The Business of Watches [021] La Joux-Perret CEO Jean-Claude Eggen

0:00Welcome to the Business of Watches, the Hodinkee podcast where horology meets high finance and we go behind the scenes of the watch industry to find the economic drivers making things tick. I'm your host, Andy Hoffman. This week, we're back in Le Chaux-de-Fonds to get to the real heart of watchmaking on an industrial scale. scale. Movement maker La Joupere is growing fast, from less than 10 ,000 movements a little more than half a decade ago to about 200 ,000 per year now. The company, controlled by Japan Citizen Group, has even attracted investment from LVMH, which has acquired a minority equity stake following the development of a solar quartz movement that's now driving Tag Heuer's revived Formula One watches and seen on F1 racetracks around the world.

0:59We sit down with Jean-Claude Agen, the La Jou Parée chief executive officer. He gives us a lowdown on what it takes to make watch movements to supply the Swiss industry and beyond. But first, we get personal with a brand new non-profit organization launched in Switzerland to develop watch industry savoir-faire and métier des arts for young watchmakers. It's called Tadco's. Now, there's a competition to win specialized and costly watchmaking machines, as well as time and instruction with masters to learn how to use them. There's also a series of limited edition brand collaborations celebrating these specialized skills.

1:48Baudouin Van Ness of the French-language podcast Tourbillon Watch tells us why he started Tadco's, how it works, and the personal connection that gives the initiative its name.

2:06Baudouin Van Ness of Tourbillon Watch, and now Tad Coes, a new nonprofit watchmaking skills development organization here in Switzerland. Welcome to the Business of Watches. Thank you, Andy. Thanks for having me. Excellent. So Tad Coes is something that has just launched here. We're going to talk about all about what it is and how it works. But let's talk about the name Tad Coes. What does that mean? What does that mean? Exactly. So it means something. So the word comes from a French region named Brittany, and it means grandfather. Yes. So we decided to pick the name because first it's also related to my roots.

3:00My mom, born there in Brittany, grew up there, and I spent most of my holidays at my grandparents. Right. So, Tad goes means in Breton, grandfather. And also, in my family, we are really into nicknames. I will not give you mine, but one of my... I will find it out one day. And one of my grandfather's nicknames was Tad. So, I used to call him Tad. Yes. Because for children, it's way easier to call someone Tad rather than Tad calls. so it means grandfather and also why we decided to choose that name for such a project because what the grandfather means it's this figure that it's a loving figure who is here to help you to make sure that everything is fine for you and also my grandparents on my mother's side was my first connection to craftsmanship because my grandmother was a framer and I spent hours with her choosing the right frame for the right painting, cutting glasses, etc.

4:12And my grandfather was an architect. As an architect, he has his own workshop and every drawing was perfect and every realization was also perfect. And so you've called this organization and this project TADCOES, inspired in part by your grandfather and this kind of passing on of knowledge and this education, this experience that someone in that kind of position has. So what are we trying to do with the organization? How does it work? It is basically an apprenticeship, sort of scholarship program to develop what we'd call métier d 'art, savoir faire, skills in watchmaking. Exactly. So basically behind that, there is two pillars.

5:01The first one, which is just we want to promote métier d 'art to make sure that those... And métier d 'art for those, you know, is craftsmanship. It's craftsmanship, it's enamel, it's marquetry, micromosaic, it's you name them. the technique that makes the watch beautiful in a way. And we want to promote those métiers d 'art because we want to make sure that those artisans have some work to practice their métiers d 'art. That's the first pillar where we challenge brands on métiers d 'art that they never used before in order to create limited edition that are sold through a subscription program to make sure that the collectors, when they have the piece on the wrist, know who the craftsperson is, the techniques, the challenges, etc.

5:54But not only that, and we arrive with a second pillar, which is we want to make sure that urological know-how is in a way preserved. And the solution we found is, okay, let's help young watchmakers that want to become independent by assembling the best conditions possible for them. So we set up a competition where you have to explain your project on the business and on the technical side. You have to explain everything. The jury will do a selection, and this selection will have to come to Switzerland, and they will have to manufacture and decorate a component. so we want to make sure that those people they have a clear view on for the project but also technically speaking they are reliable yes and what they will win so if you are you are chosen by the jury if you are chosen by the jury if you are so if you want to to to apply to the competition go to tadcos.com apply you will have to to write down to fill your candidature.

7:10It will stop on July 15. And you have to be a watchmaker between 18 to 35. If you are self-taught, you have to provide us a portfolio. And you have to want to become independent. And you have to also want to showcase techniques. It could be manufacture or finishing that you want to highlight in your creations. So if you win, what do you win? Money, not money. You win machines. You win machines, two machines. Two machines, yes. You know you're brave. So basically you win two machines that are very useful if you start your workshop. That's a Schoblan 78 and a Jigbauer author type. Basically, you do pretty much everything with those two machines.

8:07But not only, you will spend two weeks at Luc Monet's workshop. Luc Monet, the watchmaker, indeed. It's a watchmaker, a very, very good teacher and a very talented watchmaker. He worked for a branch such as Krebel Forsey, but helped also Simon Brett on his project. He is also what we call in France, Meilleur Ouvrier de France. So he's the top of the top in the watchmaking field in France. So you will be able to spend two weeks at his workshop working on those machines in order to make sure that you know how to properly, properly, properly use them. and also you will have access to two mentors one for the technical and the other one for the business side of your project and those people are Jean-François Mojon from Cronaut he worked with Maxime, Elian Busseux and all the big names and Pietro Tomager from the limited edition who is very into independence and if you win if you have any questions you can reach out to them And also what is interesting for the collectors who supported the collaboration, they will have a privileged access to those two winners.

9:32So if you win, you have a machine to start your workshop, training on those machines. You are surrounded by the best mentors in town. And also you will have access to collectors that maybe could be your first customers. And we think that with those conditions, you can start probably your business. Interesting. Yeah. So, I mean, basically you've identified what the two most important sort of tools are, these machines that anybody who wants to, you know, independently create a watch and what they are. It's very specialized. And then so how much do these machines cost? How much are they worth? And then how is a nonprofit organization going to finance that?

10:19So first question, which is how do we finance it? So we will finance it through the collaborations. Basically, the benefits of the collaboration go to the organization and pay for the machines and the communication, etc. to make sure that the organization is properly running. And those machines, so basically I asked Luc Monet, so he's the one looking for the machine for us, and he told me you have to spend around 10 ,000 Swiss francs per machine. Wow. So basically per year, we have to spend 40 ,000. Right. A pretty nice watch. Indeed. Yeah, you can get a pretty nice watch for 40 ,000. So let's talk about those collaborations of the limited editions that will be available.

11:08How will that work? And you'll work with brands to do that? And what kind of watches will we see? Beautiful watches, I hope. So we will reveal two limited editions per year. And what is really interesting in those limited editions, so we challenge brands on a metier that they never used before. and they choose a métier d 'art and then we find a craft person and the craft person arrives with designs creative ideas okay if I understood properly who you were as a brand and regarding the techniques I'm mastering I think that's the design that challenged me and you and so we really replace the craftsman at the very center of the collaboration.

12:02Interesting. Interesting. And so can you tell us at this point what brands we might see or will it be a surprise? Independent brands. And the first, I will not say the first brand, but the first collaboration will be revealed before the summer, around end of May, beginning of June, and it will showcase Micro Mosaic. I've seen the design quite stunning. I'm quite impressed also because what is so cool with such a project we are nobody in the industry we are just the people asking questions to the people who basically do things and with that goes I'm in the position where I say okay, be free do crazy shit and let's have fun and all the brands that embarking the project say yes to it let's be crazy do not let do not think about the price at the end let's create crazy pieces and they all said yes and also the artisan said thank you we we had a cocktail last week when we revealed the project and some artisan were there and say thanks a lot for having us for us it's a chance because we are free to express who we are and our craftsmanship so we are very lucky to be in that position so first collab Micro Mosaic around end of May, June the piece has two balance wheels I can't say more and the second one will be during Geneva watch days and it will be with Cloisonne enamel and the craftsmen behind it learn enamel alongside Anita Porcher.

13:58So we are quite high. Some big names. Yeah, big names. And the third one, you will see. If you go on tatcos.com, you will see the three first collaboration on the three different métiers d 'art. You know, why does the industry, I mean, you've been around the industry with Tourbillon Watch, which is basically, you know, French language podcast. and then a lot of video content and on your website. You've been around the industry for quite a while now. Why did you decide that this is the way that a project and an initiative you wanted to do? So for that, I have to tell you two stories. The first one is how we've been in touch with some collectors.

14:44and the second one is about our relationship with Indies. So at the very, it was during a COVID lockdown, I had the opportunity to interview Benoit Mintien, so founder of Recense. I interviewed him and I wrote an article about innovations they have and post the article and had few feedbacks about those innovations. people don't really understand what makes a difference. I gather all the feedbacks, reach out to Benoit, say, okay, I have those feedbacks. Maybe it could be interesting for you or for your communication because it could be points to say, okay, they didn't understand that or that. Let's do something about it.

15:32Benoit kindly responds saying, you have to reach out to my communication director. He's the one in charge of that. I do the creation and everything, but I'm not in charge of the communication. We chat to the director and he coldly answer who they are, where do they come from? How much do they worth? Are their response customers? Right. So at that moment, I understood, okay, it's very important to have a targeted audience. So you have to know your audience very well. So at Tourbion Watch, we said, okay, let's be in touch with collectors in order to know them, try to understand what they are looking for.

16:21So we can create content for them, but also we can provide feedbacks to the brand saying, we know 50 of your customers. Here are their feedbacks. So you have to listen to them. And maybe it could be interesting to do that or that. because we are the man in the middle. So we have no stake with the brands and no stake with the collectors. It explains you the relationship we have with some collectors. And on a daily basis, we chat with them. So we knew that they had something, they wanted to have something interesting for their collection. The second question is how we ended up speaking about most of the Indies.

17:08So, it was around 2017. It was early in my urological journey. Normally, you go to Patek, Codemore, Rolex, you name them. And after you did dive, you found maybe Blampin and other, some brands. It's not my path. I discovered GLC, IWC, and then I met Jean-Baptiste Vu. which was at the time maybe the only one independent watchmaker in Paris. Right. At the time, Théo Offret was his student, basically. Okay. And I met him during an event, and I was impressed by who he is without understanding the level of his know-how, because I'm not a technical guy. But I understood that there is someone. So Jean-Baptiste introduced me to Théo.

18:03Théo introduced me to Julien Tixier. And then I met David Cantor, Philippe Dufour, Ludovic Ball, or Sven Andersen. So I really deep dive into the world of independent very quickly. And when you are in touch with independent, you are also in touch with craftspers. Exactly. Who do the métier d 'art, who do the specialized skills. And when you speak to them, they say, okay, we love our work. It's our life. But it's tough. we are depending on the bon vouloir of some brands so we have to survive we have to be creative so we say okay what can we do for the collectors what can we do for the craft person what can we challenge brands and we ended up with that idea of okay let's do something with brands about métier d 'art let's help young watchmakers become independent.

19:04And so this brings it all together, gives that sort of platform or forum or challenge for brands to incorporate and utilize these very specialized métiers d 'art. And it also provides a pathway for young independent watchmakers to learn those specialized skills, those special The watchmakers could for sure do something with the craft person. They do whatever they want, but they have to express in their project what are the techniques and all the things that they want to do and showcase in order to make sure that on our side, okay, those techniques are preserved because they are used. And if we come back to the project, the project is not new.

19:53we were lucky to have some people who went on that path before us and one of them is the one and only Maximilian Busse with the Opus where you do a collab with a watchmaker and he has done the same with MB &F and by being into that industry, by knowing Max you want to do something similar but different So he's aware of the project. We would love to do something with MB &F. It would be great to have involved them in a way, but it's not a question. So there will be applicants, it'll be 18 to 35 years old, young watchmakers who either have a diploma, have learned the skill of watchmaking or are self-taught and have a portfolio.

20:44And then you have a jury who will decide who your winners are, who will get the lathe and the jig bore to start creating their own pieces. So tell us who's on the jury. So we are very lucky to have them first on board because they are key figures in the industry. And we wanted to have two different profiles in the jury. One more about the business. The other one more about the technical side of a project. So the president of the jury is Marc-André Leschoux. So he's the founder of Watchist TV, but also Oropedia. He's very into preserving urological know-how with Oropedia. And he's about to create a museum specialized in watchmaking, which is quite impressive.

21:37Yes. And we have also Alex Godby, Alexandre Godby from Philips, watch expert. but also we have Roy Davidoff. So he's a vintage dealer. And we have also Guillaume Techeu involved. So Guillaume Techeu, for the people who don't know him, he's the one who founded Outlands. And then he worked for big names. And now he's back as an independent because he has different projects. That's for the business side. For the technical side, we are surrounded by Luc Monet, Hervé Schuster, and Emilien Reverchon. So three big names in the industry. And for those who don't know, maybe tell a bit about them and why they're…

22:21So Luc Monet, by being also the one who will find the machine for us, he's a meilleur ouvrier de France. He works for brands such as Grebel Forsey. Yeah. And he's very talented, but also what is very interesting, And he's a pretty good teacher, which is quite true. I mean, not everyone who's a great artist can pass along those skills. And so he's a lot into pedagogy. And we have Hervé Schuster, who spent most of his career at Beauvais, being the director of the manufacture. And also when he wanted to become independent, he knocked on the door of the one only, Philippe Dufour. and Philippe accepted to have him in his workshop to show him the techniques, etc.

23:15So very talented, very chill. He's always great to have him alongside us. And Emileen Roverson, he's... How to sum up Emileen in a few words? That's quite tough. So he's an angler. So he does sub-parties for big names. and he's crazy, gentle, interesting, and very talented in what he's doing. So those people are maybe the most talented people to have a proper look to the candidature. Right, exactly. And last thing, so yeah, I mean, you know, this is a sort of labor of love for you. You've been around for the industry for a while. you know the project is named Tad Coase the the term for grandfather and Brittany and talk about the situation with your grandfather who this is named after as this was coming together yeah so as I said we named the project Tad Coase because it means grandfather and we love the image of a grandfather who is here to pass on know how gently but surely I grew up in the Parisian suburbs so i grew up in the flats and at my parents place in britney we were in the countryside so i could do everything i want with my brothers so when we were looking for a name for the project my grandfather had a small heart attack and when i heard about it i said okay i learned so many thing alongside them they brought me so many things so i want to keep his memory alive and who is by creating a project so i will decide it with my wife okay let's use the word tight cause yes and what is really also beautiful so we launched a project on march 4th and maybe six days before March 4th, I called my grandmother because it was my birthday.

25:31And she tried to call me and then I called. Normally when you call your grandmother it's always very happy because she's speaking with one of her grandchildren. So I call her and the voice was not here it was quite strange and she just replied okay your grandfather just died an hour ago i was okay quite shocked but she is an old lady so you have to to pay attention to everything is there the fire firefighter here because they have to make sure that everything is fine etc so after i have to make sure that my mother is aware of that and called my brother etc So a few days after that, we revealed the word, the project had caused.

26:23So for us, it's a vivid memory of who he is. The day after the cocktail, we revealed the project. I was at my grandparents' house for his birth with my family. So for me, it was very beautiful. Yes, it's not something easy to speak about. But for us, it adds more meaning to the project. And that's what we love and say, OK, let's let's go even crazier. Let's go far where we thought it was possible and let's challenge everyone. Well, Baudouin, Vanessa, thank you for telling us the story. And thank you for sharing the details of this exciting new project in watchmaking, which will celebrate and enhance and continue those skills.

27:13And I guess for people who want to learn more about it, they can go to Tadco's.com. To the website, everything, Tadco's.com, everything is explained. If they have any questions, they can write us an article or reach out to us on Instagram. It's Tadco's official. So feel free to reach out if you have any questions. If you are a collector and you love the project, feel free to reach out because we have a subscription program where the people who will be part of the subscription program have access to the design of the collaboration before it goes public and have a special relationship with the winners of the Tadkos New Talent Award.

27:52So feel free to reach out. Excellent. Baudouin, Vanessa, thank you for joining us on the Business of Watches. Thank you. Yeah, see you very soon. And now here's our conversation with Jean-Claude Héguin, the CEO of La Jou. All right. So, Jean-Claude Hagen, we are in La Chaux-de-Fonds with the CEO of La Joupere, the movement manufacturer. We looked around this morning at your facilities here, and it's quite an operation. Thank you for inviting us here.

28:31Jean-Claude Eggen:Thank you, André. It's great to have you here. So let's talk about La Joupere, what you do here and what role that you play in the Swiss watch industry. You make movements. Yes, we make movements. It was quite a hard start in 2020 because La Joupere was really down. It was really the question with which strategy we should attack this movement market. And this is when you joined La Joupere. You had a career elsewhere before that, but you joined as CEO in around 2020. That was 2020, 1st May 2020. We started here, of course, with a definition of a clear strategy for the next years. So La Joupare is one of the several Swiss watch assets owned by the Citizen Group.

29:25At that time, talk about what the business was, approximately how many movements they made per year, and then what you've done and how the business has evolved since then.

29:39Jean-Claude Eggen:The situation was really complicated at La Juppere, not due only to COVID, because 2019 they produced approximately 7 ,500 movements in one year. 7 ,500? Yeah. How many are you doing today? We are nearly 200 ,000 now. It's quite a big operation today. Mostly the growth came from mechanical movement, but we had also the opportunity to jump in in the solar quartz movement because of my past work I have done in the quartz. And we took this opportunity and there also we have quite a good growth rate. So let's talk about, you know, what role now that La Joupere plays. There are, you know, several well-established, well-known movement manufacturers, but La Joupere has been around for a long time as well.

30:36But now you are serving with your G100 movement, and you'll soon have an upgrade on that. But you are serving as a movement manufacturer for, you know, any and all brands willing. I mean, you are a competitor to Sellita and others.

30:56Jean-Claude Eggen:Yeah, we want to be independent. Of course, we are a part of a big group, as you told. But I must say, citizen, let us the flexibility and the liberty to do our own strategy. We have today more than 80 customers on the G100. G100 is basically your three-hand and other various complications movement. Exactly. And we want not to do politics. We have the same price for every customer. because I think our position, we are a supplier of the brands. And this position is very good, but we have not to go further and influence the politics of our customers. Well, that's interesting because, you know, obviously when we think about movements and movement manufacturers and suppliers to the watch industry, we think about the traditional movement supplier, which was ETA, ETA, Swatch Group, And obviously things changed with, you know, that movement manufacturer and supplying others.

32:04So, you know, what did that do to the, you know, market and industry for movement suppliers? And where is La Jouperet trying to fit in? You talked about, you know, not playing politics, but it's a political business.

32:21Jean-Claude Eggen:You know, I've seen that ETA has stopped 2019. The deliveries to third parties. of course announced 10 years before. Then we have now Sellita has a big growth because of this. But one thing was for me also clear, the Sellita as the ETA movements are the same. So we should really develop something new. If you look, the 28-24 was put on the market 71, 1971. Right. So Swiss industry saying we are the world best, but the motors, most of the watches had the motor 2824 developed and put on the market 71. More than 50 years ago. So I think it's not very innovative. Of course, we had some updates on the 2824, but not really big.

33:21Jean-Claude Eggen:So our goal was clear. We want to be better. So we started with power reserve. That was the first step. Second step will be precision, paramagnetic. And then it's the last step. So what can you tell us about where you are with those metrics, with some of your movements now? And then we'll talk about who some of your customers are as well, the ones that you can talk about. Okay, the power reserve is done. This year we will come out with the G200 paramagnetic and high precision. High precision, what kind of parameters are we talking about? We want to pass the new COSC regulation, which is called excellent COSC.

34:07Yes, excellence indeed is what it's called. And so that is, I believe, plus or minus six seconds, plus four, minus two. And so you intend to achieve that mark with your…

34:22Jean-Claude Eggen:We try. We try. And so what have you done then to build this business and to become a viable competitor? As you say, you've created these movements that hit those parameters, power reserve, precision, antimagnetic. Yeah. What has it been like building this business in the time then since you've been here? First, of course, you need the vision where you want to go. And this vision and strategy has to be clear and you have not to change it every four weeks. If you are sure that the strategy is right, then you need the good team. The right players to work with you. That's the second important step.