Nobel Watch seeks capital for ‘significant expansion’

William George Shuster, JCK Senior Editor -- JCK Online, 8/16/2004 2:00:00 AM

Nobel Watch Co., a U.S. company that makes mid- and luxury-priced watches, is raising capital for what it calls “significant expansion” of its operations and business.

The company, headquartered in New York City, has launched a private stock offering to investors to raise more than $1 million, is offering 200,000 warrants (exchangeable later for stock and worth up to $200,000) to those of its retailers who want to invest in its growth, and plans to go public before the end of 2005.

Money raised through private placement (the sale of company stock to private investors without use of public exchanges) will underwrite a national advertising campaign to build consumer awareness of the brand and provide co-op ad support to its retailer network, says Israel Genuth, chief executive officer and co-founder of the watch company.

Nobel also plans to expand its current distribution, but Genuth declined to give details on the current or projected size of its national network of retailers, except to say that they have exclusive distribution in their area. He confirmed, however, that Nobel is looking at expanding into European and Asian markets. In addition, it plans to open at least 10 company-owned boutiques in the United States, primarily in outlet malls, to sell discontinued Nobel watch models. That will probably begin in “less than two years,” says Genuth, starting the Northeast.

The private offering to institutional investors and venture capital firms was scheduled for mid-August to mid-November. The project is being handled by Laconia Capital of New York City, and the Marketing Financial Group, which will assist Nobel in its plans to go public. That initial public offering (IPO), said Laconia president Michael F. Franzese, “probably will be [made] before the end of next year.” They also have introduced Nobel to several banks “to make them aware of Nobel” and to secure additional lines of credit for the watchmaker, he says.

Future financing for Nobel’s growth will come through additional offerings or traditional credit channels, says a company statement.

Meanwhile, Nobel is letting current and future authorized dealers invest in the company’s growth through a program of stock warrants. A total of 200,000 are being offered on a first-come, first-served basis. For every $10,000 of Nobel timepieces ordered (and paid for with 60 days of the invoice date), a retailer receives 1,000 warrants (valued at a $1 each). These can be exchanged for stock within three years once the watch company goes public.

Nobel, founded eight years ago by Israel Genuth and former partner Barry Fink, caters primarily to independent jewelry stores and boutiques. It annually produces tens of thousands of watches (with Swiss quartz and automatic movements) in Switzerland, though some parts are produced in Asia.

Its mid-range watches—some with a distinctive geometric pattern integral with the case and bracelet design—are priced from $275 to $995, and come in stainless steel combined with tungsten, with 18k accents, and with gold plating. The company adds six to eight new models twice a year to reflect current fashion trends. Among the most popular is Nobel’s Paragon collection, with its patented curved case and crystal. Its solid 18k gold and diamond series retails from $2,500 to $22,000. In addition, Genuth told JCK that Nobel will this year launch a new Signature collection of limited-edition timepieces. The watch company’s “buckle-to-buckle” warranties range from two to five years.