Today is a guest post from Henry, who writes about watches at My Watch Collecting Journey, where he reviews high-end independents and other watches. Because of his focus on collecting independents, I particularly enjoyed his “quantitative” attempt to answer the unanswerable “who might be the next F.P. Journe?” Not only does it force us to look ahead instead of gawking at the current FPJ phenomenon, but it also takes an objective look at the factors that have made Journe successful, and whether those might be replicated. Enjoy. -Tony
By: Henry
It is not news anymore that F.P. Journe timepieces have exploded in the auction and the secondary market in the last 1-2 years. Take an example: the entry-level Chronomètre Bleu is trading at $60-70k and shows no sign of slowing down (3-4 times increase in value). The result is that for most watch collectors, F.P. Journe watches are too expensive to get or too long to wait. Many collectors are turning to other, more attainable independent brands.
An intriguing question then is which brands might have the best chance of becoming the next F.P. Journe. I posted this question to a few watch collectors and got interesting answers. One collector was betting on De Bethune, while another cited Akrivia as the most promising up-and-comer. One seasoned collector concluded that it was too hard for any independent brands to repeat the success of Journe, an assessment that could very well be true. One idea came to mind, which is to list all the key factors contributing to F.P. Journe’s runaway success today, and then compare and rate the other promising brands on these factors. FPJ may be used as a model to gauge the likely successors. We may look at the total scores and see who is coming out on top.
Let’s go over the key factors that are critical to FPJ’s success first to see what FPJ has done right. Each factor will have 5 points in our scoring system, which we will name the “Be Like Journe” Indicator for our discussion here.
Factor 1: Full product line
F.P. Journe produces watches ranging from the basic three-hander, QP, Resonance, minute repeater to the tourbillon. The product line includes sports, jewelry, and even quartz timepieces. The designs are mostly classic to meet the tastes of collectors. The full-fledged product line offers something for everyone at different price points which ensures the wide appeal of FPJ watches.
Factor 2: Production volume
FPJ’s annual production is about 900 which is high for producing such exceptional pieces. It is critical yet tricky to manage the production volume due to the costs to ramp up and down in response to demand while ensuring top craftsmanship. The ideal case is to keep volume high enough to meet the market demand but not to oversupply. If the volume is too low, the brand will be just a niche player for very few collectors. If the volume is too high, the market may be saturated and prices would be hurt, which in turn may discourage collectors. Creating scarcity but being able to do that at a sustained volume like FPJ does is the ticket to success.
Factor 3: GPHG awards
GPHG is the highest-level award competition in watchmaking. Winning awards would show industry recognition to validate the achievements of the brands. On top of that, the status of GPHG winners will elevate the brand status and drive collector interest and sales. It is a perfect marketing coup for young brands and the winning watch models. Even the nominated watches may claim some achievements and gain exposure. FPJ won 3 times the “AIGUILLE D’OR” Grand Prix in its early years, making it stand out from the crowd (even though it decided not to participate later on).
Factor 4: Worldwide Boutiques and AD Network
There are 10 FPJ boutiques in top watch markets including Geneva, Paris, Tokyo, New York, LA, Miami, Hong Kong, Beirut, Kiev, and Dubai. FPJ also has a strong AD network to facilitate distribution. For example, the WatchBox in the US has been very effective in making a market for FPJ.
Factor 5: Effective marketing including social media, sponsorship, founder/CEO exposure
FPJ has been a sponsor of Horological Society of New York and Mr. Journe himself has given lectures in person a few times. This is just one example of how FPJ has devoted its efforts to cultivate the collector community. Mr. Journe is a member of AHCI and has worked on the training and promotion of young watchmakers. The covid-19 pandemic has made it even more important to have a strong online and social media presence.
Factor 6: Auction performance
The inclusion and good performance at auctions are early signs of strong collector interest. For the independent brands, strong results at auctions will certainly further boost brand following.
Bonus points (up to 10): Additional indicators for future success mimicking FPJ’s circumstance and trajectory:
Founders are watchmakers, like Mr. Journe
Solid financial backing, like FPJ receiving investment from Chanel
Young founders and new companies will have ample time to prove themselves, therefore may receive bonus points to compensate for their short time in operation. The development of high horology and cultivation of brand image takes time and patience. The extra points for the highly talented and determined young watchmakers will enable a fairer comparison and hopefully a more accurate prediction.
In summary, the “Be Like Journe” Indicator has a total score of 30 points possible across 6 categories, with up to 10 bonus points for special factors. FPJ is rated at a full score of 30 as a benchmark.
The next step is to choose a list of candidates for our analysis. We will have to leave out some top watchmakers if their volumes are very low and prices very high. For the brands that only produce modern designs without any classic, standard watches, we will not include them due to a smaller collector base. In any case, it is hard to get a full list on the first try and we may always add promising candidates to the table later.
Some notes on the scores:
Product line: based on the current collection on each brand’s official website.
Annual production volume: based on recent interviews and info on the web. I checked secondary markets for numbers of new watches for sale to see if the production volume might be too high.
GPHG awards: based on GPHG award lists from 2001 to 2020
Boutiques/ADs: based on each brand’s official website
Marketing/branding: based on brand’s press releases, media interviews, sponsorships, ads, and social media activities, etc.
Auction results: based on search results on major auction sites
Reasons for bonus points:
H. Moser: Solid funding
De Bethune: Co-founder a top watchmaker; solid funding
Laurent Ferrier: Son actively participating in watch design ensuring a smooth succession
Gronefeld: Founders are watchmakers
Parmigiani: Founder is a watchmaker
Akrivia: A young company with a founder who is a watchmaker. The founder Mr. Rexhepi had worked at Patek, BNB Concept, and F.P. Journe, so he has first-hand knowledge of how the world’s best watchmakers were run. I could not help but give Akrivia extra bonus points.
Petermann Bedat: A young company with founders who are watchmakers
Czapek: A young company
Now, we have a ranking of the likely FPJ successors, as determined by the factors that are critical to FPJ’s rise. The brands that come up on top are De Bethune and H. Moser, with Parmigiani, Laurent Ferrier, and Gronefeld following closely. It is a fun exercise and through it, I have learned many new things about these brands.
While FPJ’s success is certainly a tough act to follow, this table offers some insights into how brands may improve to bridge the gaps. For De Bethune, it is marketing and branding to attract more collectors, and it may want to devote a bit more energy to classic designs. For H. Moser, the gaps are in the GPHG awards and auction results, which they are improving, especially with two wins at 2020 GPHG.
FPJ’s playbook may offer useful guidance to young watchmakers. Akrivia’s highly coveted AK-06 (50-piece limited edition) was introduced in Baselworld 2017 and sold out in the first half of 2020. The “Be Like Journe” model would suggest that they should start increasing production volume to attract more collectors. They may want to create an attractive entry-level model like the FPJ Chronomètre Bleu and Chronomètre Souverain that are priced in the $25K to $35K range, with an annual volume approaching 100. It is a very promising brand but they do still have a lot of work ahead if aiming for Journe status.
Follow Henry’s writing at My Watch Collecting Journey and on Instagram @klickme88.