Swatch Watch pulls out of U.S. jewelry stores

Swatch Watch, the best-known brand of The Swatch Group, the world’s largest watchmaker, is ending its distribution to all but a few U.S. jewelers. The pullout began in January and should be finished by June.

This “strong change” in marketing strategy affects “a few hundred [jewelry] stores,” most of whom haven’t given the brand the support or attention it needs, says Michele Sofisti, president of Swatch Watch worldwide, in a JCK interview. Swatch did something similar in recent years when it pulled out of department stores.

The popular watch brand will concentrate on building U.S. sales in its Swatch stores, through its Web site, in kiosks planned for “high-traffic areas,” and with a few retailers- including watch stores and a few jewelers-who are “willing to work with us” to promote the brand, says Sofisti.

The change follows Sofisti’s decision late last year to “personally take over the responsibility” for Swatch’s U.S. business. The Swatch Watch’s U.S. branch hasn’t had a domestic chief since January.

“This is an important market for us, a key market, and needs maximum attention,” Sofisti says. “To fully present to consumers the world of Swatch and what it stands for-fashionable, high-quality Swiss-made timepieces at low prices [about $35-$125]-it must be presented in the best way by the retailer, including window and store space, and attention at point-of-sale.

“However, we found some partners haven’t treated us in correct way. The three collections-Plastic, Skin and Irony-must be represented. If all consumers see is just two or three Swatch watches down in a window corner, they won’t understand what Swatch stands for.

“So, we’ve said [to jewelers], `If you’re not interested in supporting the brand and providing the attention it needs, if you only show less than 10% of the collections, then this isn’t the business for you.”

For now, the brand is focusing its efforts on its chain of 35 U.S. Swatch boutiques, whose sales are up 20% over 2001, and which the company will expand “depending on location and opportunities,” Sofisti says. Also planned is a series of Swatch kiosks for what he calls “high-traffic areas,” such as airports or college campuses.

The brand continues to cultivate its e-commerce business, which is doing very well, especially in the Midwest and East Coast area. In fact, says Sofisti, the U.S. Web site is “one of our best stores.”

Sofisti hasn’t written off jewelers as Swatch retailers-far from it. “We want them, but only as good partners,” he tells JCK. “They must be willing to work with Swatch, to invest [in the brand], and provide the support and attention it needs.”

Currently, about 20 fine jewelers around the country who meet those criteria sell Swatches, and more partners may be added over time.

“We’ve received so many requests [to be partners]” since Swatch began pulling out of jewelry stores earlier this year, says Sofisti. “Some who lost Swatch now realize how important it is for sales, and they want to treat it better, while others who see what [the brand] provides in marketing, advertising, and support want to become new partners.”

Meanwhile, Swatch continues to invest heavily in high-profile marketing in the United States. Recent examples include its “Wristory” auction of unique Swatches of the past 20 years; use of basketball star Shaquille O’Neill as a spokesman; promotion of its new James Bond watch collection, with some of Swatch’s current best-sellers; a benefit for the Statue of Liberty; fundraising efforts for victims of Sept. 11; and opening a new Swatch boutique in Hollywood.

Sofisti is confident that Swatch’s U.S. sales will continue to grow, thanks in part to the work of “our fantastic U.S. team,” including Venazio Ciampa, in charge of international Swatch marketing, and Hanna Moore, who oversees Swatch’s retail stores.

“The U.S. market is already one of Swatch’s top five markets [after Italy, Switzerland, Germany, and France],” Sofisti says. “But it has huge potential and I expect the U.S. market to become one of the top three” within a few years.

Swatch Group U.S., based in Weehawken, N.J., is the American branch of The Swatch Group, headquartered in Switzerland, which makes and distributes worldwide 18 major watch brands.