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BEVERLY HILLS — As the luxury watch market has rebounded from the recession, European brands are seizing the opportunity Stateside by retooling their retail strategies to include amped-up in-store shops and new freestanding retail locations.
This story first appeared in the October 1, 2012 issue of WWD. Subscribe Today.
Two major entry points to the West Coast market — Rodeo Drive in Beverly Hills and South Coast Plaza in Costa Mesa — have been target locations for brands including Richemont’s Vacheron Constantin, IWC Schaffhausen and Jaeger-LeCoultre, as well as Rolex and Patek Philippe.
“I think, honestly, in the U.S. market, the overall level of experience for a watch customer was not that good. The recession really put the finger on this matter and obliged every retailer and brand to rethink the customer experience, to make it more appealing than before,” said Hugues de Pins, North American president of Vacheron Constantin, which currently has 30 stores worldwide beyond California, including a store in New York that opened last year. “We have the effect of more brands willing to create their own in-store experience with their collectors and friends, which also sets the benchmark for the rest of the distribution.”
The brand is set to open a 681-square-foot store in South Coast Plaza in November that will sit side by side with similarly sized Jaeger and IWC storefronts with an interior pass-through. This will be followed by a store on Rodeo Drive in December.
“South Coast Plaza is a key location and allows us to tap into the diverse and elite clientele in the Orange County area, as well as growing Chinese tourism year-round,” said Jaeger-LeCoultre’s North American president Philippe Bonay, who added that its South Coast Plaza store will feature the label’s new store design concept, which was also recently implemented at the Wynn Macau as well as the 5,000-square-foot store on Place Vendôme in Paris. It draws on the Art Deco influences of the brand plus softened design elements to welcome female customers.
“We feel Jaeger-LeCoultre has reached a point in the U.S. where having a few flagships in key markets is critical to our future development,” added Bonay.
South Coast Plaza partner Anton Segerstrom has watched the tides turn.
“I think this could be a continued trend. It’s definitely reached critical mass,” said Segerstrom of the mall’s watch assortment, which boasts 26 watch retailers carrying 44 brands. “It’s been fascinating to see the success of these brands, and as independent watchmakers realize the potential of a store, more are waking up to it.”
“The North American market is showing one of the best progressions in turnover these past 18 months, and is definitely a market with a lot of potential still to explore,” de Pins observed, noting that only 20 U.S. retailers carry the Vacheron brand.
Another strategy for brands is working with wholesale partners to revamp in-store shops or open joint-venture stores. Patek Philippe recently unveiled a corner unit with its own entrance inside Tourneau’s new concept store in South Coast Plaza. In July, it launched a 1,250-square-foot freestanding store owned by Beverly Hills independent retailer Gearys.
During a visit to Patek Philippe’s store with partner Gearys on Rodeo Drive, president Thierry Stern said the brand decided not to enter retail alone because its partners better understand the retail landscape. “If I have to open a boutique, I would never have the best location. I would never have the best people. They’re already in place, so, for me, it was logical not to start that. It’s not a matter of having a higher margin. For me, it’s more to make people happy that they’re very confident in here. You know they really trust Gearys,” he said. Patek Philippe has about 23 boutiques with various retail partners around the world, and Stern projected there could be 30 to 35 in a few years and 100 eventually.
“At this point, we aren’t looking to own our own boutiques. Most stores are willing to put us in a very important spot, so we don’t have to fight with other [labels], but a lot of brands compete, and I understand why some of them are opening their own boutiques,” said Larry Pettinelli, president of Patek Philippe USA. “As long as we have partners like Gearys and Tiffany, we will be well represented,” referring to a Tiffany’s in-store shop that opened in the jeweler’s New York flagship last year.
“I don’t think Rodeo Drive has ever been stronger than it is now,” said Gearys president Tom Blumenthal, who also owns the neighboring Rolex store that opened in June, as well as a Rolex store in Westfield Century City mall.
The Patek unit joins Hublot, Panerai, IWC, Jaeger-LeCoultre, Cartier, Rolex, Piaget, Breguet, Tourbillon, Richard Mille and David Yurman as watch brands either on Rodeo or its adjacent cross street Brighton Way.
“Clearly the watch business is robust; it has to be to justify the rent,” he said. Rents on the storied street average between $375 and $550 a square foot.