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A petard is a metal or wooden box filled with gunpowder. From the 5th to the 18th century, military men attached a petard to a wall or gate. At some point they ignited the explosives, ran for cover, inserted noise cancelling earbuds and prepared to make homicidal ingress.
Around 1600, Shakespeare's Hamlet coined the phrase "hoisted by his own petard." It means being harmed by your own plan – "hoisted" being English understatement for "blown to bits."
Last week The Wall Street Journal published an article about HoDinkee, one the world's most popular watch websites.
The Journal's pay-walled piece puts Mr. Clymer's stewardship into stark, unflattering relief. Providing business majors with a textbook example of petard-hoisting.
Benjamin Clymer Esq.
Mr. Clymer began his horological journey as a watch-collecting UBS project manager. In 2008, he took his hobby online.
Hodinkee celebrated watch culture like none before. Its steady stream of snobby editorial, insider info and glossy pictures brought glamor and excitement to a previously nerdy and, at the upper reaches, exclusive culture.
As the watch website's eyeball count grew, HoDinkee attracted the attention of the luxury watch industry, which was more than happy to pay for praise.
By 2020, Hodinkee was banking some $25m from ad sales, manufacturer sponsored in-person events, a watch insurance program and a small online shop. Not bad for a bootstrapped biz after twelve years of operation.
Horological Tulip Mania
Mr. Clymer wasn't as much riding the luxury watch wave as creating it. Put another way, HoDinkee was the rocket fuel that launched the non-smart watch industry into the stratosphere.
As watch prices went ballistic, Hodinkee became more than the luxury watch industry's number one cheerleading whore. It became a cult, with Mr. Clymer its leader.
Cult leaders tend to get drunk on their power, forget they're running a scam, start to believe their own hype, spend like a drunken sailor and can't imagine that their cult could ever go tits-up.
Mr. Clymer was no exception.
For years, Hodinkee has been plagued by overspending and projects that failed to launch... A downtown Manhattan retail location that is currently plastered in Hodinkee branding has sat dormant since Hodinkee signed a lease for the space in 2019.
According to a former employee familiar with the company’s finances, it eventually cost Hodinkee as much as $80,000 a month. The company says it’s planning to sublet the space to a new tenant this summer.
When the luxury watch market was busy climbing to Tulip Mania proportions, Mr. Clymer's misguided flights of fancy were filed under yet-to-be-realized genius. He was, after all, The Man.
Petard Placement
[We] were looking out the window and I see it’s sunny, I’m not going to put on a raincoat. It’s no different than that. We saw what was happening in the market and we went for it.
In December 2020, Mr. Clymer shielded his eyes with a pair of rose-colored glasses, fabricated a business plan based on the eternal sunshine of the watch-mad world and raised $40m from banks and celebs.
[Mr. Clymer pocketed a big chunk of that to feed his own watch-buying GQ-styling NYC habits, while maintaining a hand on the tiller.]
The deal was predicated on buying watch reseller Crown & Caliber for around $46m and pimping their product on HoDinkee.
Pre-purchase, HoDinkee editorial and sales arms were closerthanthis; writers never met a watch they didn't like and they really liked advertisers' watches.
Turning the site into Crown & Caliber's storefront was a bridge too far.
For one thing, integrating the two companies was a nightmare. Their software platforms hated each other almost as much as the bifurcated employees. Orders were lost, bungled or unfulfilled. Resentment was rife.
For another, Crowndinkee failed to anticipate the looming market collapse, funneling cash into expensive inventory, exposing both companies to financial disaster.
BOOM!
After hitting a peak in March 2022, [luxury watch prices] fell nearly 30% by the end of that year, according to the WatchCharts Overall Market Index...
It has since only dipped further. Resale prices of some high-end watches are about half what they were just two years ago. The decline in interest has crashed into the broader industry—shares of certain luxury watch businesses have plummeted this year, shedding as much as half their value.
When the luxury watch market crashed – a predictable event to anyone outside Mr. Clymer's immediate orbit – the petard HoDinkee had placed against the walls of legit brick-and-mortar watch dealers exploded.
Crowndinkee was stuck holding inventory worth millions less than they paid for it. Mr. Clymer's spending problem and launchpad-stranded moonshots left nothing in the way of corporate rain gear with which to weather the storm.
Revenue at the company has declined to around $70 million last year from around $100 million in 2021, according to former employees familiar with the company’s finances. It also hasn’t been profitable for the past few years, according to former employees.
HoDinkee On The Ropes
Not to put too fine a point on it, post-Pandemic HoDinkee is a shit show.
Over the past 18 months, Hodinkee has been cutting jobs across all facets of its business, according to former employees.
The VIP sales team, a crucial wing of any luxury retailer servicing big-spending clients, has been gutted. Watchmakers in Atlanta, who approved and serviced watches that the company resold, were let go. Just a few years after the acquisition, only 14 employees are left [at Crown & Caliber] Atlanta.
How far has HoDinkee fallen?
Even the mania surrounding HoDinkee's limited edition collaborations – formerly selling out in seconds and hitting eBay for serious premiums – has evaporated.
A launch last year of a G-Shock ref. 6900 with British singer Ed Sheeran languished in the warehouse, according to former employees. Several former employees said that the company began to mark limited-edition watches as “sold out” even if stock was still available.
Confronted about the Sheeran LE watch flop and the criminal manipulation of the secondary watch market, the man who brought HoDinkee to life has his What Me Worry? face on.
Clymer disputed that description and said he wasn’t concerned about the speed at which the limited-edition products sell out. “Sometimes stuff takes, you know, 10 days instead of 10 minutes,” said Clymer, “But you know that’s okay with us.”
What's the bet the delivery terms that are OK with "us" (HoDinkee) probably aren't OK with them (paying customers)?
As You Sow...
At best, Mr. Clymer sees his customers as acolytes. At worst, they're rubes ready to buy what he's selling: an "exclusive" horological ticket to the "in crowd," whose get-togethers are the website's endless oneupmanship made flesh.
The luxury watch crash ripped the veil from many a HoDinkee fanboy's face, alerting them to the fact that chasing the HoDinkee-hyped luxury watch dragon is a mug's game. More than a few have come to resent the Porsche-driving huckster that bent over – and not backwards – to feed an addiction that left them seriously out-of-pocket.
That said, the WSJ rightly pointed out that Mr. Clymer is still a legend amongst luxury watch aficionados.
“Hodinkee had an incredibly strong brand, we still do,” Mr. Clymer proclaimed, failing to recognize the damage he's inflicted on his readerbuyers, employees and his own reputation.
Mr. Clymer's situation reminds me of a line from Hotel California. HoDinkee isn't just a victim of its exploding petard. It's a prisoner of its own device.
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