Licensing: The Road More Traveled

The term driver’s license could refer to the number of watch companies relying on licensed designer names to drive their business. This year’s best bet: if it has a fashion name, it will have a fashion watch. Watch licensing is now the order of the day.

Where will it end? If the past few years are any indication, it won’t. It will only get better – or worse, say some who think there already are too many watch brands out there.

“It’s not a question of whether there are too many watch brands,” says Kenneth Genender, president of Genender International, an active player in the licensed watch field. “It’s a question of whether there are too many watch brands with the same look.”

Licensed brands must stand out with unique design or meet an untimely death – and then relaunch. Anne Klein’s I & II, Guess, Timberland, Nautica and Joe Boxer are among those which are distinctive and successful.

A new crop has entered the market recently. Fossil launched Emporio Armani watches to rave reviews late last year. Prime Time Watch Co., the brains behind suede Hush Puppies watches, will offer Halston watches this spring. E. Gluck Corp. will introduce watches bearing hot fashion designer Joseph Abboud this spring. The Movado Group will unveil Coach watches this year. And Genender International recently introduced a cavalry of licensed watch brands, including Dr. Marten’s and Levi’s.

This licensing trend has ventured beyond department stores as designer-name watches (Emporio Armani and Joseph Abboud, among them) cross over into bridge price points. Now, after mega anticipation and hype, it’s Calvin Klein’s turn. SMH’s debut cK Collection features Swiss-made sporty and elegant watches from $100 to $250. These timepieces reflect a modern lifestyle via bold, youthful designs bearing transparent and translucent polystyrene cases and quartz movements.

cK watches span four categories: tech, minimal, dress and versatility. Highlighting the tech line is a steel chronograph with anthracite dial and 50-meter water resistance for men or women. Minimal models are elegant, with engraved numerals in the brushed steel of the face, with or without a second hand. Dress cK watches are jewelry timepieces in steel or a refined gold look, while the versatility line offers unisex and interchangeable fashions appropriate for day or night. cK watches are sold in cK shops, watch and jewelry stores, and department stores.

Breguet Finds New U.S. Distributor

Luxury watch brand Montres Breguet changed U.S. distributors Nov. 1, joining up with a new, unrelated company called Breguet LLC and severing its ties with Utime Co. The New York-based Breguet LLC immediately hustled to set up its business, while Utime announced it was restructuring.

Breguet LLC is owned by Rabco Luxury Holdings LLC, which distributes health- and beauty-care products, specialty foods, wholesale drugs, general merchandise and Golden Books for children. Richard A. Bernstein, former Golden Books chairman, now heads Breguet LLC.

Utime, based in Rutherford, N.J., distributes upscale watch brands Bertolucci, Chronoswiss, Gevril and Girard-Perregaux.

The timing of the switch – just before the busy holiday season – was less than ideal and left many Breguet retailers confused. “We’re not really sure what’s going on,” said Jack Adams, president of Cellini, New York, in late November. “I know that Breguet left Utime. It will affect us in that we can’t get product. We’ve been short on Breguet product for months.”

“There’s always a certain amount of anxiety, missing paper and missing watches in a transition, but that’s all getting cleaned up as quickly as possible,” said Bernstein.

Retailer confusion, rumors of lawsuits and misinformation abounded in the days after the changeover. Much of this occurred because answers were slow in coming from both Breguet LLC and Utime. Both said it took time to gain their bearings and develop strategies for the future.

There also was an air of mystery surrounding the departure of Hans Beck, who resigned as senior vice president of Utime as of Nov. 10. Some speculated that he negotiated, while still a Utime employee, a deal to run Breguet separately. He denied this and told JCK he left for personal reasons. He planned to take time off to be with his family in his home state of Texas.

Beck said Breguet made the decision to separate from Utime. Bernstein confirmed this and said he negotiated with Breguet a couple of months before Beck’s resignation. Bernstein did say he had spoken with Beck, a longtime friend, after his resignation about the possibility of running Breguet. Beck hadn’t signed on with Breguet or any other company at press time.

Last year, Montres Breguet said it wanted to increase its distribution, marketing and brand awareness. Breguet LLC will re-evaluate Breguet’s product and dealers, but Bernstein said most retail clients will be invited to stay on and new stores may be added.

Though Utime lost one of its most precious brands, that doesn’t mean others will follow. Remo Bertolucci, worldwide head of the Bertolucci watch brand, said it is still with Utime with no immediate plans for a change. It’s more likely that Utime will acquire another luxury brand to replace Breguet.

Charles Widmer, senior vice president of BHG Group, the Swiss-based parent of Utime, said Breguet’s departure was amicable, calling it “a mutual agreement.” Widmer is in charge of Utime’s reorganization, which he expects to be completed by the close of Switzerland’s Basel Fair in April.

Samsung To Flex Giant Muscles

Samsung Co. Ltd. soon may rival watch powerhouses Investcorp and Vendome Luxury Group as a timepiece juggernaut. The corporation has hired Martial Leuba, a managing director based in Switzerland, to acquire high-end Swiss watch brands – possibly more than one.

Samsung purchased luxury watch company Haas & Cie in the fall. However, Haas & Cie, which specializes in complicated watches, hasn’t manufactured timepieces in recent years. Whether Haas & Cie will produce watches under its name is not known.

The Korea-based corporate giant already owns Burett Swiss Sports Watches and Rollei Watches. The latter is still in litigation with Rolex, which claims Rollei too closely resembles its brand in both product and name.

Are other luxury Swiss watch brands on the block? Patek Philippe, IWC and others have denied sporadic rumors that they are up for sale. Of course, the right price could change that. And Samsung’s pockets are deep enough to cover any price tag out there. This $100 billion corporation, the 11th largest in the world, has more than 230,000 employees and projects sales of $200 billion by the year 2000. So when Samsung flexes its bulging muscles, everyone notices – perhaps even Swiss watch companies no one thought were for sale.

Swiss Army Brands Protects Its Borders

If you listen closely, you can hear the crash of Swiss Army Brands’ business in recent years. This quick fall from grace by the distributor of one of the hottest watch lines just a few years ago is baffling.

One problem stems from the name itself. Because the Swiss Army name is proprietary to the Swiss government, the company – originally called The Forschner Group – couldn’t protect it as much as it wanted. The firm did change its name to Swiss Army Brands for easier identification. But then Wenger watches entered the market, touting less expensive watches by the maker of the original Swiss Army knife (both Swiss Army Brands and Wenger manufacture Swiss Army knives). Confused consumers assumed Wenger and Swiss Army Brand watches were the same. This confusion cut into Swiss Army Brand’s bottom line, while providing a launching pad for Wenger, which had a similar look.

Unscrupulous retailers contributed to the confusion by selling Wenger watches as Swiss Army watches. Swiss Army launched a counterattack by prosecuting those retailers and running a series of ads and promotional bulletins to protect its name. One recent release states: “Don’t Be Fooled! Make Sure You’ve Got the Real Thing,” regarding its watches, sunglasses and Victorinox Original Swiss Army knives.

These factors have contributed to Swiss Army Brands’ overall slump in recent years. For the nine months ended Sept. 30, sales were $80.9 million, down from $89.4 million in 1996. In the third quarter alone, sales fell from $34.6 million in 1996 to $27.9 million, with a net loss of $775,000 in 1997 against a gain of $640,000 in ’96.

Swiss Army Brand watches are not about to hit the canvas. The successful elements are still there: it’s Swiss-made, popular, affordable and universally recognized – seemingly a knockout combination. New management, sent in to rescue the struggling franchise, hopes a Swiss Army Brands renaissance will be led by 10 new watch styles. These include its Officers series, a new titanium watch and Swiss Air Force watches. A sunwear line and other products also should contribute to success.

Says J. Merrick Taggart, Swiss Army Brands president: “The company’s strategic repositioning over the past two years has been designed to fuel growth with new products, brand extensions and alliances as well as offset the industry-wide slowing of pocket knife sales. The transition this year, which includes significant marketing investment in support of our new products, has produced a disappointing bottom line, but we are confident of the outcome.”

Xemex Debuts

Time Central, an Austin, Texas-based corporation, was named exclusive U.S. distributor for Xemex Swiss Watch, a new high tech watch line that’s distributed in more than 25 countries. The Xemex watch line includes the Offroad Collection, round-cased watches with a sporty design, and the Avenue Collection, square-cased with a dressier design. Both collections feature brushed stainless steel. The company expects to sign up 100 accounts by December 1998. 620 Congress Avenue, Suite 208, Austin, TX 78701; (512) 499-0123.

Appointments

Wittnauer International continues its company-wide transition with two new appointments. Robert Sapienza was named senior vice president of sales and special markets and Robert Q. Miller was appointed vice president of national accounts and merchandising. Sapienza will manage all sales and special market activities, while Miller handles all national accounts. – Keith Flamer