Though the economy of the US is still a little bit shaky and unsettled, watch companies across the board are reporting healthy sales and very good growth.
“The great thing about watches is that people see them as a strong investment, so even while they are not buying as much apparel, watch sales stay strong,” says Mary Leach, Senior Vice President of Marketing, Movado Group. “For the Movado Group as a whole, we have almost every price segment covered, so our corporate portfolio is very strong. From Ebel to Tommy Hilfiger, we've experienced growth in each of our segments.”
All of the companies Europa Star contacted reported strong sales and good growth.
“Business is good for Fossil,” says Shannon Washburn, Vice President, International Brand Manager, Fossil. “Our products are strong and we are seeing success in some of the new products. We are building momentum with new directions and new products.”
2004 was a good year and so far 2005 is looking even better. “We were satisfied with the way 2004 turned out,” says Francie Abraham, Executive Vice President of Marketing and Chief Marketing Officer, Bulova. “We are optimistic about the future. The economy is still unpredictable, but a lot of the things we have put into place over the last couple of years (advertising campaigns, redefined and clarified brand positioning, product development, unified internal functions, etc.) are starting to kick in now and we are seeing the results of being more consistent with our strategy.”




WATCH BAR COLLECTION BY FOSSIL


US Market Trends
There are several recognizable trends in the US watch market. Consumers are definitely watch wardrobing, i.e. buying more than one watch during the year. People are buying what they like, not necessarily what they need.
Big watches are still popular, for both men and women. In keeping with the watch wardrobing theme, consumers will buy a watch for formal events and have a chunky, big watch for the weekend or for sporting events, or just to have a ‘statement’ watch.
Colours are still very important, especially in women's watches. “A big part of our business is coming from colour, so we are continuing down that path,” says Scott Smith, Business Unit Manager for Watch, Oakley, Inc. “We are going back to our watch families and looking at our colours and doing new ones in those families. That's one of our definite strengths.”
Diamonds are still hot, and many companies are having success by adding diamonds to their existing lines, while at the same time introducing new models that are only diamond watches. “Diamonds are just over 50% of our business,” details Michele Barouh, Creative Director, Michele Watches.”Our top five models all have diamonds on them. We have not seen any wane in the diamond business. Once a woman wears a diamond watch, she doesn't want to go back. Most of the models from Michele are available with diamonds and without, but we do special variations with pavé and diamonds on the dial."
Because of American customers' willingness to buy on impulse and buy more than one or two watches, it's increasingly important for watch companies to have interesting designs. Most people already have their classical, traditional watch, so they are looking for something fun.
Mechanical watches are also continuing to gain in popularity. So much so that Chase-Durer, which has a reputation for quality, solid pilot's watches in both quartz and mechanical, is introducing a new high end, limited edition mechanical watch at Basel.
“Apogee is a special mechanical movement developed exclusively for us, which is definitely a few steps up for us,” says David Elan, Director of Sales, Senior Vice President, Chase-Durer. “Apogee is a very high end piece, with a day/date, GMT and power reserve. We started by introducing automatic and special pieces, and they were selling. There is a collector out there who wants our watches in a certain price point as long as they are high quality and unique. Since we are tapping into that market, we really wanted to do something special. Apogee is very practical in function and very special in presentation.”




CHASE-dürer & CONCORD


Who's Got What at Basel
The Americans are coming to Basel armed with great new product. Gevril will be introducing a prototype for the next evolution in the Avenue of Americas collection, the Mezzo. “The Mezzo will fill a very important niche, because many men and women love the styling of the Avenue of Americas collection, but want it in an understated size,” says Steven Pachtinger, Vice President of Marketing and Sales, Gevril. “It will be an automatic version.”
Fossil is bringing in a new design feel across the collections. “We are introducing a '70s vintage inspiration which really speaks to the Fossil core values,” says Fossil's Washburn. “It is a real sense of authenticity, retro inspired, with a young attitude and lifestyle, with a sense of humour. This is taking us back to where we started, and will be seen across all our lines and collections.”
Fossil is also expanding a program the company started in their own stores in the USA, called 'Watch Bar,' which allows customers to build their own watches. “This is following a trend towards personalization and people wanting things to be individual,” Washburn explains. “The stores have the watch heads and the watch straps laid out individually, so the customer can pick exactly what they want. There are 24 watch cases and 34 different straps. This has done very well with our retailers and we will be launching 'Watch Bar' in 125 key doors in the US, with a great marketing campaign and in-store displays to promote it.” Fossil also hopes to export this concept internationally in the near future.
Oakley is introducing two new watches at Basel, while also expanding colour in the existing lines. The first new watch is called Saddleback, which is a fashion watch, with two different bands. The second is Jury, which is within the same family as Judge, released in 2004. The Jury is a smaller version of the Judge, the movement is a little different and it will have a leather version much like the Saddleback.
Within the Movado Group, big things are happening. “One thing we are doing in the coming year is focusing on the ESQ brand,” Movado's Leach explains. “ESQ is the first entry into the Swiss watch with an entry price point at just under US$ 200. Being able to put forward a beautiful, quality made watch with a wonderful heritage and is established with the Movado brand is a real benefit.”
Ebel plans to expand the tonneau shape, with the Mini Beluga tonneau and Movado will be introducing some new sculptured watches to reinforce the art theme the company is pushing. Concord will introduce the La Nuit Delirium limited edition to capitalize on the success of the Delirium watches last year.
Michele Watches is introducing a new men's line called Turbina. “Most of our focus has been on our ladies’ watches, but we have noticed interest from our male customers for a fashion watch, so we are going to fill that need,” Barouh says. “They want something fashionable but with good watchmaking. These men probably own several higher end brands, and they want something fun but with a good name attached.”
In addition to the Apogee already mentioned, Chase-Durer will also be introducing a 45 mm automatic watch called the Tattico and two new ladies’ collections, one in a round shape and one very unique shape in 18 carat gold and 18 carat gold and diamonds.
Bulova is dramatically expanding its women's sports watches with diamonds and new diamond products in the Marine Star line. Bulova is also introducing a limited edition watch, the Ambassador, inspired by the company's watches from the '30s and '40s.




DAVID YURMAN & HILFIGER


US vs. the World
Though the companies contacted are US companies, there really isn't a US vs. the world sense to their operations. In fact, many US companies use Swiss and/or Japanese movements, and even have factories or branch offices overseas. Gevril, for example, has Swiss heritage but is headquartered in the US. Chase-Durer is US-owned, but uses Swiss and Japanese movements. The Movado Group is run out of the US, but Ebel and Movado have factories in Switzerland. Fossil uses Japanese movements, primarily, yet Zodiac, one of the Fossil brands, is all Swiss. Makes it a little hard to have an us vs. them mentality when ‘us’ is in many cases ‘them’.
Several US watch companies are not making the trek to Basel, either because they couldn't get booth space or they are not ready to expand into other countries. Companies like Kobold, Yes, Ice Tek and others are doing well in the US and want to come to Basel when the time is right.
The American companies who are coming to Switzerland are hoping to expand their success in the US into Europe and other countries across the world. Unlike years past, however, there is a certain amount of caution, as these companies want to pick the right partners and expand in the right way - carefully and with an eye to long-term stability and security.
“We are formulating business plans market by market,” explains Oakley's Smith. “We are trying to identify by product needs for each individual market, creating their own assortment.”


Source: April-May 2005 Issue

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