Did you know that Favre-Leuba once owned the mighty JLC?

[Rdenney]

I had occasion to do a bit of research into the ownership history of JLC, and it illustrates the weird and wonderful interlocking ownerships so common in the Swiss industry.

I will start in 1937, after the period that LeCoultre & Cie had owned a controlling piece of Patek Philippe (before the Sterns bought it), and after the LeCoultre family had created the holding company Societe Anonyme de Produits Industriels et Commerciaux (SAPIC), in 1927, presumably to consolidate family control. At that time, LeCoultre was two companies, the manufacture in Le Sentier and the watch sales company in Geneva, which were separate companies under the SAPIC holding company. SAPIC was family-owned, and Jacque-David LeCoultre owned the majority share.

1937 was the year that SAPIC bought Edmond Jaeger's watch company, Etablissements Ed. Jaeger, based in Paris, creating the Jaeger-LeCoultre Watch Company. JLC watches were marketed as LeCoultre watches in the US, through a company called the Vacheron & Constantin LeCoultre Company, which was the portion of the Longines Wittnauer company that imported and sold VC and JLC watches in the USA. Longines Wittnauer never owned controlling interest in the Swiss companies VC, JLC, or, for that matter, Longines.

Then, in 1938, SAPIC bought a controlling interest in Vacheron & Constantin. This saved VC at a time when they were trying to ramp up production following the Great Depression. That resulted in managing director Charles Constantin, marketing director Georges Ketterer and administrative director Paul Lebet becoming minority directors of SAPIC. Ketterer then bought a controlling share from Constantin, and VC passed out of direct family control, though Constantin remained as a director until he retired in 1949 at which time his son Leon became a director. (The merger meant that VC would no longer make movements, which disenfranchised the VC lead watch movement designer, who left to become technical director of IWC. His name was Albert Pellaton, a name revered by IWC nuts.)

Lebet, who had become the executive director of VC, died in 1945, and Ketterer took over as the head of VC. VC and JLC always remained as independent maisons, despite that VC only used LeCoultre ebauches, under SAPIC. SAPIC might be considered one of the first conglomerates. Illustrating this,1945 was also the year that Smiths bought British Jaeger Instruments, of which Allan Gordon Smith owned controlling interest, from SAPIC.

When Jacques-David LeCoultre died in 1948, his shares reverted to SAPIC, under the control of his son, Roger. Roger LeCoultre, the great-grandson of Antoine LeCoultre, thus became the Chairman of SAPIC, and Ketterer became the CEO of both JLC and VC. This was the first time LeCoultre & Cie passed out of direct managerial control of a LeCoultre, even though Roger LeCoultre was a large shareholder within the holding company. But Ketterer was the majority shareholder by that time. This arrangement lasted until 1965. At that time, Ketterer traded his shares of SAPIC for sole ownership of Vacheron & Constantin, which became independent, until it was bought by Sheik Yamani. Little did Ketterer know that JLC and VC would come together again three decades later.

Roger LeCoultre took over SAPIC, and renamed it SAPHIR. Roger LeCoultre was old, however, and a few years later, in 1969, he sold SAPHIR to Henry and Barbara Favre, also the owners of Favre-Leuba, with the result that F-L became part of SAPHIR. LeCoultre died in 1971. The Favres struggled, like everyone else in the Swiss industry in those years, and then Henry Favre passed away. They sold a majority share of the nearly dead (except for JLC) SAPHIR to VDO Automotive in 1978, the first time ownership of JLC passed out of the ownership of a watch company. (They sold the by-then-defunct Favre-Leuba brand separately, to Benedom, which sold it to LVMH, which sold it to a couple of guys who tried to revive it, who sold it to Titan, who seem to have thrown dirt over the open grave.) In 1986, VDO sold 40% of SAPHIR to Audemars Piguet (who wanted to secure their access to JLC movements), while buying out the remaining ownership of the Ketterer family (25%) and the banks (20%).

VDO's manager was Gunther Blumlein, a man of vision who, with JLC's help, also acquired IWC. JLC and IWC then helped him support Walter Lange in reviving the defunct A. Lange & Sohne after German unification. These companies were gathered under the name Les Manufactures Horlogeres, which was owned by VDO/Mannesmann/Vodaphone. Mannesmann divested non-core businesses, and LMH was sold in its entirety to Vendome, in 2000. Vendome was the company that owned Cartier Monde (and which had acquired Piaget and its partner Baume & Mercier in 1988), and was indeed the company that had helped Alain-Dominique Perrin consolidate the separate Cartier holdings starting in 1969. Vendome had already acquired Vacheron Constantin in 1996, and owned a large share of Montblanc. Perrin remained a managing director of Vendome and then its parent, Richemont, until 2003. But LMH only owned 60% of JLC, and, also in 2000, Richemont directly purchased the other 40% from Audemars Piguet.

And that's how Johann Rupert came to own JLC, along with (among others) IWC, ALS, Cartier, Piaget, Baume & Mercier, and Vacheron Constantin. And, yes, Favre-Leuba and JLC were both owned by the same people...for a little while.

Connections from here abound: Albert Pellaton was a cousin of brothers Georges and Raoul Pellaton, of the Martel Watch Company, who were the developers of the Zenith El Primero. Lots of important watch-making Pellatons! Alain-Dominique Perrin had collaborated with Pierre-Alain Blum of Ebel on a joint quartz movement manufacture, CEC, which made quality quartz movements in the late 70's through the 90's for Ebel and Cartier. This was instrumental in the rise of both companies during the 80's, which, in turn, fueled the rise (ultimately) of Richemont in the luxury watch industry. And Blum was the man who revived industry interest in the Zenith El Primero, which had been preserved by Charles Vermot, friend and chief employee of Georges and Raoul Pellaton during the years when that movement was being developed. Gunther Blumlein was the driving force behind the re-creation of ALS, with Walter Lange. Henry Favre was (perhaps a bit distantly) related to Georges Favre-Jacot, who was the founder of Zenith. Lots of important watch people with the name Favre in the Canton of Neuchatel, and Albert Pellaton's grandfather was Albert Pellaton-Favre.

In my own line of work, the saying is, be careful who you talk about, you might be working for them next week. I would say that aphorism must work pretty well in the watch business.

Rick "the watch industry is really tiny" Denney

[skywatch]

My head is spinning. Let me attempt to summarize your amazing history: 1) after a few decades, a brand is just a name, and 2) Swiss people tend to marry their cousins. Did I get that right?

Excellent write-up, thank you.

[Rdenney]

My head is spinning. Let me attempt to summarize your amazing history: 1) after a few decades, a brand is just a name, and 2) Swiss people tend to marry their cousins. Did I get that right?

Excellent write-up, thank you.

Ha!

While the ownership was changing, though, the same watchmakers were toiling in the same factories making the same watches to the same high standard.

Rick "but the days of family ownership are gone" Denney

[Matt]

The connection with early quartz is intriguing. As you no doubt know, JLC and FL both used the GP calibre 352. Girard Perregaux did the R&D, but my understanding is that JLC provided a chunk of the capital. I'd always assumed the FL came in on the same basis, but this analysis suggests that the reality may have been a little more complicated. Is there anything you can add on this while your mind is still on the period and your sources are still fresh?

[FuzzyB]

Fascinating. I'd love to see this laid out graphically.

[Rdenney]

F-L and GP were already collaborators, being members of the Communaute de Precision Horlogere (the Precision Watchmaking Community) that had been established primarily by Charles Blum of Ebel in 1957. Other members included Ebel, Zodiac, Doxa, Eberhard, and several others. They supported the collaborative development of a high-beat version of the AS1687 (for which GP usually gets the credit, though it was also the basis for the Zodiac SST).

It doesn't appear that the GP352 was a part of that effort, but clearly JLC participated in the project with them. This was in 1969 to 1972, plus the subsequent production period. The movement was predictably also used in a Favre-Leuba model. Predictably, because JLC's holding company was owned by the Favres from 1969 until 1978.

I have no idea whose idea it was for JLC to support the effort. But GP was ahead of the rest of the Swiss industry on this topic, and JLC may have identified that as necessary to their future success (or, more likely, survival). And any capital in 1970 probably came from the Favres.

It was only several years later, maybe 1976, when Ebel and Cartier embarked on a similar collaboration to produce a more highly decorated quartz movement. Ebel would have been intimately familiar with GP's efforts--they were only three blocks from each other in La Chaux-de-Fonds.

Rick "who read one source that claimed JLC was part of the Beta project, so they may have been hedging their bets" Denney

[tribe125]

Let me attempt to summarize your amazing history: 1) after a few decades, a brand is just a name

Indeed. There's a sense in which many brands, and it's especially prevalent in the luxury sector, become abstract concepts and don't truly exist in any corporeal form. Customers, as much as brand owners, have an interest in maintaining the illusion.

[Rdenney]

Indeed. There's a sense in which many brands, and it's especially prevalent in the luxury sector, become abstract concepts and don't truly exist in any corporeal form. Customers, as much as brand owners, have an interest in maintaining the illusion.

That's true for some companies, to be sure, but not really for JLC and companies like it. Nobody thinks of JLC as a family concern, and yet it still operates similarly to the way it did 70 years ago, when it was a family concern. But the mutual ownerships and corporate shenanigans were there even in those days. The Sterns bought PP in the early 30's, but have kept it in their family since then. AP is still a family concern, probably the last major company that is, though it has been decades since a family member was in operational charge. AP is relatively young--the current family board chairman is the great-grandson of the founder, and most watch companies of the last 150 years didn't survive the founders' grandsons with direct family management.

In the 30's, SAPIC owned a piece of AP to help them through tough times, and in the 80's, AP owned a piece of SAPHIR to support them enough to maintain their production. Nobody thought of that mutual support as undermining the brands, because the people, watches, and reputations were most important to them. The people, factory, and traditions are the corporeal form, and some companies have indeed lost that.

But not JLC, the big 3, Zenith, or many others--those are still made in the same places by the same people (or their similar successors), to the same standards. The Swiss watch industry will never be the club of family owners it once was, but that doesn't mean the best companies are not still committed to preserving their traditions and reputations.

Rick "who doesn't believe in elves" Denney

[Matt]

F-L and GP were already collaborators, being members of the Communaute de Precision Horlogere (the Precision Watchmaking Community) that had been established primarily by Charles Blum of Ebel in 1957. Other members included Ebel, Zodiac, Doxa, Eberhard, and several others. They supported the collaborative development of a high-beat version of the AS1687 (for which GP usually gets the credit, though it was also the basis for the Zodiac SST).

It doesn't appear that the GP352 was a part of that effort, but clearly JLC participated in the project with them. This was in 1969 to 1972, plus the subsequent production period. The movement was predictably also used in a Favre-Leuba model. Predictably, because JLC's holding company was owned by the Favres from 1969 until 1978.

I have no idea whose idea it was for JLC to support the effort. But GP was ahead of the rest of the Swiss industry on this topic, and JLC may have identified that as necessary to their future success (or, more likely, survival). And any capital in 1970 probably came from the Favres.

It was only several years later, maybe 1976, when Ebel and Cartier embarked on a similar collaboration to produce a more highly decorated quartz movement. Ebel would have been intimately familiar with GP's efforts--they were only three blocks from each other in La Chaux-de-Fonds.

Rick "who read one source that claimed JLC was part of the Beta project, so they may have been hedging their bets" Denney

That's really helpful, I knew about the CPH and I've got a couple of the fast beats. Did Eberhard ever make one as that would be (welcome) news to me and would send me to ebay with a mission? As for the quartz, that sounds right, but I'm pretty sure that the development period was significantly longer with significant patents earlier and the first models shown in 1971. I'll have to go back and find a row between Eeeb and I over at WUS HEQ in which things got a bit detailed t be sure I remember right.

[Vincent Vega]

Here's my Favre-Leuba/Patek/Jaeger/VC/JLC/IWC/GP/Zenith/ALS/Cartier/Piaget/Baume & Mercier/Longines/Wittnauer...







I think these are the entire manufacturers that Rick "Pulled from the entire alphabet" Denney, referenced.

Who knew?? I thought I noticed a little nod to VDO Gauges as well.