Richemont’s Specialist Watchmakers Maisons (SWM)is being disbanded, according to a report by Miss Tweed, an independent news source that covers the global luxury business.
The business unit is home to eight watch brands, A. Lange & Söhne, Baume & Mercier, IWC, Jaeger-LeCoultre, Panerai, Piaget, Roger Dubuis and Vacheron Constantin.
It has been run by Emmanuel Perrin for the past seven years, a lifer at Richemont who had previously held senior roles at Cartier and Van Cleef & Arpels; two brands that are grouped and organized within Richemont’s Jewellery Maisons division.
This week, according to Miss Tweed, SWM will be dissolved and Mr Perrin will move to run Panerai after its CEO, Jean-Marc Pontroue stepped away from the role.
Richemont has been asked to comment but has not yet replied to WatchPro and there is no news of the management changes on the group’s investors and press website.
But, if confirmed, disbanding SWM would be a move welcomed by Richemont’s retail partners who, in off-the-record conversations, have told me they have felt pressured into investing in brands that are not a good fit for their customers.
Effectively, SWM strengthens its position at the negotiating table when it is speaking with retail partners about future investment by advocating on behalf of all brands at the same time.
These retailers might, for example, want to stock brands like IWC and Panerai, but not feel that Vacheron Constantin or Jaeger-LeCoultre are a good fit in their location.
They might also feel it is right to build a monobrand boutique for a marque like Vacheron Constantin, but prefer a more modest shop-in-shop for Baume & Mercier.
All the time, the brand the majority of retailers covet the most is Cartier, which is not part of SWM.
But SWM has other ideas. Firstly, it wants to ride two horses by opening its own boutiques in key city locations, directly in competition with retail partners within or around those same cities.
At the same time, it also wants those retail partners to invest more, ideally by opening franchised boutiques.
This uneven playing field is tilted even more towards Richemont brands when demand spikes for hot watches like Vacheron Constantin’s steel Overseas. Suddenly, as we saw in 2022, SWM channels these pieces to its own boutiques.
A slew of boutique-only watches from across Richemont’s SWM brands antagonizes retail partners even more.
Having strained relationships with the very retailers it should be treating like royalty, SWM has then been known to push its agenda: build several branded boutiques or risk losing access to other brands in the portfolio.
No more listening to retailers who have the best-possible knowledge of what will sell to their customers. For SWM, it was their way or the highway.
In a tough global market, Richemont needs to reset its relationships with the world’s best retailers, and the most important step towards this is to listen to them when they describe which brands will work best in their territories and how they should be presented.
This is best done at the individual brand level, which is why dissolving SWM as a division, a management layer and a business strategy makes sense.
I suspect it would also make sense internally at Richemont where highly experienced CEOs would be given autonomy to make big decisions. That’s good for their egos as well as for business.