Switching from Sellita to STP for the Burrard

Hi all,

At York & Front we truly believe in radical transparency and listening to feedback, which is why we are:

1. Being open and upfront about issues we are experiencing with sourcing the Sellita SW200-1 movement without the phantom date, necessitating a switch to STP 1-11
2. Making changes to the Burrard to bring you a watch that is under USD$500

Regarding issues sourcing the Sellita SW200-1 movement, we have received notice from our manufacturer that there is an approximately 6-month waiting period to receive The Burrard's modified SW200-1 movement directly from Sellita. As you may already have heard, there has been nearly a decade of talk about ETA - a company that is part of the Swatch group - ending its supply of movements to other companies not affiliated with the Swatch group. In this time, Sellita, STP, Miyota, Seiko, among others have stepped up to satisfy market demand as ETA slowly wound down supply. Now with confirmation that ETA has shut their doors to non-Swatch customers for good, Sellita - commonly viewed as the next best alternative - has seen a substantial increase in demand for their movements, leading to significant backlogs and increased waiting times. Most distressingly, the 6-month delay provide to us is only a guideline and could worsen as we move into 2020.

Fratello has a great piece going in-depth into the issue. See the following link for a comprehensive background: fratellowatches.com/you-asked-us-does-eta-sell-their-ebauches-outside-the-swatch-group

Quill & Pad just published this timely article regarding the impact of ETA withdrawing supply:
https://quillandpad.com/2019/12/15/breaking-news-eta-may-not-be-delivering-movements-in-2020-possibly-crippling-the-watch-industry/

So how do we plan on responding to the movement backlog?

We apologize and feel like this is something that we should have seen coming. We expected there to be a slight backlog but did not expect it to be anywhere near 6 months. We own this and will be taking the necessary steps to make sure that this issue does not hinder any future releases. However, we have considered a wide array of alternatives and to help you better understand our thinking we have outlined them below.

Waiting 6 months for the SW200-1 movement from Sellita:

• After long discussions with our manufacturer, it is clear that we will not be able to get the modified movements from Sellita for approximately 6 months. Also, we will have to secure the movement supply well in advance with a significant down payment. There are two ways that we can go about securing this down payment, starting pre-sale or taking a bank loan.

• Pre-sale: We believe fundamentally believe that it is bad business to hold a pre-sale and not deliver the product for 6 to 8 months. This is not a viable option.

• Bank Loan: Being a start-up company with no reportable revenue makes it extremely difficult to take out a loan. A lot of banks are unwilling to make any sort of significant loan without personal guarantees.

Sourcing Sellita SW200 movements from the grey market and modifying the movement to remove the phantom date:

• To source the SW200 on the grey market in the quantities we require is a fairly reasonable exercise. However, the risk and challenge with this is that we would then have to disassemble each movement, remove the calendar complication (source and install new watch stems/keyless works components) , re-assemble, and then re-perform all the accuracy testing/quality control procedures to ensure proper tuning of each movement. In our eyes, this option is not financially viable or palatable from an execution perspective. Our current strategy involves the movement manufacturer providing us with the movements already in non-calendar complication spec, with the corresponding quality control and regulation work done at factory and re-confirmed by our manufacturing partner.

Using a Miyota or Seiko movement:

• As you can see from Henry's IG (@jubhat) we are clearly huge fans of Seiko and Japanese movements. They offer unparalleled value. In the case of the Burrard though, we wanted to keep it consistent by introducing our first watch as a Swiss Made, Swiss powered timepiece. This by no means limits our use of Japanese movements in future models! The Miyota 9015 has proven the be a popular, cost effective, reliable, and strong performing alternative to Sellita/ETA/STP but given our entire marketing and philosophical for the Burrard up until now has been about delivering a high quality Swiss Made watch with a strong value proposition, we have decided to save the Miyota/Seiko option for future models.

Sourcing another Swiss-made movement instead of the Sellita SW200:

• We truly believe that this is our best option. Souring the STP 1-11 would allow us access to a Swiss Made movement with very similar movement architecture as the ETA 2824/Sellita SW200, while also reducing costs at the same time. Even though the STP 1-11 does not have the same reputation as the ETA 2824 or the SW200-1, our industry contacts indicate that the reliability and quality control issues around the STP have improved dramatically over the years and are movements they commonly employ in manufacturing for other customers.
• What is most important, regardless of movement being used, is that we stand behind our product. Movements do fail, whether they are ETA, Sellita, STP or even Seiko. Bearing this in mind, we continue to offer the same 2-year warranty for manufacturing and mechanical defects on all York & Front watches. Our goal is once the watch is in our customers' hands, if there are any issues, we will do our utmost to ensure a smooth and swift resolution.

As mentioned, we have seen some comments about our pricing in the reviews of the Burrard. We have heard you and and with the switch the the STP, we are happily able to pass our cost savings to you by bringing the price down. The new Burrard with the STP 1-11 will now retail for USD$499! We want to bring you true value and think that the Burrard's mix of clean but elegant aesthetics, high quality finishes and reliability does just that. With pre-sales tentatively starting in February 2020 we are very excited to soon be bringing you the Burrard. Follow us on IG (@yorkfrontwatches) to get the latest updates.

Please let us know what you think, we are always keen to hear your feedback. Thank you for your continued support and for joining us as we work to bring our dream to fruition with the Burrard!

Thank you,

Henry & Eric