Chanel has expanded its influence in the haute horology world by buying a 25% stake in MB&F.
The house of Chanel has a broad portfolio of investments in the luxury watch industry including a part-ownership of Tudor’s movement manufacturer Kenissi and a minority shareholding in the privately-owned Bell & Ross.
Chanel launched its own watchmaking in 1987, setting up a watch design studio on Place Vendôme in Paris and buying G&F Châtelain Manufacture in La Chaux-de-Fonds in 1993.
Its investment in MB&F joins similar arrangements with Romain Gauthier and F.P. Journe over the past 15 years, creating an expert eco-system of independent watchmakers and component suppliers.
Chanel says the investment in MB&F shows its desire to evolve and invest in the future of high-end watchmaking expertise, creation and design.
Founder Max Büsser retains control thanks to his remaining 60% share of MB&F. His partner in the company, Serge Kriknoff, retains 15%.
Mr Büsser will continue to lead creation and general management, and there are no significant changes to the day-to-day running of the business with Mr Kriknoff, head of R&D & production, Charris Yadigaroglou head of marketing communications, and Thibault Verdonckt, head of sales, continuing in their roles.
However, Mr Büsser told WatchPro this morning that the investment from Chanel is an important element in a plan to secure the long-term future of MB&F beyond the point where he and Mr Kriknoff are directly involved.
The agreement gives Chanel a right of first refusal on any future stake sales in the company, making it much harder for any other company to buy the business.
“Somebody could come and say, ‘this is a big check,’ and if that somebody is a publicly owned group, which wants growth and profits and whatever, I don’t know who would take over,” Mr Büsser said in an interview with Bloomberg.
Stressing that, as they both still in their fifties, neither is leaving the business in the near future, Mr Büsser described how he has been planning for MB&F’s life after its founders retire.
“I have done a lot of thinking and planning for how we make this company thrive over the long term,” he says.
With the Chanel investment in place — details of which Mr Büsser would not disclose — MB&F intends to cap its growth, or even slow down over the next three years so that it can focus on building the foundations for a multi-generational future.
“We will use the next three to four years to professionalise,” Mr Büsser explains.
The timing could not be better. MB&F has trebled its sales from around CHF 15 million in 2020 to CHF 45 million last year.
Some of that growth has come from making more watches; up from around 280 to 420 over three years, and also from retaining a higher percentage from sales by selling 20% of its output directly to consumers through its MAD Gallery in Geneva.
MAD 1 watches have also exploded from a side-hustle to a significant brand in its own right.
Mr Büsser has many years ahead of him as the creative force within MB&F watchmaking, but he is already preparing for a time when a new designer and visionary will replace him.
A German designer named Maximillian Maertens, who runs his own design studio in Berlin, first came into contact with MB&F as an intern seven years ago.
He has since been working under the personal mentorship of Mr Büsser, and is being groomed to become the company’s next creative director.
MB&F has limited manufacturing capabilities. Its business model is to design some of the most original timepieces on the market today and bring them to life by working with a circle of equally innovative component suppliers.
Chanel’s investment therefore supports the work of an entire supply chain of small businesses in Switzerland, which have been under considerable pressure because of this year’s slowdown for Swiss watchmakers.
Frédéric Grangié, president of Chanel Watches & Fine Jewellery, says he is delighted to sign a strategic partnership with MB&F, which shares Chanel’s values of independence, creativity and excellence.
“The announcement is part of our long-term strategy to continue to preserve, develop and invest in specialist know-how and expertise, reaffirming our position in high-end watchmaking,” he adds.
Mr Büsser describes it as a platform for future security and growth that could unleash MB&F’s creative spirit. “It was our responsibility to take this major step to ensure our long-term future – a natural evolution for a company celebrating its 20th anniversary next year. In addition to allowing us to pursue our independent path, free of any pressure on growth, the investment by Chanel will strengthen our operations by providing access when needed to their wider ecosystem and network of specialised suppliers,” he concludes.
MB&F’s design-outsource-assemble model keeps the company lean, but it also exposes it to the risk of component suppliers going bust and derailing the production of its watches.
Chanel’s investment in the company provides financial cover to mitigate this risk for both MB&F and its suppliers, which could be helped (or even acquired) by the fashion house if they run into financial trouble.
“There is always a risk that suppliers fail. We are not big enough to buy them. I will not speak for Chanel, but it is clearly beefing up relationships with suppliers,” Mr Büsser suggests.