Openwork: Inside the Watch Industry

Episode 68 — "Some Brands Break Away. Others Break Down – Watch Brand Spin-offs Gone Right and Wrong"
Hosts: Asher Rapkin (A), Gabe Reilly (B)
Date: February 16, 2026

Episode Overview

This episode dives deep into the recent and rumored spinoffs and sales within the luxury watch industry. Asher and Gabe use two recent case studies—Ebel's split from LVMH to Movado and the management buyout of Girard-Perregaux and Ulysse Nardin from Kering—to analyze what factors help a brand thrive or falter after leaving a major holding company. The conversation is timely, relevant, and filled with practical, behind-the-scenes insights as the watch landscape shifts from years of stability to possible "deconsolidation."

Key Discussion Points & Insights

1. Setting the Stage: The Industry Is in Flux

• Rumors & Confirmed Sales: The episode opens with the bombshell that Richemont’s "crown jewel" Jaeger-LeCoultre (JLC) is rumored to be up for sale (00:00).
• Industry Turbulence: Recent confirmed sales like Baume & Mercier (Richemont → Damiani) and rumors around Zenith spinning out of LVMH are viewed as part of a bigger, unprecedented shake-up. "It's in the water in a way that it hasn't been for years." – Gabe (05:47)
• Transitional Period: There is speculation about a coming "age of deconsolidation" as holding groups reconsider their portfolios, but hosts remain cautious about calling it a full trend (05:20).

2. The Case of Ebel: When Brand Spinoffs Falter

Background and Rise (12:12)

• Family-Owned Roots: Ebel was family-owned until private equity acquired it in 1994, then LVMH in 1999.
• Cultural Moment: "Don Johnson famously wore an Ebel 1911 in Miami Vice." – Gabe (13:30)
• LVMH Investment: LVMH upgraded Ebel’s manufacturing, distribution, and branding, refining its SKUs and putting it on par with competitors like Omega or Tag Heuer.
• Distribution Shift: LVMH sold Ebel to Movado in 2004 at a loss, seeing potential but realizing Ebel didn’t fit their strategy to move further upmarket (14:58–18:41).

Challenges Post-Spinoff

• Distribution Mismatch: Movado’s mall brand-centric infrastructure couldn’t maintain Ebel’s luxury positioning:
  "It's like the brand is the same, but the... inner workings of the company that then needs to put it in the right doors just isn't there." – Gabe (22:40)
• Perception and Branding: Without elite positioning and distribution, Ebel faded from mainstream U.S. consumer consciousness.
• Parallel Example: The struggles of Fossil Group after buying Zodiac underscore how important distribution networks and brand perception are after a spinoff (20:35).

3. Success Story: Management Buyout of Girard-Perregaux and Ulysse Nardin (GP/UN)

How the Buyout Happened (24:23)

• Kering’s Luxury Stable: Known more for Gucci and Saint Laurent, Kering restructured and ultimately divested their watch interests.
• Management Buyout (2022): Led by former Apple executive Patrick Pruniaux, now CEO and co-founder of the independent Sowind Group (24:30). Pruniaux's Apple and LVMH experience gave him mass market distribution expertise.

Why It's Working

• Experienced Leadership: "Here is a person who understands how mass market distribution and sales works in the luxury watch world." – Asher (25:52)
• Product Innovation & Focus:
  • At Ulysse Nardin: The Freak collection becomes dominant, average price comes down, demand goes up; the Marine chronometers fade into the background (29:34).
  • At Girard-Perregaux: New Laureato with updated, in-house movement and haute horology pieces (Three Gold Bridges) get renewed investment and attention (34:17, 33:55).
• Distribution Strategy: GP finds broader appeal, UN maintains its avant-garde, indie allure. Early signs from boutiques and distribution partners are positive.

Open Questions & Risks

• Commercial Success Data?: The hosts note that the financial health is hard to measure for private groups, but increased collector attention is undeniable, especially for UN’s Freak (38:19).
• Brand Revitalization: Despite initial skepticism, heightened awareness means "GP has entered the chat" among collectors (39:44).

4. Lessons for the Future: JLC, Zenith, and Other Potential Spinoffs

• Unique Risks for Large-Scale Brands:
  • For JLC, dealing in significant volumes (60–100,000 units/year), the risk with a spinoff is that "this is a brand that needs volume to survive." – Gabe (44:56)
  • Richemont’s infrastructure may be hard to replicate; the open question is if management can deliver both product and distribution (45:27).
• The “Movie Studio” Model: Is it possible for brands to be fully independent but still use a holding company’s distribution? Hosts are skeptical but see it as a sign "anything's on the table" (46:13).
• Cautions & Caveats:
  "The fastest way to become a millionaire in the watch business is to start as a billionaire." – Gabe (41:48)
  New owners must be able to retool the infrastructure and not just inherit the brand name.

Notable Quotes & Memorable Moments

• On why LVMH spun off Ebel:
  "They made the decision just kind of like they had streamlined the product catalog for Ebel. They made the decision like, we're going to streamline our brand catalog. We're going to have brands that own a clear lane, that are differentiated by price point, and have a clear identity." – Gabe (17:22)

• On distribution challenges after spinoff:
  "Movado does advertising, branding and sponsorships at a different level. And so the different organizations aren't necessarily able to take care of the brand and steward the brand in the same ways." – Gabe (23:34)

• Reflecting on leadership at JLC & risks of spinoff:
  "If JLC is spun off to an investor group ... the stakes at a billion dollars for JLC will be a lot higher. And JLC has benefited massively from the scale of Richemont and integration into Richemont and spinning it off I think creates a way bigger, way bigger risk because that business just runs at a, at a huge scale." – Gabe (43:56)

• On Ulysse Nardin’s product reinvention:
  "The Freak is the dominant watch that people now associate with UN. Whereas if I'm being frank, I think if you roll the clock back a decade, it's probably like the marine chronometers, 100%." – Asher (29:43)

• Summing up spinoff lessons:
  "It's not just enough to take the brand and then it sets you on a new course. You also have to retool your own organization or be able to. And I think that's the, that's the silver lining of this GP/UN story." – Gabe (43:18)

Important Timestamps

• 00:00–05:20 — The watch industry’s current period of upheaval and possible deconsolidation
• 12:12–23:46 — Ebel/LVMH to Movado: A cautionary tale of the wrong post-spinoff fit
• 20:35 — Parallel to Zodiac’s struggles after sale to Fossil Group
• 24:23–36:36 — Success after the Kering/GP & UN management buyout, led by Patrick Pruniaux
• 29:43 — Ulysse Nardin’s “Freak” collection as a breakout product
• 33:55–36:36 — GP’s Laureato evolution and role of boutiques in revitalizing the brand
• 41:48 — "The fastest way to become a millionaire..." on the risks of taking over a watch brand
• 43:56–46:45 — The unique risks and questions posed by a possible JLC spinoff

Takeaways

• Success of a brand post-spinoff is not automatic: Proper infrastructure in distribution, marketing, and leadership is as critical as product quality.
• Infrastructure matters: The prestige, distribution channels, and brand culture fostered under major holding companies are not easily or quickly replicated.
• Leadership experience is crucial: Industry veterans like Patrick Pruniaux, with both tech and luxury background, can foster successful transitions.
• Potential for more shake-ups: With brands like JLC rumored to be up for sale, "anything’s on the table"—expect more moves and industry debate.
• Collector insight: The hosts reiterate the enthusiast’s adage—big financial moves in the industry carry equally big risks, and are not for the faint of heart.

This episode is a must-listen for anyone following the changing tides of the watch industry, offering candid analysis, sharp historical context, and practical lessons for brands and collectors alike.