A JCK Report
Timex Corp., which has the best-selling watch brand in the United States, plans to actively enhance its business here in this decade, according to a JCK interview with president and CEO Jose (“Joe”) Santana. Those plans include acquisition of the upscale Versace watch brand, higher-profile marketing, more focus on fashion and “wrist instruments,” and adding a watch line retailing above $300.
Santana, who has served as Timex Corp. president and CEO since 1999, spoke with JCK during the company’s yearlong celebration of its 150th anniversary in 2004, a milestone in the American watch business. Timex traces its origins to the Waterbury Clock Co., founded in mid-19th-century Connecticut.
Over 15 decades, Timex Corp. and its predecessors have survived booms and busts in the U.S. economy, surges of competition from Swiss (and, in recent decades, Asian) watchmakers, near financial ruin, changing consumer uses of watches, and periodic innovations in watchmaking and retailing that altered the watch business and challenged Timex’s place in the U.S. market. The company’s history shows that Timex’s famous former slogan, “Takes a Licking and Keeps on Ticking,” is not only a clever tagline but also an apt description of the company.
From the beginning, Timex and its predecessors were committed to mass-marketing reliable, inexpensive timepieces, often using efficient production methods or advances in timekeeping technology pioneered by the company. That, plus shrewd, aggressive marketing over the decades helped it come back to dominate the U.S. watch market—and sometimes the global one, too.
In its 150 years, the company also pioneered innovations that changed the U.S. watch business. These include low-priced timepieces for the mass market (first clocks, later “dollar” pocket watches, then Timex watches); a generous warranty (free replacement or low-cost repair) offered as early as 1900; luminous watch dials (1914, 1992); iconic cartoon character watches; watch “wardrobes”; watches as impulse purchases; and time-saving, sports, or health-monitoring “wrist instruments.” It also was one of the first U.S. watch firms to make watches abroad, be sold to foreign ownership (both in the 1940s), and change its corporate name to that of its best-selling watch.
Widely sold, widely known
Today Timex is America’s most widely sold watch brand, with 1 billion pieces sold since 1950. It claims about a third of the 60 million-plus timepieces sold here annually, with a 98 percent brand awareness among U.S. consumers. Timex Corp. is located at its “Watch Hill” global headquarters, opened in 2001, in Middlebury, Conn. It’s owned by Timex Group B.V.—a Dutch holding company owned by a Liechtenstein trust whose beneficiaries reportedly include relatives of the late Norwegian shipping magnate Tom Olsen, who bought Timex’s precursor in 1942—and does almost $800 million in sales worldwide annually. This figure includes Callanen International, its licensed brand subsidiary, which makes and sells several fashion watches including Guess, Guess Collection, Nautica, and Ecko. It has offices and facilities in more than 65 countries. (Timex’s last U.S. production facility closed in 2001.)
Timex sells watches in 450 styles in four categories (fashion, sport, outdoor, and youth) through 50,000 outlets, at retail prices of $20 to $300. Most of its business falls around the $30 level. Santana sees that sales core moving to the $40 range, as well as “more business above $100.”
Arsenal of innovations
Timex is sharpening its focus on watch styling, with “more looks targeted more to fashion.” An example of this commitment to design is Timex’s 150th anniversary “X-Factor Collection,” a limited-edition series of watches (three sets of 500, priced at $150 each) created by three leading designers in fashion, contemporary art, and industrial design. Innovative use of new and existing technologies is also growing. Examples in 2004 included Timex’s new analog compass watches and a new line of perpetual calendar analog watches (which at $60 to $100 are the lowest priced of this type in the market).
“We have an arsenal of innovations set for the next three years,” Santana told JCK. While there will be “more in the analog part of the business,” Timex also is building up its award-winning “wrist instrument” segment, providing technologies relevant to consumers’ daily lives via their watches (mainly digital). It began a decade ago with Timex’s Ironman Triathlon sports watches and Datalink personal organizer watches. It includes those using global satellite technology (GPS) to calculate speed and distance; Timex’s digital Heart Rate Monitor and BodyLink sports watches; and this year’s “Speed-pass” watch, incorporating ‘instant-purchase’ technology that lets a wearer pay for gas or food with the flick of a wrist. “We aim to grow our fitness business, especially,” said Santana. “You’ll be seeing more innovations in the GPS area and the heart-rate monitor [sector].”
Time for a new line
Timex also plans to expand business this decade through “the launch in 2005 of a new watch in Europe and later in the United States that will retail for above $300,” says Santana. Its U.S. price could be as high as $700, far beyond Timex’s traditional price range. “A price that high is something we’re still investigating,” said Santana. “The Swiss play very well [in that price segment], but we’re asking, ‘Can Timex command those high prices?’”
Other plans call for additional means of distribution and more aggressive marketing. “We definitely need to revive our promotional activity, so we’ll be innovating in this area, too,” Santana noted. “You’ll see new ways to promote Timex, starting in 2005.” A current example is “X-Cash,” a marketing program introduced in 2004 to tie in with Timex’s anniversary, which lets consumers “earn” X-Cash—usable as discounts on movie tickets, DVDs, and music—when they buy Timex products at select authorized dealers.
Timex Corp. also hopes to build business with jewelers in the next few years. Right now, they’re “a very small part” of Timex’s business, said Santana, because “jewelers prefer to sell Swiss brands.”
It could happen soon. In November, the Timex Group purchased Versace S.A., the upscale watchmaking subsidiary in Lugano, Switzerland, of the prestigious Versace Italian fashion house. Timex will continue making and selling Versace watches, which a Timex spokesman called the company’s “entrance into the luxury market.” The Versace deal, said Santana, won’t be the last acquisition: “We’re actively looking at other opportunities,” he told JCK.
Timex doesn’t expect its opportunities to end soon. One anniversary project in 2004 was a global design competition looking at watches, timekeeping, and Timex 150 years from now, titled “Timex 2154: The Future of Time.” And Timex Corp.’s commitment to affordable watches, style, and innovation isn’t changing, either, Santana noted. Referring to Timex’s slogan since 2003, “Life Is Ticking”—a nod to its heritage and involvement in users’ lives—he said, “People will continue to rely on Timex, because we create timepieces that help them get more out of their time.”