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F.P. Journe increases prices

F.P. Journe increases prices

Dec 17, 2021

Recent news about retail price increases across all F.P. Journe collections has been met with mixed reactions, most of which are negative. It is not news to anyone that I am a huge fan of the brand, and do not intend to spew hate in their direction… the intent of this post is simply to share some musings on this topic, and as always, leave you with some food for thought. As a useful starting point, I would suggest you read my previous post about the pricing of luxury watches first.

What changed, and how did it unfold?

The price increases were reportedly communicated to retailers and in addition, many clients who have been waiting for watches were called by the brand too… to be informed that the piece they had been waiting for, would now be costing them more money. Many people want to know how much the prices have gone up by — as I understand, the increases range from 5% all the way up to as much as ~60%! Now don’t quote me on these figures … this post isn’t a data source for price increase percentages; The point is some of the changes are truly eye-watering.

Now picture this: you’re waiting on a highly desirable piece, for a significant amount of time, and suddenly get a call informing you that although your watch isn’t ready… when you do eventually get it, it’ll cost 40% more. Yeah, undoubtedly you’d be annoyed, maybe even feel betrayed. Is that justified? How about if you had even offered to pay in full when placing the order, or perhaps to pay in full before the price-increase came into effect? If the brand insisted on declining this offer of free working capital — you might even feel more aggrieved. This didn’t happen to me, I’m just painting a picture for you to consider.

What about the brand’s perspective?

The Journe watchmakers are not all ‘equal’ — there are a select few who are able to work on more complicated pieces… and it turns out they lost some of these top tier watch makers who are proving difficult to replace. This will cost a fortune. In addition, the remaining watchmakers are perhaps smelling blood, and want more remuneration to combat the inflation frenzy and keep them happy.

If that wasn’t enough, they only make a certain number of pieces each year, somewhere between 700 and 900 depending on the product mix in that year (and fewer in the last 12–18 months due to COVID-19). So with costs going up, and revenue relatively static — the only option was seemingly to increase prices. But why so suddenly? Why were the historical price increases too ‘low’, thus requiring a massive ‘correction’ now?

Some are arguing that this is simply a decision which is driven by the brand’s hype status, and corporate greed is at play; Further insinuating that this is influenced by Chanel etc… I think that’s all nonsense. Having had a face-to-face conversation with someone at the brand about the relationship with Chanel, I don’t believe for a second this has anything to do with these sorts of external pressures.

It could be argued that this is a way to shorten waiting lists, since people who could possibly afford 2–3 watches, can no longer foot the bill — definitely a strong case for this argument. This is straight out of an ‘Economics 101’ textbook under ‘supply and demand’. As the waitlists grow, the demand at given price point(s) is clearly not in equilibrium… so adjusting the price would fix the issue. The problem with this simplistic view, as my good friend BMR (@tick_tock3940) points out, is that typically we would expect these adjustments to go in both directions — so price goes up now, and when demand cools, price goes back down. I doubt that a brand like Journe would ever be adjusting their prices downward — and therein lies the conundrum.

That being said, this ‘shortening the waitlist’ rationale would also be at odds with one of the brand’s goals… which is to attract a fresh wave of younger collectors into the fold of the brand, securing future revenue and strengthening the circle of collectors for the brand. I say it is ‘at odds’ with the goal, because typically, younger collectors’ pockets aren’t usually as deep as the older collectors… yes, there are exceptions to this, but in general… time amplifies the power of compounding, and therefore… wealth grows with age. So this means, the move will directly contradict the aforementioned goal — doesn’t mean it is impossible… making money is still the ‘basic’ requirement for the business to continue operating.

Hindsight is a wonderful thing… the brand would have been far better off applying stiff but digestible increases over the last 2 years… maybe even twice each year at around 10% every second quarter… to try and balance the books better. Who knows why that didn’t happen, and maybe one day we will find out… but if you read my previous post referenced in the introduction, a market-based pricing approach seems like the reason they did this i.e. looking at other watches that compete in the same price brackets as their old retail prices, F. P. Journe’s watches should cost a lot more than products in those price brackets — and now they do.

Concluding thoughts

Another conversation with A (@rockroyaltyx) yielded a great analogy… he said “ It’s like asking Rolls Royce to make a cheap city car to appeal to middle class people.” Taking this one step further, I would say that Journe collectors have been buying a Rolls Royce for Mercedes-Benz money… and while those days might have been enjoyable for those who managed to get in — it doesn’t mean that increasing the price is arrogant or uncalled for… of course people are going to be upset that they can’t pay Mercedes-Benz money for a Rolls Royce — in fact, a Rolls Royce kinda needs to be priced the way it is, SO THAT very few people can buy it… thereby allowing it to have the ‘status’ that it enjoys.

The flip side of this, is that Journe started out charging Mercedes-Benz money because they needed to build their brand and reputation… so the people who got on board early, are the ones who enabled the brand to reach these lofty heights we are seeing today. What has happened here, is that these very people who supported the brand are now being priced out, or feeling like the brand has betrayed them… and that’s understandable and natural. That said, they likely already own some watches from the brand, and have enjoyed some appreciation in the value of their collection as a result of showing this early support. So if you draw a line at the point in time where the prices now take a significant step upward — it objectively looks like a ‘win win’ scenario for old collectors (whose assets have appreciated) and the brand (who are now regarded as ‘worthy’ of these high prices by virtue of the support from these collectors). Simplistic view, but you get the idea.

So what happens next? Well, inevitably many will be disappointed — mostly the mass-adopters who are now all in agreement that this is a brand worth collecting, but who will now struggle to afford one, or get allocated one. Other existing collectors might be put off entirely by this, feeling like the brand owed them some ‘grace period’ for waiting a long time for a piece (which was the brand’s ‘fault’) — this makes the price rise feel like a penalty to them. The brand won’t suffer for it, since we are all aware there is no shortage of demand.

To end, I would propose a compromise from the brand, an olive branch towards certain collectors who have shown support from the days preceding the hype mania. For instance, if any of these collectors have been waiting longer than 12 months, offer them the old retail price or perhaps a smaller increase instead of the full increase. Potentially even have a tiered approach… e.g. waiting less than 6 months, pay the full new price… waiting 6–12 months, pay 75% of the increase… waiting 12–18 months, pay 50% of the increase etc. This gesture will probably go a long way towards showing these old supporters that the brand really does care.

Full disclosure — I am not waiting on anything so this isn’t self-serving 🙂 I have spoken with and met with several people who work for the brand… and in my experience, more than any other brand, the people at working for F. P. Journe have been extraordinarily hospitable and pleasant… they care about relationships, they go out of their way to help and above all, care about their collectors. I therefore think that they will find a way to mend any genuine relationships that have been affected by this move, and for those who never had relationships to speak of — I don’t think that matters to them — nor do I think it ought to. Like I said before, not everyone can own a Rolls Royce, and frankly, it is a Rolls Royce because not everyone can own one. That’s life!

I am fully aware of how fan-boyish this post seems… it is. I love the brand, and I’d like to believe this was done with some sort of business justification… and yes, some of the messaging could have been handled better — but nobody’s perfect. Let’s see how they handle it now.


Originally published at on December 17, 2021.

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