What a pleasure to listen to an intelligent and well researched watch subject without the recent hype.

Just wanted to say that your understanding of how businesses are run is impressive! Everything you said makes sense and is applicable to any type of business if it is to succeed. In today's world,the cost of running or increasing the worth of a business can change at the drop of a hat(esp. if not all wisdom is taken into consideration at the beginning of the process). There will always be a certain amount of risk involved, but it's the wise one who chooses to forgo the risk. Is this typical of all watch brands?

Wonderful segment with great business insight! Relaunching with an updated Polerouter on Ed Sheeran's wrist would be the biggest bang imaginable, but I take the point that given PE timetable and capital constraints, this risks a botched debut with adverse consequences for the brand. Wishing UG the best whatever path they pursue!

I fully understand your value as a consultant to companies. McKinsey and Company has 45,000 employees. All that is needed is just one person like you.

Thanks for another cogent analysis and tutorial on private equity finance. You set the standard, Mike.

Five years for a new watch in 2027 ? Who says that Georg Kern hadn't been thinking about this for some time and had already taken the necessary steps ? Thank you for your analysis; great channel !

You’re absolutely impressive sir

I did 3 investment flips with various VC.s your summary is on the money ….if at times sounding like a Job pitch!😊

The best explanation I’ve heard ever heard for how p.e. firms operate. Thank you. And the best explanation for how that translates to what we see from the brand owners. Fascinating stuff!

This was incredibly educational and insightful. Great work, Mike. Thanks!

I don't often comment, but this is an excellent video. I learned a lot and walked away with a lot of new and interesting insights. I feel this is something that really lacks in watch media generally: no one is really looking the commercial/business aspects of the industry and using that information to inform predictions or analysis of new watch releases. I think you've hit a real sweet spot here. I'm tired of watching the same "watch review" or "new releases" style content. I'd love to see more of this, if that's feasible? I'm reminded of an old Levi's commercial tag-line: "When the world zigs, zag."

Yet another well-thought-out, clearly articulated, grounded video. Thank you once again for your words of wisdom, maestro! I truly enjoy watching every one of your videos!

thanks for the great content. My only view is they should use UG to go after Longines or entry level Omega. This new brand will have 0 cred to go after JLC or anytjing close to 15K price range. Also, Breitling will not risk their main brand by launching something above it. My 2 cents.

Breitling is a partner in Kenissi movements. (Tudor, Breitling, Chanel). I don’t know what Kenissi has in the pipeline, but it was probably a factor in the deal. Movements are expensive to develop, but the cost is a lot better divided by 3 companies.

Excellent and interesting analysis! 😊

Yes, it would be extremely difficult for Breitling to develop and scale production of a new movement in 3-4 years, assuming they have not been planning this. But if we make a different assumption that Breitling has already been considering and strategically planning this going back several years, then it's possible they already have a new movement selected to use for these UG watches.

Brilliant analysis. I’ve been in executive management for more then 15 years and I agree 100%. The only thing I would add is that I think the pole router will be the second or third watch to be launched. They can’t risk the first few launches not doing well.

The B01 was designed to be completely modular for ease of servicing and development of modules that wouldn’t just be stacked ontop a base movement but the poor release reception coupled with fiscal changes has meant that the potential of the b01 range was never realized. This purchase of UG could be an opportunity to invest a little bit into a UG specific modular to the B01 offering say a chrono with a cool moonphase complication, something currently trending IMO without current industry sales data in front of me, that would elevate and legitimize a UG offering without too much upfront investment.

Impressive! Might this be a better way of creating a "Grand Seiko" without calling it "Grand Breitling" :p

When I have to write notes, pause and remind and take more notes, it’s not only entertaining but educational! Thank you for sharing your thoughts - enjoy watching your videos immensely. Look forward to more great content 😊

Very interesting, I had not considered the importance of PE and Breitling going public, etc. About developing new movements, perhaps Breitling already have some spectacular new movement in the works, and they just decided that UG would be the perfect brand name to launch it under. To elevate the prestige of the movement higher than the Breitling name likely would have allowed.

Wasn’t particularly interested in UG, but thanks for the quick overview of PE firms.

Great video and content, the most insightful, no BS, watch commentator on KZfaq. I envisage the first few being reissues of some of the past UG hits using their model ranges but as limited editions and likely more than one size option (most UG were small compared to Breitling).

Awesome and enlightening. There's usually a reason why things work out the way they do, especially in the horological world, but its rare to have a business explanation about who benefits and who pays and why its very much about following the dollars. Thanks for this welcome discussion that enables us to appreciate the watch world with both eyes open!

Excellent analysis as always. I think a viable alternative would be to position UG as a dresssier counterpart to sporty Breitling, not necessarily above them in the portfolio. That could allow reuse of the same Breitling movements. It also avoids the risks related to cannibalising Breitling sales and damaging the Breitling brand. Plus the dressy segment is slightly less competitive - Tudor don't really play in that space and I'd see Longines as the main competitor rather than JLC. My money would be on a series of Limited Edition Polerouters initially because the execution risk is lower than a chrono. Plus some teasing and exhibition only chronos.

You are one of my favorite watch channel on KZfaq. Thank you for your smart and insightful views on this superficial and unimportant hobby that watch collecting is. I’m 53 , I have been interested in watches since I was 17… UG is only famous for the bicompax , tricompax and polerouter…many models iteration with no clear icon. I don’t think the new wealthy generation have any wet dreams about that brand. I may be wrong but i wouldn’t bet on a successful commercial relaunch of the UG in this market. Off course personally I’m very much interested with the future of that great brand.

Great assessment! Thanks! Only, I dont necessarily share your optimism reg the success of the brand i.e. desirability. USP of an expensive 15k (by 2027 perhaps 18k) chronograph by UG is what again?!

Excellent analysis once again 👍 With normalised interest rates unlikely to fall in any significant way for the foreseeable future (if ever), possibly going even higher if geopolitical-generated inflation takes hold, you have to wonder if the PE growth/profit assumptions continue to hold water for Breitling/UG. Borrowing to invest on top of the $70m (already a very high price tag for the UG brand and design rights) what production output will UH have? Just divide the cost into output (= added cost per watch wrt depreciation, interest payments, etc). Perhaps the PE owners HAVE to go nearer PP or Adolf Lange in SRP to make the numbers work? 🤔 Also, I hear from various reliable contacts that discretionary spending is falling very noticeably across sectors and markets; luxury goods of all sorts (esp watches, bags, shoes), travel (esp airline load factors), automotive (esp EVs), bicycles (suddenly very slow). I can’t speak for other sectors, but I hear that even the ultra-rich are seen to be reducing spending overall - not the environment to relaunch UG and head for an IPO given what they’ll want to price UGs at and the PE firm’s desired valuation for the group. I have the feeling the timing of all this could well turn out to be a big mistake. We mustn’t forget that brand awareness of UG outside the cognoscenti of the watch community is achingly low. There’s a reason why Rolex is as desirable a brand producing in huge volumes. I can’t see PE spending on marketing in the $$$ needed to move the needle. But we shall see.

Thank you for this very informed video on the subject. I really enjoy the straight forward content on your channel.

Breitling is on pace to release a new time only manudactire movement at the end of 2024 per George Kerns. Now could that movement, or a modified version of same, be used in a new Polerouter? You bet your bottom it could.

Just find your channel. Fantastic!

I like how you understand the business and talk about it in such an eloquent manner. Insta-sub!

Excellent video and something we need more of.

Absolutely outstanding video. I plan to send this to marketing execs wishing to understand the mechanics of private equity 🍻

Your unmatched level of preparedness, industry knowledge and clear communication skills are only matched by your courage for reading AND replying to the comment section! 😂

This is far more complicated that I had envisioned. Putting myself in their shoes it certainly would be a risk and I don't know if it will be worth it. Should be interesting to see how it plays out. Hope you have a great one Mike!

If would be disappointing if Breitling just threw a b01 into UG as it would not resonate well with the customers for essentially a Breitling movement in UG at higher prices. I suspect the investment into inhouse movement for UG would be unavoidable but starting with simple movement first with standard base movement. Then take advantage of the UC catalogue and expanding into complications once the revenue and proof of concept with base models is established in the market. I doubt it will be hand finished as it’s far more profitable to have them standardised on mass machine production, thereby proving the potential for future growth with scalable production methods. They will 100% lean towards this direction in order to maximise the evaluation. Regardless this is an interesting challenge as it’s basically the Tudor Rolex relationship in reverse. It would be much harder to reinvent into a pricier brand from a cheaper one.

Very well thought & logical video on UG's future in short term. In the end it is still a business, maybe collectors were expecting too much.

Great overview. 💯 hiring a well known and respected industry veteran would be a great first move. I’m sure the PE guys running the show wear Rolexes and APs; we’ll see what they can do. Breitling was already trying to undo their past 44mm obsession by offering smaller sizes. But their divers don’t even stack up with Tudors. Now that clout is such s big part of the luxury watch game this may be very difficult.

The Hodinkee interview with the CEO was interesting. George said they will all do new movements and start with the simpler automatic and release in 2026

Thanks for great,interesting and informative talk ✌️

Ahh the question I have been hoping you'd address!

What a man.

Thank you for this outstanding presentation

Stumbled across your channel & very impressed. You know your watches and clearly have a solid business acumen 👏👏

Good stuff! Kinessi might be such a key piece. Time will tell.

impressive… very very impressive

What great and logical well thought true video

Another great video TWTW!

I think you're onto something with a modified Breitling/Tudor movement but I wouldn't be surprised with a rebranded JLC movement. A JLC movement would tick the box for a high-end movement even featuring Cotes de Geneve for an ultra premium grade. This would cut the cost of creating a factory to house "In-house production," while simultaneously guaranteeing the quality every enthusiast expects. IMO.

"I suggest you read books from both sides" - that is always a very wise suggestion.

Very insightful and instructive. All makes sense. The hopes that some enthusiasts had look likely to disappear in a fire built by the PE money men. For the foreseeable future it looks like any UGs produced will be as rare as rocking horse s**te, and very expensive. At the moment I'm looking for a deal on an El Primero where I have a much better chance of success.

Well done.

do you think it will increase the vintage UG prices ? Not speaking Pole routeur

Glad that a, likely, successful revitalizing of UG is happening. I'm personally hoping for a particular racing chronograph. This is a rare reference, and whether they will make a new reissue of it I sort of feel may be unlikely.. at least not for a long time. But, my veey favorite is the "Exotic Blue Nina" Compax. It just has the colors I like in that retro racing style with bold, yet somewhat muted, blue color block in the shape of a T. Yes, what we may get may take a long while and likely be very expensive.. but, in a way that's a good thing, for me, as it'll probably take just as long to save up $$$$$ for a UG chronograph reissue I really want.. IF it happens.

Great video and thoughtful insight!

It's a great challenge for Breitling. I agree with you. It's really difficult to develop a new movement (even on an old based calibre) Interesting to see what will be the possible supplier at the begining. Maybe something like Vaucher Manufacture which already design Ultra-Plat Microrotor movement (Seed VMF 5401). Wishing UG the best whatever path they pursue!

This is indeed a very complex issue and there's uncertainty in this "revival" for Universal Geneve. But it kind of makes my mind run wild with the speculation: Will they release a chronograph? maybe a new polarauter? so many questions... Thank you for the video.

This has been extremely insightful and eye opening to many I'm sure. Whilst I thoroughly enjoyed watching / listening, I can't help but feel that a small part of my romanticised world of horology just died a little. Not because of anything you said, but simply from the inevitable truth that comes with the transparency of business, finance, and P&L. We want the world of watches to thrive, live long, and prosper, but we subconsciously also pretend that Gepetto is whittling away in a sea of lathes and Guilloché, working tirelessly to produce the millions of watches sold on the market every year. 😅 P.S. Nice touch with the vinyl in the background. Is that a Top Gun edition?

Excellent!

Many thanks, all very fascinating - would love to know how much spare manufacturing capcity there is at Kenissi . . . It is possible for a small team, working in one large room, to perhaps meet the deadlines you suggest. However would need external manufacturing. Does Breitling have a (skunk works) team up to the task? Also looking on Crono24 - the UG product range is extensive and very diverse . . . where to start?

Great material, as always. Putting watches aside for a second, I am puzzled by the background of your home studio. What's up with a flight jet poster? Are you a fan of these in general or specifically of those flying for the Russian army? Cheers

Breitling's chief designer already said that UG will be positioned higher than Breitling. Traditionally, UG was around JLC and Vacheron prices, so that is where the new watches will be priced. They will not use Breitling movements, but bespoke new movements. They already have a 10 year product plan. Limited and low volume production.

When I heard of the acquisition I was excited, as an enthusiast. UG 'back in the game'. Can't think of a brand rebirth with that kind of back-catalogue ever. It will be quite the tightrope, but I see this initially as being for 'enthusiast collectors' due to supply limitations: they are not going to make a lot of watches in say a 2.5 year timeframe and that will be at a price and probably more in line with say Girard Peregeux (which has its own ownership story of recent times). I agree they won't be Polerouters or Nina Rindts. That is where the volume will be and they can't 'spend' that yet. Make them limited initially and it's done. What they do as far as all-important movements, I got the popcorn on its way :) They'll need someone pretty savvy running the show.

But does Breitling want to go public? PE could spin this optimistic objective to build up expectations. As you brilliantly explained, PE will not pass a well-functioning company to the next ownership but the confidence (or illusion?) their overpriced asset is the next big thing.

I always thought UG were known for their little dress watches rather than chronographs. Given that little dress watches are making a comeback, it may be easier for them to just make some nice little dress watches again rather than fuss over all this movement stuff..

I'm curious to know Mark's business background (Edit) I meant Mike*, not Mark- unless Mike so brazenly decides to change his name. Apologies 🙏🏼

Breitling is certainly taking a big risk-hopefully it’ll pay off.

I hope that Breitling, even if it has to wait a few years, say 2026/2027? will come out directly with a chronograph which is the Universal Geneve identity that we all know and appreciate. It will perhaps do so with a price around 23,000 euros in steel, placing it above and below the usual suspects at a price that will not allow you to think Breitling or Geneve, what do I choose between the two? the moment you decide to buy and spend 60,000,000 euros you already have a production plan and an almost ready movement from some former Universal team who has already been contacted some time ago.

I thought that Breitling was working on their own basic 3-hand date movement which might launch this year? That would complement the B01. I don't think that UG needs a UG" movement. As long as it is in-house to the Partner's Group then that's fine. It has to be one of Breitling's own movements, possibly even tweaked a little for UG. It definitely cannot be a Selita, ETA or even a Kenissi for that matter. I think it will be a Breitling movement tweaked slightly. You are right with how they are going to market this. It'll be with low production runs guaranteed to sell out, at very high prices promoted by the ultra rich influencers like John Mayer and Ed Sheeran. They'll just trickle out the hits like you say, and the Hodinkee crowds will gush. It'll be like the Lexus, to Breitling's high-end Toyotas.

The big unknown is how far Breitling was advanced prior to purchasing UG. If I was managing this, no way would the recent purchase announcement be the starting point, they must in my mind be two or even three years into this project. You would sign an memorandum of understanding with holder of the IP first. This would allow the Breitling designers, engineering and marketing time to figure out and prepare a relaunch plan prior to the formal acquisition for a relatively small upfront cost. The purchase announcement would critically be the first step in marketing campaign associated with the relaunch strategy. This would mean they can now start talking openly to is existing distribution channels, and present their plan to add the UG brand, showing the prototypes of the watches that are coming to give them the confidence to invest is making room in their showrooms for another brand. So don't be surprised if we see a Universal Geneve watch produced in a Breitling factory on sale later this year. That gives them three years to grow the equity in the UG brand prior to going public. A separate UG design and production facility would be something the would sell as an investment opportunity and a justification for the IPO. It is vital that the IPO not just be seen as an opportunity for existing owners to exit.

What’s a business lesson!!

Great resume of PE that seems absolutely sound... But! I agree with you assumption that B have to position UG above them, but this is problematic for two reasons: 1) the mid-up tier inhabited by JLC, Blancpain, GO and possibly GS is struggling. Massively. Beyond halo product (Reverso, FF, Panodate) it's moribund. It's constrained by a ceiling of more aspirational, upper-tier brands (Patek etc) and perpetually squeezed from below by leviathans like Rolex or Omega. I don't see the volume in this sector either - Blancpain and JLC are pretty tiny, while their watches are a long way from oversubscribed. I see nothing that will likely change this. These watches are the worst for ROI: massive production costs from high quality watchmaking, huge R&D costs from movement development and then price constrained by market position. Swatch absorbs the costs across group, Richemont hopes and prays with JLC... Then 2) mid-upper tier UG squeezes and constrains mainstream Breitling. Perhaps the idea is Breitling drops to Tudor/Longines tier and UG offers Blancpain/JLC quality for Rolex money. But that is a big ask. And from scratch? Not even considering capital R&D, margins will be slim to non-existent. And volumes small - because UG, outside enthusiasts, is nothing as a brand. Recognition is zero. And launching UG to enthusiasts with Breitling/Kenissi movements would be catastrophic - they'd be roasted. Meanwhile, a lower tier Breitling would have to scale volume hugely to battle Longines, even Tudor or TAG and they just can't sell that volume. All these factors make the UG purchase a risky move for a Breitling IPO drive - fine if it stays a shell brand, but taken to production, an albatross. And this production thing is not insignificant - there just aren't the watchmakers. That said, I'm a watch fan. JLC and Blancpain offer the best watchmaking per buck and I love steel production high horology. So a UG with reworked movements and immaculate design? Bring it on! But I struggle to see the business case beyond 2021's hubris.

Didn’t they buy also mechanism details, intellectual property, etc from UG? They could use those also.

Whatever they come up with it has to be desirable……. Nothing more, nothing less

I want the white shadow micro rotor reissue.

UG going to higher price point than B., fair point. B has to pay attention in keeping tight brand identity - collector identity- so UG model has to have UG refreshed caliber. Let's assume they go 4 a Cartier approach. Outsourcing caliber production to special collaboration, inhouse case & finishing dial. starting a yearly release of 3 series picking from the past. 1 manual. 1 bicompax, 1 diapason. 3 collaborations involving maybe Papi, or other mov celebrities or producer. 50 piece each. Limited series. Skyhigh. A mix btw initial Tesla strategy & Cartier 70ies. Than a moonswatch event before IPO. THE NINA. A 3 years prj to mass produce with kinesis. What u think. Wouldn't be great?

Accent grave makes an ehh sound as in “get” or “bet” in Genève

Breitling had their best year in 2023, up 24% to 94 million, but only an operational profit of 3 million...Ouch! maybe another reason why they bought UG hoping that this purchase will improve overall profit?

So, a Tudor to Rolex equivalent as it pertains to Breitling? Perhaps a poor example, as it appears that it's a high end, new UG...

Can it be any worse than modern day Angelus or Chronoswiss 😁😆

I am worried Breitling will end up like my friennd john

Not being weird, I promise, but when I look at your face, my peripheral vision renders the Batman toy on the left as a fairly large tarantula (for me, not good). So I just listen to you on headphones, missing the watch action. Still, I find your analysis interesting and unusual.

come for the watch review, stay for the mba

TWTW, why does Breitling have to make the watch unavailable, I mean limited? Pardon my rant, but you can't recoup $70 million investment by pissing offer customers and making the brand unattainable. The collectors are sick & tired of being treated like "Charlie Brown" with Lucy pulling away the football every time we want to buy a watch! We don't need another H. Moser (only 1,200 units) or Patek (only sell to billionaires). Why not take one model like the Pole Router or Paul Newman Daytona dial and make 5,000 units? Breitling could use off the shelf high-end ETA or Selita movements, or a Premier B01 movement to get the production line and sales moving. Collectors are getting tired of brands making a watch hard to get. I walked away from Rolex and A. Lange for its Odysseus being unattainable. I discovered UG from other channels introducing the brand well before Breitling bought UG. I am excited that the heritage models may be offered with modern movements. I would expect more from George Kerns, and I hope he does not follow your limited supply strategy and proves you completely wrong.

Get used to the term Microtor defining UG’s success.

Anything that goes in the back of those new watches will either be ETA coming to their senses or it will be kennisi and it’s much likely to be kennisi Breitling is now exposed to a downturn in the watch Market.

What you are saying makes sense but I just can't imagine it working. The UG brand is dead as can be. Most enthusiasts have no idea what it's all about, let alone general public. And even if you "educate" the people, this brand has been dead for so long, I wouldn't associate the old UG with this new thing no matter what they do. If all it takes to convince people to buy into "heritage" is buying a name, a few celebrity releases and a one hit wonder l, geeez... has the hobby really gotten so shallow?!

Very interesting video. Here in the UK Breitling have started to open boutiques and I was wondering why. In my local shopping centre/mall, there are four jewellers selling decent watches all within 30 yards of each other. One mainly focuses on Omega, Tudor, Breitling and Longines. One focuses mainly on Rolex, Omega and IWC. One focuses mainly on Tudor, Longines and Seiko/Grand Seiko. One is the Breitling boutique. Yes, they cater to us watch enthusiasts but surely they need to attract other customers as well given the overheads of such locations. Are boutiques part of a PE strategy to create unique outlets for UG?

Let’s hope Breitling don’t « Furlan Marri » Universal Genève. That is make Xerox copies of « universally » appreciated vintage models (though owning the IP this time), slap in run of the mill movements requiring zero R&D, get the endorsement of a celebrity collector, maybe an interview with Ben Clymer in a posh location, pull the heartstrings of real UG enthusiasts to get them to reach for their Amex. Then sell the company to Frédéric Arnault in two years time for € 300 million.

It’s looking like it’s going to be a cash grab to me with a lot of celebrity endorsement . you do not throw millions of pounds to release a couple of vintage style dress watches, that part of a plan would be very credible but I don’t know how much money you could charge for those watches unless they are gold and all the sort of things we are already seeing to hype up the price of watches . when it comes to chronographs well breitling already they do those, I don’t see where the real custom is going to come from without cannibalising some of the business breitling already have. just how much custom is there ?

They won't hire you for advise now!! probably a money grab situation is more likely. Like the old dials for sure.

First comment!

Layoffs ‘increase’ efficiency by having the remaining workers do unpaid overtime. In other words: slave labour. The increase in productivity and profit ends up in the pockets of the rich owners. Capitalism is efficient, it’s not fair. Your goal is to be the rich owner, not the slave labourer. Complaining or wishing for communism is stupid and a waste of your time.

Aaargh! Everyone pronounces it wrong. It's not Universal Gen-EVE as in Adam and EVE, it's Gen-EV as in EVer. PLEASE STOP IT!!!!

sounds like a cashgrab that wont likely end in anything interesting or significant

Cvc is Absolute shit. I was working before in mgt Position cvc company ownd. Its Horror. No longterm. Everthing should be positiv roi 6month max 10minth. Process are not lean. Etc

Brietling are owned by the Partners Groupwho have bought UN from Hong Kong based Stelux, Brietling have bought nothing, the name is being chucked in to add some credence too this bit of logo swopping, I appreciate your more business like anylasis, but UN is gonna have to come up with a product to increase value, sticking a B01 in a UN case won't cut the mustard. They have two movements or rights to same but no actual metal or manufacturing. Everytime you say "Brietling" you're adding credence (value) to an empty balloon.Please refer to the new owners as the Partners Group, which is in fact the case. You might wanna look into the "new" microrotor UN announced in the early 2000's and to what extent the 251 chrono is actually producable, and where. Presumably they don't even have the tooling.

UG is still producing and selling watches through City Chain in Asia. It’s not a shell or a pile of paper in a backroom. Do some research before you make a video. City Chain is a large watch retailer in Asia and it’s owned by Stelux, which owned UG.

I look forward to watching how this will unfold and what the brand Universal Geneve, will mean to us watch nerds by 2027. Thank you for sharing your analysis.