Watch Watch


Boutiques, Diversification, Sales Penetration

The Movado Group is going into the market to raise about $28 million. It plans, among other things, to use the cash to launch a line of retail boutiques and expand its product lines into women’s and men’s jewelry, pens, desk accessories and a variety of tabletop items. The first boutique should open in the New York metropolitan area next spring.

Movado also expects to launch its previously-announced original line of Coach watches in the spring. The company inked an exclusive 10-year agreement with Coach in December 1996 to develop and distribute Coach watches worldwide.

The prospectus for the new offering reveals a confident company with rising sales, improving gross margins and an aggressive four-point strategy for business development. The strategy:

– Increase sales in the U.S., Canada and the Caribbean, markets in which the company is strongest.

– Increase international sales for the Movado and Concord brands in select markets, primarily Japan, Hong Kong, Taiwan, the Middle East and Switzerland.

– Introduce and develop the Coach watch brand.

– Expand the Movado line into related product categories through the opening of Movado retail boutiques.

Advertising, a critical element in these undertakings, probably will total around $38 million in the fiscal year that begins Feb. 1, based on recent practice.

Sales have grown strongly – up 15% in each of the last two fiscal years. The chart below explains how the company breaks out sales by product class.

And they’re still growing. Net sales were $91.9 million in the six months ended July 31, up 12.4% from the first half of fiscal 1997.

Domestic sales rose 10% for the period, reflecting higher volume for the Concord and Movado lines. International sales were up 22.5%, with higher volume for both lines in the Middle East and for Concord in the Far East and Movado in the Caribbean.

Net income of $11.7 million in fiscal 1997 was up more than 20% from the year before, though down from fiscal 1995’s $13.9 million. Profit growth continued into the first half of fiscal 1998, with net hitting $2.1 million compared with $1.2 million the year before.

Gross margins also rose, from 52.8% in fiscal 1995 to 55.1% in 1996 and on to 55.8% in 1997. Higher advertising, marketing and sales costs led to an increase in overall operating expenses, which totaled 46.3% of net sales in fiscal ’97.

Levels of distribution. The company sells its Movado and Concord watches throughout the world and its ESQ line in the U.S., Canada and the Caribbean. It also is exclusive distributor for Piaget and Corum watches in the U.S., Canada, Central America and the Caribbean.

U.S. sales are made through its North American Watch Co. division, primarily through department stores, such as Macy’s, Nieman-Marcus and Saks Fifth Avenue; jewelry store chains, such as Zales, Helzberg and Sterling; and independent jewelers. Piaget and Corum watches are sold primarily through independent jewelers.

In addition, the company sells an unspecified part of its output through its own 18 retail stores scattered around the country. It says that 16 of these units are outlet stores which sell discontinued and sample merchandise and factory seconds of all five brands, “providing the company with an organized and efficient method of reducing its inventory without competing directly with trade customers.”

Movado also operates two high-end boutiques on Fifth Avenue in New York City. These offer high consumer visibility and allow the company to display a very broad inventory selection. One is a Movado store selling the complete Movado line and the other a Piaget boutique which sells both Piaget watches and jewelry.

Industry overview. The Movado prospectus provides a fresh look at competitive forces in the global watch market, which it estimates at more than $13 billion wholesale in 1996. It quotes Swiss industry figures on finished watch exports to show that about 68% of the total by value came from Switzerland, 17% from Japan and 5% from Hong Kong.

Movado divides the watch market into five principal categories: exclusive, luxury, premium branded, moderate branded and mass market.

The exclusive category (suggested retail of $10,000 and up) includes models in precious metals, including 18k gold and platinum, set with precious stones. Movado’s entries here are the Piaget and Corum brands and certain Movado and Concord models. It includes among its competitors in this class such brands as Audemars Piguet, Patek Philippe and Vacheron Constantin.

The luxury category ($1,000 to $9,999 suggested retail) includes watches typically made in 14k or 18k gold, stainless steel or a combination of gold and stainless steel. Some are set with gems. Movado includes the majority of its Concord, Vizio and certain Movado models in this category, which it says it includes such brands as Baume & Mercier, Breitling, Cartier, Ebel, Omega, Rolex and Tag Heuer.

The premium branded category ($500 to $999 suggested retail) includes the majority of Movado watches and certain Concord models along with such other brands as Gucci, Rado and Raymond Weil. Typically, says Movado, premium brands feature gold finish, stainless steel or a combination of the two.

The moderate branded category ($100 to $499 suggested retail) includes the company’s ESQ brand, plus such other brands as Anne Klein, Bulova, Gucci, Guess, Seiko and Wittnauer. These watches usually are made with gold finish, stainless steel, brass or a combination of gold finish and stainless steel.

Movado says it does not compete in the mass market category (less than $100 suggested retail). It lists Casio, Citizen, Fossil, Pulsar, Seiko, Swatch and Timex among the brands that do.


A new Porsche Design boutique opened Dec. 1 at 343 Powell St. in San Francisco’s Union Square district. It will offer the company’s entire collection of luxury items including leather goods, apparel, sunglasses, consumer electronics, cookware, fine writing instruments and Porsche Design and Eterna timepieces.

Announcement of the opening was made by American Pd Co., designer of Porsche Design, Eterna SA and other products. Porsche Design has boutiques in Beverly Hills and Costa Mesa, Las Vegas, Bal Harbour and Aspen.

Aspen is making jewelry news in December. UTime Co. announced that it will unveil a unique 10th anniversary Bertolucci clock and 14 specially-made lift clocks in Aspen this month. The celebration marks the beginning of a long-term agreement under which Bertolucci is named “Official watch of the Aspen Skiing Co.” Hyde Park Jewelers is the exclusive Bertolucci distributor in Aspen.

The clock tower is at the base of Aspen Mountain in the ski resort’s Gondola Plaza.


Seiko Corp. has reached an agreement with the Salt Lake Olympic Organizing Committee (SLOC) and the U.S. Olympic Committee (USOC) for a sponsorship and licensing partnership. It covers the next five years, leading up to and including the Olympic Winter Games of 2002.

The agreement gives Seiko four years to create customized timing and scoreboard systems. These are expected to be almost entirely new and to incorporate a number of technical innovations.

Seiko also will have the exclusive right to market watches and clocks with SLOC and USOC marks in the U.S. throughout the period. It plans to launch such products under Seiko brand names next year.

Merging Style & Function

Supermodel Roshumba was awarded a Citizen Promaster Yachting watch at the 1997 United Cerebral Palsy Regatta held in conjunction with the Cigna Knickerbocker Cup. The watch features a race timer with warning signal; autostart 1/100 second chrono; color graphic time display; two alarms; calendar; rotating compass bezel; screwback case and 100 meter water resistance.

Luxury on the Wrist $1,000+ Watches are Addictive

Are you in the market for $1,000-plus add-on sales? If you are, think luxury watches!

Baume & Mercier and Conde Nast Publications recently surveyed consumers who own a luxury watch, identified as one costing $1,000 or more. The study found that almost one man in ten and one woman in five in this group own five or more; almost six in ten owners have at least two.

The study was conducted among 6,000 affluent subscribers to Conde Nast magazines and came up with a number of other enticing marketing facts. Among them:

– A third of those who buy a luxury watch do so within a week of deciding to make the purchase. Nearly two thirds do so within a month.

– More men than women now own such a watch.

– Design is by far the most important issue for women making such a purchase.

– When men and women agree on buying reasons, they rank quality first, followed fairly closely by craftsmanship. Status comes a distance behind (quality outscores status by a two-to-one ratio) and then “heirloom value.”

And how important is a luxury watch? Very, to those who already own one. Not as important as entertaining or foreign travel, but just about as important as buying a new car or a piece of jewelry. These affluent buyers consider it much more important than a second home.

Not just those who own luxury watches seem happy and anxious to buy more of them. Three in four of the well-to-do who don’t now own one say they want to, according to the survey. And, luxury or not, those who own them wear them regularly. Almost seven in ten say they do so every day.

The average age of those responding to the survey was 47. Their average household income was $160,735.

ALG Group to Market New Brands

The ALG Group LLC, a new watch company formed by former Wittnauer executives to market new watch brands in North America, has signed up three new lines from Spain’s Barcelona-based Festina S.A. The company will begin an intensive marketing program in January and the new brands will be featured at the JCK Orlando Show.

The initial collections include Jaguar, a line of Swiss dress and sport/dress watches priced between $350 and $450; Calypso, a colorful brand of sport watches priced under $100; and Festina, a comprehensive collection of high-styled watches “for all tastes” with an average retail price of $250.

Festina watches are closely connected with sports sponsorships. The brand is the official timer for the world-famous Tour de France bicycle marathon.

Principals in the ALG Group are Reynald (Renny) M. Swift, former president of Wittnauer International, and Ron Girardi, formerly a senior executive with the company. ALG is a marketing, sales, distribution and consulting organization serving the watch and jewelry markets worldwide.

Exercise Your Automatic

The problem: an automatic wristwatch that isn’t worn won’t stay fully wound. A secondary problem: if it’s worn only occasionally – not uncommon if the owner has a large watch wardrobe – there also may be lubrication “dryout.”

The solution: invest in an Orbita Watchwinder, says the Orbita Corp. of Wilmington, N.C. This device keeps “self winding” automatic wristwatches fully wound when they’re not being worn. A watch rotates or “orbits” on a tapered and cushioned powered mandrel tilted at a 30º angle; this mimics normal wrist action.

The models now being offered plug into a wall electrical socket, but a battery-operated unit will be introduced in the spring, for those who want to keep a watch in a safe. The units come in hardwood and grained leather cases.

A single head unit retails for $495 and a triple head (for the owner of many automatics) for $995. Charles Agnoff, who heads the company, says the watchwinder will be sold to jewelers at keystone. A first run of 500, which he advertised in the Robb Report in August, sold out in three days, he says.

Agnoff, who retired in 1995, developed the product when he discovered that his retirement gift from his wife, a Rolex Oyster Perpetual, ran down when not worn. For more information, contact Orbita Corp., 2625 NorthChase Parkway, Wilmington, NC, 1-800-800-4436.

The Orbita Watchwinder


The American Watch Association is urging the Federal Trade Commission to keep the industry’s watch guides, arguing that they’re needed to maintain proper standards for marking and labeling watch products. In addition, it filed the following recommendations with the FTC on Oct. 1.

Thickness of gold plate. One micron of gold plate is too low a standard; the ISO standard thickness of 5 microns should be adopted.

Gold plate. “Gold plate” should embrace whatever technology applies a durable layer of gold to a watch.

Country of origin. The FTC Guides should not address a watch’s country of origin; country of origin standards are best left to the Customs Service.

Metallic content. AWA opposes eliminating marking the metallic content of a watch. “Base metal” should continue to be marked; more specific terms such as “stainless steel” should be used where applicable.

ISO standards. Because watches are sold in many international markets, U.S. standards should conform to ISO standards wherever possible, including ISO standards for antimagnetic, shock resistance and water resistance.

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