A

Welcome to the Business of Watches, the

B

Hodinkee podcast, where horology meets high finance and we go behind the scenes with the executives driving the industry this week, one of the UK's biggest watchmakers and a brand that's only about five years old. We talk with Richard Bentz, the founder of studio Underdog. We discuss the rapid growth of the irreverent brand and how he's managing getting bigger while staying true to the company's roots. But first, let's catch up with some business news making headlines in the watch world. Secondary market Prices are rising after years of declines, prices on the secondary watch market are stabilizing and posted gains of more than 1% for three consecutive quarters, according to an analyst report from Morgan Stanley and watchcharts. An index of pre owned watches compiled by Watch charts rose 1.9% in the first three months of the year from the previous quarter, led by gains from a wide swath of brands including Longines, Patek Philippe and Zenith. The data shows it's the first time since 2022 that prices have climbed significantly for an extended period. The results suggest a broad recovery in secondary market values driven by rising prices on the primary market, tariffs on watches entering the US and increased confidence and interest in the market for pre owned trade premium watches. The gains were broad based with 25 out of 35 brands tracks showing gains during the period from January to March and another Cartier record price tag. Christie's snatched the title of selling the most expensive Cartier wristwatch at auction with a rare 18 karat gold Cartier London crash from 1990 that fetched about $2 million at Christie's Geneva important watches sale in May. The watch be out the previous record holder another Cartier crash, this one from 1987 that sold for 1.99 million through Sotheby's in Hong Kong just a few weeks before the Cartier crash. Wristwatches that were made before 1991 are extremely special and the market has changed. And in other auction news, a Patek Philippe First Series 2499 in pink gold sold for about $10.25 million in Hong Kong last weekend. At that price, it's the most VAL timepiece ever sold at auction in Asia and the most expensive watch sold at auction this year and it sets a new record for the $24.99 reference. Auction prices have been soaring so far this year with record results for the big three Phillips, Christie's and Sotheby's to start the year. For more on these stories and more business News, head on over to Hodinkee.com and now here's our conversation with Richard Bentz, the founder of Studio Underd.

A

Well, Richard Bent, the founder of Studio Underdog. Welcome to the business of watches. Where do we find you this morning? We are speaking remotely. You are in Brighton.

C

I'm in Brighton, yeah. I've, I've got you up nice and early this morning to get this, this conversation done first thing. So the sun's sun's out. It's. Yeah, we've had a bit of a heat wave in the UK over the last week or so, so I'm enjoying it.

B

Excellent.

A

So let's talk about Studio Underdog, which is your brand, an independent brand, a UK based brand. Where are you at now in terms of production? How big is Studio Underdog? You're actually among the biggest UK based watchmakers.

C

This really is the business of watches, isn't it? Straight in with the, with the numbers. Now we're relatively public. I know some of the BR brands you speak to often will kind of give ranges, but we're fairly transparent. So in terms of our output, last year we did, I believe, 14,600 watches and we're a British brand and we've decided that it would be a good idea to assemble all of these watches here in the uk, which is easier said than done. It's an industry that doesn't really exist. The infrastructure isn't really there. So it's something that we've had to slowly build out ourselves. And even though we're a young brand, five years old, it still feels relatively slow.

A

Absolutely, and we'll talk about that and sort of the, you know, some of the business moves that you've made in terms of, you know, fostering that assembly and that whole infrastructure in the uk. But let's talk about, I mean you're a relatively young brand, as you say you started in 2020. I mean, what is the history of Studio Underdog? I mean, we all kind of know it as watch enthusiasts. It's been around for a while but I mean this was something that bas. That you started, I think during COVID you know, that that's not that unusual a story, but I mean, you know, tell me what you were doing before and how Studio Underdog sort of came about.

C

Sure. So my, my background's in industrial design. That's what I studied. That's what I absolutely love. I didn't really know the watch industry existed until my early 20s, but when I discovered it, it felt like a bit of a match made in Heaven. Because my approach to design, I always found myself gravitating towards designing small objects because then the devil's in the detail. So I worked in the industry for a few years, about six years designing watches for some other brands, mostly fashion brands.

A

Okay.

C

The first watch I designed was a Minions watch, a watch for children. So humble beginnings for sure.

A

Right.

C

But I got a few years of experience under my belt and then Covid happened, Covid came and I was stuck at home trying to figure out what I wanted to do. And I decided to use that newfound spare time to start plugging away at a bit of a passion project. Something that had been burning away in the back of my mind for quite some time. I decided to actually sit down and put pen to paper and that was it. It was really quite an organic growth in the early days. I launched in March 2021. I think I managed to sell 250 pieces in my initial batch. And over the years we've just scaled that up. More people have discovered the brands, more people have got hands on and been impressed. And yeah, it's been a real organic growth to what started as a passion project.

A

And so talk about that process and what you did. I mean yeah, you worked in the industry, based in the uk, you designed some watches. But how did you go, You I guess had design ideas, but how did you go about creating, you know, assembling, building that first watch? And also talk about, you know the, the name Studio Underdog, which has been the name from, from the get go. Right?

C

For sure, yeah, that was, that was the name from, from day one. I think it's a good representation of, of the brands. Whether it's in its early days. I still think we're very much in our early days. We're a design led brand. We act as sort of a design studio and we're very much the underdogs. This is what started off as a one man brand, a brand based in the uk. We've got a long way to go to really kind of compete with some of the big boys or compete with the Swiss watch industry. So I think it's going to be a long time before we ever have to consider rebranding as the business grows, if we grow out of being an underdog, I don't think that's ever going to be the case. Unless we take some market share from Rolex, I think we'll forever be an underdog.

A

But how did you, you know, so you had a design in your mind. How did you go about actually producing these watches? Obviously, you were not a manufacturer at the time, although you certainly now have assembly and aftermarket facilities. But, yeah, tell us about, you know, because this is the dream, I think, for many people, how to start a watch brand. It's not easy.

C

Well, I think it probably, on the surface of it, when people hear about the brand and feel like it's come out of nowhere, and certainly on day one when we launched, we were probably looked more advanced and more established than someone might expect from a passion project that had been developed over a few months. The reality was it was niggling away for years in the background. I spent six years in industry that included not just refining my design skills, but that included trips to Hong Kong to meet suppliers. I suggest, you know, I get a fair few people asking me, enthusiasts looking to do something similar, and I say the things you got to do is get over to the Hong Kong Watch and Clock Fair in September and take a trip to Switzerland for ephj, the supplier fair. And coming up next, coming up next month. And it really is. I thoroughly enjoy those trips. Not only to connect and catch up with part of my supply chain, but it's kind of a bit of a Disneyland. You can walk around these booths, you can go, I recognize that sapphire crystal. I know who you're working with. Oh, I've seen this bracelet launched recently. I see what's going on here. So it's quite incredible to see and put the pieces of the puzzle together. So certainly when I came to market, I had a foundation, I had some relationships with suppliers and partners that I wanted to work with. And fortunately, because I had that relationship, they were willing to effectively invest or take that risk in me as a. As a young entrepreneur looking to place initial orders that fell typically under their moq, their minimum order quantity.

A

Yeah, I mean, that moq, as you say, I mean, this is part of the biggest challenge, I think, for new startup brands is that, you know, they're looking for components and suppliers, but indeed, they fall under that mo. And so that's about relationship building, I presume.

C

Yeah, that's. That's how it worked. Worked for me. And of course, we're fortunate now with the volumes that we're doing that, you know, those MOQ concerns are less of a concern as such.

A

How did you finance this operation? Did you, you know, was that loans? Was it, you know, did you have investors? Did you use your own capital?

B

How did it work?

C

I guess a little bit of a mix of both. We don't have any investors, so to this day, we still don't have any investors. I had a little chunk of change that I was saving for a house deposit and my parents advised me that it's probably not best to throw that into a new venture considering whilst I am an entrepreneur, this is very much my first venture into entrepreneurship. So what I wanted before I took that risk was a proof of concept. If I'd gone to any business advisor and said, I want to launch a watermelon themed manual wound column, wheel, chronograph and I expect it to be a huge success, I think I'd have been told to get real pretty quick. So I wanted a proof of concept. So my very first introduction was a crowdfunding campaign where effectively I managed to get around about 250 people to put their hard earned cash down a full 100% deposit. Effectively it was like a two scription

A

as we say in.

C

Correct. Correct. And obviously those people, those first 250 people took a risk. One of those people happened to be Nicholas of Fears, actually he was a supporter from the outset and that gave me my proof of concept. Once I had those 250 people saying, look, we're going to take that risk, we're going to put the money down and hopefully we'll get a watch at the end of six plus months that really allowed me to feel a lot more comfortable investing some of my own capital. And of course we're not talking crazy numbers here. This, this was in the brand's infancy.

A

Indeed. And, and so what should we think about? I mean, yeah, you're, you know, studio Underdog watches are assembled in the uk. What should we think about, you know, in terms of, you know, you talked about going to Hong Kong, you talked about going to ephj. Do you, do you make any claims about, you know, Swiss Made or, or anything like that or how do you, you know, decide what components to use in various models and is it important for you, you know, where those are sourced from?

C

Absolutely. And it was a question that I've asked myself a hell of a lot because to commit to assembled in Great Britain, I guess if you wish to call that a label as such, that carries little to no weight compared to the likes of Swiss Made. Right. But for me I felt there was real value in. It's quite an honest message. It's a part of the process that we're doing. It's something that we are proud of, we're willing to talk about it. And whilst Maybe it carries 5 to 10% of the weight of Swiss Made, it's something that we have Real ownership of many brands that come to market. If you wish to meet the criteria for Swiss made factory supply chain will help you do that. And of course there's absolutely some loopholes that brands are able to leverage to meet that label and also be able to offer product at a competitive price. We source materials, movements from all over. You know, our straps are made by a British independent here in the uk. Our movements, we use Chinese movements. We work quite closely with Seagull, which is a relationship that is, is really important. Maybe something we'll touch on in a little bit more detail shortly. And of course the likes of Solita as well. And then you've seen through some recent collaborations, we've had the opportunity to work with, I guess a different part of, part of the Swiss supply chain which is, which has been a real eye opener as well. So it gives us a huge amount of freedom and flexibility. Bringing everything here into the uk, assembling it ourselves gives us a huge amount of control. And I guess this is me admitting that maybe I'm a bit of a control freak.

A

Well, indeed. I mean, this is. As the entrepreneur and the head of this venture, I mean, that's kind of a necessary thing. But, you know, you've grown quite a bit since those days, since that launch in, I guess 2021. That started in 2020. You know, talk about where we're at now. You said you're making, you made about 14,000 watches last year, which is not an insignificant size, Right. I mean, that's quite a fair bit of volume. And so, yeah, I mean, I think the most recent interesting transaction you did in the sort of the biggest business step that you've made is you acquired, you know, full control of the assembly facility and company. I think it's called Horologium.

C

Is that bit of a mouthful? Absolutely, yeah. Horologium, yeah.

A

And so talk about, you know, why you did that and where you are in terms of, you know, staffing in size now and what your operation looks like.

C

Sure. So as I said, if I was going to champion this assembled in Great Britain message, I really felt like I needed to have ownership of that. There was a small risk that through working with a third party, you don't have that level of control. If the team at Horologium had decided that they no longer liked the sound of my voice anymore, that would put me in quite a predicament and vice versa. We had got to the point where because of the growth of the brand, we were close on 90% of their revenue and that's not a good position for them to be in as well.

A

Completely depended on your business. Indeed.

C

Exactly. So it was a bit of a. We both felt like we were in a risky position and there was some obvious solutions. Really the first step that we took to de risk was back in July 2024. So we became a minority shareholder, which gave a little bit more comfort. That really cemented the relationship and was more of a gesture in the fact that neither party were going anywhere and we could both kind of rely on each other. And importantly for me, I could start to communicate this assembled in Great Britain message with a little bit more confidence in December of last year. So December 25, that minority stake increased to full ownership. And there was two key reasons for that. One, as I touched on before, huge level of control. We really get to own that process, pull as many small levers as we want to make tweaks and refinement and optimizations and also making sure that everything that side of the business did was in the best interests of Studio Underdog as the key brands. The other thing that we gained access to was opportunity. We as a young brand, five years old, most people know us from the digital realm. They've seen this online brand come to market and maybe they've had an opportunity to meet us face to face at events. But this gives us a real home. So we, you know, as part of the acquisition and over the last few months we've been slowly making the building ready, which we've coined the doghouse. So we plan to open our doors and allow customers to come and meet us. We'll have a showroom, we'll have an assembly experience. So it also unlocks a huge number of opportunities that we just wouldn't have been able to execute certainly to the level that we plan to execute this year without that deal going through.

A

Indeed. And so, you know, this is going to give you a physical, in fact a bricks and mortar presence in the near future is that, you know, it's interesting. I mean, obviously you started as an online only brand. What's your sense now of, you know, how you find more clients or people interact with watches? I mean, how important is it that people have a chance to see touch and feel products before buying them, particularly in your price range, which is obviously more approachable and entry level with not everything but, you know, most of your products?

C

I think, look, there's no question it's, it's important. That being said, 96, 97% of the volume that we do is direct to consumer through online sales. And I'd imagine the vast majority of those sales, you know, may have not had the opportunity to get hands on before. That is where it's so critical for us to be as transparent and open as possible. The research that customers will do will often be reading up on the brand, reading reviews from independent writers. I believe we've got a few hands on pieces on Hidinki as well. So I'm sure that's gone a long way, there's no question. But as the brand matures and levels up, whilst we don't expect the sell through within our showroom to, to be a considerable part of the business, even the sheer fact that it exists will move the needle as far as I'm concerned. It gives us, it gives us a door. If someone has a service request, knowing that if they really wanted to, they could come and they could knock on the door and we'll be there and we've got nowhere to go.

A

Yeah.

C

So I think that makes a real tangible difference as well. I'm looking forward to welcoming people through those doors and I'm hoping the people that do make the effort to come will be a microphone really for the incredible things that we're doing to showcase what assembly in Great Britain actually means, what that looks like to see part of the industry here. You know, the volumes we're doing are great. As far as I'm aware, we're the largest assembler of mechanical watches in the uk. That's not to say we're a big business, that's to say it really doesn't exist. So we've been growing that side of the business out. It's not easy hiring, finding that level of expertise. We've recently introduced over the last six months a training scheme and system. We've got, I believe, three new starters joining in the coming weeks which will help us increase our output. Of course. So yeah, looking forward to really showing this flourishing and growing business and being proud of it really.

A

Yeah, no, it's quite interesting and quite unique and unusual. There are of course, other UK based watch brands. We had Mike France from Christopher Award on the show quite recently. There's Bramont, you mentioned Fears, who you've done collaborations with. You know, what, if anything, did you learn from or take away from, you know, the experience of any of those brands in how you've gone about building Studio Underdog, obviously, you know, you know, Bremont is, is one we think of that's been sort of high profile over the past last more than a decade and you know, they've had Their ups and downs as a, as a UK brand, you know, manufacturing, etc. Etc.

C

A huge amount. There's no question when I was very fortunate, and I think it's something that's potentially quite unique to the British watchmaking space is as I was starting my brand, I was knocking on doors. I was really trying to pick people's brains and I was very surprised to, to have those doors opened rather than me being pushed away as. Hold on, you're coming here as a potential future competitor to pick my brain. That was not the case. So I've got a great relationship, a great friendship with Nicholas Affairs. As I said, he was one of the early supporters from the outset. Mike France was hugely accommodating, has given me some great advice over the years. Even Davide, I have a really good relationship with and I've been to visit the wing. Absolutely, yep. To see the, you know, the work and the scale of the business that they're operating. So I've been able to pick a lot of brains. There's a lot of bits of advice that I have categorically ignored or gone in the total opposite direction of. But there's even more advice that I've very much taken on board which has helped to shape the brands to an extent. But with all that said, this assembly part of the process for me certainly is kind of new territory. We're trying to do it in a slightly different way as to maybe others have done before. Despite the business that I'm growing and running, I'd actually say I'm quite risk averse. So I like to think the decisions that I make are relatively strategic and well grounded. Who knows, maybe in a few years time people will say otherwise. I've got some advice from very reputable people in industry that assembled in Great Britain is not the way to go. Don't do it Rich. But you know, I have to carve my own path.

A

Indeed, indeed. So let's talk about some of your product offerings now. I mean, remind me, you know what the price of that first watch and was the watermelon watch, the first watch?

C

I think it was.

A

Yeah, it was. So what was the price on that? What was the movement inside? And then where are we now in terms of your average price? And you have some models that are permanently in the collection, then you continue to do collaborations and special limited editions and those things.

C

So the 01 series watermelon and the other products within that collection, they're currently at £550. They use ManU Woun's Colin Wheel Chronograph from Seagull, which allows it to be that competitively priced. We're on the third generation of that, so we've made some incremental improvements over the years. We have our O2 series, which is our field watch. We're working towards a new generation of that, which hopefully should be launching in the coming months. That's around, I believe, the £850 mark with a Swiss Solita movement. And we've got our O3 series, our salmon, which is, I believe, around 1750 GBP. And that again, is a Sellita, a monopusher SW510. So I'd say we're. We're quite competitively priced. The majority of the sales that we do are our O1 series, followed by our O2 series. I think we're able to offer a huge amount of products again because we focus on the D2C model for quite a competitive price, you know, whilst offering a lot of fun. What we say is we make serious watches for serious collectors that don't take themselves too seriously. And I'd imagine a lot of people would just assume Studio underdog. They start with the fun, they start with the play, but the reality is that the play and the fun comes almost at the end as a bit of a twist, as such.

A

Yeah, no, it's quite interesting, but, I mean, you did. I think I was covering the industry back in 2022 when you came on board and it was just. It was quite fortuitous timing. I mean, you know, the world was looking for, you know, there was almost a shortage of product and you really were able to make a splash and everybody sort of, you know, picked up on the brand. I mean, was there any specific initiatives or, you know, moves that you made that, you know, got you that. That profile? Because, yeah, you. You made quite a splash when you. When you started.

C

I wish I could pat myself on the back and tell you about all my strategic planning and, you know, how it was destined for success. But the reality was I was just designing for myself and maybe that was a case. As an enthusiast, as a collector, I was potentially feeling fatigued with the industry at the time and this was my rebellion as such. Who knows? I was just designing a watch for myself that I wanted to wear and I hoped that it might resonate with others. And it certainly, certainly did and continues to as well. The Watermelon is still our most popular, our bestseller to date. And one thing I'm quite proud of as well is that collection, that 01 series, whilst we are on the third generation of it. It's not like we've been making new colors every month and just swapping it out. Those four items are the ones that we originally launched with and those four items are the same collection today. And that's a strategic decision as well that I think is really setting us up for the long term to cement these products as, you know, as I guess making their little place our little dent in the industry as such, rather than taking, I guess a more of a fashion led approach, which I'm sure would pay dividends in the short term. You know, the watch industry as we know, is a long term game and I think that that's the approach that potentially makes studio underdogs stand out. Again, people assume we're just the fun, goofy brands, but the reality is, you know, the first nine steps are all quite serious, quite structured. And then that tenth is that playful twist that I kept referencing.

A

Yeah, and let's talk about collaborations. I mean you've done several over the years, Christopher Ward fears and then sort of, you know, the one that was in some ways the most high profile was with H. Moser and that was a collaboration where, you know, you both produced a watch and they were sold to together. Some of your clients or fans or customers perhaps felt a little uncomfortable with that situation. I think it was a 50 or 60,000 franc watch from Moser that needed to be purchased together. But yeah, talk about that collaboration, do you think it was the way to go and will we see more of that in the future from you with. With sort of high end collaborations like that.

C

So that as a designer, there's no question that was a dream come true project for me. You know, the brand at the time was just over three years old. There's very few independents or Swiss brands to that level that would be willing to even consider taking the risk on a small up and coming company. H. Moser are obviously willing to take that risk. We broke a few hearts, there's no question. I think that the biggest learning from that launch for me was, if I'm honest, I wouldn't change the product. I love it. I loved the conversation that that kind of created these two watches being sold as a set. The thing that was maybe a bit of an oversight on my part was I pitched not only the products, the kind of the duo of watches, the design, the storytelling around the product to the team at Moza, but also the, the build up to the launch. And one thing that we enjoy doing is, is building up that excitement, that buzz, that hype and I wanted the unveiling that Studio Underdog was collaborating with H. Moser to be the final kind of surprise at the end, on the. Effectively the. The fourth day of teasing.

A

Right.

C

But what that resulted in was, you know, or the way, you know, I'd structured it and planned it was Studio Underdog was releasing and building up to a campaign and Moser was doing the same alongside. And for those that were tapped in, you'd start to see this crossover at a different sort of a different day. What I didn't take into account was a customer base that loves and supports and knows Studio Underdog, that doesn't and didn't know who Moser were. For me, as an enthusiast, that kind of. I hadn't even considered that sort of segment of the market. So for those folks, what that resulted in was four days of teasing, of getting excited for a new Studio Underdog launch, for the grand reveal at the end, to be this collaboration with a brand that maybe they didn't know, and a price point that felt quite out of touch. It was a small, but certainly a kind of a vocal, you know, a vocal part of my community, which I absolutely listened to, there's no doubt. But I think one thing that even Moser were pleasantly surprised at was the number of Studio Underdog customers that were still interested in this product. Whether interested means, you know, making a purchase or even just supporting the project. Supporting me as a designer and seeing that three years prior or years prior, I was designing a Minions watch that sold for a grand total of £7.99 to having the opportunity to design and work with the team at Moser for a piece that was closer to the 60,000 Swiss franc mark. It felt. Yeah, it was an exciting one for me, for sure.

A

No doubt. Yeah. And so where should we expect, or what are your ambitions in terms of collaboration and in terms of the evolution of the product and the brand? I mean, you know, you have that core collection with the O1 series, but will we see you moving up and premiumizing, which is the trend in the. Certainly in the industry right now?

C

I'd say yes and no. I'd say, you know, I'd imagine a lot of people will ask that question with almost a bit of a sinking heart. It's what everyone else is doing, it's what the industry is expecting. You've seen through collaboration that Studio Underdog can justify a higher price point and there's a market there and we've been able to do, in a short space of time, build that credibility, that confidence and that trust with our consumer. So I am really proud of the fact that through collaboration we have been able to touch some higher price points. But we also need to make sure that people, when they think of Studio Underdog, they don't just think of us as a collaborator. You know, I love the work that Second Second does. Second Second is not a watch brand. We are, we need, when people think about Studio Underdog, to think about us and our core collection as well as the collaborations. So this year we're focusing on core. You know, we've, we've kind of. Last year collaborations was a critical part of the strategy. This year we're kind of, we're looking inward a little bit more. And whilst I do see, and I think it's quite clear that the learnings through collaboration that there's a market that is interested in Studio Underdog at a higher price point, there's no question that what has led to the brand's success is to an extent a value proposition. Being competitively priced, being a playful part of someone's collection that isn't breaking the banker. So such, obviously it's all relative but we have a huge number of our customers that will have their watch box, they'll have their speedy, maybe they'll have their independent, their mosa, they'll have their datejust and then they'll want something to show off their more playful side of the collection. And Studio Underdog can do that at likely what will be the most affordable piece that they're looking to acquire. And it also shows your tactics as well. If you see someone wearing that datejust on the tube, whether they're a watch person or not, or you could start up a conversation is anyone's guess. Whereas if you see someone rocking a Studio Underdog, you know, you can have a chat.

A

Yeah, they're a watch person, they're an enthusiast, no doubt. Yeah, for sure.

C

So going back to kind of answer your question about will we be pushing up, what's the strategy? I don't want to say too much. We are developing an O4 series. One thing that we've kind of been working towards is this fight for credibility as such. And I think the next obvious step for us is venturing into a little bit more kind of technical development, maybe something offering something slightly more unique with the movement. We're not working towards an in house movement at the moment, but we're certainly looking to offer something quite unique and I would very much, much the intention is very much to surprise and delight the community by maintaining the accessible price Point. And I guess I almost don't want to say bang for buck, but you know. Yeah. The next launch certainly isn't going to be tens of thousands or multiple thousands for sure. We're going to keep it more attainable.

A

Interesting. And any plans to shift or change at all your distribution model, obviously, as you say, over 90% is online. Although you do have some retail partners I think with Time and Tide in London and maybe New York, but yeah, tell me.

C

Yep, so we work with Time and Tide for their three discovery studios, Melbourne, London and New York. It's been great for us to of course get products in front of people. The reality is we've set up the business as a direct consumer model and that's what our margins are based on. So to grow out retail in any significant capacity really comes at the cost for margin. For us. We have control of our supply chain now. We have control of our assembly output. The first four, even now five years, the level of demand on the market has really been more than we've been able to assemble. Of course that's a problem, maybe an artificial problem that others in the industry have, but the challenges with the infrastructure here in the UK have made that the case. What that means is we've not been hugely motivated to sell anything other than direct consumer because we have the consumers there digitally lining up at the door. Now that we have ownership of the supply chain, we are able to increase that output. Finally, for the first time ever this year, we've been able to put some stock online so it's more readily available rather than exclusively launching via drops, which we'll continue to do for our Les and special editions. But that's certainly a maturing of the brand. And then the next logical question is, well, what does further distribution look like? I don't think it certainly in the short term or even the long term to be honest, that traditional distribution and retail will be a part of the brand strategy. We are looking to expand our retail partners really by hand, picking those that we feel like will almost be ambassadors for the brand and those decisions are not really based on margin or additional revenue that it might unlock for the brand. It's more about positioning.

A

Right.

C

You know, who we want to get in front of as such. Touch. So we'll see. I think the, the first learning we'll have is with the opening of the doghouse, with our first own run physical space, you know, to have our showroom, to have customers come and, and book fire appointment to get hands on with our product, see the collection, get under the hood of, of the brand. No doubt we'll take some learnings from that. And of course I, I tuned into your interview with Mike France and I'm in awe about the growth that he's had in terms of physical retail, which he total ownership of through the US and his plans for growth there. So I'm sure I'll continue to have my ear to the ground on that one.

A

And so am I right to think then your biggest challenge these days is production and making the product as fast as possible or to meet demand. Is that your biggest challenge these days? Is it about staffing? Is it about capital?

C

Historically, I'd say, you know, up until the last six months. Really until the acquisition, yes. I'd say the assembly was a bit of a bottleneck and of course it's in a way a good problem to have because what that created was an additional buzz. We were able to leverage the fact that it's common knowledge that if you want a good watch, you have to wait. Right. Thank you. Rolex. We've been able to leverage that and explain our drop model and customers have been quite understanding. Now we have the ownership, it's less of an issue. Of course, with ownership comes a lot more responsibility. Overnight we went from a team of seven to we're currently a team of 26 and likely by the end of next month we'll be a team of 30. So the business as a whole has certainly scaled, but of course so has our assembly output. So has the product offering that we've been able to bring to our customers and our community. The growth in our community as well is something that we're super excited about as people discover us every day. The biggest challenge I'd say that we have these days, meeting the expectations and the growing expectations of the community. I'd imagine there's a lot of people that still think of Studio Underdog as a one man brand. They probably think of me working away in the corner of my living room as I did four or five years ago. So I think we've had this fight for credibility over the last couple of years and I think that's something that's never really going to change. And to do that I think it requires taking risks, it requires pushing the business forward. The risks that we've taken on as the acquisition we've developed, you know, we've invested six figures into, into the redesign and development of the doghouse, the interior, to make it customer ready. We've gone one step further to make sure that this is our home and the Fact that we can invest these sums of money into this building. We've, you know, we've purchased the building as well. A seven figure investment to have a home, a long term home for the brand. These are all kind of the necessary risks that I feel like we have to take at this stage. And the next chapter for us is really innovating from a mechanical standpoint, which as you're well aware takes huge investment, is a huge risk. But that's what's going to separate us, you know, that's how we will be able to continue to stand out. So exciting times ahead, you know, a few more sleepless nights for me. But hey, this is what I signed up for.

A

Excellent, very good. And you know, last thing, what's your sense of the market right now and how much insight through your orders and customers do you get into various regions, I wonder? And obviously, obviously you're at a more approachable price point. But yeah, I mean, what's your sense of global demand for premium watches these days? There's a lot of uncertainty still out there, socioeconomics, geopolitics, et cetera. But yeah, what's your sense?

C

I mean, there's no question there's been some tough times, some slight kind of declines in overall markets. I'm more optimistic. I'll touch on that shortly. Tariffs, for example, are a huge headache. And you know, I'm actually surprised that we didn't see more brands kind of go under, to be honest. It was really that, that significant for us. I'm quite optimistic. I think British horology as a segment is an area that's really continuing to grow quite significantly year on year. There's a lot of data from the Bellwether report that really confirms that. So Studio Underdog as a business is continuing to grow. Of course I have to look at the bigger picture, but there's so much data and what little old Studio Underdog is doing compared to the likes of the big mainstream brands, the top brands in the Morgan Stanley, we have the same product but the brands operate and run incredibly differently. So I do take everything with a pinch of salt. I am an entrepreneur so I'm probably more optimistic than I should be.

A

You need to be.

C

Yeah, exactly. So we're just making sure that we try and do right by our customers, not fall down the trap of, as you mentioned, while the going's good, increasing prices and then, you know, when the going's not so good, kind of being in a bit of a hard place. We've done a good job of avoiding that for the most part and we'll hopefully continue to do so.

A

And so, you know, production wise, are you looking for increases? Can you talk about, you know, what kind of growth you might be able to experience this year and then remind me how you have approached the tariff challenge? Yeah, I mean, you know, we've saw a lot of brands, you know, we just mentioned Christopher Ward. I mean they were able to shift, you know, their sort of distribution model through a US entity. Were you able to do anything like that to reduce your, your exposure to those US tariffs? And, and yeah, what kind of growth can we expect from you this year?

C

So the US is a huge part of the studio underdog business. Last I checked around the 40% plus mark, it's by far our biggest market. So it's critical to the success of the brand.

A

I didn't realize that.

C

Absolutely. U.S. purchasing power is unrivaled and people, they spend, they spend their money. So it's by far our biggest market. So we knew that that needed to be the case where we have a long term vision in mind for the brand or at least the decisions we make are decisions based on the long term. So we took a huge hit in terms of our US kind of margin. There's no question everyone did. Even with solutions in place. The solution that you mentioned that Christopher Ward had, we implemented the same. We were fortunate that we kind of slightly ahead of the curve in the fact that we'd set up a US entity and then it was just a bit of a learning as to how to get that functioning and operating and that's something that we continue to do. It's still a lot of sort of admin and work on a day to day basis to get those break bulk shipments in and covering all the US costs and the tariffs and the duties etc. But it's the right thing for the long term. It probably meant that 2024 was maybe a little bit more profitable for us in the US side of the business. But of course the growth that we've seen over the last 12 months means it's clearly been the right decision. So that answers your questions on tariffs, where else are we going?

A

And growth, I mean, how are you looking to scale production and revenue growth? And it's interesting, I mean you did mention the company and the brand is profitable.

C

The company and the brand is profitable. Yeah. We've not had any investors on board so we've been able to grow the businesses. As I mentioned, I'm risk averse, so I don't like the idea even Though I know it's the sensible thing to do to invest huge sums of money in the short term and go into debt for long term reward. That sounds pretty scary to me. So I've avoided that for the most part and that seems to have worked for us. We've scaled the business, as I mentioned, first year, 250 pieces and this year 14,600 or last year 14,600. So the growth and the multiples of the business year on year have been quite impressive. This year we're focusing a little bit more on stability. I'd like to see kind of 10% incremental growth in terms of the revenue, not as such kind of taking a step back or pausing. We're just focusing so much on the foundations of the business this year. That is the doghouse, that is supply chain, that is innovation. So I just want to make sure that we don't have too many peaks and troughs as such and that it's a confident continuation of the business. So with those 14,600, revenue was around the £9 million mark, 12 million USD. So we'd like to see that slightly increase. But the target is to be there or thereabouts.

A

Excellent. And remind us when the doghouse will be open and ready for the public and where it is and what to expect next from you guys that you can, at least that you can talk about.

C

So I decided to do this recording in my office in Brighton because the doghouse is currently a construction zone and there is all sorts of drilling and banging and pieces of wall. I believe it doesn't even have a door as we speak. That is, that is being painted. So. It is, yeah, it's, it's, it's a big project. It's something that I'm really excited about. I believe we should be complete by mid June. We were targeting end of May, but mid June is the new date and open to customers by the end of June. So I would very much like to extend an invite to you or a member of the team if you'd like to come and see what the doghouse is all about. And then, yep, it will be open to the public. And one of the things, I guess the last little bit to touch on that the doghouse is able to offer us, that's quite unique is, is an assembly experience. So we'll be welcoming customers in, in groups of likely three to four to do most of the day with us where they get to assemble their, their very own studio, Underdog Watch. And hopefully we'll be able to showcase really just how talented and skilled our team are because they make it look very easy and can assemble a lot of watches per day and I've given it a go. My watch wasn't held together by Blu Tack which is good. It worked surprisingly past QC which I'm quite proud of but my God these guys make it look easy for sure.

A

Richard Bentz, the founder of studio Underdog, congratulations on your success so far and wishing you the best of luck in the future. Thank you for joining us on the

B

business of wall watches.

C

Absolutely my pleasure. Thank you so much.

A

And that's the business of watches for this episode. We hope you enjoyed. Please head on over to Hodinky.com where you can join the discussion and leave any comments or questions about this episode or the business of watches in general. Who knows, we might even enter answer

B

your question on a future episode.

A

Thanks for listening and see you next time.