ROSY TIMES CONTINUE FOR WATCHES
Byline: Wendy Hessen
GENEVA — With all the talk of mergers, acquisitions and musical managers, the merchandise could have easily taken a back seat at the fine watch world’s leading trade shows here and in Basel, Switzerland.
At the shows, which ran from the end of March through last Tuesday, gossip percolating during the day and over cocktails and dinner each evening frequently centered around who was likely to acquire the LMH brands owned by Mannesman, IWC, Jaeger-LeCoultre and Lang & Sohne, and how much they would cost. LVMH Moet Hennessy Louis Vuitton, the Swatch Group and the Vendome Luxury Group popped up most, but Rolex was also thought to be a possibility.
Industry sources claim the bidding for Jaeger alone has already hit a fevered pitch — just under the $1 billion mark — though the brand has been valued at roughly $400 million. In another development, on the opening day of the show, it was announced that the U.S. operations of Jaeger would be run by Ronald Wolfgang, an industry veteran and former head of Ebel. He succeeds Nancy Fox, who left the company.
LVMH had its own announcement: As of June 1, the American operations for its stable of watch brands will be consolidated under a new entity, LVMH Watch & Jewelry USA. The new company will handle operations for Tag Heuer, Chaumet, Christian Dior Watches and Fred watches and jewelry, and Susan Nicholas becomes president of the division. Nicholas is currently executive vice president and general manager of Tag Heuer USA.
Previously, Dior and Fred were sold through Benedom Inc. Steven Kaiser, president and a substantial shareholder of Benedom, has sold his stock in the company, but will stay on through the transition, according to Nicholas.
The Basel World Watch & Clock show ended its eight-day run March 30. It was followed by the high-end Salon International de la Haute Horlogerie here, which ran March 28 to April 4.
With the U.S. market now the largest importer of Swiss watches — sales hit $956 million last year, an increase of nearly 14 percent — and demand showing no signs of abating, manufacturers at both shows were keen on attracting the attention of American store executives.
“The American market is becoming more European, with a desire not only to spend, but to own several timepieces,” said Tag Heuer’s Nicholas, echoing the sentiment of most vendors that claimed to have logged very strong shows, despite the fact that there were virtually no major new launches this year.
Even the most conservative firms injected renewed color and fashion into their offerings this year. Many also devoted considerable energy to expanding the breadth of merchandise specifically for women. And retailers found plenty to fill their cases beginning this summer and right through the critical holiday period.
Among the big draws at both shows:
Rose gold, usually reserved for highly complicated men’s and vintage timepieces, was suddenly everywhere. Practically every brand, including more accessibly priced lines like Omega and Christian Dior, offered it, but several, such as Patek Philippe, really committed to the metal. Patek’s new versions of its hot “24” watch were entirely in rose gold.
Oversized watches: Though they have been seen in fashion circles for some time, retailers are finally on board. Some styles were as large as 50 millimeters, or about 2 inches across, and included plumped-up crystals. They ranged from using the simplest of quartz movements to complicated versions from such names as Corum, Panerai and Fortis.
Color dominated, from pastel pinks and blues to midtones in semiprecious and precious stones. Among the strongest examples of matching dials or stones with straps were Rolex’s new women’s Cosmograph, Concord’s Crystale, Harry Winston’s Aurora collection, Roger Dubuis’s Lady Sympathie and Jaeger-LeCoultre’s Cabochon Reverso. A striking contrast was the thrust in lines like Christian Bedat’s. His citrine-accented No. 7 watch was paired with a turquoise strap; another style had blue sapphires with a pale yellow strap. Chocolate or Havana brown dials provided another novel source of color.
The desire for diamonds continues unabated, but instead of miles of pave looks, there were more pieces accented with center, baguette or square cuts. Diamond-laden lines included Cartier, Piaget and the ultra-exclusive Roger Dubuis. Even Coach added its first commercially available diamond piece.
The fashion item of the season: watches with either large, leather cuff straps or double or triple-wrapped straps in leather or plastic. Hermes started the trend for double-wrapped straps at last year’s show, but now all the fashion lines — including Gucci, Guess, Calvin Klein and DKNY — have added their own versions.
The depth of the fashion focus was best explained one way, according to some store executives.
“The way the economy has gone in the U.S. now, many of our customers have become very wealthy, very fast, and at a younger age. In the past few years, they have satisfied their initial desires and are now searching for something that is newer and sets them apart,” said Tim Braun, fine watch and jewelry buyer for Neiman Marcus. Braun singled out Franck Muller for his “exciting design concepts and tremendous fashion sense; Piaget for its new directions, which he said would “light up the luxury consumer,” and the eclectic feel at the venerable Corum brand, which is now being run by the team that built Gucci watches.
While Jennifer DeWinter, vice president and associate general merchandise manager at Saks Fifth Avenue, said there wasn’t much that was completely new, there was a lot of very salable merchandise to be had.
“With color being so important now, watches from David Yurman and Christian Bedat looked great,” said DeWinter. “Both just work so well with ready-to-wear and make watches an accessory opportunity.”
She also lauded Bulgari’s new Rectangelo watch and said she felt the extensions in Baume & Mercier’s Capeland, Hampton and Catwalk lines would keep the momentum going on what are already strong sales.
John Green, president and chief executive officer of Lux, Bond & Green, was enthusiastic about the combination of new products and their salability.
“There was a ton to choose from,” said Green. “Rolex, which rarely has anything new, had a lot of new pieces, and it will all sell. Patek Philippe is very hot now and in tune to rebuilding its image from just a wealthy and understated man’s watch. Until last year, they had missed the whole women’s market. We happen to like rose gold, and the new “24” will do well for us. Baume & Mercier has turned itself around and is now a product leader, rather than just being about a price point.”
London Jewelers. based in New York, singled out Franck Muller as a big hit, particularly since one of Muller’s new watches is called Long Island.
“We are ecstatic about the Long Island watch,” said Mark Udell, owner of London. “For us, it’s a home run that we will launch in our East Hampton store this summer.”
Udell also stocked up on Patek Philippe’s “24” in rose gold and said he liked the variety of colors in the Rolex Cosmograph.
“Color has really taken hold, and the more people that are exposed to it, the more will buy it,” Udell said. “Even Dunhill had a fun watch in color that has a matching lighter and pen. It’s a great gift set and is very affordably priced.”
Like other retailers, Udell expressed mild trepidation about whose hands the LMH brands would end up in.
“Certainly, there is a lot of talk, and it concerns us,” he said. “We would like to have some firms remain small and separate, instead of having the whole industry controlled by one or two big conglomerates.”
Distribution, not surprisingly, was a key factor for Samuel Getz, president and chief executive officer of Mayor’s Jewelers. The company, which has been concentrated in Florida and Georgia, will go national this year, opening nine stores, beginning in June with a unit in Tysons II in McLean, Va. Other locations to be rolled out are in the Somerset Collection shopping center in Troy, Mich.; Fashion Island in Newport Beach, Calif.; Desert Passage in the Aladdin Hotel in Las Vegas, and StoneBriar, a new mall outside Dallas.
“The biggest challenge now is that luxury brands have to be very careful about their distribution, not just in terms of who sells their brand, but how it is treated in the stores. It’s beyond volume,” said Getz. “If [the industry] had much better controlled distribution, there would probably be a more comfortable attitude about allowing certain retailers to sell their merchandise over the Internet.”
As for product, Getz said he was most interested in offerings at Girard Perregaux, and the direction at Piaget and Baume & Mercier.
“It will be interesting to see what happens with Corum as well,” Getz said. “They need to decide if they are about the high end or about price points. Everyone now is trying to redefine themselves.”
While Getz was less enthusiastic than others about the opportunities for watches and jewelry in rose gold, he said he expected white gold and big watches to continue to be strong sellers.