Cyma, one of Switzerland’s last family-owned and -operated watchmakers, is under new management—its next generation. They took over in January 2007 at its Le Locle headquarters and U.S. offices, and their plans are re-invigorating the 145-year-old company.
Françoise Schürch-Guilgot is president of Cyma SA, where she has worked many years, succeeding her father Claude Guilgot, who bought it in the 1970s. Florian Niculescu is president of Cyma USA (The Glenn Corp.), succeeding Hugh Glenn, who retired in 2006. Niculescu—formerly with the Vendome Group (now Richemont) where he worked with the Baume & Mercier luxury watch brand—joined Cyma in 2002, overseeing production and the Middle East market.
Françoise Schürch-Guilgot and Florian Niculescu
In 2006’s second half, Mrs. Schürch-Guilgot, Niculescu, and Cyma’s team developed new strategies for the brand for next three to five years. She told JCK they call for increasing production (now 30,000 annually); more investment in marketing and advertising; developing new customers among the younger generation, and building business in the United States (“our priority now”), its top market.
Glenn Corp. introduced Cyma to the U.S. market in 1984. By the time the Swiss watchmaker bought it in 2003, almost 600 independent U.S. jewelry stores sold its watches, providing about 60 percent of Cyma SA’s revenues.
New pricing. Niculescu spent his first months in America this year traveling with Cyma USA’s sales team “to understand our jewelers’ concerns, the U.S. market, and our competition; the nuanced differences between the U.S. and European cultures, and how the brand is perceived here.”
He was pleasantly surprised at how much Cyma’s U.S. jewelers appreciate it. “They love us, because we support them by selling only to independent jewelers outside big cities, not department stores, discounters or the Internet,” he said “That won’t change.”
However, Niculescu noted “the in-store turnover we had was down, primarily among competitive items.” He analyzed Cyma USA’s history since 1984 and found its “route to success is giving more value for the dollar.” So, Cyma has taken steps to boost turnover.
First, “we’re invested in pricing,” says Niculescu. Cyma reduced prices 30 percent on a fourth of its watches. Markdowns are “permanent, and cover all collections. They’re not temporary or discounts, or on old or excess stock.”
While prices dropped, quality didn’t. “I promised our jewelers when we changed pricing, that we wouldn’t lower quality, and we won’t,” said Niculescu. “We want to build business by giving more value for the price [of a watch].”
To motivate retailers’ support for the aggressive new pricing, Cyma did something no one else has: It compensated its dealers for the markdowns by giving them merchandise equal to the markdowns’ retail value. “We have a compact with our customers to take care of them,” explains Niculescu.
Beefed-up marketing. The new pricing policy officially began in July, but Cyma personnel got a taste of retailers’ reaction at June’s JCK Show in Las Vegas, where it debuted. It was its best show in 20 years, they said, thanks to the aggressive pricing. Since then, noted Niculescu recently, data shows “in-store and overall turnover have increased, and there’s greater enthusiasm, too” among Cyma’s retailers and personnel.
Also boosting turnover is beefed-up marketing, “supporting our retailers with more advertising, incentive programs and [staff] training,” says Niculescu. Though investment in product and product value is “more important,” Niculescu says, Cyma USA’s 2007 marketing budget is “400 percent bigger than 2006” and directed at retailers’ hometown markets, especially local newspapers and magazines, billboards, radio and local TV.
Cyma USA’s success has been primarily in the Midwest, in smaller cities and towns outside urban areas. Plans call for developing other markets, too. “We have three priorities,” says Niculescu. “First, the Southeast, then the Northeast, and then the West Coast. We’ll have representatives all over the United States, but we’ll go step-by-step.”
Inventory is also changing. The brand’s 1,000-plus skus will be reduced to 350 to 450. “We have too many collections,” says Niculescu. “We must clarify them, and develop and invest in those that strengthen the brand’s identity.” One initial result is that Cyma’s stylish, decade-old Imperium line has become its core collection. Also, while 14k gold watches remain a Cyma staple, there will be more 18k, steel and 18k, and steel models. Other lines, models, and marketing strategies will debut in 2008. Altogether, Niculescu aims to “give our jewelers the right tools [to sell the watches]; protect the brand for them; stay as important to them, as they are to us; and work one-on-one with them to develop business, marketing and product.
“After all, what’s important for Cyma,” Niculescu says, “is that our independent jewelers and their customers are happy and proud to carry and to wear a Cyma watch.”