'...and keeps on ticking'

America's most widely sold watch is marking its 150th anniversary with plans to expand its U.S. business.

Staff -- JCK-Jewelers Circular Keystone, 1/1/2005

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.

Industry pioneer

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.

Seeking opportunities

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."

The Times of Timex: A Chronology

1854. Benedict and Burnham, a major manufacturer of brass products in Waterbury, Conn., in Naugatuck Valley—a 19th century watchmaking center—begins making clocks with movements using inexpensive brass parts.

1857. Based on the clocks' success, Benedict and Burnham stockholders start an independent company called Waterbury Clock Co. (WCC) to mass-produce affordable shelf and mantel clocks for working-class Americans.

1878. Benedict & Burnham begin test production of a new pocket watch with an inexpensive movement using a long brass mainspring, invented by watchmaker/jeweler Daniel A.A. Buck.

1880. Benedict & Burnham stockholders set up an independent company to produce the low-priced pocket watch ($4 retail) and call it Waterbury Watch Co. (WWC), quickly creating a market for cheap timepieces for ordinary people. By 1887, WWC has produced more than 7 million pieces—each in a colored cardboard box with bright silk lining—sold not only in America and Great Britain but also as far away as Japan and Australia.

1881. Robert H. Ingersoll (later a great watch marketer of the early 20th century) starts Robt. H. Ingersoll & Bro., in Brooklyn, New York City, to sell "dollar" items by mail.

1887. Noting the growing popularity of pocket watches, WCC produces its own—called "Jumbo," measuring two-and-a-half inches wide—using a small clock movement.

1892. Ingersoll, seeking cheap timepieces for mail order, buys 1,000 Jumbos from WCC. He also designs a smaller pocket watch, the Universal. WCC agrees to make 10,000 Universals for Ingersoll, marking the start of a 30-year relationship.

1893. Ingersoll debuts the Universal at the Columbian Exposition world fair in Chicago. It retails for $1.50 (90 percent less than other watches). Within a year, he sells 225,000 and contacts WCC to request 500,000 more.

1895. The Yankee—the first "dollar watch"—goes into production, based on work by Ingersoll and WCC to create a pocket watch small enough to be efficiently mass-produced (using stamped-out parts) and retail for only $1. Cost to dealers: 80 cents for 12. A million are sold the first year. Others notice, and "dollar watches" proliferate.

1898. Inefficient sales policies (i.e., large volumes sold at very low wholesale, letting merchants use its watches as free giveaways) and financial woes force Waterbury Watch Co. to close. It reopens as New England Watch Co., known for skeleton pocket watches and women's enameled watches.

1900. In less than five years, six million Yankees have been sold in America and abroad, making it the most successful timepiece (to date) in history. In addition to reliability and price—Ingersoll promises "the cheapest guaranteed watches in the world"—reasons include its generous warranty (free repair or replacement for 25 cents) and famous slogan, "The Watch That Made The Dollar Famous."

Early 1900s. WCC employs more than 2,000 workers (on a $1 million payroll) to produce Ingersoll watches, now its main product. Between 1898 and 1906, it adds five factory buildings to keep up with demand.

1914. WCC produces 4.5 million Ingersoll watches annually—more than all other U.S. watchmakers combined, and more than all European watchmakers. Ingersoll buys bankrupt New England Watch Co. to produce more watches. Ingersoll's European branch creates a compound called "Radiolite" for luminous dial hands and numbers to read its watches at night. By 1918, most Ingersoll watches have Radiolite dials.

1917-1919. To meet U.S. military needs in World War I, Ingersoll and WCC modify thousands of small Ingersoll pocket watches to become military-issue wristwatches. Lugs are added for a canvas strap, and the watches feature "Radiolite" hands and numbers.

1921. Wartime closings of its European branches, over-expansion, post-war shortages of raw materials, and financial woes force the Ingersoll company into bankruptcy.

1922. Ingersoll's assets are bought by WCC, its longtime watch supplier. It adds a division to market Ingersoll brand timepieces, especially wristwatches.

1928-1932. Fierce competition from Swiss watchmakers, plus operating and financial problems—worsened by the 1929 U.S. stock market crash and ensuing economic depression—push WCC near bankruptcy.

1933. A comic character rescues Waterbury. Its Ingersoll division produces the first-ever Mickey Mouse watch under exclusive contact with Walt Disney Enterprises. An instant success with children and adults, two million are sold by 1936. Though not the first comic figure watch—earlier ones by others featured Orphan Annie and Buster Brown—the Ingersoll Mickey Mouse is the most popular and iconic, prompting legions of character timepieces from watchmakers (mass market to luxury) since then.

1940. Waterbury adds the Ingersoll "sweep second hand" watch and—with Europe now at war—starts making bomb fuses for British military.

1941. Norwegian Thomas Olsen, owner of an international shipping company and a World War II refugee to the United States, purchases majority control of the financially troubled Waterbury Clock Co. and becomes chairman. (Later Timex chairmen include his son Fred and granddaughter Anne, the current chairman). Fellow Norwegian refugee and engineer Joakim Lehmkuhl in 1942 is given daily control. Over the next 30 years, as president (and later chairman), he helps make WCC the world's most successful watch company.

1942. With U.S. entry into World War II, WCC moves to nearby Middlebury, Conn., builds a new facility, and begins government-contracted production of aircraft timing instruments and anti-aircraft fuses. By 1944, the company has produced 4 million such fuses.

1943. The company changes its name to United States Time Corp.

1944. "Timex"—a name created to convey U.S. Time's technological expertise and innovation—is used for the first time on a few nurses' pendant watches.

1945. "Timex" is trademarked and used in some ads.

1946. U.S. Time opens its first overseas production facility, in Dundee, Scotland. (The facility closes in 1993.)

Late 1940s. Wartime contracts end. Finances shrink. Workers strike. Sales fall.

1950. U.S. Time quietly debuts the first "Timex" brand watch line. Stylish and inexpensive ($6.95-$7.95), it uses a new, simplified mechanical movement with long-lasting alloyed metal bearings instead of more-expensive jewels. It's more durable and less expensive to produce and sell than other watches. When jewelers spurn Timex because of low markup, U.S. Time develops new outlets, including drug stores and department stores. That same year, Polaroid Corp. contracts U.S. Time to exclusively produce its new "instant picture" cameras, the start of a 30-year relationship.

1952. To boost Timex sales, U.S. Time launches one of history's most famous ad campaigns. To demonstrate durability and reliability, print ads and later TV ads—with no "cutaways," at U.S. Time's insistence—put Timex watches through "torture tests," strapped to speedboat propellers, jackhammers, high divers, automatic paint mixers, even a dolphin. The famous tagline is spoken by TV newsman John Cameron Swayze, holding a tortured Timex up to the camera: "Takes a Licking, but Keeps on Ticking!" Sales skyrocket. By 1955, U.S. Time has sold 12 million and captured 15 percent of the U.S. watch market. By 1960, it's selling 8 million annually—three times all other U.S. watch firms. By 1962, a third of all watches sold in America carry the Timex brand.

1959. U.S. Time debuts "Cavatina," Timex's first women's watch, along with more innovative marketing: the watch as impulse purchase and watch wardrobes. The low price ($9.95-$17.95) and many styles let women buy several for various occasions or ensembles for what would be the cost of one expensive watch. Timex "ignored the notion of a watch as a lifetime gift," said Time magazine, instead preaching that "it is almost as cheap to buy a new Timex as to repair an old one, and urges consumers to build a wardrobe of different watch styles, as if watches were shoes." It's a concept that affordable fashion watches like Swatch will use successfully, 30 years later.

1960s. Timex becomes the world's leading watch brand, with sales in 30 countries, and 5,000 employees in the United States, Canada, Great Britain, and Europe. By 1967, Timex accounts for half of all U.S. watch sales. Its low-priced watches—like women's models with "genuine 8-facet diamonds" for $15—impact well-known higher-priced U.S. brands, contributing to some closing and/or selling or licensing of their brand names to foreign companies.

1969. Acknowledging the success and recognition of its best-known brand, U.S. Time Corp. officially changes its name to Timex Corp. It also produces its first experimental quartz movement watch, six months before the debut of Japanese watchmaker Seiko's quartz watch, which sparked a revolution in the watch industry.

1975. Timex sells 38 million watches worldwide (25 million in the United States), more than any other watchmaker. Polaroid ends its contract; Timex lays off 2,000 employees.

Late 1970s-early 1980s. Revolutionary quartz analog and digital watch technology quickly and dramatically cut watch production costs and alter watch retailing. Hong Kong becomes a center of low-cost watchmaking. Cheap digitals proliferate. The Swiss industry, built on mechanicals, tries to survive. Timex stops making mechanical watches, closes or consolidates operations worldwide, and cuts its 30,000 employees to 6,000. It diversifies unsuccessfully (products include a 3-D 35-mm camera, healthcare instruments, mini-TVs, and the briefly successful $99 Sinclair computer).

1983. Timex sells 18 million watches, half the number it sold in 1975. It turns down a chance to distribute a slim new high-tech, low-priced Swiss plastic fashion watch called Swatch, soon to be a major competitor and the most successful watch worldwide since Timex.

1984. Timex concentrates again on watches, creating innovative quartz analog movements with fewer components, reducing production costs and time.

1986. Timex debuts its innovative Ironman Triathlon digital sports watch (named for the Hawaii race it co- sponsors). Within a year, it becomes America's best-selling sports watch and, shortly after—and continuing into the 21st century—the most widely sold sports watch in the world. It's also Timex's entry into niche marketing— creating products for specific market segments based on lifestyles and interests.

1991. Timex adopts a multi-brand strategy, purchasing the Norwalk, Conn., Callanen Group, which designs, markets and distributes several popular fashion watches including Guess, Guess Collection, and Nautica. Callanen becomes Timex's licensed brand division.

1992. Timex debuts Indiglo, the watch industry's first electroluminescent watch: The dial is back-lit by a bluish-green light, illuminating the entire face for easy reading, at the push of a button. It's named one of the year's "Best Products" by Business Week and Fortune magazines. By the end of the 20th century, more than 75 percent of all Timex-made watches use Indiglo, and Timex's U.S. market share is back to a third.

1994. Timex, in collaboration with Microsoft, introduces the DataLink watch, which can contain addresses, scheduling notes, phone numbers, and other personal information, and transfer such data to or from a computer. In 1997, it adds Ironman DataLink, combining the convenience of a personal organizer with a multi-function sport timekeeper.

Late 1990s. Timex is ranked a top watch and/or fashion brand by U.S. consumers in annual surveys by various fashion publications. Timex also unveils another joint venture with Motorola: a digital wrist pager/watch called Beepwear.

2001. Timex opens its TimeExpo Museum and its "Watch Hill" global headquarters, both in Middlebury, Conn., and closes its last U.S. manufacturing facility (which made cases and parts for 80 percent of its annual watch output) in Little Rock, Ark., ending 121 years of watchmaking in the United States. The work shifts to Timex's watch assembly facilities in the Philippines. It also has facilities in Europe, India, Hong Kong, and China. Timex's U.S. distribution and repair center stays in North Little Rock.

2002. Timex unveils the Ironman Speed & Distance System, the first watch to use Global Satellite Positioning (GPS) technology to measure speed and distance. The sports watch is part of Timex's ongoing commitment to "wrist instrument technology." It gets the Consumer Electronics Association's prestigious Innovations Design and Engineering Award—the seventh such award in eight years for Timex. Earlier honorees include its Internet Messenger and DataLink products.

2003. Timex Corp. passes the 1 billion mark in Timex watches made since the brand debuted in 1950. It drops its famous 50-year old "Licking/Ticking" tagline for "Life is Ticking"—a nod to both its heritage and its intent to be relevant to consumers' daily lives.

2004. Timex Corp. expands licensing of its "Timex" and "Indiglo" brand names to non-watch products and services such as cell phones, smoke detectors, and luggage. It unveils "Speedpass-enabled" watches with "fast payment technology," which lets wearers instantly pay for purchases with a wave of the wrist. (A user's credit or check card is linked to the Speedpass device in the watch.)

2004 and beyond. Timex Corp., still headquartered in Middlebury, Conn., marks its 150th anniversary. It's the best-selling watch brand in America (about a third of the market, 98 percent brand recognition among U.S. consumers); about $600 million in annual sales; 450 styles in fashion, sport, outdoor and youth watches; a leader in "wrist instrument" technology; 100,000 U.S. retail outlets; 7,500 employees worldwide; and manufacturing and company offices in 65 countries, including the United States, Germany, France, the Philippines, China, Israel and India. It launches its first line of low-cost analog perpetual calendars, a limited-edition watch collection by leading designers, and a global design competition ("Timex 2154") to envision "the future of time."

Timex Tidbits

Benedict and Burnham—the 19th-century Waterbury, Conn., brass manufacturer whose officials launched the companies that later became Timex Corp.—began making clock movements to find new ways to use brass.

Timex Tidbits

To debut its inexpensive Mickey Mouse watches (wristwatch $2.75, pocket watch $1.50), Waterbury Clock Co. set up a mini-assembly line at the 1933 Chicago World's Fair where people could order one, see it made, and immediately take it with them.