Some well-known watch brands are making big changes in the business they do with U.S. jewelers.
Swatch Watch, one of the world’s most popular brands, has pulled out of jewelry stores. Meanwhile, other brands—including popular fashion names—now want jewelers as primary retailers of their Swiss-made watches. They’re making product and operational changes, even adding jewelry, to boost business with jewelers who, several say, “really know” how to sell watches. Such news is important to independent jewelers, 86% of whom sell watches. Most, according to JCK‘s monthly poll of U.S. jewelers, do 10% or more of their annual business in timepieces retailing for $100 to $500.
Here’s an overview of what several brands are doing:
Boss Hugo Boss, a well-known fashion name whose watches are distributed by Helvetia Time, this year is “definitely concentrating on jewelers,” says Michelle Venya, president of Boss Hugo Boss USA.
BHB watches, launched in 2000, have been sold only in Boss boutiques and better men’s shops. But with this spring’s debut of Swing, BHB’s first women’s watch line, “We have a complete collection in men’s and ladies’ timepieces to offer jewelers, providing them a broad base of customers,” says Venya.
BHB watches retail for $295 to $1,995 (for diamond watches). Distribution is exclusive, Venya says, with “only one high-end department store, one BHB store, and one jeweler within a metropolitan area” selling BHB watches. She anticipates a network of some 50 jewelers at most and says she has already approached several of the better jewelry stores.
There are “real growth opportunities” for BHB watches in U.S. jewelry stores, says Venya, who expects them to account for a third of the brand’s business within a few years.
Fendi watches, made and distributed worldwide by Taramax U.S.A. for the Italian fashion house, has shifted its business strategy to focus on jewelers.
In the past year, Taramax left 600 department stores because “[they] really didn’t know how to sell Swiss timepieces and have a lot of discounting and staff turnover,” says sales and marketing coordinator Debbie Daniels. “Retail jewelers provide the attention the brand needs. They understand the quality of our Swiss-made timepieces and sell them on their merits, not just the name.”
“Our intent,” says Ralph A. Othouse, Fendi’s new international marketing director, “is to make our watches’ distribution channel consistent with their quality. Jewelers are very knowledgeable about their customers and our product, have informed sales staffs, and superior selling ability.”
Fendi is now in almost 300 jewelry stores, and “will add 100 to 150 doors annually—primarily independents, but also a few [regional] chains,” says Othouse.
The goal is to do 85% of Fendi’s watch business with jewelers. To accomplish this, Taramax is pushing the brand upmarket, beefing up pricing (now starting at $250), using more full-cut diamonds on watches, and adding a diamond line (Diamond Classico, $495-$1,399) with certificates citing the number, clarity, and carat weight of diamonds on each watch. Also new is Fendi’s “perpetual warranty,” under which a watch serviced annually while under warranty has its warranty extended another year. In addition to national advertising, Taramax is using a “key market” strategy—identifying those with “the most distribution and strength, and reinforcing our presence with high-impact marketing,” says Othouse. The company also is supporting independents with a comprehensive training, marketing, merchandising, and ad program.
Other changes, too, have affected the brand. Taramax has made key appointments in a corporate realignment for future growth. Those include Othouse as international marketing director, a new post; Richard Fetzer as general operations manager of Taramax’s U.S. headquarters in Spring Lake, N.J.; and Michael Feely as vice president of U.S. sales. It also has revamped its watch image materials to mirror those of the Fendi fashion house, making new in-store displays and presentations and switching the color of packaging, corporate materials, and business cards to Fendi’s signature yellow.
Guess collection, distributed by Callanen International, the licensed watch division of Timex, is adding U.S. jewelers to its global network.
Gc, as it’s also known, is the sophisticated counterpart to popular Guess fashion watches and is sold in 60 countries by 3,500 jewelry stores. “Abroad, Guess collection accounts for 25% [of our total business],” says Callanen president and chief executive Cindy Livingston.
In the United States, Gc is sold in some 300 department and Guess clothing stores. Now, Callanen aims to duplicate Gc’s foreign success in U.S. jewelry stores. “We want to develop a universe of 500 to 800 jewelers, starting with 250 within the year,” says Livingston. “We’ll keep it limited, preferring the right partners rather than over-distribution.”
The stainless-steel watches retail for $150 to $2,000 (for diamond watches), with a pavé timepiece priced at $4,000. “We expect most sales between $150 to $300—where there’s a void for Swiss watches, especially $200 to $250—and want the niche Gucci and Fendi had before they moved up [in price],” says Livingston. About 65% of Gc watches are Swiss-made; 100% will be within the year, she adds.
Gc’s entry vehicle into U.S. jewelry stores is Swiss-made Les Mémoires de la Vie. Each of these polished women’s watches has a dial cover that can be engraved inside by the jeweler at the wearer’s request. Five interchangeable covers are available, each with its own design or gemstones, and new covers will be issued annually.
Complementing the watches is a same-named jewelry collection in sterling silver and vermeil, also engraveable. Both will be available in September.
Callanen provides in-case and window displays and collateral materials for jewelers and, to build brand awareness, is advertising in national magazines, newspapers, and regional publications.
Swatch Watch, the leading brand of the Swatch Group, the world’s largest watchmaker, this year ceased doing business with all but a very few U.S. jewelers. This change in strategy affects “a few hundred [jewelry] stores,” who didn’t adequately support the brand, says Michele Sofisti, president of Swatch International. Since January, he’s personally overseen the U.S. business, because “this is a key market, needing maximum attention.
“To show consumers the world of Swatch and what it stands for—fashionable, high-quality Swiss timepieces at low prices [about $35-$125]—retailers must present it in the best way, including window and store space, and attention at point-of-sale,” he says.
“But, if all they do is put two or three Swatches in a window corner, we say [to jewelers], ‘If you don’t support the brand, if you show less than 10% [of it], this isn’t the business for you.'”
Swatch is concentrating on its chain of 35 U.S. boutiques, where sales are up 20%, and will expand the chain “depending on locations and opportunities,” Sofisti says. It’s also focusing on some other retailers, such as watch stores, and on its successful Web site. Swatch, which invests heavily in high-profile U.S. marketing, also plans kiosks for high-traffic areas such as airports and colleges.
Sofisti hasn’t written off U.S. jewelers, but “they must be willing to work with Swatch, invest [in the brand], and provide support and attention,” he says. Currently, 20 jewelers sell Swatch watches, and more may be added. “We’ve received many requests,” Sofisti says. “Some who lost Swatch now want to treat it better. Others see what [Swatch] provides in marketing, advertising, and support and want to be new partners.”
Sofisti expects U.S. sales to keep growing. “This market is one of Swatch’s top five [after Italy, Switzerland, Germany, and France],” he says. “I expect it soon will be in the top three.”
Swiss Army Brands, which in 2001 revamped its U.S. watch operations and relaunched its Swiss-made lines, is seeking independent jewelers as major players in its business. “Our strategy is to create a strong and diversified distribution network, with independent jewelers providing 50% of sales,” says Sue Rechner, senior vice president of retail sales. SA is approaching that benchmark, with 46% of its watch business this year from jewelers.
Jewelers are “a big part of our future,” adds Cheri H. McKenzie, senior vice president of global marketing. “We’re developing product specifically for them in terms of styling, pricing, and technical features.”
Rechner says those products are “more feature-rich and higher priced,” because jewelers have the knowledge and ability to sell them. “We’ll continue to evolve our product in this direction,” she adds. The core of SA sales falls into the $125-$500 range. New lines this year include the stainless-steel Alliance—with what McKenzie calls “luxury sport styling”—and the “retro-classic” Infantry, for younger men.
SA is upgrading marketing support and point-of-sale materials for jewelers, adding new packaging and a sales incentive program, and is already participating in advertising projects with many jewelers. The Swiss brand, whose U.S. base is in Shelton, Conn., also has a new ad campaign, tagged “Life Ahead of You, A Legacy Behind You,” designed to “stress what’s important [in a watch buyer’s life] and our roots as a watch company,” says McKenzie.
The company also has restructured its sales department, staffing it with watch-industry veterans and focusing on direct sales and service to jewelers. “We’ve made significant inroads in rebuilding our business with existing independent jewelers,” says Rechner. She says the company had added more than 50 new jewelers, many of whom sell upscale brands such as Rolex, Cartier, Piaget, or Patek Philippe.
Zodiac, the Swiss brand recently bought by Fossil Inc. and relaunching here in September, expects to “do 80% of business in jewelry stores, both independent and chains,” says Enrico Margaritelli, president of Fossil’s Swiss watch division. “The other 20% will be jewelry departments in better department stores.”
Larry Lich, a watch industry veteran known to jewelers who sell fine watches, is Zodiac USA’s new senior vice president of sales and marketing. Lich, who was with Raymond Weil until early this year, aims to rebuild Zodiac’s U.S. network. Universal Watch Company of Atlanta will handle after-sales servicing, and a new showroom for Zodiac watches will open in New York City later this year.
The new Zodiac timepieces are “positioned between Raymond Weil and Baume&Mercier,” says Isabelle Maujean, Zodiac vice president and brand manager worldwide. “They retail for $395 to $1,800, with a few diamond pieces at $3,000.”
Made in Biel, Switzerland, by Fossil’s Antima Group, the watches have “fresh, contemporary styling” and are for “dynamic individuals, not brand-conscious [ones],” says Diarmuid Bland, Fossil senior vice president. The revamped brand’s signature design element is the square, which is incorporated in its flagship Bellevue collection and used in its marketing and promotional materials and packaging.
“We aren’t reinventing Zodiac, but returning to its generalist roots,” notes Bland, “not identifying with one category, as it did before with sports watches, but again offering classic, fashion, and sport.” There are two “old” Zodiac holdovers—a new version of the Seawolf diver’s watch and the cross-in-a-circle logo.
Also in the works are consumer and trade magazine ad campaigns; new packaging, marketing materials, and in-store displays; and—further down the road—a jewelry line to complement the watches.
Zodiac, founded in 1888, was revived in 1990 by former TAG Heuer principal Willy Gad Monnier. When his company went bankrupt, Monnier sold Zodiac in 1998 to Genender International of Wheeling, Ill., which sold it in October 2001to Fossil. The Richardson, Texas-based company is best known for Fossil and Relic watches, which are sold in department and specialty retail stores in 80 nations.