Bulgari is betting on the U.S. market, innovation, and a reinvestment in of one of its most popular designs to bolster its bottom line.
Jean-Christophe Babin, chief executive officer of the LVMH Moët Hennessy Louis Vuitton-owned jeweler, told WWD while in New York to celebrate the 40th anniversary of the house’s Bulgari Bulgari watch style that, “when I look at brand size versus market size, I see that the U.S. is one of those markets where our potential growth is the highest.”
The 131-year old brand — which operates about 300 retail units worldwide — is presently represented in 18 U.S. cities. Babin labeled these locales as the “right ones,” and was firm that the brand will invest its efforts in “optimizing” pre-existing units rather than adding new stores.
“I believe in the U.S. today, in the current landscape of luxury those are the right cities. But are we in the right mall? Perhaps 15 years ago it was the right mall, but now it’s time to move on, so it’s more a re-optimization,” said Babin, who joined the firm in 2013.
In the last two years Bulgari has revamped a handful of its U.S. units (including Bal Harbour and Ala Moana — which reopens in December), and will soon begin to break ground on modernizing its Fifth Avenue flagship. During the renovation, Bulgari’s New York retail operation will move into the temporary space next to Bergdorf Goodman on 57th Street, which has recently been occupied by Saint Laurent and Salvatore Ferragamo amid those labels’ own facelifts.
“The challenge is, ‘How do we get to our potential while making the right profits?’ So it’s finding a balance between the right investments, novelties and profits,” said the ceo.
To chart growth in the public domain, Babin’s team is making deep investments in what he labeled a “very active sequence of [promotional] events.” In the last year, Bulgari has mounted multiple design retrospectives nationwide and thrown ancillary store events for top clients, as well as a string of press dinners and outreach events.
Babin declined to share growth projections for the U.S. market, saying that the brand hopes to grow on a double-digit scale globally. One way to do that, he believes, is by growing Bulgari’s watch business — the brand’s second-largest product category that currently represents about 20 percent of worldwide sales.
While many of the firm’s competitors have become skittish in their timepiece dealings, given the Swiss watch market’s current downturn (last month, the industry posted its largest quarterly export drop since 2009), Babin said he is “bullish” about the category.
“On the innovation front, we are one of the most creative watchmakers this year, we have also been one of the few watchmakers in a period of uncertainty to significantly increase media spending [for watches] rather than holding or decreasing,” he said.
“Based on results we know we are outperforming the segment, so the goal is to keep outperforming and gain market share. We are no longer in the dream years when the watch industry was growing 15 percent a year.
“It means we have to be even more creative and audacious with the product and how we communicate it.”
As part of these efforts, Bulgari introduced the concept for its Diagono Magnesium model at this year’s Baselworld fair — a watch that doubles as a digital key, which unlocks an encrypted mobile password vault. A final prototype will be unveiled at next year’s fair, and is scheduled to hit the market soon thereafter.
Also part of Bulgari’s watch schema is the expansion of its Bulgari Bulgari collection — a design that, at its inception in 1975, was an innovation in marketing. It was the brand’s first fashion watch, and utilizes the Bulgari logo as a design element for cachet — the first categorical style to do so at the time. Strategic in its ability to widen Bulgari’s watch consumer, the company hopes that the “BB” style will work the same magic again and help it gain more market share. Styles start at $4,200.