Wittnauer Bought by Bulova; Sector Group Sold, Restructured

Two more well-known watch brands—Wittnauer and Sector—have been sold to new owners.

Bulova will relaunch its newly acquired Wittnauer line in early 2002, say Bulova officials. The revamped and redesigned Swiss watches will retail for $300 to $1,000.

Bulova acquired Wittnauer trademarks, related inventory and receivables, and some equipment from the former Wittnauer International (now the name for Bulova’s division) for $11.6 million in September. The management of the former Wittnauer International kept the FUBU trademark.

Bulova also acquired the Internet names Wittnauer.com and WittnauerWatches.com. However, the Wittnauer factory in Puerto Rico (used mainly for repairs and imports) and Wittnauer headquarters in New Rochelle, N.Y., weren’t part of the deal.

New Wittnauer. Wittnauer will continue to be a brand of high-quality, Swiss watches, with the added benefit of Bulova’s strengths in financial management, distribution, and service. It joins Bulova’s three other brands—its core Bulova line, Accutron, and Caravelle.

The new Wittnauer watches will be “a separate entity [within Bulova], with a separate sales force, separate marketing campaign, [and] a whole new look,” says Bulova chief operating officer Paul S. Sayegh.

Wittnauer has thousands of outlets, primarily jewelers and department stores, many of which are also Bulova clients. Bulova wrote its retailers, and Wittnauer’s, about the changes, promising them “a stronger, better product,” says Sayegh.

Some “key players from Wittnauer’s successful history” have joined Bulova, says Bulova president and chief executive officer Herbert C. Hofmann. They are Robert M. Mazzone, a 21-year Wittnauer veteran who was senior vice president of sales until 1997. He is now a Bulova vice president and managing director of Wittnauer International. Bulova senior vice president John L. Davis, a 46-year veteran of Longines-Wittnauer and its president from 1979 through 1991, will be a consultant on Wittnauer.

Other core Wittnauer personnel now with Bulova are Lorraine Logue, managing director of Wittnauer Canada; Jay Lott, sales administration; and Adrienne Forrest, special markets.

Bulova has been a major player in the U.S. watch industry since its founding in New York City in 1875. Wittnauer (later Longines-Wittnauer) was created in 1880. The two companies were early neighbors on New York’s Maiden Lane, once an important center for watchmaking and jewelry, and then on Fifth Avenue. Bulova later moved to Woodside, N.Y., while Longines-Wittnauer eventually went to New Rochelle. Bulova, still U.S.-owned and operated by Lowes Corp., does most of its production in the Far East and in Switzerland.

Topsy-turvy. The sale caps a topsy-turvy decade for Wittnauer (formerly Longines-Wittnauer). Jack Davis, its long-time, successful boss, retired in 1991, turning the reins over to Reynold M. Swift. In 1995, SMH (now The Swatch Group) ended Longines’s 125-year relationship with Wittnauer and took over U.S. distribution of Longines. In late 1996, Swift and three other executives of Wittnauer International, backed by Composite Holding, a St. Louis investment group, bought it from Westinghouse Electric Corp., its owner since 1969. The four execs later sold their shares and left Wittnauer. Charles Watkins, a partner in Composite Holdings, took over as president and chief executive officer.

Earlier this year, in a document sent to creditors, Wittnauer International’s former operators announced that it couldn’t “continue in business with its … trade indebtedness,” about $23.8 million, unless it sold some or all assets. Also early this year, Wittnauer considered moving its headquarters to Lauderhill, Fla., to be close to South American markets and its Puerto Rico plant. The move—which would have required Wittnauer to sign a 10-year lease and create 200 local jobs—apparently fell through this spring.

Re-energizing Sector. Sector Group SA, known here for its Swiss-made, Italian-designed sports watch, was acquired this summer for $96 million by The Opera Group, a Milan, Italy, investment firm whose major shareholder is Bvlgari, the luxury Italian jeweler and watchmaker. The Sector Group, based in Neuchatel, Switzerland, is one of Italy’s leading sports watch suppliers.

The Opera Group is restructuring Sector Group SA as a holding company called “Quadrante,” which will oversee Sector’s own brands and those it has under license. Opera’s plans call for “international revival [of Sector] through growth of existing brands, new license agreements with prestigious brands, and new acquisitions,” says one of its reports.

Opera owns 77% of Quadrante. The rest belongs to Tetragon Partners, a Luxembourg investment firm (15%); the Giardiello family, founders of Sector (5%); and Enrico Ceccato, Quadrante’s new managing director (3%). The board of directors includes Francesco Trapani, chairman of Bvlgari, and Silvio Ursini, marketing director of Bvlgari.

The Sector Group exports 88% of its watches to 50 countries, including the United States. In addition to Sector Sport watches, the group also sells the Phillip Watch, Chronostar, Robert Cavalli watches, Invicta, Mode, and Lucien Rochet brands.

Repositioning. In the United States, Sector Sport watches are distributed by Rabco Luxury Holdings, New York City. The change in ownership won’t affect Sector’s U.S. distribution, says Norm Kushner, Rabco vice president of sales and marketing, but does give the parent firm “additional resources for growth and marketing.”

Rabco took over distribution last year, and is revitalizing the U.S. business. “We feel Sector [retailing for $175-$1,000] is one of the most undervalued brands” in the market, says Kushner. “It’s a true sports watch with beautiful Italian design and Swiss craftsmanship, an incredible value for consumers and jewelers.”

Rabco spent much of this year rebuilding Sector’s distribution. “We’ve repositioned the brand, introduced new collections, and are marketing it through traditional channels consistent with its image,” says Kushner. Those channels include independent jewelers, chain stores like Tourneau’s Watch Gear stores, and fine department stores. Rabco now has 150 Sector outlets and aims for 400.

It is spending $1 million this year to promote Sector, with ads (and the training of retail salespeople) focusing on the brand as a true sports watch.