By  on March 28, 1994

NEW YORK -- While most of its growth is expected to come from new products and international expansion, Fossil Inc. still sees lots of room for its core Fossil brand fashion watches to expand market share in department stores.

"Our philosophy -- as Ralph Lauren has proved -- is you can do more business in those doors by becoming more important to those doors," said Tom Kartsotis, Fossil's chairman, chief executive officer and founder. "I think that's a big part of our growth going forward," he said.

Kartsotis spoke recently in New York at a consumer products and retail conference held by Montgomery Securities.

Besides its growth strategy for Fossil -- which includes expansion plans for Europe and Asia and a continued push into the hot licensed products area -- Kartsotis talked about the potential for private label watches, leather goods and the company's lower-priced Relic watch brand.

Kartsotis also said Fossil is in talks concerning a TV shopping venture and expects to be on the air sometime this year.

The Dallas-based company, which went public in April 1993, recently reported earnings shot up 62.9 percent in the year ended Dec. 31, to $11.5 million, or 91 cents a share. Sales jumped 42.3 percent, to $105.1 million. Most of the growth came from Europe and in licensed and private label products.

Kartsotis said the company's Fossil brand, which accounts for about 70 percent of sales, was "extremely strong" in 1993.

"Its our most developed business, but it is still growing at a 10 percent rate," he said.

One of the keys to Fossil's success has been its close work with department stores to protect the brand, coupled with its own marketing efforts, he said. To prevent the brand from being marked down, Kartsotis said Fossil gives away, with watch purchases, such items as T-shirts, beach towels, caps and pens.

He also noted that the Fossil brand is not sold to J.C. Penney Co. or promotional retailers like Mervyn's to protect its established department store business.

"As a result, stores are more apt to emphasize the importance of Fossil," he said, adding that this has led to special promotions in many department stores. He noted that last June, for example, Macy's New York flagship created a main-floor promotion with the theme of a Fifties-style hamlet called "Fossil Town USA."

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