The Business of Watches [012] Manuel Emch, The Head Of Louis Erard And 'The Numbers Guy' At Kollokium, On How To Build A Successful Swiss Watch Brand

32:23So I didn't want to go over a certain amount. And they wanted to push like, let's do more volume. Right. And I said, okay, I had different strategies, and surprisingly one of the strategies I used at Louis-Yard was the collapse, okay? Indeed, and we'll talk about that. We'll talk about that. They thought that was not the right strategy and that with money we could achieve everything. I disagreed. It was a bit of a difficult thing, and I decided that, and I felt that the reason was not the interest of the brand, which ended up being visible now in the last two, three years. So I said to myself, I don't want to be there.

33:05I don't want to do something I don't agree on, which is not what is my shared vision on it. And I resigned in 2015. It took a year to exit. It's a tough exit because, you know, I learned one thing in life is money doesn't always give you reason but a lot of money does and that was a bit the situation anyway I ended up exiting and then I had sort of a year garden leave trying to get everything sorted out they put in a new management they invested a lot of money and then three or four years later they pulled the plug because they understood that something was not the way it should be yeah and I'm a bit disappointed for that because I think and even today some people still tell me oh let's relaunch it let's redo and i said okay but for me what is the past is the past uh i don't want to go backwards uh but but the brand still has momentum and a lot of people still talk to me about all these uh these collabs and these partnerships and these iconic uh elements and and i think this is good it means there's still a lot of room anyway i left in uh i resigned and then 2015, I think, and then could leave 2016.

34:22And then I was like, okay, I do the garden and leave, but what I'm going to do? I don't have any fallback scenario or shallow career, as we say. I had a few job opportunities, but I wasn't really interested to work for anybody anymore because that was my second brand that somehow I built, either within the big corporation or for an investor, but a lot of independence. and somehow I didn't feel it to take any sort of CEO position on. So I said, what can I do? I said, well, let's be a bit of consulting. Right. That's how my, I would say, third career started. And 2017, early 17, after the garden leave, I started consulting.

35:06And one of the very first clients who came to me was in late 2017. It was Louis A. and it's interesting because okay the company was in a very bad situation they accumulated several million losses over in the last 10 years it had a very good run when it started in 2003 when it restarted with this idea of most affordable Swiss mechanical watch but then again it's a very clear mission very clear but also very transposable and because they went very quickly from zero to 20 ,000 pieces, took a lot of market share. But then again, it was a small independent company, still is, not highly verticalized.

35:52And obviously all the competition started to understand that there was this, you know, this new venture, this new brand taking a lot of quick market share with a simple concept of making very affordable mechanical watches. And what happened is, well, a lot of the brands started to do lines, aggressive lines. And when you compete with very big corporate companies with a very, let's say, very vertical. Yes. Well, they obviously have access. They obviously have prices which are more competitive. And Louis-Arre didn't reinvent itself and started trying to fight this price war and lost it. It's very simple, meaning that more and more references, starting in two courts, women's, multiple colors, until it totally diluted itself.

36:41Too many SKUs. SKUs, too many retailers, too big margins, huge margins, and basically a big organization to sustain all this without making any profit. And that happened, that shift, so it was very successful from 2003, I think, to pretty much 2010, and then it shifted, and it went down the drain for a few years. And so the shareholders and back then CEO asked me if I could, basically they were hesitating to close the company and the question was shall we uh shall we re-inject shall we clean the balance sheet or shall we close the company and my mission was to make a strategy that could work which is what i did so i proposed this strategy which was basically moving away from irrational into emotional meaning that we keep this kind of accessible, accessibility, value proposition, but not just for mechanical movements, which is something everybody can do or a lot of people can even do better, but to everything that makes values of watchmaking.

37:51Craftsmanship, artisanship, people, distribution, scarcity, name it, second market CPU, whatever makes this kind of, call it, perception or values of haute horlogerie, but at affordable price point. And obviously, collapse was one of the things I didn't want to do the same collapse I did with Romain Jérôme because I don't like to copy-paste what I do. And so they looked at the strategy. They said, oh, it is very interesting. Okay. We're willing to follow up on that strategy. I said, good. Thank you. I said, well, no, thank you because who's going to put this in place? I said, well, I don't know.

38:32You have a CEO. I can help. At the same time, they said, okay, but we would like to have you on board. I said, okay, here are my conditions. We can't afford your conditions, but we can give you shares. And I said, okay, well, anyway, why not? I had nothing better to do. I had two, three other mandates, one in Germany, and I was about to start my mandate, and Russia was pretty much at the same time, but I would say I had time. So I said, okay, let's do it. And interestingly enough, I think we were talking Baselworld 2008, which was probably the last buzzer word, right? 2018 or 2019, yeah. Anyway, so I did the strategy and one of my first meetings, I always remember, was together with the Japanese distributor.

39:17So the back then CEO asked me to, so we're talking end of 2017 or 18, see, I'm going to last my time. It's not good as a watchmaker, but anyway. So end of the year, I did the strategy. Beginning of the year, the investment was done to assenir, as we say, to clean a balance sheet. And basically started to implement slowly the strategy. And Basel World happened, so we were at the very, very beginning. And the back then CEO said, look, if you have to come for one meeting, one important meeting, I want you to meet our Japanese distributor. I said, okay. I said, because basically 40 or 50 % of our business.

39:59I said okay, that's indeed very important. And I remember I get to this meeting. So different strategies. I call it back to the roots. We go to Noir Hamon, we decrease the references to 10 references. We talk about craftsmanship, artisanship, two lines, sport line, classical line, like a Swiss cross, sorry for that. So we have sports and classical. the classical line is animated by collaborations between the classic and collaborations in the middle of the of this l shape there is craftsmanship artisanship which is a kind of collaboration but not that much because you don't push people ahead and then the other part of this was cross with sports that we are launching by the way this year sports line and partnerships so the way of animating the sports line is through partnerships i see and in between the two is materials.

40:54Artisanship, craftsmanship, know-how, other side materials. So pretty easy strategy. I was pretty good at that, I must say, even before I tried GPT. Well, it certainly incorporates the important elements, as you say, of horticology and very focused. I'm very focused and decreasing a lot of things. I mean, you have to imagine when I came, there was 300 reference products. I killed 299 of them, so I just kept one. We had about 300 point of sales. I closed 270. Basically it was a reset. It was basically a new co within the old co. Anyway, so the first, very first meeting, so all this strategy which is obviously very theoretical.

41:36We obviously started putting things in place. We changed the organization. One of the things I found was fantastic was the team. Very resilient. They went through very hard times. They're very resilient and actually within the whole team we had two people we had to let go because we were basically in the sales administration because of all the deals and invoices and pro formas and changes and margins. I simplified everything so we could deal with one person instead of three. I added a technical constructeur, as we say, a technical designer for watches because we wanted to upgrade the products and I want to have that in-house.

42:18and a friend of mine joined me to support me in sales because I couldn't do everything at the same time. After the back then CEO, which was very much sales, took his retired within the process. But basically it's the same team. Nothing changed. And most of the people have over 10 or 15 years of company history. so we really only we didn't change a lot of organization we got rid of every hierarchy everything was flattened out and this was very good because it was just before covid everything was digitalized we we interacted uh we started to interact on on meetings because i couldn't drive that much up there because of my different mandates so i had to find a way to make it efficient for me, which happened to be very efficient for Luia because of COVID, because we were hyper-prepared to be very digital.

43:18And that's obviously been a bit of a game changer. Anyway, it was the whole strategy, but the very first meeting was very funny. So I go to this meeting in Baselworld. I meet a Japanese distributor and I've been very active in Japan. I mean, it's one of my first subsidiaries I built with Jacket Rowan. I spent at least three, four times a year in Japan. Important market. Important market and understood very quickly that Japanese being Japanese in a very subtle way, trying to make us understand that they want to stop.

43:53It's not that clear. No, no, no, it's not straightforward. It's not necessarily about the truth, it's about the harmony and the balance. So they wanted to be very harmonious and balanced with the approach, but it was pretty clear where they wanted to head. And I was like there and said to myself, okay, well, if they stop, it's finished. I mean, the company was already losing money and quite a lot of money. This was 40%, I think, back then or somewhere around that of the business. We lose that. I mean, it's good. We can basically close down the company. So I was there and I was like, okay, I need to pull out something.

44:36I need to make them, I need to gain time. So I said, oh, so Manuel joined us. He helps us with the strategy as a consultant, blah, blah, blah. The strategy is going to be a lot about, you know, classical, decrease the references, blah, blah, blah. Again, let's say high level strategy. I didn't go into the details with the collaborations. And that's how everything started. And I said, okay, okay, I need to tell them some sort of collaboration. So I went through my head and somehow Anna popped up, okay, because I knew Silberstein. Helen Silberstein. And I knew him from the past. I knew how kind of a cult status he had in Japan or has in Japan.

45:17And I did a collaboration with him back in the RJ times, which wasn't that successful. Terrible one. Anyway, not all collaborations work out successfully, but I said, okay, I just pulled the name, okay? And I said, look, yeah, so the first collaboration, I jump on what he says, the first collaboration is going to be with Alan Silberstein. And obviously the Japanese are, you know. And at least I short-term killed the idea of stopping. So I started wondering, okay, and then they said, okay, this was April, and I said, okay, but then they pulled the thing and said, But if by the end of the year it's not delivered, we'll have to stop because for us it doesn't make sense anymore to continue.

46:03You've got a deadline then. I've got a very narrow deadline. I was like April, December, I'd say end of November because we still have to ship the things. And I was like, okay. And you still haven't spoken to Alan Silversand. I haven't spoken to him for a few years. so so so the back then CEO looks at me and says well I didn't know this part of the story and I said me neither I just pulled it up anyway I somehow saved the moment and then I took my phone I called Alain and I said so this is like five minutes after the meeting said oh what are you up to nowadays and he said oh you know I'm retired and you know just occupied sometimes you know I'd like to do something I said how about making another collaboration and he said yeah sure with you anytime and he says but for which brand and I said well Louis R and he said I don't think I know the brand I said doesn't matter Anna you know it doesn't matter just trust and he said okay let's do it so we did it very quickly on existing material on existing cases so we basically just redesigned an existing watch with the dial hands, with the story.

47:22And it's been, it's been, boom. Okay, so. It's been a core part of the collection ever since. It was the game changer. It was the initial game changer. And it's interesting because it reminds me of what I did with the Volcano watch in RJ where suddenly one thing just changed the whole perception of a brand. One product with RJ, it was even a virtual watch. But it was one of these, I have a few of these very moments where you say, changes everything just on a concept. And we did the watch, it just boom. And then from then onwards, it was basically building that strategy step by step. We talked about the classical line.

48:02We still have a sports line to set in place. There's still a lot of work to be done, but it's been very quick. We changed everything in 2018, 19, we changed everything. And from 2019 onwards, it started to be profitable. Right. So we turned the company, the turnaround is spectacular, I must say. We basically just managed to, you know, we have a very interesting thing in Switzerland when you accumulate losses, you can keep them a certain number of years and deduct them from your taxes. So we managed to basically use the entire joker in the last three, four years. We just decreased the capital of the company and paid back all the investors.

48:46which is great. So we, I would say it's been a very, very successful story with Louis Herra and it obviously has to continue. And like everything else, it needs to evolve, it needs to adjust, it needs to, it's, a watch brand is a very organic company. You have to adjust, you have to adapt, the markets are changing, environments are changing and you can't, you can't just go on with the same logic all the time. You have to have a vision, a strategy, but you have to adjust it over time. Indeed. And, you know, I mean, we've gone through much of the history of your career here. What you've obviously done has been successful at, you know, building brands.

49:33And indeed, you know, there's another brand you're involved with called Colloquium, which has had, you know, quite some success among certain parts of the collector community. you know if you could sum it up what does it take to build a watch brand um or you know is that anything that one can answer in a concise way actually surprisingly yes i think i can that's probably my my trademark today i think it's pretty easy uh all the brands have been involved i either build them up, turn them around or made them successful. There are a certain number of ingredients in the recipe, but I think the most important ingredient is to understand the brand.

50:18You got to listen, you got to feel, and you got to hear the brand because it resonates. And then there are a certain number of, you know, over time, call it experience, call it know-how, call it network. That obviously helps. But again, as I said just before, it's very organic. so you gotta adjust. It's a recipe, but it's an ever-changing recipe. So you have a certain number of ingredients, but some new come to it, some you have to let go. And you have, again, it's not a roadmap that you can apply. But I don't know, maybe I think the fact that I have this dual, some call it schizophrenic logic, of being very down-to-earth, you know, in colloquium they call me the numbers guy.

51:06although I believe I'm the creative one but definitely I'm not for them. So I think I have this duality between very business oriented, business process or engineering, optimization, organization. I'm very known for that. I'm very efficient with this. It's also the way I live. And then at the same time, this capacity to find solutions, to have creative ideas, to be open-minded, to try and to bring in new things because maybe what is important is to have a kind of curiosity. Sure. And my curiosity goes beyond watchmaking, goes into lots of different fields, and I nurture myself from this. So I think it's a bit of, over time, a bit of expertise, experience, know-how, network, and then it's a capacity to basically listen to the brand and try to resonate with it and understand how this brand or this project could evolve and what may make it successful.

52:09You mentioned before when talking about Louis-Hurard the rational part of the decision-making for the consumer and for the brand, and Louis-Hurard was a brand that was simply the most affordable, most approachable mechanical Swiss watch versus the emotional element of decisions that brands project and consumers make. Where do you think we are on that pendulum, on that journey? It is a journey. I think we left the rational and we're steering towards the emotional. We are not a time-giving instrument anymore. We're not, let's call it a consumer product anymore. but somehow we're not the art yet okay we're we're not the full emotional we're somehow in between and this is something very interesting in the watch industry because we're between let's say a discretionary good and art we're not there but we're not there but we are on the journey and i think we all agree and we see this when the cycles are are kicking in nobody needs a watch nobody buys a watch for purely rational reasons um But at the same time, we see that evolution from, especially also when you look at the major trends, okay, consolidation, the winner takes it all, independence, which are more people than brands, personification, you know, the artisan, the craftsman, the owner, the watchmaker, and the micro brands.

53:47kind of cool, popping up, different, extremely agile and reactive products. And everything that doesn't fit in one of these categories somehow will have a hard time. And that shows that these major trends are happening and that shows also that today the consumer looks at watchmaking different. So we're long gone any sort of instrument or time-giving device. Status is still there, but status is changing. and the status is changing very quickly. The importance of the creator and the person. We see this, Max is a very good example or others. Max Brusser. The kind of the personification behind, we're buying a part of the artist, we're mapping his studio or his atelier or his manufacturer, whatever you want to call it.

54:40But we want to be part of the tribe, the family, we want to support the artist. And then the micro brands where we just want a cool product. We want a good price, cool product. We don't want brands. We don't want retail. And obviously all these elements have been enhanced by how the market dynamics have changed, how communication has changed, how distribution has changed. Transparency is kicking slowly in. Maybe it could go a bit faster. Transparency, meaning the buyer, the consumer, understanding a lot more about how watches are made and how the industry works. First and foremost, educational, obviously much more know-how, much more knowledge, but also being more curious about what he sold.

55:27We see the scandals that happened just recently in Italy with some of the luxury brands. People are not willing. They want to know, and they want to know more and more, and they want to share the values as well. So I think these are all elements additional to social media and so on, which has been a game changer. These are all elements that are changing. Internationalization of the watch industry is very interesting. Swiss made, oh, great, but come on. If it's not honest, if it's not transparent, if it doesn't, the values, it's just a tag. It's just a name. And we see how quickly, we started with the German, the Japanese, the Grand Psycho, now the Chinese, but the Russians, the Finnish, the British, the French, there is a certain internationalization of watchmaking where people are not buying a brand, distribution network, marketing, still a bit, but a marketing capacity or regional routing or a national routing, but they're buying a product.

56:31So fundamentally what has changed a lot is we're on this journey, but in this journey we're also moving away from brands to products. And even within the biggest brands, people are focusing on certain products. You know, Royal Oak, probably what everybody is more striving than certain other products or Natalus or Aquanaut. You know, it's even within the very, very strong brands. So products versus brands. It's the products that take the lead. These are logical things that happen because of the way the watchmaking is evolving. Where, again, it's down to what you have on the wrist. who is behind it, how it's done, and what it stands for.

57:12And so what does that mean? As someone who's both worked in, you know, for the major manufacturer, big industry groups, and also for much smaller companies, and then, you know, basically Colloquium is a micro brand that you're a part of. You know, where is the industry going? What does that mean for the big brands, for the rich malls, for the swatch groups? Well, you can see, you can see if we talk for the big groups, I mean, you first see results of, I mean, two of them very recent. One is a major shift to jewelry, high jewelry, I mean, which is totally meaning the brands. What Brishmall is doing, yeah.

57:50And I kind of shift into the second row of watchmaking. I'm not talking of all the brands, but a lot of the brands. Let's say the focus is shifting away, which I think is a very strong meaning. And then we see the results of the SWAT group, which are definitely largely negative, but still somehow slightly positive. They're an optimistic bunch. Oh, and I must admit the AI move to put the focus away from the reality that I think is a bit afraid. And as a former part of it, somehow also heartbreaking. It is what it is. I mean, if they're not capable to recreate, to put back into the center, not managing, not business plan, not forecasts, not volume, not distribution, not retail, but what really matters, the product, the value proposition, the attractivity, the scarcity, they will be on losing ground.

58:54I mean, that's some more than others, some shifting into other fields, which were, I would say, these values where distribution, marketing, retail is still more important than in watchmaking. That's why I say, I mean, the market is clearly, in a way, either the leader or the challenger, or then you have to be super creative, super personal. you got to offer something different and i see making this little footnote how i don't like to use the word easy because it's never easy but how impactful we we managed to do a colloquium although we're just the three of us although it was a covet project uh where we were basically stuck and then started talking about what we would like to do for us instead of doing for others because both of my partners in crime used to work with Bach.

59:48I know since I'm 15 or 14, childhood, he has been my creative counterpart on all the projects I did in my career. We've been working on all the brands together, and Amr, which happened to be a client of mine when he was 19, and on Jacket Road Times to have clients on Lausanne, which are less than 20 or around 20 years old, are very uncommon. Exactly. They somehow stick close to these people. And then had one of the first, if not the first, community manager, social media and so on, and basically helped me also with turning around Louis-Harr, because when I came in, there was no internet. There was not even an Excel database.

1:00:29There was nothing. It was business cards in a file and some sort of internet page or not webshop. And 80 % of the people on the Instagram account were basically, sorry to say, without any, but basically I had it from Indonesia or Pakistan, which most of the time means what it means. So basically bought followers and it's just, there was nothing. We had to build and he helped me a lot for this. And basically both of them challenged me saying, okay, we help you, we do things together, we help other brands, let's do something for us. Both of them independent because they didn't know each other. And I'm sorry for my English, but both of them broke my ears, not to say anything else.

1:01:11And I said, dude. That's perfectly clear. You know what? That's probably better if we meet all the three of us. And it was very, very funny because the very first meeting, which was at my place. So they come on time, but basically they took the train. They came to my place. They ring on the door. I open the door. My phone rings. It's the Swiss Confederation saying I have to quarantine because I have COVID. Oh la la. Right away. so that's why I say it really is a COVID project so I had to quarantine and then we started talking over the phone and you know all these things and how they happened and we never wanted to do, it was never and we call it a project, not a brand and the idea was just to make a few watches for us and our friends, so we did our first prototype, we made a lot of innovation in watch design, lots of things that have never been done before with a lot of In terms of the loom and the way...

1:02:09We just wore it on the wrist in Geneva Watch days 20, 22 years ago, 2023. And people started to ask us, what is this? I said, oh, it's just a project for us. And then we just, that's how we started. We sold off the first hundred pieces basically off the wrist. People say off the shelves, we sold it off the wrist without any marketing, nothing. And we never have invested one single cent into marketing. so basically on True we did a nice film yes the film was fun we obviously but social media Hammer is doing internet site we do together we do everything ourselves and we're just the three of us and it's interesting because we started to be in a mode of we make a drop every three months four months depending obviously on the development because we the three of us are perfectionists, so that doesn't make it easy.

1:03:06And in general, there are runs of 300 to 500, and we tend to sell them in a few seconds or minutes, which is great. I mean, we have to obviously continue and develop it over time. But from day one, I also said we need to have a direct consumer only doesn't make sense. We need touch points. And we onboarded retailers 10, 11. So, yeah, I mean, it's interesting to think of a colloquium in retailers, but tell me why retail still needs to be part of, even for a very specialized, very insider-y brand like Colourpon. Yes, because I'm a strong believer of a business model that's balanced. Balanced, obviously, what means balanced?

1:03:52But if I take Louis Aar, it's 50 % of our revenue are online. Which is a lot for certain brands. And actually, surprisingly, this year we're ahead of, I think we're at 12 % or 13 % above last year. Wholesale is down. To retail, yeah. But online saves us. I've always said I just sell enough watches per year to pay my organization to be fully independent. I don't want to be dependent on anyone. Maybe I've been burnt over the years. So now I want to be like, we have our destiny in hands. but then again distribution points and it's the same with colloquium because it's very interesting because both of them said why should we give anything to retainer we have the demand we can sell it and i said because this is an investment this is not giving away something this is building something for the future first and foremost you can negotiate good margins because when you have when you hold the knife distribution is a bit is always a bit of a is a bit of a power game of course makes it much easier because you tell them what they can have you allocate them what you You decide, you basically, you have that, I mean, I should say that.

1:05:01You have a lot of power though. You're in the driving seat and that's obviously good, but you're in the driving seat today. Who knows about tomorrow or after tomorrow? Things are changing again. It's organic. You can have ups and downs, cycles. We have a fantastic run. Yes, it's great, but who knows? And then there's another very down-to-earth point is a watch is not commodity to a certain extent. It's a very sustainable long-term product. It needs service. And when you're sitting in your little ivory tower in Switzerland with all the problematics of exportation, currency, blah, blah, blah, cost of FedEx, which is probably in Switzerland four times more expensive than anywhere else in the world.

1:05:47If there's a problem, how you solve the problem? And for me, retailers are touch points. First and foremost, you can go there. And we're trying to have a network that covers somehow the world, that at least you can send your watch, that they can take care of it, they can repair it. So that's the whole touch point element in terms of service. It's a touch and feel. Because there is a certain amount of people, understandably, who for spending three, four, five thousand without even touching the project, without even ever having had in hands, it's not easy. Yes. And this is also something that is very important.

1:06:29So these are possibilities they can go and touch. And we asked all our retailers to have always one piece available, not for sale, but for, so that we can create database, we can create interest, we can create activation. because yes, we can go through our database. Surprisingly, we sold in, I don't know how many countries. We said, oh, let's choose the places where we want to go. So with Danmark, we said, oh, we want to go to Copenhagen. How many watches sold in Denmark? Seven or eight. Okay, we already have a community, ask them to invite so we can do Tupperware. But okay, this is good. This we can do ourselves.

1:07:06But to do it with a partner is also creating a lot of credibility. And we did so far one single event in Saudi Arabia. And we flew down Amr and me in this particular case. And our partner, Yasmin, invited about 35 clients. We, or 30 clients, we invited 10 we had on our database. And we sold 40 watches. So you go like, okay. And there are a certain moment in time where there's momentums. We have that kind of, yes, we can sell everything direct. Yes, we don't need distribution. But today, I don't know what's going to happen tomorrow. And I think as the watch industry is an ecosystem. For me, the ecosystem is what makes our strengths.

1:07:51And the ecosystem is between the brands. And I'm a big supporter of mutualization. I try to mutualize brands. When we do events like Geneva Watch Days or Watches and Wonders, we're 10 brands, 12 brands, different brands. We open up. We share because I don't look at us as competitors. I look at us as a small, not even industry anymore, but kind of volume artisanship where if we hold together, together we're stronger. It's very important. Same with the collaborations. Same with the artisans. Same with the retailers. It's an ecosystem. And I think the more we can support each other, the better it is because what you give comes back.

1:08:34I'm a big believer of that kind of energy. What you give away comes back. Absolutely. And so, you know, how many Colloquium watches have you sold so far? And then what is, I mean, do you have a business plan for this brand? I mean, you know, what? There's two things that I've stopped in my life. The first is titles. I hate titles. Okay. The second is business plans. I hate business plans. So with Luya, we have the same. There's a lot of people who have written business plans for their watch business who are thinking, uh-oh. Budgets and business plans. And so obviously I had to do a business plan for Luya because I was requested.

1:09:09Otherwise, consulting is a bit hard without a business plan. But we didn't do any for Colloquium. We'll never do. But even for Luya, I never do a budget. I have the same budget since 2019. I said to my investors, this is the budget. I said, yeah, but we saw the same budget last year. I said, yes, and we'll see the same next year. And I said, why? Because I'm not going to lose my time. And not your time in giving you kind of expectation, aspiration. Our aim is simple. We produce 10 watches a day, more or less, let's say around 3 ,500 watches a year, based on a pipeline of products. We obviously do a pipeline more towards 4 ,000 because we always have some rejection and things that don't work in time, suppliers that maybe are not able to deliver certain elements or quality that we are not happy with.

1:09:53But we have that framework of minimum three, maximum four. And it's planned through the year. We know 50 % we sell online, So in terms of values, in terms of units, about one third. These 1 ,200, 1 ,500, we know we're going to sell them because the products are good enough. Or at least so far it happened to be like this. And then we work on the wholesale. And all this means, okay, this is more or less the target. If we do more, we do more. If we do less, we do less. Then we do more. But anyway, the most important thing is that expenses are under control. So this, the marketing budget is always the same.

1:10:32This is for the pictures is always the same. Sometimes you have a bit more free room or we make a little bit more and then we can take it. And then it helps me after three, four years to basically pay back my investors, which I think if I'm an investor and somehow the watch industry, this is a bizarre thing. Investors in the watch industry means like, more like messina, means more like, you know, you're not. Investing means you give and something comes back. Okay. well, you maybe get some watches a dividend for a lot of brands, but I don't get that concept. It's not an industry known for generating great returns.

1:11:08For its return on investment, yeah. But I'm a big believer of return on investment. I think that's, well, if it doesn't make profit, it doesn't make sense. And so Louis Rourke has been profitable basically since, what, 2019, 2020? Yeah, 2019 basically we probably just around zero. And then since then it's been very profitable. But also because we are lean. less than 10 people, 50 % online. And that's where I tell you, that's why I don't do budgets, but I don't care about growth. For me, I care about brand value. I care about brand attractivity. And I care about scarcity. So for me, more is often less or is probably the enemy of better.

1:11:51So when I tell this to my shareholders, I say, look, we might grow when another wave comes. Today we're not in a wavy situation. It's pretty flat. Nothing is really moving. The markets are a bit difficult. So yes, by just being steady and keeping the momentum and being worst case at the same level, best case a little bit better, we already gained market share. But if we push too hard now, we will put a lot of efforts when the market is not reactive and better wait for the next wave. Maybe the next wave is tomorrow. Maybe it's in three years. Maybe it's in five years. To be ready. Yeah. To scale, I think you need the context.

1:12:38That is the real challenge. I mean, you know, you have all this experience with all these brands. Colloquium is a brand that was launched in COVID times. It's done quite well. But what is the biggest challenge for a small watch company and or launching a brand these days? And how has that changed from what it used to be? Because as you said, I mean, Louis Herard was actually a differentiator by making well-priced mechanical Swiss watches back in the day. Now, not so much. What is the biggest challenge these days? The biggest challenge is to continuously reinvent yourself. I wouldn't even say reinvent.

1:13:19It's to constantly adjust and being creative. What is the challenge for Luia? Well, the challenge is we did phenomenally well with one concept. Now we need to evolve the concept. I talked about the sports line. This is a risk. You've got to be risk-taking. But even within the classical line, I mean, I have clients who bought 25 regulators over the last five years. And when you're at 4 ,000, I watch 25, you start to say, that's not affordable anymore in the sense that it's quite an investment. But how many more regulators with the same case can I do? So we need to invent. We constantly need to tell ourselves, okay, we need to anticipate the next step, not fall asleep, not redo what we do, but constantly evolving.

1:14:09And this is difficult because that means you constantly need to be on momentum. It means you need to have the energy, the time, and the availability to reinvent yourself. And you have to avoid to fall in traps. you know you see a lot of the brands are struggling today because of the market environment they they basically focus on how to survive and that's probably the worst at the same time it's very necessary because if you don't have but you're not back to the wall you if you're too comfortable you're human beings i'm lazy so if i have no reason to do something why should i do it but i think it's this kind of capacity to to innovate call it innovate whatever it means create push boundaries to to basically that organic to give space to this organic element which is which is the brand and i think this is the most challenging and and really put creativity and product into the center because that's what it is people want to buy a product a cool very well made a product I see a very interesting thing if you take complicated watches.

1:15:1210, 15 years back, it was all about the complication, the tourbillon, the minute repeater, the QPs. And if you can put 25 tourbillons on top of each other, it was great. So that was the strive. Today, it's all about finishing, artisanship. It's all about simple three hands with extremely high level of finishing. The number of introvert angles or the hours spent on the wheeling and so on is what counts. It's totally different. It could be more or not be more opposite. And this happened, this shift happened in 10, 15 years. So, you know, we went from crazy, three constructive watchmaking with as maximum complication on top of each other, very particular cases, forms and high end to simple, pure, very highly finished, very asymmetric if possible, very independent, and lots of craftsmanship and low volumes.

1:16:12Two different worlds within the same. And that's what I mean with the whole concept of watchmaking. I don't think you have to change all the time, but you have to adapt to the market needs. You have to adapt how consumer trends are changing, how, you know, and I think it's a mistake that a lot of the corporate groups are doing is they don't understand that because they're not close enough to the client. This kind of strength they had in the past, which was the number of intermediates, okay, we have our subteries, we have our retailers, we have our teams and brand managers and so on. Today is a huge, which back then was a great, how do you say, innovation.

1:16:54Sure. Funnel. Funnel to bring back things and to be as close as possible to the markets. But today, the market is, there's no distance anymore between the client or the collector or the consumer and the brand. And when you build over a year such a number of intermediates, that's where they're weak today. Because their strengths of 10 years ago is their weakness of today. And I think that's what I mean. Things are changing all the time. And I think the most important thing is to just basically constantly reinvent yourself. Excellent. Last thing. I mean, you know, what will we see next from Manuel Emk and from Louis O 'Rourke, from Colloquium, maybe something else, which should we be looking out for?

1:17:41And yeah, what's next? Oh, plenty of things. I'm a pipeliner in the sense that I think for both brands, we have projects for the next three or four years because again, we like to create, I like to create, we like to do projects. Projects change, evolve. Sometimes you pull them out, change them. But for me, a pipeline product is probably the most important element. So getting back to budget and forecasts and strategies, product. Pipeline is just the only thing that really matters to me. If it comes to Liar, I'll tell you about the idea of, you know, the sports line and then the activation through partnerships.

1:18:21so we start, I'm sorry some people will bash me for this but we get back into you know classical line was collaborations artisanship so it's a human element okay so there's a human touch the person, the watchmaker the artisan, well the sports line will be activated through that's why you call it partnerships and not collaborations towards I don't like the word brand but towards philosophies around thematics and And surprise, we're going to start with anime, with video games, things like this, because I think they're fun. So that's something that will hit. And then we're going to evolve the collaborations.

1:19:01We're going to change all the cases. Now we're going to move away. Cases are going to be different in the future. So we're not just making the dial and hands and story. Now we're going to go into the cases more and more, more and more complex, more and more refined, and into the movements as well. So not just Sellita regulator or three-hand movements, but we're going to see some historical movements, maybe some special movements that we found that we refurbish, if you like, or readjust. We might find some executions more personalized because we believe that we need to build. Because today we have watches at 4 ,000 and watches 15 ,000 with the Tourmio and there's a whole gap in between.

1:19:50Now distribution is not saying the price is going to go up, but our distribution network is more AAA distribution network and obviously when markets are a bit more difficult, a retailer who has only AAA brands will focus on what he can make the most money on and very normal. So selling a 4 ,000 Swiss franc or a dollar watch when you can sell a 20, I would say the incentive is not as big and that we understood we have to give them also a bit more complex and a bit more premium products, yes. At the same time, we don't want to stay where we are in that accessible price point. We don't want to leave our territory, but we can extend the territory.

1:20:32And if it comes to Colloquium, well, we have the Project 2 that we actually wanted to launch initially three or four months ago, but we haven't managed. And it's very interesting because we kept some philosophies, die cast new case and we are again did something totally crazy um so when we did this on the first project with the pins with the 468 pins on the metal pins and 488 on the lumicast or lich block pins so it's not the same watch by the way okay it also has a different case and has a different sapphire crystal but you can't see it that's the beauty about it uh very geometrical we're moving into something totally crazy, much more organic.

1:21:13And the dial, and then something where we really struggled is composed of, it's a stack-up of 64 dials. So we put 64 dials stacked up to create a dial. Wow. So that's a bit of a, it's a bit of a, so we will have the friends and family project ready in Watches and Wonders. So it's going to be 199 pieces. We're not going to do any marketing. which is going to be, it's off the wrist. It's going to be for those who supported us, but also for those who see it. And we start with that, and that's project two. We work on project three and four. So mix and match, as you can see. I have another project that I'm very interested to develop, totally other price point, another endeavor.

1:22:02Different brand, different... Yeah, different project. I like to do. I mean, at a certain stage, I don't know if it becomes too easy. I wouldn't say that, but I see what could work and where there is a market. And I think there is something that I have done in the past with more high-end products that I haven't done for a while that I want to redo. And I would love to do something much more affordable. So for me, it's really, you know, I have ideas. Now I need time. I don't always have time. That's probably the thing. But I would say Colloquium is on track. Louis Herard is doing well we need to readjust a little bit we'll take a bit of time to evolve the strategy but then I have time for other things because I stopped a lot of the you know I used to be chairman of Raketa the Russian company which when they came to see me was really not in good shape 2018 I did the strategy for them they did I think 15 fold we did 15 fold over the last few years but I also decided we really built something quite incredible.

1:23:11But when the war started, I decided to step down because for reasons which are personal, I didn't want to continue like this. But I had to do kind of an exit and step away from it, which is done. But it took a lot of my energy. And until then, I spent one week a month in Moscow for the project. then I helped a bit at the beginning I did some other projects so I was quite busy and I decided that I want to concentrate on new goals new projects new brands and you know Luia is doing very well but Kolokjung is just I don't know how to say this but you ask me how many watches we do I don't know yet but probably this year about 1500 which is honestly from and everything sold in a few minutes and really sold out.

1:24:08I mean, there's nothing available. So this is pretty amazing. So I want to concentrate on the projects that work or that need maybe a little bit support right now to rethink or to evolve. And then I want to do new projects. Excellent. Thank you for your insights and this great chat. And we'll obviously be watching and following. Thank you, Manuel. Thank you very much, Andy. Thank you for having me.

1:24:42And that's the business of watches for this episode. We hope you enjoyed. Please head on over to hodinky.com where you can join the discussion and leave any comments or questions about this episode or the business of watches in general. Who knows? We might even answer your question on a future episode. Thanks for listening and see you next time.