Maurice Lacroix’s Upscale Makeover

Maurice Lacroix S.A., the Swiss luxury watch, is making significant changes in the United States and worldwide to take it higher in the luxury sphere.

In the past year, Maurice Lacroix North America added a new president/chief executive officer and a marketing director. It streamlined products, began sharply reducing its retail outlets, and launched a new ad campaign (part of a global marketing endeavor).

All this is part of what Randi Shinske, president and CEO of Maurice Lacroix North America, calls the brand’s “2012 global vision.” It wants to become well known worldwide and plans to focus on mechanical luxury watches using its own in-house movements. The brand is “rebuilding itself internationally and redefining itself in the U.S. market,” Shinske says.

The new strategy began with the appointment last April of Shinske, who has more than 20 years of experience in fine watches and luxury products, including stints as president and CEO of Ebel USA. (She was then, and is now, one of the few women leading a luxury watch brand.) She also has been president and CEO of a firm giving strategic direction to luxury jewelry companies and has held management posts at SMH/Swatch, Montblanc, and Damiani. Shinske’s appointment was followed by the creation of a new staff including the appointment of jewelry trade show and marketing veteran Fran Pennella as director of marketing and public relations, and the relocation of the brand’s North American headquarters.

Maurice Lacroix makes its watches in Saignelégier, Switzerland, and sells them in 3,300 outlets in 60 countries. Since the 1990s, it has focused increasingly on mechanical watches, especially those with complications. In early 2006, it unveiled its first movement produced in-house, the hand-wound calibre ML 106 for its Masterpiece Le Chronographe, taking it into the exclusive club of Swiss brands that make their own movements. In October 2006, it began making movement components in Montfaucon (near Saignelégier), becoming a vertical operation controlling development and production of its watches.

The brand now has three movements, with additional patents pending. “The direction is to go deeply into mechanical movements in the next five years,” Shinske says. “That’s where investments are going, including production.”

Maurice Lacroix’s output is 60 percent mechanical watches and 40 percent quartz watches. It’s aiming for 90 percent mechanical and 10 percent quartz by 2012, and it wants 80 percent of its movements produced in-house by then. The company turns out 125,000 watches annually, but focusing on mechanicals means production will become “more limited,” Shinske notes.

The brand’s assortment is already changing. “We’ve tightened collections in quartz, while expanding them in the mechanical end,” says Shinske (who trimmed the line in the U.S. market from 400 SKUs to 135). The focus now is on three areas: the mechanical Masterpiece collection (traditional styling for older, more conservative consumers), the beefed-up mechanical Pontos collection (contemporary styling, for younger consumers), and some quartz bread-and-butter pieces.

Shinske aims to establish “an exclusive distribution [for the brand] in the United States and the Caribbean, capture market share in the luxury mechanical timepieces niche, and become the entry brand for those wanting to get into luxury watches with quality movements at reasonable prices.”

To that end, Maurice Lacroix North America is “taking a hard look” at its retailers, notes marketing director Fran Pennella. The brand entered the U.S. market in 1994, through an agent, and then started its own company in California in 1995. Since then, its network of retailers has grown to more than 400. However, its image, target audience, and distribution were “all over the place with too many doors and not always in the right partner or place,” says Shinske. “So, there will be tremendous changes in the distribution,” shrinking to 150 outlets by 2009. “We want to ensure the retailer’s vision, store, and customers match our vision for the brand,” adds Pennella.

Maurice Lacroix’s pricing also is changing, as it moves into higher strata of luxury watches. “The product had been undervalued,” Shinske notes. Its current average retail range is $800 to $4,000, but “we’re moving quickly to $3,000 to $8,000.” The new Masterpiece collection retails for $5,000 to $15,000, Pontos for $2,500 to $6,000, and quartz watches for $1,000 to $3,000.

To promote its watches and new image and raise its U.S. profile, Maurice Lacroix North America has a new ad campaign. It’s part of the brand’s global repositioning, which features a new logo and tagline (“More than meets the eye”). The campaign began during the 2007 holiday season with ads in trade and upscale consumer magazines and includes fresh point-of-sale displays and a redesigned Web site.

One of the biggest changes has been moving the U.S. headquarters from Encino, Calif., to Hackensack, N.J., which has facilities for shipping, receiving, and after-sales service. The six-hour time difference between the East Coast and Switzerland is an advantage compared with nine hours from California. “Now we can do business with Switzerland the same day,” says Shinske. “We’re also more accessible to media and many of our accounts.”

The new headquarters operates as Maurice Lacroix North America, which covers the United States, Caribbean, and Canada. However, its legal name—Desco Luxury Americas—draws on its parent firm, Desco von Schulthess A.G. and anticipates potential future business in Latin America, and possibly additional luxury products. However, Shinske’s goals for now, she says, are “relaunching the brand in the U.S. market and making it No. 1.”