Major watch dealer sheds one third of its workforce

CHRONEXT has laid off almost one-third of its workforce as headwinds in the after market for luxury watches take their toll.

In a statement sent to WATCHPRO this morning, the company’s co-CEO Philipp Man confirms the redundancies — around 40 employees have been released out of a total workforce of 150 — and calls it a “hard but necessary step”.

“Like many companies in the technology sector at the moment, we are also feeling the effects of the market turmoil and inflation caused by the terrible war in Ukraine which is leading to more restrained consumer behavior.

“For this reason we regrettably had to lay off a number of talented friends and colleagues, some of whom have been with us for many years.

“This hard but necessary step enables us to guide CHRONEXT through this likely longer volatile phase in the best possible way and will ensure a strong foundation for the future,” the statement says.

CHRONEXT was one of the first major players in the secondary market to go public with news of falling prices since the end of March.

In the case of watches being discontinued by Rolex at the time of Watches and Wonders Geneva, some references have seen prices fall by around 50% since their peak, although many are still more expensive today than they were at the end of last year.

Other unicorn watches, such as Patek Philippe’s Nautilus and Audemars Piguet’s Royal Oak, have also seen sharp price corrections.

Because these have been the most desirable and least obtainable watches in the world over recent years, secondary market traders have focused on buying them and are most exposed when prices turn.

Private equity and venture capital investors, which have poured millions of dollars into secondary market players in recent years, are suddenly closed to the sector.

This is prompting companies that have relied on investment to fund growth to restructure and focus on profitability.

CHRONEXT reported top line sales of €101 million in 2020 and an annual growth rate of 47% from 2018-20.

The business was aiming to go public last year, and set a price range of CHF 16 to CHF 21 per share that would have valued it at over CHF 700 million.

That IPO was postponed just a week later, with CHRONEXT saying the market conditions had deteriorated and were no longer right for the floatation.