SDC Weekly 89; Status Hierarchy; Psychology of Luxury Spending
Patek Philippe Bomb Suspect Arrested, Richemont Executive Shake-Up, Breitling and Gallet, Subdial and Stuart Hennell, Consumer Sentiment Falling, LVMH and Arnault’s Age, Grey Market Dynamics, and more
🚨 Welcome back… I finally hit 30 minutes reading time exactly, so I will say nothing more. Enjoy.
Estimated reading time: drumroll …. ~30 mins
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Patek Parcel Bomb Suspect Arrested in Geneva
According to Stefan Blättler as quoted in Le Temps, a 61-year-old suspect arrested last Wednesday is indeed connected to the explosive parcels targeting Patek Philippe employees.
“It will now be necessary during the investigation to determine in what form and how this person is involved,” Blättler said, speaking to RTS on Sunday evening. “We can for the moment start from the idea that he acted alone, even if it also remains to be verified.”
They haven’t revealed the suspect’s motivations yet, but the judge has confirmed the suspect will remain in custody for at least three months. Of course, the presumption of innocence still applies – but this is the first major breakthrough in the case.
Why Patek specifically? Was this a disgruntled former employee, a bizarre extortion attempt, or something else entirely? Hopefully we will find out soon. 📦💥
Shake-up at Richemont
Today’s news brings us what appears to be the end of Richemont’s Specialist Watchmakers Maisons (SWM) division. Emmanuel Perrin (who led SWM for the past seven years) is now moving to head up Panerai after Jean-Marc Pontroué announced his departure as Panerai CEO (after a six-year stint).
Here’s his farewell message on IG:
Miss Tweed reported on this reshuffle today, noting the SWM division has been home to eight watch brands: A. Lange & Söhne, Baume & Mercier, IWC, Jaeger-LeCoultre, Panerai, Piaget, Roger Dubuis, and Vacheron Constantin.
Rob Corder at WatchPro reckons disbanding SWM might actually be a positive move for everyone involved. He argues the division has functioned as a “quango” which created tensions with retail partners by forcing them to invest in brands that didn’t align with their customer bases.
The real issue, he says, is that SWM gave Richemont too much negotiating power, effectively telling retailers: “Want access to our hot brands? Then you’d better support our struggling ones too.” Basically they were “bundling” - but on B2B sales rather than B2C. The irony is incredible 😂
Naturally, this created an uneven playing field which only got worse when demand spiked for models like Vacheron Constantin’s steel Overseas, which (at the time) were quickly funnelled to Richemont’s own boutiques.
Corder suggests dissolving SWM could reset relationships with retailers and give individual brand CEOs more autonomy - which may be a win for everyone except those who enjoyed the bureaucratic power structure and easy sales to boot.
I mean, Corder makes a good argument, but I do wonder how much this applies in a cooling market. In fact, one could argue that in down cycle like the one we’re in right now, maybe having them all ‘pooled’ together is better for all the brands?
Firstly, in a cooling market, consolidated negotiating power becomes crucial to survival. Individual brands operating solo might face huge margin pressures as retailers (themselves struggling with decreased foot traffic) demand better terms. Being in the SWM umbrella group could provide a shield which prevents retailers from playing Richemont’s own brands against each other - which basically ends up putting all the brands in a race to the bottom when it comes to pricing and payment terms.