The watch world received an influx of new players in 2002, in what was already a crowded marketplace. Among those that jumped into the scene are big-gun designer names such as Yves Saint Laurent and Prada, as well as new and revamped lines from Burberry, Christian Dior, Hermès and Yves Saint Laurent.

Jewelers Tiffany & Co. and David Yurman are stepping up their efforts in watches. The Italians are also getting more aggressive in the watch arena, with firms such as Grimoldi, Damiani, Garavelli, Pomellato and Locman increasing their watch efforts on these shores.

Heading into 2003, many wonder if there is room for everyone and some companies are already scaling back their distribution to address a difficult retail environment. The Swatch brand, for example, is focusing on its retail business and cutting back its wholesale distribution.

Also, expect to see more consolidation in a sector that is now dominated by huge conglomerates. A few key companies — The Swatch Group, LVMH Moët Hennessy Louis Vuitton, Compagnie Financière Richemont AG and Movado Group — control much of the action now, and independent firms often lack the muscle to keep up with the big guns. The Swatch Group had sales last year of about $2.9 billion, Richemont’s watch sales were $1.7 billion and LVMH’s watch and jewelry sales totaled $480 million. Movado Group’s sales last year were about $300 million.

Industry watchers say that brands with heritage and well-known names are poised for the best future. Rolex, for example, remains a consumer favorite and more mass names such as Bulova and Timex keep on ticking.

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