Cyma, one of Switzerland’s last family-owned and -operated watchmakers, is under new management—its next generation. They took over last year at its Le Locle headquarters and at its U.S. operation, and their plans are reinvigorating the 145-year-old company.
Françoise Schürch-Guilgot is president of Cyma S.A., where she has worked for many years, succeeding her father Claude Guilgot, who bought the company in the 1970s. Florian Niculescu is president of Cyma USA (The Glenn Corp.), succeeding Hugh Glenn, who retired in 2006. Niculescu, formerly with the Vendôme Group (now Richemont) where he worked with the Baume & Mercier luxury watch brand, joined Cyma in 2002, overseeing production and the Middle East market.
In 2006’s second half, Schürch-Guilgot, Niculescu, and Cyma’s team developed new strategies for the brand for the next three to five years. Plans, she tells JCK, 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 were selling its watches, providing about 60 percent of Cyma S.A.’s revenues.
Niculescu spent his first months in America traveling with Cyma USA’s sales team “to understand our jewelers’ concerns, the U.S. market, and our competition; nuanced differences between the U.S. and European cultures—and even between regions within the United States—and how the brand is perceived here.”
He was pleasantly surprised, he said later, at how much Cyma’s U.S. jewelers appreciate it. “They love us, because we protect and support them by selling only to independent jewelers outside big cities, not to department stores, discounters, or the Internet,” he says. “That won’t change.”
Niculescu also notes, however, that “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 has been giving more value for the dollar.” This has led Cyma to take steps to boost turnover. “We’re investing in pricing,” says Niculescu. Cyma has reduced prices 30 percent on a quarter of its watches. Markdowns are permanent and cover all collections. “They’re not temporary or discounts, or on old or excess stock,” he adds.
While prices dropped, quality hasn’t. Indeed, it’s gone higher. “I promised our jewelers when we changed pricing that we wouldn’t lower quality, and we won’t,” says Niculescu. “We want to build business by giving more value for the price.”
To motivate retailers’ support for the aggressive new pricing, Cyma has done something no one else has: It’s compensating 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,” Niculescu explains.
The new pricing policy officially began last July, but Cyma personnel got a taste of retailers’ reaction in June at The JCK Show ~ Las Vegas, where it debuted. It was its best show in 20 years, they tell JCK, thanks to the aggressive pricing. Since then, notes Niculescu, statistics show that “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 he considers investment in product and product value more important, Niculescu says Cyma USA’s marketing budget for 2007 was 400 percent bigger than it was in 2006. It was directed toward retailers’ hometown markets, and a large amount was used for advertising in local newspapers and magazines as well as on local radio, TV, and billboards.
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 also is changing. The brand has over 1,000 SKUs now. “That’s very high and will be reduced to 350 to 450,” Niculescu says. “We have too many collections, too. 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 will be its core collection. Other lines, models, and marketing strategies for the Cyma brand will debut in 2008. While 14k gold watches remain a staple, there will be more 18k, steel, and steel and 18k models.
Altogether, Niculescu aims to “give our jewelers the right tools; 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 me and for Cyma,” he says, “is that our independent jewelers and their customers are happy and proud to carry and to wear a Cyma watch.”