufacturing logistics are going to work. That's what will make or break the transaction, IMO, because setting up your own watch assembly location isn't a trivial amount of money and Richemont only committed to one year of continued logistical support if I remember right.
You're right: one year of support as a transition period. Fairly unusual, I think, but I suppose it says a lot about Damiani's lack of watchmaking infrastructure.
Let's assume you're right and turning it into some kind of glorified 'house brand' is the plan. Leaving aside how bad I think that is as an idea, could it be a viable business?
Rocca - Damiani's multi-brand retailer - operates 37 stores in Italy and one in Albania (and a H. Moser boutique in South Korea, bizzarrely). Morgan Stanley's most recent estimate had B&M producing 78,000 watches a year. Even if that number turned out to be vastly inflated - let's say out by a factor of two or three, and I doubt it is *that* inaccurate - for Rocca to be the primary sales channel for the brand each store would have to shift somewhere in the region of 500-1000 watches per year. Given that Baume & Mercier is currently stocked in thousands of stores around the world, I can't see it making sense. Rocca is such a comparatively tiny piece of the retail market. Of course, the brand wouldn't cease to be stocked elsewhere, but we're talking about flipping the business model from predominantly wholesale to predominantly own-channel retail - I can't see it.
But maybe that's the wrong starting assumption. Untethered from Richemont's production setup, Baume & Mercier doesn't have to make 78,000 watches a year. Maybe the plan is to dramatically reduce volumes, focus on appealing primarily just to one market - Italy - and try to carve out a niche. The problem I see with this is the economies of scale that work against you - like you say. Making 5000-10000 watches a year is hard, because you're a bit too big to outsource everything but not big enough to justify the investment in your own production/assembly facilities. Most brands that operate in this volume bracket are either there against their will - i.e. they've seen sales fall in the last decade or so - or they charge significantly more for their watches. We're talking about a Baume & Mercier that's by common consensus going to cost less than they do now, going it alone, in one market... you put it neatly: volume suicide. Hard to reach a different conclusion.
God, they make 78k watches a year? I didn't realize the volume was quite that high!
You're right about the volume flip and how untenable it is, but I do think the logistical challenges of divorcing from Richemont's production infrastructure is going to dramatically cut their output. I literally just finished the Hodinkee podcast interview with their CEO and didn't realize they had as much volume in the US, Japan, and the Middle East as they do. They definitely have the legs to be more than a pure house brand so scratch that. Should've listened to the podcast before commenting here.
I do think they're going to have to close lots of doors and shrink the number of markets they make a play in between logitical limitations and less marketing/sales resources. 1000+ watches sold through Rocca might be a decent chunk of their profit if production drops to 10k or 15k watches and the rest are going through distribution in whatever markets they're strong in. Should've listened to the podcast before commenting here.
The Hodinkee podcast was full of bold proclamations about growth. I wonder if any of that changed now that the sale is occurring. I can't imagine the owners will follow the Richemont's plans exactly, but they also must have approved of the plans as part of the due diligence during the purchase process. I'm really curious how they're going to drive prices down and manage the production logistics at the same time.
I'll be honest, I hadn't listened to the Hodinkee podcast either. I probably should...
There's something about the design of the Mermont that's quite interesting, namely that the curved slant of the Breguet numerals is echoed in the spiral dial brushing and the "twisted" railroad ten-minute track (breaking it into ten-minute and half-hour delineations is in itself quite a thoughtful detail). Almost feels like the single hand should be curved to some extent to match it.
I think I quite like it…
Completely agree re: the Union Jack motifs!