Questions Remain

This is an update to our article published earlier this week.

Minutes ago, Romain Jerome issued a statement regarding the recent departure of CEO Yvan Arpa and other senior executives:  “Owners of the limited liability company RJ Watches SA and its watch brand Romain Jerome have decided to part with the CEO, the head of administration, the sales director and two other staff members. Nonetheless, the change of management in no way jeopardises the ongoing success of the company, which continues to enjoy excellent sales, promising order volumes and an extremely strong brand image.”

Unfortunately, this really tells us nothing that was not already reported.  It does seem that these people were dismissed (rather than them resigning), but many questions remain:

• Who has replaced these people?
• Who is now running RJ on a day to day basis?
• What is the financial state of Romain Jerome? Certainly the company was quite proud to trumpet it financial success as recently as January of this year – but what are we to make of its current report that sales are “excellent” and order volumes are “promising?”

On the last note, I can still agree that the brand image is strong.   But certainly some more answers would be appreciated.

A Crisis for the Manufacture of the Crisis Tourbillon?

After an initial report by French watch industry report Business Montres, Perpetuelle.com has confirmed the departure of Managing Director Yvan Arpa (pictured below) from Swiss watch brand Romain Jerome.  Reasons and circumstances surrounding the relatively short lived tenure of the brand’s leader are yet unknown.  Romain Jerome’s last reported financial condition was robust, but I do wonder how much of its last reported CHF 50 million order backlog from Baselworld 2008 is still on the table and whether a sharp decline in global economy may be in play here.  However such speculation is unverifiable, at least for the moment as I am told by a Romain Jerome representative that the company will issue more formal statement, presumably in the very near future.

Founded in 2004, Mr. Arpa arrived at the young brand in 2006 and quite literally led it to new heights (and depths) with the creation of the now famous “DNA of Legends” watches which utlized rare materials such as rusted steel from the Titanic and dust from the surface of the moon.

Romain Jerome Managing Director Yvan Arpa

The brand created a great following and the love and hate of many a watch collector with its bold and unconventional watch designs, including even a “watch” that does not tell time.  Under Arpa, the company pushed the envelope in every way – even going so far as to issue a special watch earlier this year in a sort of open defiance of the global economic recession.  The “Crisis Tourbillon” (show below) boldy declared “ma petite enterprise ne connait la crise” (my small enterprise knows not of a crisis) and boasted of the brands robust sales and profitability.

Has pride cometh before the fall for Yvan Arpa, or is the reason for his departure more benign?  Stay tuned.

Romain Jerome’s Crisis Tourbillon – Offered at CHF 198,000

It appears that the economic slowdown is not affecting all brands equally – as would be expected!  But one manufacturer/brand, Romain Jerome, seems intent on making a bold statement with its latest piece, the “Crisis Tourbillon” – that it is in fact defying the economic crisis outright!

With the release of the Crisis Tourbillon, Romain Jerome also seems to send a metaphorical message that the crisis only affects those who would let it affect them it’s latest press release noting that the Chinese ideogram for crisis, Wei Ji, comprises two parts: “Wei” meaning “danger” and “Ji” meaning “opportunity”.

Featuring the Yen, Euro, Pound and Dollar

a unique piece (quantity of 1), with a “crisis defying”
price tag of 197,000 CHF ($175,000 US)

The prevailing pessimism has not affected the Geneva watchmaker, according to Yvan Arpa, its Managing Director (pictured below): “We don’t only manufacture luxury products, we create luxury. The materiality of the crisis has not affected the environment and values we have established.”

More than just lip service, Romain Jerome has released its sales and profitability figures for 2008 and the first month of 2009 to back it all up:

• 2008 Total sales of CHF 25 million, three times initial objectives for 2008 and six times total sales for 2007
• Ratio EBIT (Earnings Before Interest and Taxes)/Turnover exceeds 20%
• 2009 January sales: year-on-year increase of 400%

Following the 2006 appointment of Yvan Arpa as Managing Director of Romain Jerome, the company has released some very unique and head-turning collections – the Titanic-DNA (2007), and Moon Dust-DNA (2008), and now the one-of-a-kind Crisis Tourbillon.

I admire this company’s bravado!