In early 2022, the second-hand watch market began declining in value, a downturn that has since continued. The WatchCharts Overall Market Index, which tracks the prices of 60 timepieces from brands like Rolex and Patek Philippe, has fallen 37% from its March 2022 peak.
Crown & Caliber, whose business relied on buying and reselling pre-owned watches, found itself underwater, having paid top-market prices for watches whose value had declined, according to four people familiar with the business.
The downturn, in combination with cuts to the overall business, led revenues at the combined company to decline, from around $85 million in 2022 to roughly $60 million in 2023, according to one of those people.
Other expenses further weighed on its balance sheet. In 2019, Hodinkee signed a 10-year lease on a brick-and-mortar outpost in the SoHo neighborhood of New York—the location of the original Supreme store, according to two people familiar with the strategy. But more than five years later, the store has yet to open.
The company was unprofitable in 2021, 2022 and 2023, according to Hodinkee’s founder and executive chairman Benjamin Clymer.
Four rounds of layoffs
Hodinkee responded to these and other commercial challenges with a series of layoffs.
In 2023, it laid off staff in January, then reduced headcount by 20% in August and another 50% in November. In March, the company shrunk further: 10 to 15 staffers were either laid off or left, including the chief operating officer, chief product and technology officer and the head of Hodinkee’s VIP program. Only the August 2023 cuts have been previously reported.
The company, which had around 150 employees in September 2022, declined to provide an updated headcount. Internal sources placed the figure between 30 and 75 people.
Crown & Caliber, in particular, has shrunk from 75 staff to around 20, and its entire team of watchmakers and technicians was cut in November, according to four people familiar with the operation. Its on-hand inventory has decreased—down from roughly 3,000 watches in 2021 to around 400, according to two sources directly familiar with the matter. (A Hodinkee spokesperson said this was inaccurate). And its customer-service teams in Atlanta and New York have been drastically reduced, according to those two people.
While Clymer insists that Crown & Caliber remains a core part of Hodinkee’s future, others are less certain.
“The fact that [Hodinkee] let go of their watchmakers is a big indication that Crown & Caliber might not be long for this world,” said one source.
Audience trust in commerce content
While Hodinkee originally bet it could turn its readers into Crown & Caliber customers, that strategy didn’t pan out.
After the merger, the Hodinkee website began featuring more pre-owned watches, including ones it sold through Crown & Caliber. This made audiences suspicious that Hodinkee was promoting Crown & Caliber inventory rather than recommending the best products on the market, according to six people familiar with the situation.
