A historic referendum will decide today whether the United Kingdom should remain a member of the European Union, or leave it. The implications for the watch industry, in case of a Brexit, could have major repercussions on British watch companies. We spoke to the CEOs and founders of four brands – most of which source parts from Switzerland, with the notable exception of Roger W. Smith – to hear how this decision would impact their trade, if at all.
Piers Berry, Founder Of Pinion Watch Company Ltd.
The Pinion Axis II in stainless steel.
Pinion is a relatively recent start-up brand based in the UK that makes affordable watches. The collection, which is powered by Swiss movements, has been received very well in the local market, but Piers Berry plans to take the product abroad with the help of a manufacturing facility.
“Our thoughts on the outcome of Brexit are largely neutral. We make niche products in small volumes, which are sold direct to collectors, rather than high volume sales via retail stores, and we use a handful of UK-based watchmakers to build our products. Over the last 12 months 90% of our customers have been UK-based, with approximately 30% of them having bought more than one watch from us; the majority of these customers already own one or more watches by independent British watchmakers. I don’t see the Brexit affecting these collectors, who like to plan their purchase in advance and who enjoy direct interaction with like minded companies.”
“Should we actually leave the EU, I’d imagine the rules and changes could take up to two years to take effect. However, in the short term the main impact for us is the strength of the pound after the result of the Brexit. All of our watches are fixed by GBP, so should the pound weaken, then due to the exchange rates, customers – especially those in Europe – will benefit from this. But the weak pound will also mean our parts and manufacture will be more costly to produce – we’ve combated this by investing a large amount of our revenue from sales over two years back into parts and stock, so in the medium term at least should the pound weaken, we have more than enough stock to sell until it became stronger and more stable again.”
David Brailsford, Founder Of Garrick Watches
The Garrick Norfolk in gold.
Garrick is a low-volume British watchmaker specializing in bespoke pieces. Garrick manufactures most parts of the watch, including the case, in the UK and sources movements from Switzerland, before assembling and finishing them in Norwich.
“Virtually all our sales are outside the United Kingdom; I would say 90%, but most are to the U.S., HK, and Dubai. Leaving the EU would have no impact on Garrick. The biggest issue for any business trading in the EU is the British pound. The exchange rates cause more problems than anything else and therefore, in my opinion, leaving won’t make much of a difference. Most brands still buy parts from Switzerland, which isn’t in the EU. Yes, Switzerland is part of the single market but still negotiates its own terms and trade agreements. I truly believe that Britain will be able to negotiate with the EU on the movement of goods. It will take many years to negotiate these terms and this may cause some small problems but I don’t see a meltdown happening anytime soon.”
Giles English, Co-Founder Of Bremont Watch Company
The Bremont Regatta Oracle Team USA.
Bremont has been one of the UK’s modern success stories. From their base on Henley-On-Thames, the English brothers (Nick and Giles) have developed a global and loyal following. The company specializes in professional and tool watches, and have strong ties in the naval and aviation industry. Bremont Watches Bear Grylls Replica counts more than 100 employees worldwide and make between 8,000 and 10,000 watches per year.“The UK is an island, but in the modern world we cannot commercially act like one in such a global economy. Although most of our business is done with Switzerland or the rest of world outside Europe, we feel the EU is not holding us back in any way. Also if staying together helps in a small way to prevent a third World War, then it is worth it.”
Roger W. Smith, Founder Of Roger W. Smith Watches
These lengthy and lean sailing boats became popular from the early 20th century, and the variety of these in Bermuda was probably a rare sight. A day after, Giles was equally excited to watch them competing at a regatta in the deep blue waters off the magnificent Bermuda shore. Those ships — or at least the elegant theme of this J-Class ship — has been the stated aesthetic inspiration behind the AC that I (AC 1) watch dial. It’s elegant and classy, but sporty and constructed for purpose.Bremont has been getting a great deal of life from its 43mm wide “Trip-Tick” situation — that is the basis for most of its timepieces — just as it’s in the AC I. The case is distinctive and comfortable to the brand. Additionally, it uses a centre barrel produced from colored anodized aluminum. Here, this barrel is in black with sleek flat lines, which are a stark contrast to something like the knurled texture barrel in crimson on something like a Bremont Martin Baker watch. Do not overlook that the steel portions of the situation are both machined in-house by Bremont, but are also given particular heat treatments to make them harder and more scratch resistant than untreated steel.
Roger W. Smith in his workshop on the Isle of Man.
Roger W. Smith is an independent watchmaker based on the Isle of Man, where he produces some of the world’s most exclusive high-end watches. A former student of the great George Daniels, Roger W. Smith is considered to be one of the finest watchmakers alive today.
“As I am based in the Isle of Man, I find myself in the position of being an interested party, while not being able to vote on Brexit. The reason is that, although located at the center of the British Isles, the Isle of Man is not part of the UK and has its own parliament, Tynwald. Trade to the EU is therefore via a special protocol through the UK. If I did have a vote, I would firmly advocate ‘Manx-it’ however! I think the ‘Remain’ campaign have shown a monumental lack of confidence in Britain’s ability to produce goods and services that will appeal to the world. The Swiss have achieved bi-lateral free-trade arrangements – not surprisingly, given that, like the UK, they run a trade deficit with the EU. Above all, their watch industry transcends notional barriers to trade. They simply make outstanding watches that global consumers want. From our own perspective I am absolutely confident that Brexit will have no impact on my business, which, in any case, has major markets in the U.S. and Far East. I believe Brexit will open up more doors for British export than it will close and I think it will help to enhance our identity and reputation.”
Position: Out, but unable to vote
Impact On Retailers
Leaving the EU would almost certainly prompt a devaluation of the pound and the euro versus the dollar, according to Luca Solca, an analyst at Exane BNP Paribas. And while that could be good news for luxury tourism sales, retailers fear a weaker pound would prompt brands to re-adjust prices.
Prices for luxury watches have been largely stable in UK. Rolex has not raised them since 2012; Patek Phillipe cut them only recently by 10% following the revaluation of the Swiss Franc last year. In an interview with The Financial Times, Mark Hearn, Patek Philippe’s UK managing director, said the company had not made any decisions regarding prices should Britain vote to leave the EU.
Marcus Margulies, chairman of Time Products and owner of the eponymous Bond Street boutique told us, “An exit from the EU will only create great uncertainty, which cannot be good for the luxury trade.”
Voting is currently underway and polling stations will close at 22:00 BST.