Hodinkee brought in money from its affiliate marketing, advertising and insurance operations, but between 50% and 66% of its total revenue came from Crown & Caliber, which had thinner margins, those people said.
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’s business relied on buying and reselling pre-owned watches, and it found itself underwater, having paid top-market prices for watches and seeing their value decline, 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 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, and 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 at 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 also 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 its 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 that it could turn its readers into Crown & Caliber customers, that strategy didn’t pan out.