he advent of smartwatches, changes in distribution, the many emerging Kickstarter players, and most recently Covid-19: bad news and new competition have been mounting for the traditional giants of the fashion watch segment, such as American groups Fossil, Movado and Timex.
They have reacted differently: Fossil has been pivoting ever more towards smartwatches (it sold a whole R&D division to Google) and Movado has acquired emerging fashion brands such as Olivia Burton and MVMT.
From smartwatches to Kickstarter brands, competition has been mounting for the traditional giants of the fashion watch segment.
What about the Timex Group? The American company is organised around several divisions, between non-Swiss made production, mainly its own Timex brand, and a licensed Swiss-made hub in Ticino. Paolo Marai is in charge of the latter. We interviewed him as a new watch brand joins the Timex portfolio, following Versace and Ferragamo among others: Missoni watches.
- Paolo Marai, President & CEO Timex Group Luxury Division
Europa Star: You’ve recently announced – in the middle of the pandemic! – that you will be partnering with Italian fashion brand Missoni to produce watches for them. How did this happen and what is the partnership about?
Paolo Marai: We’re excited to introduce a new brand, even in the current circumstances. Missoni is an independent fashion house well known for its colourful knitwear designs, as well as its unmistakable zigzag motif. When a brand has such a strong identity, it makes it easier for us to translate this spirit into timepieces. Moreover, the Italian fashion scene is a small world – we knew key people at Missoni, as we already take care of the horological side of several fashion houses. Hence, with them, we are not in terra incognita, which makes the partnership and our discussions all the more fluid. We are based in Lugano and we have our own design centre in Milan. You need to be culturally and geographically close to translate their spirit into watches. The right conditions for this partnership were all in place.
“When a brand has a strong design identity, it makes it easier for us to translate their spirit into timepieces.”
What is your plan for the launch of Missoni timepieces?
We actually already presented prototypes of the new models last February, during a private event in Dubai. Retailers have already taken orders. Delivery of the timepieces to the markets is planned for August.
How do you inject the spirit of the brand into a watch design?
There is a mix of colourful designs and zigzag motives that are typical of Missoni, but we are also introducing more formal black and white timepieces. One differentiating element about the brand is that it was founded by an athlete: Ottavio Missoni was a professional hurdler who represented Italy at the 1948 Summer Olympics. We have also injected this heritage into the collection. The brand is at the crossroads of fashion and sport, which is a perfect match in the world of watches. Prices will start at 400 euros for Swiss made quartz timepieces.
“One differentiating element about the brand is that it was founded by an athlete: Ottavio Missoni was a professional hurdler who represented Italy at the 1948 Summer Olympics.”
What makes you so confident about going ahead with a new watch brand launch in the middle of a historical crisis?
Maybe retailers are not in the right mood right now for new brands, but times of crisis also bring new opportunities, so we are betting that many of them will be willing to overhaul their portfolios and showcase something different. And through our licensing activity, we have nurtured contacts with retailers for a long time now. We can rely on this existing network. The plan is to use a multi-channel approach: as with the other partners we represent, the core business is not to sell through their brand boutiques, but through multi-brand specialised watch stores, as well as pop-up stores, e-commerce and duty free. It is an Italian fashion brand and we can draw on our experience with other houses such as Versace or Ferragamo.
Why not put the focus on the brand boutiques?
It’s not the same clientele. Through the multi-brand watch stores, we aim to attract watch aficionados. Moreover, the challenge with brand boutiques is to continuously train the staff, as there is a higher rotation in this environment. Timepieces are generally not the priority there, either for staff or for clients, compared to the core offer of the brands.
“The challenge with brand boutiques is to continuously train the staff, as there is a higher rotation in this environment.”
How has your existing portfolio of brands coped with the pandemic?
On the production side, we only had to shut down our facilities in Switzerland for one week. Hence we managed to fulfil the pre-existing demand. On the sales side, we had a pleasant surprise from e-commerce: this channel had already experienced growth in 2019 and continued to grow even after the pandemic struck the world. Otherwise, the situation really varies from country to country. The pandemic affects the markets in so many different ways. For instance, Turkey temporarily cut its astronomical import tax due to the coronavirus, so we recorded surprising growth in sales there. Meanwhile, in the Gulf States, the shopping culture is to buy in malls and not online, so the impact has been greater. The effects of the virus will not disappear until a viable treatment is found. Meanwhile, we have to live with this new reality.
“The pandemic affects the markets in so many different ways. For instance, Turkey temporarily cut its astronomical import tax, so we recorded a surprising growth in sales.”
Do you think that the perception of luxury is changing, due to this unprecedented episode in human history?
Again, the answer highly differentiated: I think each category of products will be affected in a different way. In terms of price points, I envision an even deeper polarisation between entry-level on one side, which caters to people who are losing purchasing power, and high-end on the other side. The mid-range segment may suffer proportionally more, as the middle class is hit by the crisis. Our company recorded 30% growth these last two years, so we have proven our value; however, the fashion watch segment is suffering. We need a sound general market to thrive, including healthy competition.
“I envision an even deeper polarisation between entry-level and high-end. The mid-range segment may suffer proportionally more, as the middle class is hit by the crisis.”