Why do some independent brands fly journalists on private jets while others don’t? Why do some independents produce one-off watches for exhibition only while others don’t? It might seem like a ridiculous question, easily answered with the notion of subjective management style and approach. Yet, I believe there’s a deeper answer. It’s one that helps us understand some of the business phenomena in independent watchmaking today.
Currently, “independent” exists as a kind of undifferentiated mass in the watch industry – a loosely defined term that equates to watch brands outside of the historic, family-owned maisons (Patek, AP) and large, publicly-traded groups (LVMH, Richemont). Take these five indie brands as an example: H. Moser & Cie, De Bethune, Sarpaneva Watches, HYT, and Grönefeld Watches – all established businesses with defining products from recent years.
However amongst these five companies, there are two different business structures. H. Moser & Cie, De Bethune, HYT are all private equity or “family office” run brands, whereas Sarpaneva Watches and Grönefeld Watches are both owned and operated by founders. It is hardly a coincidence that the latter category rarely creates major marketing campaigns.
In most other industries, there is a cultural divide between owner-operator and private-equity-backed businesses. The former tends to be mostly heads-down, fixated on steady, manageable growth that doesn’t demand reinvestment of ownership’s earnings too quickly. The latter tends to fall on the opposite side of the spectrum. Armed with outside capital, private equity backed businesses tend to aggressively invest on all fronts: R&D, product, marketing, and sales. Generally, the more money that goes in, the larger the growth expectations – no one wants to invest $1 and get $0.50 back. The watch industry is by no means immune to these cultural forces in business structure.
It might seem like a mundane distinction, but I’ve found it quite useful to help guide myself and other independent watch collectors with purchasing decisions. Often, collectors of independent watches gravitate to brands with watchmakers that share their own values and personality traits.
From private equity backed indies, you will generally see a bit more playfulness – a luxury afforded by the extra capital. For example, H. Moser’s Swiss Icons, the satirical commentary on the zeitgeist of modern watchmaking, is a representation of something you will not likely see from an owner operator brand. Though many criticized the brand’s move as gimmicky (a common critique of private equity backed brands generally), I tend to appreciate these brands because they consistently push the limits of the watch industry. They encourage introspection and debate; something we could all use more of in this space.
In terms of collecting, I personally tend to favor independent brands with founders who act as owner operators. I gravitate to individuals who truly put their own skin in the game, kickstarting and developing slowly but steadily, sometimes, over decades. I want to be connected to the guy who sold his motorcycle to start his business.
Appreciation of indies goes further than just the commodity or asset itself, as it often can be when purchasing from the historic maisons and large groups. It’s a friendship, a patronage, a return to human relationships through production – not only with fellow collectors around production.
Everyone has their own style and preferences, just make sure you know yours before picking who you’ll support.
Another day with the beast,