Corum, Sold Again, Expands Its Market
Corum, a luxury watch brand, is going downmarket thanks to its new owner, veteran American watchmaker Severin Wunderman. A new mid-priced collection called “Corum Boutique,” unveiled at Basel 2000 in late March, carries suggested retail prices ranging from $625 to about $1,660. Corum’s traditional price range is $1,875 to $12,500. The new watches will be sold at fine jewelry stores.
The product additions follow on the heels of Wunderman’s acquisition earlier this year of Corum Ries Bannwart & Co. S.A., which took place shortly after Corum’s buyback of the North American distribution of its watches from the Movado Group. Under the new agreement, Wunderman acquires 90% of Corum, with the other 10% held by Jean-René Bannwart, Corum’s managing director. Wunderman, best known for creating and producing Gucci timepieces for 25 years (until Gucci ended the contract), reportedly spent several months in negotiations before finally acquiring the Corum shares personally, rather than through his company, Severin Montres Ltd.
Wunderman said he would be personally involved in Corum and try to “recover the international renown that [Corum] merits, while maintaining its rich traditions and know-how.” He said there would be no changes in personnel. Indeed, staffing could increase if his plans to “considerably reinforce” the watches’ distribution network, with heavy emphasis on the U.S., Asian, and Swiss markets, prove successful.
Corum Ries Bannwart & Co., headquartered in La Chaux-de-Fonds, produced 9,000 watches in 1999 and did about $18.7 million in business. Wunderman wants to boost that figure to $125 million in five years, with the “Corum Boutique” collection providing the initial lift.
Faking on the Internet
The Internet adds convenience and selection to online watch retailing, but it’s also helping counterfeiters. According to Cyveillance, a provider of e-commerce data, 4% to 8% of the Rolexes, Guccis, and Montblancs sold last Christmas by more than 7,000 online retailers (or “e-tailers”) were fakes. Because most sites selling luxury watches are unauthorized to do so and acquire them through “gray market” sources, there are few controls over watch authenticity. Online retailers themselves often are fooled, and consumers may not realize they’ve bought a bogus product until they have it serviced.
“If online sales represent 5% of the $150 billion market for luxury goods, losing even 2% of that total means hundreds of millions in lost revenue for these luxury brand companies,” says Brandy Thomas, CEO and chairman of Cyveillance. “Not only that, widespread sales of imitation luxury products ultimately devalues those brands and leads to commoditization.”
The problem will probably worsen, experts warn. Officials of the Swiss Watch Federation say that without some controls the Internet will become the “leading channel of distribution of counterfeit watches in the future.” And Cyveillance’s report notes that the number of sites selling fake luxury goods is “roughly keeping pace with the growth of online commerce.”