Bremont has come under considerable pressure since its first appearance at Watches and Wonders Geneva this year for what was perceived by its fans as an underwhelming new collection of Terra Nova field watches, a downgrading of ambition to manufacture in the UK and a rebranding that was ridiculed on social media for being as generic as a United Nations logo.
Watch lovers may think only about the status and style of their wristwear, but investors in Bremont had a great deal more to worry about, as accounts published for the British business lay bare today.
In the final full year under the stewardship of co-founders Nick and Giles English — both no longer active in the business — Bremont racked up operating losses of almost £14 million from turnover of £20.4 million, which was an 8% annual drop in sales.
Effectively, the English brothers’ mission to make a Bremont movement on an industrial scale in the UK had all-but broken the business.
Without billionaire hedge fund manager Bill Ackman bankrolling Bremont, there wasa real risk the company could fail.
Something had to change. In fact, almost everything had to change.
Step one in the turnaround plan was to hire a highly experienced CEO from the watch industry in the form of Davide Cerrato, who took the reins at Bremont in May 2023, just a month before the end of the 2022-23 financial year in which the company lost £13.9 million.
Mr Cerrato earned the job with a pitch to turn around the company by making it a leader at a lower price point than Bremont’s watches with the ENG300 inhouse movements would allow.
A time-only version of the Terra Nova launched in Geneva sells for £2,500. That is competing with Oris and Longines, not Breitling or TAG Heuer.
Machinery and tools that had been acquired in anticipation of inhouse movement production ramping up at Bremont’s The Wing manufacturing and technology centre close to London were soon being advertised for sale.
Any income from the sale of equipment does not appear on the latest Bremont accounts. In fact, the value of fixed assets increased slightly from £6.3 million to £6.7 million, although only a proportion of this would be watchmaking plant and machinery.
Mr Cerrato also intends to take Bremont global; breaking out of its reliance on UK sales.
In FY 23, £14.5 million of sales came from the UK and £4.2 million from the United States. All other markets around the world collectively contributed £1.5 million.
Bremont rebranding
The new Bremont logo was an attempt to usher out an old era where the mission to make watches in Britain seemed more idealistic than realistic and vanity projects such as sponsoring the Williams Formula 1 racing team appeared to take precedent over stemming losses that totalled more than £23 million in the decade since 2012.
The new logo may not have hit the mark with Bremont’s supposedly loyal customers, which could be considered a sign that the bathwater had been thrown out with the baby, but allowing the business to continue drowning was not an option for its investors.
Explaining the financials for 2022-23, Bremont director Rupert Morley says the results were “impacted by the commitment of significant resources to the development of the ENG300 movement and the in-house design and manufacture of components with constrained capacity to produce other watches”.
The company had more cash to hand at the close of the financial year in June 2023 — £17.7 million compared to £3 million in the previous year, thanks to a £48.4 million investment from Mr Ackman’s New York-based The Pershing Square Foundation in addition to private equity firm Hellcat Acquisitions.
There is little more explanation in Bremont’s latest accounts. The report notes that the end of the financial year saw the appointment of Mr Cerrato as CEO and the launch of an ambitious multi-year strategy aimed at “building on the impressive legacy to create a British national champion in the global luxury watch space”.
Nick English remains an officer of Bremont, but has now taken a role as executive chairman of British electric car company Moke.
Giles English resigned as a director in May this year.
Commentary from Mr Morley accompanying Bremont’s published 2022-23 accounts, draws a line under the era of the English brothers.
“Bremont is fortunate to have inspirational founders, a much-loved brand, a world-class management team and a highly skilled workforce and now investing heavily in people, technology and operations to support future growth,” he concludes.
While there have been some high profile departures from Bremont’s Henley headquarters, the company finished its 2023 financial year with its highest ever headcount of 172 people (up from 141 in 2022).
Directors’ remuneration almost doubled from £565,285 to £1.1 million.
