Second Lives – AP and Rolex CPO, Ebel Reboots, Bennahmias Returns – Episode 99

0:00 I cannot tell you how many clients I've spoken to who wanted to trade an AP to me and begged and pleaded for us to place it in a way that the brand wouldn't know. I think they've done a really good job of, like, terrorizing their clientele in that regard, and now they want them to sell them their watches. This is Openwork, a look inside the watch industry, a podcast from Collective Horology. I'm Gabe Riley, co-founder of Collective, and I'm Asher Rapkin, co-founder of Collective. Collective Horology is an independent watch retailer based in Ventura, California. We carry a wide range of of independent brands including Bamford London, Gaga Laboratorio, Renaud Tixier, and more. To learn more about us and check out the watches we carry,

0:41 visit collectifhorology.com. You're back! I am back in action. We missed you. Speaking of Renaud Tixier, that new Monday Skeleton— oh man, oh my, my. You know, the funny thing about that watch, we— I don't want to give the impression like we always know what's coming, you know, 6 to 12 months in advance. I wish we did. That's, that's not always the way it was. Sometimes we find out whenever we're else does. Exactly.

1:05 But with this particular watch, I remember sitting at our meeting with RT in the— their meeting space at Watches and Wonders. And, you know, the watch is miraculously beautiful, and it has a pretty big price tag that is equivalent to the quality. $145,000. I've never bought for inventory watches at that price so fast in my life multiples. Yeah. And they're gone now. I mean, it shows how, how, you know, it's a funny thing. This is the thing I learn every time we do inventory or buy inventory is like when I think I'm being ambitious, it turns out I'm being a little too, a little too, too short in what I order. And when I, when I'm ambitious, sometimes I end up with stuff around. The joys of buying, of being a

1:51 buyer. But putting that aside, the— we bought the— we bought these watches off renders. They were that good. Yeah. Well, okay. So these are, if you know, there were no Tixier Monday, which has this amazing micro rotor mechanism, basically an inertia wheel that allows power to continue through the drive, the gear train of the watch, even after the micro rotor itself has stopped. That inertia is allowed to carry through, so it makes the winding efficiency of the micro rotor higher, essentially. Yeah, you know, there's 2 things going on with this watch. One is there's that, that mechanical ingenuity, a product of Mr.

2:27 Dominique Renaud himself. But the other thing was the handwork of Julien Tixier, the Tixier in Renaud Tixier. And of course, Famously, he built by hand himself the initial prototype of the Monday. Do you remember when he showed us the, the Legos? Oh, yeah. Yeah. Of the inertia wheel. Yeah. One of the, one of the things that, that I love, you know, and maybe this is just me as a parent too, is when we were being shown how the specific inertia wheels in the Monday work, it was demonstrated to us using a much larger, so obviously not to scale, a version of that that was made in what looked like Lego Technics. Yeah, it was Lego Technics. Which is just awesome. You know, I love the idea that people prototype in that. It makes perfect sense.

3:13 You know, if it was prototyped that way, but the concept was— the concept was executed with pretty, pretty— they've also since scaled up and 3D printed the mechanism. Yeah, but my point is, I just thought that was, that was so cool. It was charming, and it makes Plain really, in some ways, kind of like that bezel on the Ming World Timer, the daylight savings time offset bezel. When you look at it, you're like, how has no one ever done this before? It was— it's kind of— all good ideas are like that, right? Yeah, it's kind of like that with this, with this micro rotor.

3:40 But, you know, of course, that's the Renaud part of the equation. The Tixier part of the equation is the handwork that goes into the watches and the hand finishing. And he set that standard obviously with the prototype of the Monday. But now to have it in skeleton does 2 things. One is it leaves fully naked and exposes fully the, the, the micro rotor, the inertia wheel, the dancer as they call it, and really the mechanical prowess of that watch, the watchmaking prowess of that watch. But it also fully shows what Tixier is capable of himself in terms of, you know, old-school watchmaking, skeletonization, hand-finishing. And it's the version of the watch that puts it all on the table. Yes, it's a lot of

4:24 money. I can only ever dream of owning a watch like this. I'm not going to pretend that this is ever something I personally would own, but I'm just so happy it exists. So we got some great live photos. Blake took the live photos in Geneva, and I did a write-up on the watch itself, and that's on collectivehorology.com on our blog.

4:41 So if you just want to see this thing, like, this is one of those watches that, like, if you're just into watches, it's really cool. So check it out. Hat tip to those guys and kudos. That came out after New York Watch Week, you know, I think, which was the one more thing. Well, it was the one more thing. Wise in a sense, I think, just to wait a moment and then fill, fill that void. But let's talk about some news.

5:06 Well, just after we recorded today's episode, major news out of Switzerland. LVMH has announced that they are restructuring. Zenith. That means they're eliminating hundreds of jobs, maybe most of the jobs at the brand around the world. It also means that they are essentially shutting down the brand for a period of years.

5:25 They're seemingly pulling out of retail and distribution from what we understand, and they're going to ultimately refocus the brand on the high end of the market. This isn't surprising. We see this happening all over the industry. We've talked about the boom in the high end of the industry and just how challenged brands are in the sub-$10,000 price segment. We've also discussed trouble at Zenith. For instance, earlier this year, we talked about reporting that LVMH was exploring a sale of the brand. Now, of course, LVMH has denied that, but clearly there was trouble in paradise. We have a lot of thoughts on this, and we're going to bring that to you in our next episode, which is going to be actually

6:04 episode 100 of Open Work. We had other plans for that episode, but this is an important story and one we have a lot of thoughts and feelings on. Zenith is a brand we know and love. We love the watches. More importantly, We love the people. Our first collaboration in the watch industry was with Zenith, as well as our 10th collaboration was with Zenith as well. So we have a lot to say, and we know a lot of other folks have things to say. So we plan to be speaking with people who are involved with and invested with the brand.

6:36 We plan to do plenty of research to understand what exactly is going on here, both at Zenith and LVMH, as well as within the industry more broadly, and what the implications of all of this are. So you can expect that next week. The 100th episode of Open Work. Not the kind of news we would have wanted to cover, not what we had planned for episode 100, but this is important. So of course we will tackle that next week. Now in the meantime, this week we have plenty of other news and goings-on from within the watch industry, and we're excited to share those with you. So without any further ado, let's get on with the show. François-Henri Panamias has joined Hublot as an advisor. We're gonna talk about AP

7:21 his alma mater as well. They're rolling out a CPO program. We'll talk about Rolex CPO as well. There's some interesting news there. And then we'll end on Ybel. Journe and Chanel take a stake in— a majority stake in Ybel, which is fascinating. I mean, that is my— that could be an episode unto itself. It probably will be. It is a tangled web they're weaving there and a lot to get into. But let's start with François-Henri Benamias, former CEO of AP. That's where, of course, he made his name, cut his teeth.

7:56 But now he's also the CEO of the— is it the Honorable Merchants Guild or group or something? Exactly. It's some luxury holding company that he announced. And before we get into the Hublot thing, so he leaves AP, he starts this Honorable Merchants Group, which I guess is like a new age luxury holding company. They have investments in a number of brands. I feel like I read that they have like a luxury e-bike brand in there. In their stable. I think something like that. Don't quote me on it. There were rumors that they were gonna get either acquire De Bethune or maybe he would become CEO of De Bethune. That didn't pan out, although it appears that there were some discussions there. Now Antoine Pin

8:35 has become the CEO of De Bethune, formerly of LVMH Bulgari. So now we hear this and it's fascinating. I'm curious on your thoughts about— now apparently the scope of this is he still remains at the honorable emergency Merchants Group. He still has a new watch brand. I think it's like Northeast West South News, something like that, that they're launching within that group. We'll see watches apparently next year. So he's still doing all that. And now he has a, quote, discreet project on which he's consulting Hublot. And Hublot's CEO remains in place, but yet they decided to publicize this.

9:15 I, I don't know what to make of any of This is like Mark McGrath being assigned the CEO role at Ed Hardy in 2002. Did that happen? It should have. Yeah. I get, look, all right. So I think, I think there's a couple of ways to look at this. Actually, that's genius. There's a couple of— you could turn back time. There's a pretty, I think there's a, it's very tempting to look at this and like want to you know, be a cynic about it, but I think it's brilliant. The thing about— the thing about this guy is that no matter what you think about him, how he presents, like his vibe, he is able to, for a certain subset of client, develop some of the best pop art that appeals to them. Now, I'm not saying it's good art. I'm not saying the

10:11 Spider-Man watch, you know, or any of the Marvel stuff from AP was like amazing watchmaking. Personally, it wasn't for me, but there are a lot of guys who bought that. And what Hublot basically is, is horological pop art. That's a good— okay. And if you— that's a good point. If you think about it that way, because as we've talked about in previous episodes, like, that's not all he did at AP. No, no, no. But that was— but that was where the— and maybe it's a better fit for Hublot than it ever was for AP. That's my point, which is If it is pop art of a certain type, this is the guy who knows how to do it.

10:48 And I think we have to, we have to evaluate it purely. So you think that's his remit? That's your speculation. He's not coming in there to coach them on manufacturing scarcity. He's, he's figuring out how to be more hublot than they already are. I think if you think about it in that structure, it's ultimately what value he could provide to them. I don't think you can look at this horologically, and if you do, that's the wrong way to evaluate— in my opinion, is the wrong way to evaluate it.

11:17 I think you have to look at it from the perspective of what can this man bring. And the— and to the vast majority of the watch collecting community, as like collectors, I don't think this is relevant. But as Hublot has made abundantly clear, they don't care about the watch collecting community because that's not who they sell their watches to. And that's okay. And in fact, it's more than okay because really what it does is it's a brand that LVMH owns that isn't consistently cannibalizing or sitting over everything else. Like sometimes I think people miss the point when they talk about the fact that like Hublot is now using a lot more Zenith movements. Like, that's great, but you're looking at it the wrong way. Like, sure,

11:56 does that quote unquote justify the price of some of these pieces? Maybe, maybe not. I don't know. That's not why they're doing it. They're doing it because it's a better movement, I suspect, or they have better access to that movement at better costs. Maybe, who knows? Maybe helps Zenith more than it does Hublot.

12:11 Yeah, it's an interesting way to look at it. So all this to say, you know, while I am not a huge AP fanboy, as I'm sure folks who listen to us know, I do think that if we pluck what his strategic vision was for AP and apply it, it is probably better applied, frankly, to Hublot than it was there. So honestly, whoever made this hire, bit higher. Okay, so let me ask you this. You mentioned Zenith.

12:37 The current CEO of Hublot is Julien Tornayre. He came from Zenith. Yeah, that's where he cut his teeth and made his name, really helping that brand become what it is today. I mean, sort of plucking it from obscurity in the mid-2000s and setting it on a, on a more sustainable course. Is this a threat to him? And, you know, the other thing, what's interesting is in all the press I saw around the watch— sorry, around this announcement, it was kind of like it made it clear that LVMH was involved in this. And who's the Arnault that runs the, the watchmaking division of LVMH?

13:15 Oh God, I'm bad at this. He's the younger one, one of the younger sons. You know, he was very much involved in the press and the images were of him with François Benamias. And I didn't see Julien Tornayre in any of the sort of the imagery around. I mean, it's a good look for him. Who knows? I mean, the, you know, the political intrigue of the LVMH palace is outside of my pay grade. I guess my point is, if whoever made the decision made a good choice, I seem to think it is unlikely that Bonamius would want to be the CEO of Hublot.

13:51 Honestly, I think him coming in and sprinkling, you know, a little bit of Ed Hardy on it might not be the worst idea. But I can't fathom that this is a job that he wants. I mean, you know. Yeah, I think you're right. It's kind of like a Hollywood model where you're bringing in an outside producer or showrunner for a project or a particular remit and they do their thing, but the executives of the studio remain in place. And also, Julian Tournair is an exceptional CEO. So I think it would be weird, honestly, if you get rid of your bread and butter, everyday awesome leader. With someone who's a little bit more, you know, I'm a dude who wears cargo pants and I'm 60. Like that vibe is, that vibe is a very different energy, but it

14:35 is the right vibe for the brand and he is the right guy for the brand. So look, I think about LVMH is like, you gotta respect what they're doing between the Zenith, like collabs with independent watchmakers, the Louis Vuitton and De Bethune stuff, you know, moves like this. You should ignore them at your own peril from a business standpoint. And then they got the, you know, with everything they're doing with Daniel Roth and Gerald Genta and all that stuff. I mean, relative to their competitive set of giant holding companies, there's a lot going on there. Yeah, there is. I want to dig more into the earnings. LVMH recently published quarterly earnings and they notably glossed over the watchmaking division, which I

15:22 need to research that a little bit more carefully before we comment on it. But apparently maybe not everything is going so hot over there. And so to your point, this could be smart. Absolutely. Mix it up, bring it— bring in the guy who can— who has a track record of bringing brands into pop culture, which is exactly what Hublot does. That's in their— that's in their DNA. It's part of their character.

15:45 Speaking of Mr. Benamias and AP, now what I'm hearing from WatchPro, they're reporting that AP is ready to roll out, and they're saying AP hasn't confirmed confirm this, but they've got, they've got details through their sources. AP is getting ready to finally roll out something that they first floated in 2018, which is their own certified pre-owned program. And apparently the structure is going to be a little bit different from what Rolex— Rolex does.

16:11 Let's just call it Rolex from now on. It'll be a little bit different from what Rolex does, which is, uh, it's basically, as we've talked about, very decentralized, goes out to the authorized dealers. The authorized dealers are the one buying the watches and ultimately While they may lean on Rolex initially for service and certification, ultimately they're expected to take that on. This will be very different. AP, we've talked about their centralized retail model where they have closed retailers, they're bringing things in-house.

16:38 So this will be a centrally controlled and run certified pre-owned program where the brand itself will be the ones buying back the watches and then reselling them. Interestingly, one of the things that, that's being floated here is that they'll be selling online. Yeah, that is interesting. I also— so look, if I think there's like 2 problems they're trying to solve here, right? One problem is that obviously they quote unquote don't have any watches. Leave that one open for interpretation. This is a way to address that same way Rolex does, right? Like, we don't have a Sub for you here, but I have a Sub for you for 50% more over there if you want it right now. And 2, you know, for most production APs, secondary value has been slowly

17:22 declining. And this is, I think, one way for them to try to clean that up by buying up inventory and then resetting the market. There's no guarantee that will work, but it certainly gives them a little bit more control over the secondary value of their brand, which I think for a lot of people who collect AP is very, very, very top of mind given that the prices of those watches continue to climb and were climbing long before the CHF inflation and the tariffs caused a sort of, you know, industry-wide price increase. So, you know, if we look at this from, from like a boardroom perspective, I think there's a lot of, of good intention and strong strategy here.

18:05 The question for me is less about whether this is the right choice for the brand, because honestly, I think it probably is. It is. The question for me is about the tone and the way that they're going to interact with their clients about it and the expectation a client will have about whether or not they are now an AP client.

18:23 Just sort of an interesting thing. Oh, that's a good point. So if you think about the way that like AP operates and I'm not making this up, I mean, it's my own personal experience. It's stuff that we've seen from like recorded interactions. It's like it's very quid pro quo. You know, you must buy a bunch of things before you can get a thing that you want. We are explicit about stating that, you know, it just is what it is.

18:43 And, you know, in defense of AP, that's the fact that they're kind of transparent about that is probably a little bit better than telling them than not being. So, you know, it is what it is. Well, the question will be, you know, are you an AP client now if you buy up a bunch of pre-owned stuff? Like, do you suddenly qualify for a 16202 if you spend— if you just drop $100K on some pre-owned Royal Oaks? I don't know. So it's sort of an interesting question there. And then the other one will be AP is notoriously aggressive with people who resell their watches, even if it's been years since you bought it. Oh, that's a good point.

19:20 And now they're going to go out there and buy those watches. There is a part of that that does feel— that doesn't sit great with me. Yeah. Where it's like, you know, it's hypocritical. It's incredibly hypocritical. And, you know, and what I mean, like, let's be real, like, business is business. I don't think they're going to send an apology note to everyone that they demanded to know why they sold their watch to. Like, give me a break. But the hypocrisy is there. And I do think it's, you know, there's nothing to do about it. But I see it and it feels kind of crappy. Well, it's also— they've, they've made it very clear to clients that they don't want them selling their watches, and now they expect those same clients to turn around and sell them their watches. If I were

20:00 an AP client, I would think twice about turning around and offering a watch back to the brand. Well, and I suspect that they're going to do kind of what Rolex does, which is set an event horizon on it. It's like, we can't sell me back something unless it's been 2 or 3 years or something like that. But then the question becomes, will that leave a bad taste in the mouth of the brand where it's like, oh, well, you clearly, you know, resell your watches back to us. Like, will we reallocate you another?

20:22 I'm not like— the truth of that is probably, yeah, of course they will. But it's difficult to break. Like, I cannot tell you how many clients I've spoken to who wanted to trade an AP to me and begged and pleaded for us to place it in a way that the brand wouldn't know. Can't guarantee that, which of course we cannot guarantee, but that sort of like weird PTSD It's like being in this, like, abusive relationship.

20:45 It's like they can't— they can't know, you know? And I think they've done a really good job of, of, of, like, terrorizing their clientele in that regard. And now they want them to sell them their watches. So without going too much further down that road, that's a thing. It's there. Let's see how this goes. You know, AP hasn't been making a lot of great executive decisions of late. So this does sort of feel like maybe it's like a pretty generic but maybe strong choice. So let's see how it works out. I'll be curious to see how it goes. I think the other question here will be, will they pay attention? Here's the other problem. Oh, I've got another problem too.

21:23 There's several here. Let's, let's actually look up some data here. Well, let me, while you look that up, can I ask you a question? Yeah, sure. What do you think this does to the rest of their product line? Because you've pointed out someone goes into the AP house or boutique today, they want a new Royal Oak, they're a first-time client or, or whatever. And they're direct— and, you know, they're directed now to a certified pre-owned Royal Oak, and does it count, and blah blah blah. Here's the other thing: what does it do to the watches that AP currently directs people to?

21:54 So currently, if you go into an AP house and you want a Royal Oak, you're directed to a Code 11. So this is exactly the data I just— what happens to the Code 11.59 in a world where AP has now Royal Oaks that are certified pre-owned that they can readily point you to? Well, Well, I think the problem's bigger than that. So let's look at a 15210ST. That's a base model white gold. Is that white gold? No, I'm sorry, steel. Pardon me. Obviously ST, duh.

22:19 15210ST. That's an 8— that's a base model 1159. Okay. Retail price on that right now is $28,800. Market price is about $17,000, which means that wholesale on it, even ballparking here is like probably somewhere around— Well, are they wholesaling? It? No, no, no. I'm just saying if somebody buys it secondhand against that original price. So basically, if you called up a dealer today and you had a '15 210ST to sell, they'd probably give you around $11,000 for it.

22:49 No way. Really? Yeah. That's brutal. So the depreciation is more than 50%. Do you think they're going to list a '15 210ST for $18,000? No way. But they can't list it for more than $28,000. That's absurdity. So what are they going to do? Okay. Yeah, this is interesting because now they've said we're buying watches.

23:09 People aren't necessarily going to want to turn around and sell them their, their Royal Oaks. They're going to want to turn around and sell them all these other things they got bundled on, like their Code 11.59s. That's definitely a possibility. And what's the brand going to do? Say we're not going to buy that? Well, I don't, I don't know, but I think my point is like the brand is, is currently dealing with some deflation in their secondary brand or secondary market pricing.

23:38 And I mean, look, let's, let's also be realistic here. Let's say you buy a Sub, a current model Sub, right? And that, that's more than 2 years old now. As you go to trade that back into a dealer who sells pre-owned, you might get at or slightly below retail for that of what you paid. Yeah. And then they're going to mark it up to a little bit over you know, what you would've paid plus tax, 'cause that watch is quote unquote difficult to get from a dealer, but is certainly available.

24:08 So, you know, if you, if you don't wanna wait 7 or 10 months or however long it's gonna take, or years for some people to get a Sub, here's the shortcut. You pay an extra few thousand bucks, you get the warranty, you call it a day. Like, that's that. That doesn't really apply here, you know? And I think the question will then be like, are they gonna be selective? Like, are they only gonna take like 16202s and things that they know that they can sell for incredibly high secondary prices? And if they will, what message does that send to their, to their clients who are going to say, oh, amazing, I've wanted to sell a bunch of these watches. And then, right.

24:40 And then they bring them in and they're like, oh, but sir, we don't want this one. We don't want this one. We don't want this one. And then they're sitting across from the table like, let me get this straight. This was pitched to me as the most desirable, quote unquote, watch ever. And now you won't even buy it back from me. Exactly. So I think, I think they're between a rock and a hard place here. It's going to be tough. Yeah. Because no one is going into the AP house looking for a CODE 1159, much less a used one. No.

25:07 And I think— I mean, oh, can you imagine? Yeah, it's tough. Hey, it's Gabe, and no, I'm not gonna ask you to buy a watch. Instead, if you're enjoying this podcast, please take a moment, if you would, to give it a rate and review on your podcast player of choice. I know we ask for this all the time, but there's a reason we do. You know, it's pretty incredible Open Work has quickly risen to become one of the top watch podcasts in terms of downloads, but we still trail many other watch podcasts in terms of ratings and reviews on places like Apple Podcasts, Spotify, or wherever you get your podcasts. So if you'd take a moment to give us a rating and review, we would really appreciate it.

25:50 It goes a long way to helping other people who would enjoy this content find it themselves. Back to the show. The Rolex model works for all sorts of reasons we've discussed. The— it just doesn't really work in the same way for so many brands. I think a lot of brands— and look, the problems you're pointing out with AP are only magnified once you get into other brands where nearly all the watches lose value, right? I mean, there's a reason most other watch brands haven't done this, is because they don't want to open that Pandora's box of secondary valuations and trade-ins with their clients. It's tough.

26:25 It's gonna be interesting. So I'll be curious to see how it goes. That's, that's an interesting topic. Speaking of which, let's look at Rolex CPO. We had talked about this, this number, this benchmark coming up. Looks like it's coming. They're approaching a billion-dollar scale. Yeah. So it's a billion dollar— wow. So they will be at a billion-dollar run rate. So this year, 2026, they won't hit a billion dollars. They'll probably get somewhere just shy of $800 million. So I guess the guess here is $780 million this year. But they'll be, if they hit that number, they'll be on a run rate for $1 billion in the final quarter of the year, meaning it's all but certain that, you know, nothing is certain, but it's looking very

27:07 much like in 2027 it will truly be a billion-dollar business. Yeah. Which is remarkable for a company that produces a million watches a year. I mean, look, Rolex continues to be just an example of itself. It's difficult to express how much of an anomaly they are relative to their competitive set and also just the market. And honestly, I'm blown away. Like, this is such a gigantic number and what it shows, I mean, look, let's be honest. I mean, dealers would not be operating on shorter margins with these. I know there's this perception out there that like— and we see this in the comments sometimes— that people, you know, that dealers are making some obscene amount of money on these watches.

27:57 I recognize that people are still gonna say it, but I can tell you for a fact that that is just not true. Dealers must be turning over very quickly to be making this into the business that it is, which means that the product is selling very fast. Otherwise, this is just not possible. Let me give you some numbers on this, please. Okay, so this is coming from Morgan Stanley and WatchCharts.

28:23 So they are estimating that in Q3 of 2026, Rolex CPO did $229 million in sales. That's up 61% year over year. So if you looked at Q3 2025 versus Q3 2026, Up 61%, up 30% quarter over quarter. So just within the same year, just from Q2 to Q3, the business grew 30% by their estimates. I mean, absolutely mental.

28:54 I mean, the growth here and the appetite for this program is wild. But let me ask you this. Yeah. Well, so a couple things are happening at the same time that that's happening. Growth in Rolex pre-owned prices is decelerating and is actually falling behind a lot of other brands. So let me give you a rundown of some other brands, and this is Q3 performance. So Q3 price index performance from WatchCharts. They look at all the brands, they look at their pre-owned prices, and they say who's up, who's down. Yeah, Q3, Longo was up 4.4% quarter over quarter. Vacheron was up 3.1% quarter over quarter. Patek 2.6%, Cartier 2.4%, AP 1.2%.

29:42 Overall, the watch market, pre-owned watch market, in terms of pricing was up 1.2% quarter over quarter. Rolex was only up half a percentage point. So a couple things are going on here. One, the CPO program couldn't— and I think we talked about this on a previous episode in an earlier quarter— the CPO program could not have come at a better time. Yeah, it's sort of bailing out the Rolex pre-owned market, you know what I mean? It's like just as that market is decelerating because of what we know is the, the CPO premium that Rolex ADs are able to charge— they can sometimes go 20-30% over market on a pre-owned piece because it's certified and they're the ones selling it— that is, that has got to be helping buoy these numbers

30:24 and certainly came in the nick of time. I guess my broader macro question about all of this is, okay, great, we've got this Rolex CPO program, and if you want a Submariner— let's take the example you just gave a couple minutes ago— you want a Submariner, you go into the store, you basically can choose now between if you want to put your name on the list, yeah, for a new one, or just not get a new one, or pay a few thousand dollars more and you get the certified pre-owned version. And you're right, most people will just say, yeah, screw it, okay, I'll do it. I don't know about most people, but enough. Plenty of people will say, I guess a casual buyer, you know, who just wants the Sub. Yeah. And honestly, it's probably

31:05 the cost-efficient way to do it. Yeah. No, it is. If you don't want to deal with a, you know, non-CPO dealer. You don't want to buy a bunch of jewelry or, you know, watches. Or you don't want to buy from someone who's selling pre-owned, who's a trusted seller. Oh yeah. Which is that other sort of intermediary step.

31:17 Yeah. But go on. But you're a casual buyer. Sure. The peace of mind is worth it for you and it's not that much over retail. You know, we're not talking about a Daytona here or something. Whatever. Sure. So this starts to make Rolex watches, in a sense— just forget new or whatever, but like legitimate Rolex watches bought from a Rolex retailer— more kind of available, you know? Does— is that sort of lower— so I think 2 things could be going on. One is, is that gonna suppress demand for Rolex overall? Because now all of a sudden you've got a big segment of the market, the casual buyer, who's satiated. I'll tell you, I'll tell you what they want. Want. The other, the other point here is that the other

31:58 dynamic that's going on in the market is tastes are shifting. So it's no coincidence that some of the brands we listed as improving while Rolex is flagging in terms of pre-owned values are Vacheron, Patek Philippe, and Cartier. You know, tastes are shifting, as we've said many times, to dress watches, more formal watches, gem-set watches, all of that sort of stuff, and away from stainless steel sports watches. I'll tell you why I don't think So I had a client once that wanted to sell an extremely rare Rolex. It was a rainbow Daytona.

32:30 Rainbow Daytona. I don't exactly know the MSRP of that. It's somewhere in like the high hundreds. It's like $170,000, $180,000, something like that. I don't think it's a published price, but it's somewhere in that range. Is it like an off-catalog piece? No, it's on catalog. It's just on allocation. But, you know, you can't just buy a rainbow Daytona. Very few are made and you have to be relative to Rolex, and you have to be allocated one. And the demand for them is extraordinary, which is why the secondary value of them is often somewhere in the like $275,000 to $300,000-ish range, which is wild. Now granted, I will tell you, having put my hands on that watch, it's totally awesome. Not, you know, I can't imagine any world in which I

33:07 would wear that watch, but it's just cool. Anyway, long story short, I knew of another client that wanted one, and I, and I called this client up to let him And even though this watch was more or less unworn, he didn't want it. Not because he didn't have the, the means to buy it at the price that was being asked. He did. He didn't want to buy it because that's not the way he wanted to get the watch.

33:28 And I think that that's a part of it. And I think this goes— this speaks to the AP thing too. There is an intellectual structure that some of these brands apply of you have been chosen. And if what, you know, it, it's not a matter of money. There's plenty of people out there who have the money for a 16202, right? Just buy one used, whatever. Yeah. But they don't want that. Yeah. Yeah.

33:53 And it's not, it's not the delta. It's not the amount of money between— it's how it's offered. That's right. So I think, I think that there will always be the person who wants to be allocated the 56 or the 5811, you know, who always wants to be allocated the 16202 because because it feels like you won because that's the, that's the, like, the structure of, of, of the, the, the business that's been built. And I get that. I do.

34:21 So I, I don't know that any of these pre-owned programs will drive down the demand on that sort of thing. And I do think that these programs speak to different clientele. AP, I don't know, remains to be seen, but I think with Rolex, that's what we're seeing. That's what we're seeing. Like, people debate all the time about like, oh, well, this price is so high, I could just get it from them.

34:42 Like, yeah, totally. This program's not for you. Mm-hmm. Yeah, but I think this is my— this is my point, which is the— you're right about the example of that rainbow Daytona or any number of other watches, of course. And I can certainly— when like the client's like, oh yeah, I do want that watch, but I want it in this way, that, that makes sense.

34:59 Absolutely makes sense. It's like, I want my name on the papers, you know? But how many— you did— how many people have reached out to us in our lifetime saying, Hey, I'm getting married in a couple of months and my husband has always wanted a Rolex and I want to buy him a Rolex Submariner. And then you have to explain to them all of the mishegas around getting a Rolex Submariner.

35:19 Sure. And that has driven the desirability of Rolex and hence the secondary and the resale value of Rolex. Yeah. Now, however, we're entering a world where someone sends you the email and says, hey, I'm getting married, I want to get my husband a Rolex, how does that all work? And you say, well, you really can't get one new, but you can go and get a certified pre-owned. Most of them will just go and do that. And all of a sudden now, yeah, official Rolex watches are more readily available. And does that end up in the long term suppressing the value on the secondary market?

35:52 No, because a pre-owned watch will never be the same as a new watch in any consumer's mind. It may not stop someone from buying. I think there are a lot of people for whom it is the same watch because they just want a Rolex. I don't, like I said, I don't think it will change whether people people buy it, but I don't think that the fact that you get the box and it's a different color, you know what I mean? It's, it's like, it's like when you're, it's like when you're freelance versus, you know, like a contingent worker at a tech company versus non-contingent.

36:20 You go there, it's the same food, it's the same desk, it's the same office, but your badge is a different color. Yeah, but I think there's a lot of— for someone who's into watches and cares, sure. For someone who just wants a Rolex Which is, again, this is an unanswerable question. Again, they're selling a million a year.

36:38 Most people just want a Rolex. They're not thinking about it the same way, and now they're more readily available. Yeah. Look, I think all of these things can be true, but bottom line, the part that's inarguable, the program works. The program does work and seems to be working in the nick of time. Indeed. Now, speaking of bailouts, let's talk about Ebel.

37:00 So this is an interesting one. We did an episode, gosh, a year earlier. And like more comments on that one in terms of like people love and care about this brand. Yeah, the, the YouTube video clip on that is like the gift that keeps giving. People still comment on it. So Ebel, of course, back in the day, I think it was in the early 2000s, they had been acquired— 2004, they were acquired from LVMH. You know who had Ebel before LVMH? No.

37:27 Our good friends at Investcorp. They had, they had Breguet and Ebel sitting side by side. They sold Breguet to Swatch Group. They sold Ebel to LVMH. I thought they sold it to Innotrade. Yeah. Or was it Innotech? Who knows? LVMH sells it to Movado in, in, in 2004. And for the last 22 years, it's kind of languished. It went from a Swiss brand that I think stood side by side with peers like a TAG Heuer or an Omega and others. Now it's kind of turned into, unfortunately, sort of a mall brand. And it, you know, when you have a hammer, everything looks like a nail. And Movado's whole business we talked about is geared around distribution to malls and small jewelers. And so that's where Ebel sits, which is, you know, in some level,

38:14 in some ways, kind of a shame. I love the old, the old watches. Now we hear that Journe, with investment from Chanel and Pierre Jacques, who will serve as the CEO of the brand, are buying it from Movado. Well, they're buying 95% of it. Movado will continue to owe 5%. How exactly the deal is structured and being financed and what percent Journe owns versus Chanel versus Pierre Jacques unclear, but I found this just fascinating on so— there's so much going on here. I think one question on a high level is like, does the world need another brand reboot?

38:53 I mean, gosh, we just got through like Galley, you know, for instance, and now here comes another. But this deal is so unusual, it leads me to believe that these folks have an unusual solution. Yeah. For, for eBell, which I'm curious to see how it, how it will play out. Well, they're betting nearly $67 million on it. Look, I, all right, so a couple of things.

39:17 Let's, let's look at the structure and, and the individuals versus what it could hypothetically be. Mm-hmm. Because we don't know. So when you look at the folks behind it, we have Chanel. Okay. Chanel has quietly taken stakes in some of the biggest powerhouses that are existing already, as well as those that they believe in on the independent side. Chanel is involved in far more.

39:44 I don't even know if, like, some of the things that we know about some of their investments, I don't even know if they're public. So for instance, Cross Studio, Marco Tedeschi, that's public now. Oh, it is public. Okay. So there you go. So that's, that's news. But they've invested in, in Jordan, obviously, MB&F, Romain Gauthier, Canisi. They own Bell& Ross. Look, I don't think they fully own Bell& Ross. They have a stake. They have a stake. So my point is their first reboot, man. It is. But, but they don't strike me as fools. And the people and like the watchmakers that are involved in Chanel would not be involved if they didn't have good leadership. So that's number one. So very impressive there.

40:23 Number 2, I'm very curious about Journe's interest here. That's— it's like if Journe weren't in the headline, this would make a lot more sense to me or be a lot less interesting. Yeah. And it's fascinating because I wonder in the way that like Romain Gauthier has provided watchmaking guidance for Chanel brands, I wonder if it's kind of like, you know, François-Paul Journe will give watchmaking guidance to Ebel. But then there's sort of this broader question of like, The man is older now.

40:57 His, his own brand is untouchable. Well, this could be his legacy. Yibelle. Oh, yeah, exactly. And I think like the sort of the, you know, the like the easy, cheap answer is like, oh, well, this is going to be the Mad addition to the MB&F or like whatever. I can't see that. So honestly, like the thing that came to my mind was that like the brand meant something to him personally, kind of like the way that like, you know, the rich billionaire buys the coffee shop that he used to work at, you know, buys a newspaper. Yeah, exactly. Yeah. But my point is like, I have to imagine there must be some emotional connection to it. At least that's how I, what I imagine I'm spitballing here. I guess the bottom line though

41:40 is you have a, you have a Pierre-Jacques who, you know, who has been a CEO in the industry for quite some time. Björn needs no introduction and Chanel is not messing around. Pierre-Jacques was CEO of Debitune, very different brand from Ybel. Same with, sure, same with Björn. This is what makes it so interesting though. Yeah. So I don't know what's going to happen here. I find this— I'll put it this way. When, when Galet, when the Galet thing was, was announced, I think we all kind of knew what was going to happen and exactly what we thought was going to happen happened, right? They relaunched a brand that sat below Breitling, as we talked about on previous episodes, like what you thought was going to

42:16 happen happened. I think what makes this so fascinating is like, I got no idea what's going to happen here. None. Which is why, you know, I'm the Michael Jackson with the popcorn meme here. I'm excited. Let's see what happens. What do they have in mind? What are they going to do? And what's interesting is, you know, normally I'd say a brand like Ebel under the Movado Group had really fallen from grace, has really fallen from, from grace, unfortunately.

42:42 But it's also faded into the background a bit. And, you know, usually I'd say a brand that's fallen from grace, it's going to be really hard to reboot them. Like, again, like Chanel has, has taken stakes in a lot of watch, watch brands and businesses, but all of those brands have taken investments in Chanel from a position of strength. You know what I mean? Yeah. This is a very different move for Chanel in their, in their playbook. Like, they're taking a big risk here. Yeah. They're not underwriting a business or giving some security or some liquidity to a business that's established. They were shown something that clearly interested them. This is a turnaround.

43:18 Yeah. And so normally I'd say like, oh my gosh, a brand like this, that's going to be really tough because you don't— look, Chanel isn't taking a flyer on this, and Journe is not taking a flyer on this, and Pierre-Jacques is not taking a flyer on this for these watches to end up in malls again. Let me put you this way. Max— I'll put you this way. Max Busser is nobody's fool, and he has been offered money from so many people over the years, but he took it from Chanel.

43:44 Yes. So that leads me to believe that if he thought that these were the right people to, to have a stake in the future of his company, company from now until forever, you got to imagine that whoever is making some of those choices over there, it's pretty exceptional. Pretty exceptional. But I typically say the deck is stacked against them because of the rocky road that Ebel has been on over the last 22 years. However, the fact that they've, as we discussed on the last time we talked about them on the pod, the fact that they basically faded from memory and into obscurity actually gives them some permission. Dude, F.P. Journe and De Bethune watches traded wildly under retail up until a couple of years ago.

44:28 So this is— but yes, I'm not talking about watch quality. I'm talking about like brand management. But here's my point. Ebel is effectively, let's just say right now, at least in the US, it's a mall brand. Sure. Essentially. And typically I'd say like, good luck with that. I mean, like pulling a brand, pulling a brand out of that segment of the market, typically there's so much baggage. But what if they aren't? What if that's not the— what if that's not what they're trying to do?

44:54 Maybe. I think, I think the impulse is to be like, you know, okay, FP Journe is involved, it's going to become haute horology. What if it's not? Oh, I don't think it's gonna become haute horology. Yeah, but what if it's— what if it is a mall brand? What if it— what if the goal of it is to— and I'm making this up— is to make it the most incredible mall brand that's ever existed? What if their theory is like, you know what, well, they should pick a different channel because malls are dying. Okay, fine. But I guess my point is like, what if they look at it and they're like, you know, the era of Seiko and G-Shock is over.

45:23 Okay, that's an interesting brief. So I guess my point is we don't know what they're doing, and I want to be very careful that we don't make assumptions just because of where these people came from, you know? So, so maybe it is another matte edition. Well, no, I don't think those are mall watches. I think, I think my point is, like, I find it interesting when people cross over from, you know, from, like, could the CEO of Target become the CEO of Apple Retail? Like, potentially. They tried. Now, obviously, they tried that. Was there a JCPenney Yeah, they tried that and he failed miserably. And then ultimately they chose a different approach that worked better. But my point is, it just goes to show that you can't, you can't just make an assumption

46:03 based on someone's history about whether that's the trajectory they're going to take the brand. So I'm curious about what the brief was here, but there's no way Chanel coughed up this much money and these guys coughed up this much money without a business plan. Like, they know what they're going to do here. Yeah, well, it's pocket change for Chanel, not so much for, for Jordan or an executive.

46:26 Who knows, Jack? But who— and who knows where the actual money came from, you know? Does, does the, does the world need another brand reboot? No, it really doesn't. But my gosh, is this an interesting one. It's fascinating. This is one to watch. Like, there, there will be a case study written about this thing one way or another because it goes one of two ways, you know what I mean? Or it goes in a way that none of us can see, which is kind of what I'm hoping for, that there's a thing that they see that none of us do. Yeah.

46:52 And then that's, that's what I mean. It's either wildly successful or it bombs. But either way, it's gonna be— is that how anything goes? It's gonna be a wild ride. Yeah. All right. Shall we leave it there? Yeah. Interesting times in the watch industry. That is for sure. Well, thanks for listening. Open Work is a production of Collective Horology.

47:10 You can find us online at collectivehorology.com where you'll find tons dozens of independent watch brands and their watches. Get in touch with us, and to do that, you can email podcast@collectivehorology.com. They can't— they can't know!