Breaking Down The Brand: Panerai — The Hummer Of The Watch World

What do Panerai and Hummer have in common? Arnold Schwarzenegger is one correct answer — the “Governator” is the original civilian Hummer driver AND a passionate Panerai wearer. Another answer is a military history with a civilian follow-up. For quite a while, Panerai was the hottest ticket in town. But ever since the 2007–2009 Great Recession, Panerai, the king of XL watches, seemingly has been less relevant. Disappointed “Paneristi” lamented the endless limited editions and especially the launch of the S-sized Luminor Due with a water-resistance rating of 30 meters. And there’s also the confusion that surrounds the in-house and non-in-house movements. I guess it’s time to break down the brand Panerai.

Panerai is like the Humvee. The High Mobility Multipurpose Wheeled Vehicle made by AM General, is a light four-wheel drive truck that came into service in the 1980s. In 1998, General Motors (GM) saw commercial potential in the large military jeep and bought the brand name from AM General. Over the years, GM started marketing three different models. It all began with the original Hummer H1, the civilian version of the military Humvee. Later, the 2001 H2 and the 2005 H3 followed, which took design cues from the Humvee but were new designs based on GM platforms. But by 2008, the Great Recession hit the world, and neither the H1, the H2, nor the smallest and cheapest offering, the H3, could save Hummer. That is why, in 2010, GM pulled the plug on the brand.

Panerai Luminor PAM 116 in gray titanium with a tobacco-brown dial

Officine Panerai — Since 1997

Unlike Hummer, Panerai never went out of business ( I will come back to Hummer’s electrified rebirth in 2020 later on). But the watch brand’s past, course of life, and product strategy have a lot in common with the car brand’s. It’s fair to say that the watch brand Panerai has existed since 1997 when the Firenze-based original Panerai company sold the name “Officine Panerai” and its remaining watch stock to Vendôme Luxury Group, which later dissolved into parent company Compagnie Financière Richemont AG. Before that time, the cushion-shaped watches used by the Italian Navy between 1935 and 1955 were essentially Rolex Oyster pocket watches with lugs. They were supplied as cased units and given Panerai-made dials. And between 1993 and 1996, Panerai Luminor and Mare Nostrum watches were designed and made by Guenat S.A. Montres Valgine in Switzerland. The commercial watch brand Panerai aimed at civilians is a 1997 invention.

Panerai — The Hummer of the watch world

Still, in 1956, G. Panerai & Figlio developed its first own watch, the GPF 2/56. This GPF 2/56 was developed for the Egyptian Navy and was the first serially produced Panerai watch that was designed and manufactured by the company. The instantly recognizable, iconic Tight Seal Device with its large integrated crown guard is the heart and soul of the watch. A watch that looked like an instrument that Panerai also made and had an instrumental case size of 60mm. The movement, however, was not an in-house affair. Inside the GPF 2/56, beat the Angelus 240 eight-day movement, which was produced on special request and supplied by Stolz Frères SA in Le Locle Switzerland. The watches that came out after 1997 had the looks of the military-used models, but they were aimed at civilians, just like the Hummer.

Panerai PAM 21 — Picture courtesy of Phillips

Reinterpreting the past of Panerai — PAM 21, PAM 127, and PAM 203

Let’s have a look at how Richemont-owned Panerai deals with its past. The 1997/98 PAM 21 was the very first special edition that Panerai released under the Richemont umbrella, and it is a perfect recreation of a Rolex-produced watch of the past. In 2002, the limited-edition Luminor PAM 127 debuted. This faithful 47mm replica of the 1950s Panerai 6152/1 with its 47mm cushion-shaped case and large, domed crystal got the loving nickname “Fiddy” — Rapper 50 Cent supposedly coined the nickname — and was on many people’s wish lists, including mine. This limited edition with its gold hands and sandwich dial was the godfather of the following Luminor 1950 collection. Inside the watch beat a modified version of an ETA 6497-2 that Panerai named caliber OP XI.

Luminor 1950 PAM 127 — Picture courtesy of 9Maiali

The PAM 203 from 2005 didn’t have a modified ETA movement. Instead, it housed a caliber that linked directly with Panerai’s past — the Angelus 240 hand-wound movement. Panerai presented the movement as historic “NOS” (New Old Stock), but that statement led to a lot of movement controversy.

Panerai PAM 203

Caliber controversies

When Panerai became available to the public, the completely original-looking, XL-sized watches soon gained a fanatical following. These “Paneristi” were smitten by the watches’ looks and history, and they wanted to know everything there was to know about the brand. The watch love is strong among the Paneristi. But when something is very dear to you, you also follow that something with great attention. In other words, everything that modern Panerai does is scrutinized by a critical fan base. So when Panerai claims something, the Paneristi dive into the past. And sometimes that leads to controversy. Like with the supposedly NOS Angelus 240 movement inside the PAM 203.

According to brand specialists like the (in)famous Jose Pereztroika, aka Perezcope, the 150 Angelus 240 movements that Panerai put in the modern Luminor PAM 203 were based on key-winding movements from old table clocks. Richmont-owned Panerai subsequently converted these movements into crown-winding calibers using reproduced parts. These old movements were not uniquely rare, nor were they ever meant to be put into Panerai watches, as the brand suggested. Knowing this shines a strange light on the PAM 203, which many consider a modern Panerai “Holy Grail”. The Angelus story proved to be not the last caliber controversy.

The Angelus 240 caliber inside the PAM 203

What exactly is “in-house”?

When you visit the Panerai manufacture in Neuchâtel, you will read this in the lobby of the modern building: “Manifattura Di Alta Orologeria”. This means “Manufacture of Haute Horlogerie”. But Panerai always used movements made by other specialists, and that was never a problem until Nicolas G. Hayek of Swatch Group announced in the early 2000s that he would no longer supply movements to brands outside the Group who used them in watches with prices he deemed unreasonably high. Why should Swatch do the development and pay the cost while other brands continued to make easy money? And even though COMCO (Switzerland’s Competition Commission) prevented the ETA boycott from happening, competing brands started to develop their own movements. How? By buying movement specialists and by expanding pre-existing caliber-creation capacities.

Panerai had already started using movement manufactured in Fleurier, and because of the possible ETA ban, Richemont thought it wise to expand the production capability. Thus, ValFleurier was created, a movement-manufacturing facility for Richemont brands. The integrated manufacture ValFleurier has three different locations and the capability to design new calibers and produce and finish tens of thousands of movements per year. ValFleurier makes, amongst other movements, the hand-wound tourbillon Caliber 98900 for IWC and also the Baumatic BM13-1975A that beats within several Baume & Mercier models. But that same movement also beats in side IWC Pilot’s watches and a number of Panerai models. Is a ValFleurier movement an in-house movement, one that, because of the “in-house” label, always has a premium price tag?

Panerai Submersible PAM001226

The difference between “P” and “OP”

In 2005, three years after opening the doors of its production facility in Neuchâtel, Panerai released its first “in-house” movement, the hand-winding P.2002. In this case, “in-house” means that the caliber is produced by ValFleurier exclusively for Panerai. The use of the letter “P” signals the use of a Panerai-exclusive caliber. “OP” refers to outsourced, non-exclusive movements. So when Panerai used its version of the Baumatic BM12-1975A, it got the name OP XXXIV. Until recently, that is… The OP XXXIV, which beats in several Due and Submersible models, still exists, but is now called P.900. Is this a case of trying to make you believe you’re buying a watch with a Panerai-exclusive movement?

Panerai Submersible PAM00684 42mm

More caliber confusion

Knowing what we know now about the recently introduced P.9200 chronograph movement, I would say yes. Panerai answered affirmatively on its Instagram account when asked if the P.9200 — which beats in, for instance, the steel PAM01109 and PAM01303 Luna Rossa with closed case backs and the gold PAM01111 with a semi-transparent case back — was an exclusive in-house caliber. But the truth is that this caliber is a basic ETA 2892-A2 equipped with a Dubois Dépraz chronograph module. A decent chronograph movement indeed, but by no means an exclusive, in-house creation. The movement also lacks Élaboré decoration like Côtes de Genève, but it does have an ETA 2892-A2 stamp inside.

The use of the letter “P” implies in-house. And the term “in-house” implies a caliber that was designed, produced, and assembled from scratch by a watch brand in its own manufacture. That’s what watch brands want the public to believe because it justifies a higher price, as I wrote. It also implies better quality. And that also isn’t always true because a newly developed movement has to compete with proven, highly evolved calibers that operate flawlessly and at the peak of their abilities. “In-house” is a fluffy marketing term, an overused buzzword without real meaning.

Panerai Luminor Due PAM00676 from 2016

The Panerai equivalents of the Hummer H2 and H3

Apart from debates, discussions, and controversies regarding Panerai movements, the model range also came under heavy fire, especially in 2016 with the launch of the Luminor Due. The tough Submersible with its diving bezel is the Hummer H2, a very logical evolution model of the original diver’s watch. The Due is the Hummer H3, the model that has to appeal to a larger audience than ever before. The Due is like a two-wheel-drive Jeep, and that’s a proven and commercially successful recipe. You don’t need four-wheel drive and low gearing when driving to the supermarket, and you don’t need a 44mm deep-diving watch to do that either.

Panerai Submersible Bronzo Blu Abisso PAM01074

A talk with Panerai exec Alessandro Ficarelli

Last summer, I was invited by Panerai to join the Eilean Experience. That also allowed me to talk to Alessandro Ficarelli, Chief Marketing Officer at Panerai. Ficarelli has been with the brand since 2005 and has worked in many departments. As of last year, he’s in charge of marketing and communications, and he also is responsible for the interesting (and sometimes complicated) heritage part of Panerai. He has to deal with the different discussions regarding the movements, the shared fan pictures of Chinese-made “super-replicas” on Panerai’s Instagram page, the military history, and the product strategy:

“When it comes to sales, I cannot complain. The new Submersible Quarantaquattro collection we launched earlier this year outsells most other watches we have. And [while] the Luminor Due might be the topic of heated discussions, we can’t produce it fast enough. Ever since we launched the 38mm size of the Luminor Due, it has been out of stock. The Due is the watch that allows us to grow, to reach a new audience. I don’t think Panerai sold its soul with the Due. We have watches in the collection that appeal both to purists and newcomers who have a different approach to watches.”

Panerai Radiomir Eilean Experience PAM01244

1935 instead of 1936

“Regarding the often heated debates on the internet and social media, I will say this. Not everything is black and white, and sometimes the way opinions and things are expressed leave no room for real debate. I respect the thorough research some people do, but the way they communicate and vent their opinions and findings, not always so much. Believe me when I say that even we at Panerai still come across things we never knew before. We always believed 1936 was the year of the first wristwatches Panerai supplied to the Italian Navy. We even named a Radiomir after that year. When the correct year turned out to be 1935, we were just as surprised as anybody else. And I’m sure we will stumble upon new facts as we continue to research all the historical papers we have.” 

Panerai PAM 249 Radiomir California 1936 47mm – Picture courtesy of 9 Maiali

Breaking down Panerai — How to look at the brand

It’s hard to look at a Panerai watch with a clean palate after following the brand closely for the last 15 years. The history of the brand/watch that includes the sinking of a British warship by divers of the then-fascist Italian Navy, for instance, is a historical fact that you can’t deny. But because it’s also “ancient” history, many can disregard it.

The very unclear way of communicating about the use of in-house, outsourced, or in-group movements is way more recent and therefore more problematic. Historically, Panerai was never a manufacturer of movements. Modern Panerai claims to be. But I strongly believe that the fans wouldn’t mind Luminor and Radiomir iterations with outsourced movements as long as they were being told the clear truth about the origins of those movements. The label “in-house” is an empty marketing term that only caused murky waters for both Panerai and Paneristi to navigate through. Accidents were bound to happen.

The Luminor Due might be troublesome from the perspective of personal taste, but because Panerai is part of the publicly owned company Compagnie Financière Richemont AG, growth is necessary to please the shareholders. Only a privately owned Panerai brand could choose to only build watches that speak to the most fundamentalist of fans. And even then, continuity is not a guarantee; how many purist Paneristi are there, and how many Panerai watches will and can those purists buy to keep the brand afloat?

The electric Hummer and the Luminor Due

Coming back to Hummer., two years ago, General Motors announced a return of the Hummer nameplate under its GMC brand. Later that year, it materialized in the Hummer EV. And to great success, I might add. The Hummer EV Edition 1 sold out within the first 10 minutes of pre-orders opening. If the Hummer EV becomes as popular as the highly debated Luminor Due, General Motors can count itself lucky.

If you want to have a complete overview of the current Panerai collection, please visit the brand’s official website. And I also advise you to have a look at Jorg’s well-documented and insightful articles about the best Panerai watches from the 1990s and 2000s.

Find and follow me at Lex Stolk • Instagram.