SDC Weekly 42; Hodinkee update; Remy Cools at it again; Smart Rings
Onlywatch update, Tudor does an interview, Auction bargains, Neuralink in action, F1 deep dive, Cockney accents and the power of words.
What’s going on with Hodinkee? Have you heard of the Barkley Marathons? Why should you care about smart rings?
Hello 👋 and welcome back to the SDC Weekly. Today, you’ll find answers to the questions posed above. If you’re a new subscriber, take a look through the older editions of SDC Weekly here.
Small talk
Snoopy
So, we’ve been talking about it for weeks now, and the Snoopy MoonSwatch has finally been unveiled and on sale from yesterday. Perhaps the funniest story I’ve seen was this one - which explains how a Dubai store only got 20 pieces (wtf!) and they were “sold out” before the store officially opene. The article cheekily alludes to the watches having been sold to “people with close ties to Dubai’s inner circle who never stepped foot inside the store” - while there is no evidence to support that theory, knowing Dubai, that is indeed likely!
Hermes hit with anti-trust lawsuit
A new class-action lawsuit has charged that the requirement of buying ancillary items before being able to buy a Birkin bag is a form of “tying”, which violates anti-competitive law. Interesting to note, Hermes’ employee incentive scheme allows them to make commission (1.5%-3%) on everything except Birkin/Kelly Bags. So it is no surprise, this bundling is happening… they get paid more because of it. I wonder how many multi-brand watch ADs also compensate in this way - I have asked them before, but most sales staff deny they are earning commissions on non-hype pieces.
Tudor Interview
managed to get an interview with the CEO of Tudor, Eric Pirson - the first he’s ever given, and something rather rare for any senior executive from the Rolex group. The article explores the resurgence of Tudor, which has emerged from the shadow of Rolex, to craft its own success story. Apparently they have over 120 staff on their Geneva campus, and here’s one thing I found interesting: The Kenissi movement factory also has 120 workers, and Tudor only owns an 80% stake. Guess who owns the other 20%? Hint: they also own stakes in F.P. Journe and Romain Gauthier. Christie’s Schumacher Collection
The watch is “arguably the most important Vagabondage F.P. Journe ever made,” Remi Guillemin, Christie’s head of watches in Europe and the US, said in an interview. Source
He would say that, wouldn’t he? In their Rare Watches auction on 13 May 2024, Christie’s will be selling eight watches from Michael Schumacher’s collection. Mildly interesting, but to most a sad reminder of a legendary F1 driver. More on this in the links below.
Phillips Online HK Auction
This auction ended yesterday, and there were some epic deals on wheels! This 38mm Journe CS sold for £38k, a 15202 AP Jumbo went for £40k, a Breguet 7027 for £9k and a Rolex 1665 Sea-Dweller, “Great White” MK I for £9k as well. There was also a Moser Endeavour Perpetual Calendar in white gold for £20k. Makes me regret not taking a cheeky punt, but I am averse to dealing with Phillips, regardless of what’s on offer. If you don’t mind them, then it seems there is some decent value out there.
Global economy
Not as random as it seems… McKinsey published this Global Economics Intelligence executive summary last week, and here’s what I found interesting:
So, despite elevated prices, consumer sentiment apparently remains upbeat globally. This surprised me, particularly the point that retail sales in major economies showed steady growth. Overall, though, the report suggests consumers may still be willing to make luxury purchases (such as expensive watches) in economies where consumer confidence is high; the US is a key example. In countries like India and China, economic growth is projected to be strong, making it a good place for luxury watch brands to consider expanding their presence. In Europe, the outlook seems bleak. You can read the full report here.
OnlyWatch again
I shared their announcement last week, and The Fourth Wheel went into further detail last Friday. For starters, here you will find the audited financials for 2021-2023. There is also a detailed slide deck which has slides like this one, as well as some commentary around the expenditure in each year:
The most interesting takeaways from The Fourth Wheel were:
OW initially announced they would use KPMG for the audit, then used Grant Thornton instead. When the story broke, Luc said “We have appointed Ms Bettina Ragazzoni - KPMG Monaco, as auditor.”
The watches for OW2023 (postponed) were in fact donated to AMM1 and valued at €5,303,601 - there is therefore an open question around whether the watches we saw floating around must be returned to OW for the 2024 event or whether the brands are allowed to pull out and/or get their donations back. All unclear.
There is no guarantee (yet) that the 2024 event will go ahead as planned, but OW remain hopeful it will. Remember, some brands pulled out, and will now have to opt back in. Some may not have publicly withdrawn, but instead expressed their intent privately (which is possibly what led to OW postponing in the first place).
The OW team shared this letter last year, promising to “Set up a charter for the prevention and management of conflicts of interest” - this was not publicly addressed in the aftermath, but they have put a ‘conflict of interest policy’ in place which must be signed by all stakeholders every year. This is not a public document.
In conclusion, perhaps the books are in order, but the ownership stake in the beneficiaries of OW funding (research companies) hasn’t really been addressed. I explained this in this previous newsletter. The furthest OW have gone to address this was to create a ‘conflict of interest policy’ which nobody can see. The only time this may become a problem, is if/when one of those research companies finds a cure, and then commercialises / sells the research for profit. This sort of breakthrough is possibly worth a fortune, and while we have been assured these corporations can’t or won’t pay dividends - Luc’s ownership stake being sold would not be ‘a dividend’ - so what happens then? Of course, maybe these companies will never find a cure, in which case this ‘problem’ is irrelevant.
Ok, enough of the small talk… Let’s dig in.
ScrewDownCrown is a reader-supported guide to the world of watch collecting, behavioural psychology, & other first world problems.
⚠️ NOTE TO SUBSCRIBERS:
Some email applications may truncate this post. You can read it all online here or click on “View entire message” at the bottom.
Thanks for reading!
👀 What’s next for Hodinkee?
Hating on Hodinkee is something of a pastime in many watch collecting circles today, but the Dink’s role in shaping a generation of budding collectors can’t be overlooked, and the collector community does perhaps owe them some credit. With earnest beginnings, they put out some exceptional content in the early days, and many folks in the hobby are upset because of this fact - they saw what the dink was and are now seeing what it has become - and it is this delta which seems to irritate many people.
Granted, they did themselves no favours over time; remember the travel clock saga? That said, there have been some epic posts over the years like this one on Patek Philippe Perpetual Calendar Chronographs or this adventure inside Rolex HQ. They really were putting out some fabulous content in the early years, and anyone denying this is drunk on haterade.
I was listening to Ben Clymer on this podcast with Barry Ritholtz, and at some point during the conversation they were talking about people buying watches without physically trying them on, and Ben casually replies “we do about $100m per year” (of sales to people without trying them on). So nonchalant, too.
During the podcast they cover other salient points, for instance how, until April 2021 when they hired their first Chief Marketing Officer, they were doing ~$30m per year in revenue without spending anything on marketing (or ‘customer acquisition’ costs, as Ben describes it). The comment from Ben most relevant to today’s post however, is this one, referring to the early days before they became the company we know today (emphasis mine):
It was really special because we weren’t selling anything. We were just there to promote the industry. And what changed for me was, after a few years of making a good living, and I own the whole thing, so it was like a nice little living for me, I said, hey, I’m getting these emails that person X or woman Y is buying this Patek Philippe or Rolex, whatever, because of the content we’re creating. And here’s the proof. Here’s an email. And I would take that to brand X and I would say, hey, isn’t this cool? Do you guys want to advertise more? And they said, “oh, no, we’re good, but do you want to come to Per Se for dinner?”
And I was like, Per Se is lovely, but that doesn’t pay for my rent. It doesn’t allow me to grow this business. And I said, man, our audience is really special. And we started doing these surveys, internal surveys, where, hey, what do you want from Hodinkee? The number one response every single time to this day is for Hodinkee to sell things because they trust us.
Isn’t that crazy?
I think Ben is a smart man, so I don’t think modern Hodinkee is a case of Ben not realising how selling products could poison the well of trust Hodinkee had built. It is just capitalism, baby!
Let’s agree the general ire is related to a rise in disingenuous ‘advertorial’ content as well as the shift towards creating a ‘lifestyle brand’ as opposed to an enthusiasts’ website focused on watches. The trust Ben describes in that interview, didn’t just disappear overnight… it evaporated slowly, over time. How long, exactly?
How about a trip down memory lane.
Ben started Hodinkee in 2008, and grew it slowly. By June of 2015 he was teaming up with Watchville founder Kevin Rose, absorbing Kevin’s 5-person team, and making Kevin the CEO of Hodinkee. Around this time, they also raised some VC funding:
Along with Benjamin Clymer, Hodinkee’s founder and editorial director, the team has raised $3.6 million from True Ventures and a handful of angel investors to continue expanding the effort.
By April 2017, less than two years later, Kevin left the company. He actually went on to become a Venture partner with the lead investor in Hodinkee, True Ventures. Here’s what Kevin said in a parting blog post:
I’m happy to report back that it’s worked beyond our expectations.
In the two years since we merged the company [Hodinkee] has been on a tear, tripling our team to 22, increasing traffic by 35%, more than doubling revenue, and exiting 2016 profitably.
Unlocking the next phase of growth will be all about scaling our e-commerce offering and continuing to lead the market with the very best content and editorial. The board and I absolutely believe that Ben Clymer, Hodinkee’s Founder, is the very best person in the world to lead us through this, and I’m incredibly proud and excited to announce that he’ll be stepping back into the CEO role this spring. I’ll continue to support him as a product advisor, board member, and collector.
Ben, as CEO again, wasted no time in changing gears, and by January 2018 Hodinkee had become an authorised dealer.
"Never did I think this little site would become a business, but when life gives you an opportunity to do something special, it's a mistake to not pursue it. Since 2015, we've been working with the best watch brands in the world to conceive great products for you. Today, we take it one step further."
Perhaps naïvely, Ben thought that by only including “watches they loved” in the online store, they would remain true to the perception people had of the site being impartial, i.e., only recommending products they genuinely loved. I am not sure how true Hodinkee was to this ambition, but this quote from the aforementioned article explains it:
He explained to me that the buying experience is highly curated, including even some "new old stock" TAG-Heuer that had been unavailable. You're not going to find every single Oris or Longines piece, for example, just the ones that make the Hodinkee cut — watches they loved. Choices run the gamut from a very affordable Oris Divers 65, at just under $2,000, to a stunning Vacheron Constantin Historiques Cornes De Vache 1955 for $72,500.
After this, in June 2019, Clymer led Hodinkee into Japan too - this was a partnership with Hearst Fujingaho, the Japanese subsidiary of global publisher Hearst:
Nicolas Floquet, Representative Director and CEO of Hearst Fujingaho commented, “Hodinkee is famous worldwide among timepiece admirers for its unique approach to the world of wristwatches and for being one of the most successful digital media brands over the past 10 years. It is a privilege for Hearst Fujingaho to introduce the Hodinkee brand in Japan and share its unique content with a new audience of connoisseurs and beyond.”
Benjamin Clymer, founder and CEO of Hodinkee, adds: “We are very excited to launch the first international edition of Hodinkee in Japan. When looking to expand the global footprint of the brand, it was imperative to find the right partner, and we have with Hearst Fujingaho. Hearst Fujingaho’s commitment to editorial excellence, ability to produce high quality print and digital content, and its knowledge and network of watch brands is unparalleled, and we are certain of a successful venture between the two companies.”
Then, in December 2020, just as the watch market was about to experience its highest peak ever, Tom Brady, LVMH Luxury Ventures and The Chernin Group (TCG)2 invested in a Hodinkee Series B round to the tune of $40 million - TCG was the lead investor, but exactly how much each stakeholder owns is not public knowledge. Toby Bateman, the former MD over at Mr. Porter, joined the company as its new CEO, and Clymer was no longer CEO - again.
In February 2021, Hodinkee acquired pre-owned watch retailer Crown & Caliber.
Of the acquisition, Hodinkee executive chairman Benjamin Clymer said, “Hamilton and I have been friends for ages. One night over dinner six years ago, we hatched the idea of joining forces one day. Neither of us were ready at the time, but the idea never faded. Today, I am thrilled and honored to finally make this a reality.”
By mid 2021 they were reportedly doing $100m in revenue and planning to expand their organisation. Unfortunately, the timing was off, and as most failiar with the watch market will recall, this was the beginning of the end for the watch bubble. Insiders say Hodinkee had only purchased Crown & Caliber to expand their retail and logistics footprint (C&C was in Atlanta), but this didn’t pan out because C&C customers were not effectively ‘transferred’ to become Hodinkee customers. I am not familiar with the back end of either, so take this with a pinch of salt.
Either way, the wheels started to fly off. Here’s more, if you aren’t convinced.
At its peak, they had between 160 and 200 staff, and by the end of 2023, they had apparently completed five rounds of layoffs, and as mentioned in last week’s SDC, they were reportedly laying off more staff this month3.
I saw some reports about why Hodinkee have been letting people go in stages. It turns out, businesses with 100 or more employees are covered by the WARN (Worker Adjustment and Retraining Notification) Act and must either give employees 60 days’ notice in writing of a mass layoff or pay the employees if they fail to give the notice. A ‘mass layoff’ is defined as4:
at least 50 employees are laid off during a 30-day period, if the laid-off employees made up at least one third of the workforce;
500 employees are laid off during a 30-day period, no matter how large the workforce; or
an entire work site is closed down and at least 50 employees are laid off during a 30-day period.
I guess it was easier to just let them go in stages to avoid any further liability.
I found this to be an interesting comment on Reddit:
Man I’m not really sure what Ben Clymer hoped to achieve with H but this is a terrible look. Watches have been a niche product since a LONG time now - why the fuck would you position your e-commerce and editorial platform as anything else other than that? There is no sense is positioning H as a style/fashion/lifestyle platform - there are plenty of better options out there for those verticals.
It doesn’t help that H had Kevin Rose at the helm for a while who is a notoriously bad executive and is known to leave projects half-finished. I suspect Ben got some terrible advice from one of these tech types and made a broader play to become a big fashion/lifestyle/e-commerce platform and that’s backfired spectacularly.
The only thing left now is to narrow focus and go back to what made H great or pursue a merger+acquisition with NAP group or one of the other lux e-commerce platforms.
Context - Used to work in luxury e-commerce - I admire what Ben has built but suspect he acted on some terrible advice here.
The reality of Hodinkee’s current situation is much worse than people realise. These layoffs are a difficult thing - real people, friends in the collector community, are losing their jobs… and it may not be over yet. My understanding is the main investor, TCG, has set a deadline for Hodinkee to return to profitability by the middle of 2024, or they will be cutting their losses and walking away.
To date, Hodinkee has been pitching to investors in the industry to be acquired, and for now, have found no takers. It would appear their retail business is not worth much, and the only remaining value is in the user base. Problem is the user base is largely ‘disgruntled’ and with the watch market being in the gutter, these users are inherently less valuable anyway.
21,417 media jobs were lost in 2023, which is worse than at any point since the Great Recession (excluding the pandemic). Social media algorithms seem to downgrade content which links outside their platform, and this reduces the visibility of media organisations like the Dink. Advertisers find social media ad-targeting more efficient than traditional media placements, leading to a shift in marketing budgets. The pervasive influence of platforms like TikTok has led to shorter attention spans, making it challenging to engage with condensed, superficial content before swiftly moving on to the next piece of ‘media.’
The thing is, ‘media’, as we understand it today, is relatively recent. In the past, newspapers along with limited radio and television stations served as the primary media outlets. Advertisers relied on these local channels to connect with residents in various cities and towns. This pattern extended to the national level, where major media houses and national television networks were the sole platforms with access to large audiences.
Such platforms thrived as advertising funds poured into them. However, with the emergence of the internet, everything changed. This transformation was gradual; the first banner ad appeared on the web in 1994 but as you can see, it was sh*t! Not only that, tracking and attribution was basically unheard of, and ad-targeting capabilities were a pipe-dream. Nevertheless, as search engines and social media platforms developed, targeting and placement capabilities improved, and once advertisers recognised the potential of these platforms, the behemoths we all know today, were born.
The balance of power shifted when search engines and social media platforms replaced the dominance of print and television. Despite challenges, media isn’t extinct; rather, it has struggled to adjust to a transformed industry landscape. Media firms of the past misunderstood their competitive edge; they believed it lay solely in content quality, assuming advertisers would consistently pay a premium for it. However, their true advantage was not content, but attention. With the rise of search and social media, attention shifted, and of course ad revenue followed suit.
Traditional media’s reliance on perpetual premium-ad rates proved unsustainable. While some claim “Media is dead,” this isn’t exactly true. Consider this very newsletter you’re reading, on a platform that inherently displays zero ads. Media itself remains vibrant; it is the ad-centric business model which is dying. There are no rules dictating how media companies should operate, but future success hinges on creating diverse forms of media and using them to generate revenue. The key lies in balancing expenses and earnings, adapting strategies to ensure financial viability. Check this out:
The New York Times Company added 300,000 paid digital subscribers in the fourth quarter of 2023, the company said on Wednesday, helping to push annual revenue for digital subscriptions above $1 billion for the first time.
So where does this leave Hodinkee? This may be a philosophical question for Ben Clymer; considering what Hodinkee stands for, and why people might find value in its continued existence. Here’s some food for thought: There are a handful of exceptional writers on Substack who, as single individuals, have 50,000-100,000 subs paying them as little as $50 per year and many charge even more - that’s a minimum of $2.5 million a year. By a single writer. Hodinkee has been home to many decent writers, and probably paid them a lot less... but this is where they can leverage the power of their platform. Hodinkee gets about 3.32 million visits per month, according to this free online tool - how many of those would be willing to pay a subscription fee? Probably too few.
How many would consider it, if Hodinkee ceased to be a retailer of watches, and instead chose to be the sole independent journalism house in the watch collecting world, offering exceptional content, unprecedented access and objective unbiased commentary - something they have proven to be good at?
Probably a lot more.
💍 Lord of the (Smart) Rings
Seems like a random topic, but bear with me. My buddy Ish sent me a link about smart rings, and the article explored the rising trend of smart rings, spurred by upcoming releases from Samsung and speculative plans from Apple too. Smart rings can also track hand movements more precisely, and while this does potentially raise privacy concerns, it does enable novel interactions with technology.
They discussed the Oura ring which they describe as having capabilities similar to smartwatches … but in a ring form. Future advancement in the tech hints at other interesting features including device control and notifications.
As we move into the world of spatial computing as Apple calls it, smart rings could offer a lot more than just health tracking. Imagine your devices being able to detect finger gestures, and perhaps causing us to wear multiple rings to improve accuracy. I can just picture the cvnts doing this in public!
Anyway, the key point of here, is that smart rings allow watch nerds to have our cake and eat it: still enjoy health and activity tracking, but keep wrists free for traditional timepieces. And that’s without looking like a complete pillock wearing a fine timepiece on one wrist and a wanky smartwatch on the other.
Randomly, I just met a colleague who has used one of those Oura smart rings for 3 years - he loves it. We discussed it further, and his initial reasoning was because he couldn’t get used to a sleeping with a smart watch, but enjoys the sleep tracking and recommendations it offers. He’s sending me a referral code, and I will report back if I decide to take the plunge. Perhaps we will soon see an era of smartwatch recycling which leads to a boost for mechanical watch sales?
🤥 Remy (Not so) Cools, again!
This is an interesting video for many reasons. For one, Kelly Yoch from Watches of Switzerland is punting tourbillions as well as independent watchmaker Remy Cools. Given their poor outlook for 2024, it is perhaps unsurprising that WoS is fiding creative ways to boost sales with these advertorial videos. The issue is, they are using Business Insider! Business Insider “has been nominated for several awards, but has also been criticized for using factually incorrect clickbait headlines to attract viewership” - and now it seems they are adding to their shady reputation by enabling the spread of bullsh*t in the world of watches.
Watch that video, and you will see how it insinuates Remy Cools makes all his parts in his own workshop, seemingly as a means of justifying his egregious price tag. This video is best described as mise-en-scène with the sole purpose of marketing (some might say misrepresenting).
Here’s the truth: Remy and his colleague assemble the watch, and they do some finishing. The dial, the case and most of their components are done by Comblemine, a supplier. Like the majority of independents, Remy buys his components from outside suppliers and does finishing in his workshop. It is likely Remy did actually work on parts of his prototype by himself, but again, not majority of his components.
There are very few independents who actually make their own stuff, but it is appealing for small ones to insinuate they do, because this allows them to justify the insane premiums they wish to charge - expecting to become wealthy within a few years of starting out, whilst forgetting how most of their predecessors waited decades to receive major acclaim and make decent money. Max Busser and his stories of nearly going bust come to mind, but any of the old boys will tell, you, they waited a long time to see the money they are seeing today.
Collectors must educate themselves to understand what is real and what is not - fabricated stores like this one being put out by mainstream media is worrying to say the least... but that’s what you’re here for, I suppose!
Spread the word.
📌 Links of interest
💎 He was America's flashiest watch dealer. Then the feds caught up with him. (Thanks Eric!)
🤖 The first Neuralink patient shows his implant in action.
🚪 The History of the Hinged Case-Back.
⚙ Valjoux-nited States of LeCoultre: The Mystery & History of the LeCoultre Chronograph.
☢ Ever wonder why “Jeff” is on a list of nuclear superpowers. Who TF is Jeff?5
🤓 17 astounding scientific mysteries that researchers can’t yet solve.
☕ “I’m a Food Scientist, and This Is How To Make the Perfect Cup of Coffee”
📨 Election year video: Why US elections only give you two choices. (10 mins)
🥽 Not sure how I missed it, but Casey Neistat’s Apple Vision Pro review is awesome. (10 mins)
⚔ How the Most Expensive Swords in the World Are Made.
🛩 Boom’s first test flight could signal the return of supersonic air travel.
🏎 Formula 1 cars, explained for rookies (with Max Verstappen). (23 mins)
🏁 How a Microsoft Excel Spreadsheet From Hell Slowed Williams’ F1 Cars For Years.
🤡 Finance worker pays out $25 million after video call with deepfake ‘chief financial officer.’
💩 Research into children’s body odours found babies smell of flowers and soap, eliciting parental affection, and puberty makes teenagers’ armpits smell of cheese, goat and urine!
👂 Are You Noise Sensitive? Here's How to Tell.
🏃♂️ One runner described the new section of the Barkley Marathons as “brambly” and “pitchy.” Welcome to the sport's most mythical race. Only 17 people have ever finished in its nearly 30-year existence. Here’s a podcast with the founder if you’re as intrigued as I was.
⭐ 8 Google Employees Invented Modern AI. Here’s the Inside Story.
👨🏫 Odd one, but I enjoyed watching this history lesson: The Story of COCKNEY - the (London) Accent and its People (30 mins)
End note
In case you missed them, a few recent posts I shared:
This edition ended up being longer than anticipated, due in particular, to the links section which is video-heavy. I often hear complaints from one mf my earliest subscribers, Bruce - yet he still advocates for leaving it all in! I have started trying to be more disciplined, and do remove some links wen the list ‘looks' too long’.
Coming back to the Hodinkee section; since writing it I saw Spotify is now rolling out an online education offering of “freemium video courses” to test them out. That’s not entirely their area of expertise, and they might be suited to audio language lessons at best - but who knows? They’re testing it anyway. That’s the sort of attitude I would expect from Hodinkee as they find themselves walking towards the edge of a cliff.
The Remy Cools video was really irritating, and it worries me that instead of moving towards honesty - the new kids on the block are instead choosing bullsh*t as their preferred approach. In a market like this one, I think this will definitely come back to haunt them. We shall see… maybe people really are that stupid, and I am naïve to think otherwise.
Until next time,
F
🔮Bonus link: The Power Of Words
Mohammed Qahtani, a Saudi Arabian engineer, won the Toastmasters World Championship of Public Speaking. The contest took place over six months, with several knockout rounds, starting with 30,000 participants from more than 100 countries, and ending with this… his winning speech. Enjoy.
Believe it or not, that “❤️ Like” button is a big deal – it serves as a proxy to new visitors of this publication’s value. If you enjoyed this post, please let others know. Thanks for reading!
AMM - Association Monégasque contre les Myopathies
An American investment advisory firm focused on private equity investments in the media, entertainment, technology, sports and consumer and digital media sectors.
Here’s a whole Reddit thread about the most recent layoffs.
Jeff is not a person, but an acronym for Joint Evaluated Fission and Fusion Project, an international collaboration to create a library of nuclear data. It's likely that a data mishap placed JEFF on the chart, making it, ever so briefly and only on a bar chart, the tenth biggest holder of nuclear weapons in the world.
Fulsome, thorough, newsy and always entertaining. A true must read. Bravo.
Hehehe I like the teaser 🤓
I also have big FOMO about that! But hey, you can be a passenger on a fighter jet :D
Yes, I was thinking about that. But it also isn’t your first language, isn’t it?