The Business of Watches [014] Baume & Mercier CEO Michael Guenoun Talks Strategy On The Eve Of The Brand's Sale By Richemont

0:00Welcome to the Business of Watches, the Hodinkee podcast where horology meets high finance. I'm your host, Andy Hoffman. This week, we're in Meirin, Switzerland, with a very newsworthy interview with the chief executive of Beaumont-Marsier. Beaumont-Marsier is very much in the news at the moment. It's just been announced the brand is being sold to Italy's Damiani Group, in a move that's sure to reverberate throughout the Swiss watch industry. We talked to Michael Guineau, the CEO, about the approachably priced brand's storied history, its place within the Richemont Group, and about reports the brand was up for sale.

0:43But first, I'm joined by a very special guest, Adrian Barker of Bark & Jack, the YouTube channel and accessory maker with their great straps, as well as other products. and he's also the co-host of the Movement podcast with Britt Pierce. Adrian is here to talk about some of the business headlines in the watch world and also a very special project that he's involved with.

1:15Adrian, thank you for being here. This is great. Andy, this is a pleasure. Yeah. Where are you today and how are things? Things are very well. This is an absolute pleasure to be on your podcast. I'm a huge fan and I am in what is right now sunny Glasgow, but I can already see the clouds coming in, so it might not last this sun. But I'm very well, thanks. How are you? I'm very good. Very good. I'm super excited to talk to you. And let's first talk about this very exciting project. Now, you've now collaborated on your first watch with the great UK Pace brand Christopher Ward. The watch is called the C60 Trident Lumiere Green 15 by Bark and Jack.

2:00It's a very cool watch. I've seen some pictures. How did this all come about? This is your first collab as Adrian Barker and Bark and Jack. Yeah, tell me. Yeah, this is hugely exciting. It's quite surreal. My original plan when I wanted to do something in the watch industry was to start a watch brand. It wasn't going to be Bark and Jack. Bark and Jack was always supposed to just be a placeholder name. I always had the intention of changing it and then things got a bit out of hand and I never got around to changing it. But my dream was to design watches and build watches. And this was before this huge infrastructure around micro brands that that we now have today.

2:44And so I was emailing suppliers and trying to get quotes and seeing timeframes. What was the economic reality of trying to make your own watch back in those days? Well, I knew I wanted to go ETA. And so I've got an email from ETA. I asked them, what was the process? What were the minimum order quantity and timelines? I knew that they were shutting down, supplying outside of Swatch Group. So I thought this would be the thing that I need to secure first. and they came back and said yeah we we can supply you um the minimum order value was something around 250 000 Swiss francs and and we could supply in three years time wow it didn't matter about the three years time because I didn't even have a tenth of that to to put into this project um but it wasn't just that it was it was all the aspects of of building the watch just realized I have nowhere near enough cash to even get this going from a small standpoint.

3:42So getting to this point of launching this Christopher Ward was quite a dream. And it's really exciting to finally get to this point because it's been a project that's been in the pipeline for really quite a while. I think the best part of a year, no, over a year now. And, you know, so first off, why Christopher Ward and why collaborate with them for your first watch? You've been, you know, a major presence on YouTube and in the watch world for quite a long time now. And so, yeah, why Christopher Ward? Well, I've had quite a few ideas around collab watches. And I wanted the first one to be quite a punchy one.

4:22I wanted to come out quite strong with the first watch. And I've got a really good relationship with Christopher Ward. Our first intern at Bark & Jack, going back about four years, is actually a marketing manager at Christopher Ward now. And he went from Bark & Jack to Christopher Ward, which I feel is quite a fun connection. But it was getting hands-on with the original C60 Lumiere. It was a watch that really spoke to me because it was a true proposition value. it was a truly regardless of whether you like the design or not just factually the stats the performance of the watch is outrageous for the price and i thought this this is so close to being in in what i perceive to be perfect it's a slim very deep depth wise diver made of titanium cost certified movement it's it's a really high performing watch there were just aspects of the design that that I would change and because I have this kind of in with Christopher Ward I felt in my head I felt confident to go down and say hey I think I could tweak this and make it a bit better and it wasn't until I was in in the in the boardroom with Mike France the CEO and all the all the top brass of Christopher Ward thought uh who am I to think that I can improve something that these guys they obviously know how to design watches and build a watch business um so it was It was very much taking myself out of my comfort level, the whole imposter syndrome, and they properly grilled me on my intentions and ideas around the watch, which I quite liked.

5:59But it was a long time since, because I run my own business, when I come up with ideas of things, you do it. You have an idea and you execute it. So it was interesting going back to having to pitch something to someone else and try and get their buy-in. But yeah, they're very much on board. Well, let's talk about the watch itself and let's talk about some of the design elements that make this, you know, the Bark and Jack collab. And I think, you know, it's clear you were inspired by some sort of, you know, mil sub elements here. The dial, the markers is a little different. Plus, there's some quite interesting stuff that you've done with the loom.

6:42Talk about it. So there's a few technical changes that we've done, like the loom. The loom's using the next grade of loom from the original Lumiere because we wanted it to be bright, we wanted it to last longer. It's got a two-tone loom, so the minute hand is green and the rest is blue and then 0 to 15 on the bezel is green and the rest is blue and that's where the name Green 15 comes from. And to get that brightness the same on both colors of loom, we needed to increase the grade of the loom. But the big thing that I changed, I feel, is the perhaps feel of the watch. I really wanted to push it into being a purposeful watch.

7:21I grew up around military watches. People call it boring. But I have this very conservative look of watches that everything needs to be purposeful. So rather than having a gray Fumé dial on the original one, we've changed it with quite a deep texture. We've changed it to be a satin matte black dial or just off black. Actually, it's not quite true black. and so it's a very flat, very satin-finished off-black dial. And that then contrasts nicely with the matte black loom markers and we've changed the shape of the loom markers and the height of the loom markers to kind of make it feel a bit more sleek perhaps on the dial.

8:00And so we've got different shapes to increase legibility. So you've got triangle at 12 o 'clock. At 369 you've got batons and then all the other markers are round plots. and so 12 o 'clock triangle. Which is unusual for the Lumiere, right? Yeah, so previously everything was quite deep batons and so we wanted to make it as legible as possible so you can just glance at the watch and you kind of have a better grasp and I guess that's the mil sub impact is that in the Porsche design and their use of matte black and matte white within their dials. So it was really fun coming up with aspects from different watches that I enjoy and bringing it together.

8:38and it was really interesting mocking up the design. I'm fascinated by design because I feel like I have ideas but my execution is terrible. So we had all these ideas of what we wanted to be in the watch but when we did our mock-up it was a mess. Nothing was balanced. It had what I wanted. It had the ingredients but the outcome was pretty bad and we sent that off to Christopher Ward and they worked their design magic. and they took all the elements of what I wanted, but it was about tweaking the spacing, the sizing, and just making it right. And the balance that they created, it is just magic.

9:21And a big change was the bezel. So previously, the bezel wasn't fully graduated. This is fully graduated throughout and fully loomed. So the touches are just tweaks, and I feel that's testament to how nicely they designed the original Lumiere. but I just wanted to push it even further into being that utilitarian tool watch and I feel like they nailed it yeah very much a useful purposeful built watch definitely very Adrian Barker very uh Bark and Jack so it's their designers were disappointed when they saw the what we'd created oh it is where's the color where's where's the fund no um that's not me you you have been called Mr.

10:05Boring before, indeed. That's right, yeah. So let's talk pricing details and when is it available? This podcast is coming out on February 4th, on Wednesday, but talk about where people can check this out and how much it costs. So the price of the original one was one of the big factors around it because it's such a neatly packaged product. This sounds like a sales pitch. I guess it is a sales pitch, nearly packaged products for a good price. This is a touch more. So this is going to cost£2 ,150. But the package is slightly different because we're going to be launching a new strap alongside it.

10:43And that strap is going to be included along with a branded UV torch because we have our logo on the dial that's only visible under a UV pen. Because I wanted it to be a stealth logo. I didn't want to take away from the legibility, but I also wanted our stamp to be on it because I'm proud of what we've done. so this is a stealth logo just above chronometer and it only glows under uv light but it's not and i guess for for the u.s listeners it's uh going to be just under three thousand dollars so two thousand nine hundred ninety five dollars and that's without any tariffs or anything extra that's that's going to be the that's a nice you know important psychological mark to hit i think so so good for you for that i mean last thing i mean on the on the watch i mean is there anything you know that stands out that you've learned from a watch industry business perspective in in doing this collaboration and and making this watch i mean you know i'm sure you learned lots of things that you that you didn't know but but did anything stand out on that front for you it it was perhaps a i was going to say humbling no i guess it is a bit humbling when when you you build your own products you you do what you want to do if if you think something needs to be changed then you change it if you want it to be a different color you make it different color if you want somebody to be a different size you do the different size and so it was interesting going in with a from the headstrong mindset of we build what we want to build to then pitch that to someone else who no no they have their own viewpoint of how they want things to be and so it was interesting working with with multiple people within Christopher Ward and pitching ideas and them saying oh no we kind of want it to be this way and then having to negotiate figure out what what can we push what what can we keep um one of those was was the trident logo on the the counterweight to the second hand i wanted that to be a little dot just to increase legibility they really that they said this this is part of our branding it's a dive watch and this is our mark for our dive watches so we need to keep the trident logo and i i disagreed with that until i got the watch in my hand and realized actually no the trident logo is so fine that actually the dot the circle counterweight would have been less legible i should mention the order window because it is it is limited edition not limited to numbers but but limited it's going to go live on on the 5th of february uh 3 p.m gmt and it's going to go it's going to be available until the 12th of february 3 p.m gmt and then watches are going to be delivered from march excellent so no limit on quantity and so where should people go if they want to have a look and uh and and order the watch is Christopher Ward's website, your website?

13:25Both. It's going to be in front page of both. So ChristopherWard.com or BarkAndJack.com. Christopher Ward are going to sort everything out, but we'll have a link over to their website. Awesome. That's great. Well, congrats again. That's really fantastic. And I think the watch looks brilliant. I'm looking forward to seeing it in the titanium. So let's turn to some business lines. We wrote about it a few weeks ago on Hardinkee, and now we had it confirmed over the weekend, Patek Philippe will be rolling back prices for U.S. customers by an average of about 8.5%. The brand says that effective February 1st, a moderate global price increase of 4 % driven by rising costs of precious metals and gemstones was implemented across both watches and jewellery.

14:12But in the U.S., this global increase was partly offset by the reversal of tariff policies from 39 % to 15 % for Swiss goods imported into the United States, reducing the current suggested U.S. retail prices by about 8.6%. Now, this is after raising prices in the U.S. alone by some 15 % last year, with total price increases of there being about 22 % or 23%. What do we make of this move by Patek in the US and is it going to spur other brands to actually, you know, change pricing with the tariffs coming down, Adrian? What's your take on that? Pricing is a big, you know, it's certainly a hot topic and something, you know, our readers are talking about a lot.

14:59Yeah. And I think, yeah, we often talk about pricing with the lower end of the price range in watches. But I think it's just as crucial at the upper end. And if spending 50 ,000, 100 ,000 on a watch, actually, it's probably more impactful at that price range. I think this is crucial because the US is a huge market for the watch industry. It's the biggest single country market. Exactly. It often jumps between one and two. And they need to protect that. Patek and all the brands have a responsibility to protect that market. Because if they don't reduce prices and there's a huge differential between markets, then you will just increase luxury tourism.

15:44You will just push your buyers to travel to Europe or to Asia, especially if they can save 8 % to 10 % on a watch. That's a flight and a weekend away. And so suddenly your buyers are no longer buying in the US and they're buying in Europe. and that will annoy those who can't justify traveling. However, if you're dropping 50 grand on a watch, if you're going to save 10 % by taking a flight and a nice weekend away, then why not make an event of it? So I think it's a smart move commercially to protect the US market. But I think as an industry, it's a smart move because I could imagine brand X struggling with the concept of a headline being brand X reduces prices because it's not a strong look.

16:34It's, oh no, are these guys struggling? Well, we know Patek aren't struggling. We know Patek are very strong. And so it's them being the front runner for this trend. And I think it's an important trend. Price is, we are in luxury and these things are technically unnecessary, but we're obsessed with them and we want them, but we still need to justify them. So if the prices get too extreme, then our minds will change. So I think it's a positive move all around. And I hope other brands follow suit because luxury tourism can damage the markets. Indeed. Yeah, no, that price arbitrage is something that all brands have to deal with, those working on a global scale.

17:16So indeed. Now, you know, this week the podcast is about Bowman Mercier and talking to the CEO there. You've done some Bowman Mercier content in the past. I know you've handled some of their watches. You know the brand pretty well. Now, we've just had confirmation that Richemont is selling Beaumont Mercier to the Damiani group in Italy. What's your take? What does this mean for the brand? Why are we seeing this happen? And how might this shake out for the industry? Obviously, Beaumont Mercier has been in a different place compared to many of the other brands in the Richemont stable, and they've decided to let it go.

18:02Yeah, it's a very interesting move. I think it's a good move for Richemont because they seem to be, for the other brands, be pushing up their position in luxury. I think a lot of brands are doing this, but especially Richemont. and Barmermercier don't really fit within that the category perhaps of where they see themselves positioned and it's it's it's a shame I don't know it's it might not be a shame because because these new guys might might have a strategy I know I know they're going to be opening up single brand boutiques which I think would be a very strong position because Barmermercier have a fantastic offering but it's unfortunately one of those brands that you need to experience to understand that offering and when you're in a multi-brand boutique it's it's hard to break through the typical household names tiso omega tudor it's hard to to get presence there and so the single brand boutiques could could be very powerful and i feel like they've got such a fantastic offering with their riviera range it's on trend for right now it should be bigger than it is and maybe it just needs a change in strategy and and that's i guess one of the challenges around these big groups is that they're built to make money and if if product brand x is churning over a lot and and they're they're performing well then cool we're going to focus on that and and allow that to to keep going and support that and that could mean that's bomb and mercy have have been left behind perhaps or haven't been invested in so it'll be interesting to see what the strategy is and and what the outcome of that strategy is as far as i'm aware it's this um group's first watch brand yes yeah i mean they're a watch retailer obviously in italy but yeah indeed this would be their first brand and i feel like that's an interesting move in itself because if we look at a lot of the groups the groups that have a jewelry arm and a watch arm i think right now predominantly the Jewelry is supporting the watches.

20:03So they must have some interesting roadmap ahead for this. And I hope it works out well, because it's a very cool brand. It's got a huge amount of history, nearly 200 years old. And so, yeah, I'd love to see them be bigger. I think they should be bigger. They deserve to be bigger. And do you think, though, this also might fire the starting gun on some of the big groups, whether it be LVMH, Richemont, or others sort of reconfiguring their portfolios of watch brands? I mean, might this be the permission slip that everyone needs to start reshuffling things and selling off some brands that are underperforming?

20:45Yeah, I think in this market where brands are needing to be careful and strategic and perhaps cut free some of the weaker brands. And unfortunately for us as watch geeks, I feel those weaker brands are typically the more niche brands, the brands that are perhaps loved by the watch geeks, the watch enthusiasts, but they're not household names. And I feel like these brands, for them to be commercial, they need the numbers. They need to be selling the units to the normal guys, not us. And so unfortunately, we might see some darlings of the brands being up for sale. And it could be a strong move. It could be a sad move.

21:33I just hope that the brands that we love, I'm thinking about Zenith here, for example, that was the last big brand that was rumored around sale. Zenith and LVMH have denied that the brand is for sale. They have indeed, yeah. And things have been rumored for a long time. But regardless, it's brands like that, which I do hope someone with deep pockets come around and pick them up and sort them out. But yeah, I have a feeling this will be the start to quite a few changes. Okay, great. Well, let's leave it there, Adrian. Thank you so much for joining me and congratulations on the new watch. Anybody who wants to see it can take a look at our story on Hodinkee or head over to Christopher Ward or Barkandjack.com.

22:18It's fantastic to see you do your first collaboration. So good for you. Thanks so much, Andy. Thank you very much. Excellent. Thanks, Adrian. And so here's our conversation with Michael Guineau, the CEO of Beaumont-Mercier.

22:41We are in Mérin at the manufacturer and the headquarter of Beaumont-Mercier, just outside of Geneva. I am with the Chief Executive Officer, Michael Gunon, who is joining us today on the Business of Watches. Michael, thank you for joining us. Thank you, Andy, and good afternoon and really welcome to Beaumont Mercier's quarter here. Excellent. Thank you. And so Beaumont Mercier is part of the Richemont Group. You're in sort of more the entry-level price ratio for the brand. But this brand has a great history. It's been around for well over a century. You've been in this role for over a year as the CEO.

23:26But for those who don't know the brand particularly well, tell us about the history of Beaumont-Mercier and the various iterations that it's gone through and how it ended up here at Richemont. Okay, so how many days do you have? It's a long history, indeed. I guess we'll get the condensed version. So let's summarize that if I can. But yeah, it's close to 200 years of history with a very strong, rich heritage, know-how. And it started with a family story, a beautiful two brothers, Louis Victor and Celestin, who really were passionate about watchmaking, who created this company in a Swiss Jura. And then very rapidly, they expanded internationally.

24:16So in addition to have this watchmaking expertise, they were also very entrepreneurs. So very quickly, back in 1814, they expanded internationally in London, then in some markets such as India, Australia, New Zealand. So they immediately had a very strong success and expanding internationally. Then, after Paul Mercier being part of the story where they met William Baum and they're really starting to expand, developing the creativity element while continuing to develop their expertise on the watchmaking, which was really part of Paul Mercier until today, where we continue to innovate on the watchmaking while also pay a lot of attention to design, to form.

25:06We are a maison of form, as you most probably know. So this is rich history. And then we, to summarize on two important milestones for Beaumont-Mercier, we launched the Riviera collection in 1973. 1973, yeah. Yes, it was a very important collection. This is your integrated bracelet, sports watch, basically, the Riviera. Exactly. is really the sport-chic collection of Riviera. And we have, less than five years ago, relaunched Riviera with a modern twist, more contemporary design. Then we also had the Hampton collection, a big part of the square shape that we launched in 1994. And more recently, we have very, very pride with our own movement, the Bomatic movement.

25:57Exactly, yeah. It is today featuring 100 % of our Clifton collection, which is a high-end collection of Beaumet Mercier. Very important collection. And actually for Watches and Wonders 2025 this year, we have relaunched Clifton with a new design. It's the one that I'm wearing today. And this proved to be, after a bit more of six months of launch, proved to be a very strong success. And it's a combination of strong automatic movement with our own BOMATIC with a design code, with what we call a retro look. And this, we believe that the combination plays a very strong role with the success of Clifton.

26:40So Clifton today benefiting of a double-digit growth. We are very happy with that. And this was a latest launch that we did and released during Watches and Wonders this year. And so when we think about the product in the collection, the Hampton, which is a square-shaped watch, the Clifton, more classic, but relaunched and certainly focused on the Bomatic movement, and then as well as the Riviera, which you launched five years ago. Talk about the Bomatic movement, though, and sort of where that's utilized in Mercier products and sort of what it means for the identity of the brand to have that in-house well -known caliber.

27:26We have indeed, as I was mentioning, we are using the baumatic movement in most of our high-end collection. Clifton being, as I said, the watchmaking line of Beaumet Mercier being very important. A classic while aesthetically with precise code design and the baumatic. We are using indeed Bomatic in some of the Riviera, which being also part to reinforcing our watchmaking identity. And then we have the collection called Classima, which is one of our bestsellers in volume, being the classic design, both in automatic and in cross. But we are not using Bomatic in Classima as we will keep it for the Clifton, which is a more high end line.

28:19And then we have the home term that you describe, a square aesthetic, both on a different size, both for men and ladies. And it's an important collection historically for the Maison that capture both men and ladies, which is important for us as we have both clientele and it's an aesthetic that are quite important for the Maison. And let's talk about where Beaumont-Mossier fits within the Richemont group. Richemont is a conglomerate of mostly Swiss luxury watch brands. I guess Beaumont Mercier fits in a little more at the entry level. I mean, what kind of price range do you have and what kind of consumer are you trying to target?

29:04And what does that mean for your retail situation? And retail is obviously an area that you know quite well because your job before this was being the CEO of Time Valley. So obviously, each maison has this unique positioning. You are totally correct that we are considering on the entry luxury Swiss watchmaking. An important element being our heritage, a very, very rich heritage and patrimony that is really part of Beaumet Mercier. We always want to play a strong role and even more now a stronger role into the segment of 2000 euros. This segment around 2000 euros is an important segment for us.

29:54We see that a lot of the industry has been, let's say, a change over this and has a lot of evolution around this segment, some going up. But in Beaumet Mercier, we believe on the authenticity of the importance of this segment. And we want to actually reinforce this segment into our collection, into our portfolio of collection. And this is very important. And ensuring that we keep the motto of Beaumet Mercier being accept only perfection, only manufacture watches of the highest quality. So this is part of the authenticity element that we will continue to reinforce. Also having the fair price, we'll continue to develop the watchmaking at the high quality Swiss time PC.

30:40So it's important for us. So if I'm hearing you correctly, though, you're telling me that it is a goal and objective for Beaumont Mercier to remain, though, in that more entry, more approachable price level. Because, indeed, as you mentioned, we have seen many brands move up, premiumize, raise prices, and try to sort of jump segments into a higher price bracket. Why is it important to serve that customer and that consumer base at that level? And then how are you doing that right now? Because, obviously, we're here in Switzerland. The Swiss franc continues to appreciate against the U.S. dollar.

31:22You're wearing a gold watch, a Clifton right now. The price of gold has hit levels that it's never hit in our lifetime. And then we have other issues like U.S. tariffs, which will soon be reduced, we hope. But indeed, there's a lot of price pressures, cost pressures on the industry. Yes, I think you described my daily headache, I have to say, on the combination and to find the right balance. I just want to reinforce the authenticity of Beaumercie. We are not a maison that's here for a few decades. We are here for actually close to 200 years, where we see through this close to 200 years, many volatilities and many different cycles of business and difficulties.

32:14Today, we look at a long term view on everything we do, not on the short term view. And what is important for us is to ensure that every single product we developed adds a fair price and being authentic on our value proposition. We, and not only me saying, but a lot of our retailers and clients, journalists saying that we propose a high value for money product. It will not be a commercial tagline for sure, but it's part of our authenticity. We want to preserve this element, despite indeed the very strong inflation in cost, strong Swiss front, as you described. But we want to respect this authenticity and this high value for money without transferring this high cost necessarily to end client or retailers.

33:08So for us, it's very important that we keep that in mind on the long-term view and we are playing and will continue to play a stronger and stronger role into this segment of entry luxuries with watchmaking. And, you know, we've seen certainly in the statistics through Swiss watch experts that this approachable entry level luxury watch segment, it seems to be under pressure. It seems to be where we're seeing, you know, the drops in volume. What specifically are you trying to do to appeal to that consumer and to translate that value for money that you're trying to convey without saying, you know, we're value for money?