Citizen Watch

So I think the company Citizen that you sort of have been investing in, take us through what is the sort of logic behind that position?

Citizen watch I invested in mid last year, I would say.

Watches is not an industry where you think there is growth.

Yes, the volume of watches have declined, I think since 2000s.

And Japanese watches, whether it's Citizen, whether it's Seiko, whether it's Casio, are now in a cycle of premiumization of their products.

That is translating into not just revenue growth, but margin expansion.

So Citizen Watch, it is in consumer sector, which is generally weak, but it has its own idiosyncratic cycle that it is in.

And more importantly, because most thought watches were X growth before the stock market, generally was cheaper relative to our earnings forecast that we had, which was very different from the market consensus.

Well, I think one thing that is absolutely fascinating, and this ties into windup as well, is the way some brands have shifted between watch time and windup over the last few years.

You know, there are some brands like Oris and the Citizen Group that show it both.

But I think it tells you something when a brand makes the decision to go from one to the other.

For example, Bremont in its previous existence used to show at watch time, now shows it at wind up.

Exactly.

Okay, my crush of the week is everyone who works at InStyle Magazine and Citizen Watches, Powered by Light.

And the InStyle magazine team, like y'all knew who you are.

You're just so fucking funny, real, cool, great vibes.

But the Swiss were slow to embrace this new technology, and by the late 1970s cheap quartz movements from Japan flooded the market, causing a significant decline in mechanical watch sales.

Quartz watches were cheaper, more reliable and more accurate, meaning that watch production quickly shifted from Switzerland to Japanese brands like Seiko, Citizen and Casio.

This was known around the world as the Quartz Revolution, as regular people could now easily afford a reliable and accurate watch.

But in Switzerland, it was called the Quartz Crisis.

Daiwa Security, apparently 110,000 customer records, names, email account numbers, incident involving FAQ platform providers rather than the bank's core system itself.

Moving on, Citizen Watch.

Yes, the watchmaker got hit, and I held this up.

For those listening, I'm wearing a watch.

Mechanically.

Or what's the Citizen, a Japanese company, has the EcoDrive, which can actually use lights to repower the batteries, as well as lots of other different brands.

Tag Heuer has the...

Tag Heuer has the solar, they're Swiss.

Yeah, their solar is really sophisticated at this point.

But you have Citizen, you have Seiko, and, of course, you have the always beautiful, nature-driven Grand Seiko.

My favorite overall in terms of the brands.

I love their dials.

Smartwatches, Apple Watches, Garmins are the minority, and it's just some type of analog watch or, like, maybe a vintage-style Casio digital or something.

But the-- y-you see a lot more, like, maybe few hundred dollar Citizen chronographs than you would.

And then the stores are almost like that Geneva vibe, where it's a tiny kiosk that sells energy drinks, coffee, cigarettes, and, like, phone cases, and there will be watches there, like, in, you know, a little s- selection of watches, and there's a ton of those stores.

So, and so clearly, if it's, like, one of the five products you sell, like, it-- they must be moving in some volume.

They, they all have the same water resistance.

Um, okay, that's that.

Uh, it's, it's really hard to talk about something like this Citizen because it's, it was kind of like something like that for, like, a different generation.

I st-

It was the future.

Seiko and Citizen made gorgeous jewel-like quartz watches in the 70s and 80s that sold for like serious money.

And today, you can find them on the secondhand market for 30, 50, maybe less than 100 bucks.

And they're usually 32 to 36 millimeters, which is the perfect size or a modern size.

It cannot be bought at the same store like everybody else's phone.

And that is the entire currency of being a teenager, is it not? And you just handed it to them on a steel bracelet.

Now, Citizen also deserves a specific shout out here because of like EcoDrive.

They, you know, they figured out how to power a watch with light back in the 1970s and they perfected it as the EcoDrive and, you know, I think 1995.