NEW YORK — Riding high on the recent momentum for watches, Tourneau is seizing the moment and embarking on an aggressive growth plan.
The privately held watch retailer, which now has 17 stores and annual sales estimated at about $140 million, plans to open three stores before the end of the year, in downtown San Francisco, San Jose, Calif., and in Las Vegas, where the firm will incorporate a new store design.
Tourneau also is stepping up its marketing investments, expanding and renovating existing stores and freshening up its flagship on Madison Avenue here — considered the world’s largest watch store, with a citation from "Guinness World Records" to prove it. It is also beefing up its private label watch business as part of an overall effort to brand the Tourneau name, and plans to increase its investment in Watch Gear, its lower-priced retail concept aimed at younger, more fashionable shoppers.
"Watches are now a fashion accessory and a statement piece," said Andrew Block, Tourneau’s senior vice president of marketing. "And the diversity of styles now available have made watches more appealing."
When asked if now was a difficult time to be expanding due to the uncertain economy, Block said: "The market is favorable for retailers to get premium locations. There is certainly a desire for landlords to bring in tenants that will perform well for them."
Founded in 1900, Tourneau has built its business by selling and promoting high-end Swiss watches. While it has dabbled in jewelry and other categories, watches are the company’s primary focus, and it now carries some 100 brands ranging from flashy newcomers such as Grimoldi to stalwarts, including Seiko and Citizen and luxury names such as Rolex and Patek Philippe.
While other watch-only stores have sprung up in the last decade, including Watch World and Watch Station, both of these concepts have concentrated on lower-priced watch offerings. Tourneau’s competition primarily comes from independent jewelers, many of whom don’t carry more than a handful of watch brands, and department stores, where watches compete with many other fashion categories.
Tourneau now views itself as a national chain and sees plenty of opportunity ahead. Block said the firm plans to open at least two to three new stores a year for the next several years."We won’t move into a location that is not sustainable, manageable and successful right out of the box," Block said. "That is key to our expansion."
The San Francisco store, set to open early next month, will occupy 900 square feet and will be located in the San Francisco Shopping Centre, a retail mall between Union Square and the South of Market entertainment district downtown. Next up is the San Jose unit, which is slated to bow in mid-September. The Tourneau store there is part of a new mixed-use concept called Santana Row, which will feature stores, restaurants and residential areas.
In November, Tourneau plans to open its Las Vegas store at the Forum Shops in Ceasars Palace. The 1,200-square-foot store will feature a new design concept, including more use of glass and steel to create a sleeker environment, according to Block. There will be colors on the walls, and, for the first time, a digital clock will be hanging in the store as opposed to an electric clock.
"We have adapted our design to create a more open, well-lit and inviting atmosphere," Block said.
The firm also is expanding its store at the South Coast Plaza in Costa Mesa, Calif., by 600 square feet, essentially doubling its size, which is also slated for September.
In its four-story New York flagship, a few areas are being reconfigured. The mezzanine area, which now houses pre-owned watches, will be devoted entirely to Rolex and Patek Philippe. The downstairs floor, which holds less expensive watches, will be gaining space, since the Swatch brand will be leaving as part of its strategy to cut back on wholesale distribution. The brands Tissot, Hamilton and CK will be expanded into that area.
The Watch Gear concept, which bowed in 1999, is also an area of growth. Block admits it took some time to get this lower-priced concept off the ground, partly because the company was targeting a new demographic and also because its specialty is luxury marketing. In 2003, Tourneau plans to focus more on building this concept.
On the marketing front, Tourneau, through its own spending and with co-op advertising, now spends an estimated $25 million on a wide variety of media, such as print and direct mail, as well as in-store events such as jazz concerts at the flagship and in-store exhibitions by different brands. Block said the company is increasingly adding more events and marketing programs, including exclusive product introductions at the store.
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