A recap of the WSJ article:
A profitable Hodinkee raised $40m in 2020 from LVHM, John Mayer, and Tom Brady, among others, in a move “driven by a question: Would people who read about $50,000 watches on Hodinkee buy them there, too?” (See
@Evitzee here.) At that point, Ben Clymer handed the CEO position to someone the company brought in and “stayed on as executive chairman, [describing] his current role as ‘the emotional leader of the business.’”
Then, as
@reverbtime points out, Hodinkee “
bought a ton of luxury watches at the top of the market. What could go wrong?” The $46m Crown & Caliber purchase in February 2021 was meant to capitalize on the secondary market for watches streaking upward amid pandemic-driven online buying.
https://omegaforums.net/threads/business-is-not-booming-for-hodinkee.171432/#post-2332584
“I don’t want to say we were chasing it,” said Clymer, during an interview in Hodinkee’s Manhattan office last month. “But again, we’re looking out the window and I see it’s sunny, I’m not going to put on a raincoat. It’s no different than that. We saw what was happening in the market and we went for it.” In December 2021, the company set a goal of $141 million in revenue, according to a board presentation.
Then, in early 2022, the rains came.
Using sixteen(!) former employees as sources, the article describes Hodinkee as “plagued by overspending and projects that failed to launch.” One project in particular stands out:
A downtown Manhattan retail location that is currently plastered in Hodinkee branding has sat dormant since Hodinkee signed a lease for the space in 2019. According to a former employee familiar with the company’s finances, it eventually cost Hodinkee as much as $80,000 a month.
The purchase of C&C was a mess, with C&C employees resentful at being bought out by a flashy outfit that was actually less profitable than the company they took over. The companies struggled to integrate their operations. WSJ gets Clymer and the current Hodinkee CEO, Jeff Fowler, to deny that they had planned to shut down C&C’s website entirely before confronting them with evidence to the contrary. “When asked about a board presentation that indicated that had been he plan, Clymer responded, ‘Things change.’”
As the company began spiraling, it stopped buying watches and began flogging what they had more frantically. It has cut Hodinkee staff from 160 to around 50, while only 14 C&C staff are left. Some of the past Hodinkee employees the Journal talked to said the company had resorted to marking its slow-moving “limited edition” pieces, such as an Ed Sheeran-branded G-Shock, as sold out even as stock sat unsold.
As someone whose own company is not doing gangbusters, I’m not going to point and laugh at anyone for a failed business venture. I will, however, spare a chuckle for someone who is probably not in close touch with the hundred-odd employees he laid off describing his role as the “emotional leader” of the company.
