Episode Transcript
Marcus: Hello. I'm Marcus Stuttard, I'm the head of UK Primary Markets and the head of AIM here at the London Stock Exchange. Today I'm going to be speaking to Brian Duffy, Chief Executive of the Watches of Switzerland Group, as the latest in our be inspired set of interviews Brian, it's a privilege to be here with you today. You obviously joined the watches of Switzerland Group five years ahead of the IPO.
Marcus: Can you just talk to us today a little bit about the sort of the journey from joining the company through to IPO?
Brian: Sure. So we were private equity once beforehand and was one thing of certainly a private equity at some point exits not forever. And the normal time frame actually would have been something like five or six years for this group. I was attracted to the business. I loved watches, love retail, love, luxury brands. I was UK based and I've previously been living in Switzerland.
Brian: So I was attracted to the business, attracted to the environment of private equity overall. And, you know, we successfully run the business was, you know, really good financial performance and inevitably then start looking at an exit, looked at another private potential exit, which I personally wasn't in favour of. And then took a serious look at the IPO and delighted that we did.
Marcus: And at the time that you conducted the IPO back in 2019, you stated a number of through clear objectives that you were hoping to achieve from the IPO around increasing the brand and the global profile of the business. Which is striking given that, I mean, to my mind the company has already got a high profile, but also it being able to diversify the range of finance options and also being able to incentivise and retain key members of staff through the shares.
Marcus: Do you feel like the IPO has achieved those goals?
Brian: Certainly two or three. I think our profile is hugely elevated with a very relevant audience. Of course, the financial community, not disproportionately our consumers, but also with the press. I mean, the share investment community is very, very broad and the UK and elsewhere and they are hitting a bonus. We've been a success story, so there's good, good news coming out continually.
Brian: So I think our profile is very, very positive. I think we delighted to be able to offer the management, you know, up and share participation and December. We gave all of our employees the after shares and a surprise for them just before Christmas. Delighted to do that, too. And the Save Again scheme we put in place. So all of that, it's great.
Brian: The access to money, less so because we didn't need it actually the way things have gone. We did refinance on IPO, which I think again was very positive for this business. Hugely just a. But our business has done so well and our products are selling so quickly that honestly we haven't needed cash. We've made acquisitions but financed all the way to cash flow.
Brian: But obviously, the access to cash is here if we ever need it someday.
Marcus: And clearly, when you paid in 2019, you didn't know what the three years ahead we're going to bring. How did you find being public during the pandemic.
Brian: You went to really kind of two different things. It was our early years of of being a part of being a public company. So we were still learning. I'd never been on a board other than I was on the board of Glasgow Celtic as a public company, but different than what sort of Switzerland. So a new experience for me and the team It's all being good.
Brian: Ultimately, things you have to, you know, be confronted with, address, think about and come by dealing with an external board, dealing with a degree of governance and reporting, all of which ultimately I think is positive. But you have to adjust. You have to look after the business best interests. We were very fast in our decision making. And that's been my biggest focus to make sure that we could stay entrepreneurial and focus on decision making.
Brian: But I think with our board, we've been able to do that. Um, so, so then along comes a pandemic. And one of the things that we decided to do early on correctly is be very available to the investor community because people didn't understand our category overall, didn't understand the model so we knew the more we talked to people, the more we get a buy in to what we were doing.
Brian: That obviously became a lot more difficult. And as we were all working from home in a sweatpants and bare feet, but I think the industry responded very, very well with, uh, you know, we never had a in beforehand. And I've spent the last three yields with most of our interactions on Zoom. So that did create a different, you know, aspect to it all.
Brian: But I gave them a technology I think they understood, responded very well.
Marcus: And coming back to the sort of the gift of shares to employees, do you I think it's early days, but do you feel like that is aligned employees interests with the performance of the business to a greater extent?
Brian: Yes, it definitely has helps for tension, obviously, which today is a big deal. It's the biggest deal. People talk about recruitment. The biggest deal is retention overall. So it definitely helps We gave all of our employees £1,000 at the IPO with time to so and we were determined every occasion to try and make sure that there was a, you know, a sharing of the wealth and the success overall.
Brian: We also beyond that, we've put four and a half million into our foundation, very conscious that our business did really well. But the towns and cities that we live and work in, that's not the case with everyone. So we've put this foundation in place and concentrating on the on, you know, poverty, food-banks, homeless and the and the Prince's Trust.
Brian: And I'm engaging all of our employees and volunteering and so on. So I think your consciousness has raised much more of a kind of broader responsibility as you have to employees and community and a public situation which, uh, which is all very good.
Marcus: It's a really good point. Do you feel like your external investors are asking more, more questions about that side of the business? And the whole ESG agenda?
Brian: For sure. And I think correctly so. I think, I think community responsibility to me is very, very important and clearly looking after our employees as much as we possibly can. And again, during the pandemic, we kept everybody employed and fully paid and socially engaged and even had access to, you know, whatever help people might have needed financially, psychologically or medically or whatever.
Brian: So I do think all of that's very important. And I do think, you know, we were given the environment of attention within our company, single responsibility. But therefore, in a public situation, the need to do that and the prompting to do that again, I think it's very healthy. And we very much responded to it.
Marcus: And having been through the process of running the business when it was private equity owned and then getting through IPO, and now you're three years into life as a public company for those founders and CEOs of private businesses that might be watching, is there a key piece of advice that you would give them?
Brian: My key advice would be to, uh, to own the process You won't be short of advisors, particularly leading up to an IPO. You're really inundated with a lot of very, very good advice. And I think and I talked to some other CEOs who have been through, I think, a, you know, less positive experience than we have. And I look at it and I think they lost control.
Brian: And if they stopped being a passenger on the bus while on the driver of the bus, so just I guess I would say is, you know, very much on the story, on the process make sure that you're, you know, driving and, you know, approving of all the decisions. And the other bit of advice I would give is really spend more time thinking about post IPO and pre IPO.
Brian: Everybody's very focused on an event like it's the end of the whole process. But as management and the business system beginning in many respects, so in choosing your board and choosing IT advisors and, you know, setting up how you're going to operate, think more of a post IPO within pre.
Marcus: I'm really glad to hear you say that. I mean, when we're talking to private companies you know well often say if you the IPO as the start of the journey because you know we talked about the higher profile and visibility from day one you are potentially a much higher profile business.
Brian: Yes and you as management are going to be judged on your credibility and you know, the indications or promises the guidance that you have given. So I'm not you've got to take that very, very seriously, as I'm sure all CEOs would. But I think the scrutiny, the governance, the attention, the profile for a good business is all very positive front.
Marcus: I could speak to you all day. I'm dying to ask you more questions about the watch industry, but sort of conscious of your time, in view is time. Let's wrap it up there. Thank you very much for your time today and for the rest of the viewers, please do come back to London Stock Exchange dot com where there's a whole series of these be inspired interviews with CEOs and founders that hopefully give you an insight into the life of public market CEOs.
