More about Losses and Gains in the Watch Industry

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James Elsener
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Joined: Tue Oct 02, 2018 8:27 pm

More about Losses and Gains in the Watch Industry

Post by James Elsener » Wed Apr 17, 2019 4:01 pm

A few messages I received on the previous article about the state of industry have asked whether there are more losers and winners to the shakeout we have seen and that in some markets is still going on.

By nature I am inclined to concentrate on the winners. And yes there are quite a few independent companies springing to mind. They all have gained additional windows over the recession. The success of a watch brand is closely linked to the number of shop windows it is displayed in. Contrarily to what some marketing beacons say, the bricks-and-mortar stores of any format are the most important venue for watch sales and I strongly believe that they will be for a long time to come.

And here is my special list of winners which are not part of a group (alphabetical order):

Bell & Ross is for sure one big winner. The language of their design is clear cut and focused. The pricing points they aim at make their watches affordable to quite a large audience across the globe. The way they started to integrate direct sales into their distribution policy is exemplary (they executed to the letter what I have been lecturing about in marketing and distribution sessions across the industry for the last few years) and allowed for integrating their authorized distributors as the focal point of delivery of the watch. Bell & Ross are now solidly entrenched in the US-market and will be able to take the brand to new heights in Asia by emulating what they did in the USA.

The Japanese brand Casio has cleverly stuck to its roots and cultivated them to the max by focusing their entire commercial strategy on their famous G-Shock series. They have understood perfectly well that Casio is far away from the world of haute horlogerie and are one of the few brands able to attract and keep a younger set. For most watch retailers carrying Casio has therefore become vital to their long-term success as the brand brings in younger people in numbers.

Corum is another brand having understood the underlying mood of these times. By enlarging their Admiral’s Cup and Bridge collections and sticking to their price point they have gained windows in Asia. This was the more important to them as they lacked the all important economies of scale which leads to a consistently high quality watch.

Nixon showed the industry the way from a marketing point of view. Their incredible range of styles and colours hit the nail of the times on its head: variety at affordable prices. The company banked on the world-wide awe the California-life-style commands and they have become a fixture in the watch industry in no-time. What started out modestly at Baselworld a year ago found its temporary climax this year in their all new booth. I am convinced that they will be one of the few brands being able to profit from being copied. Their success had brought a new spin for the mass-volume Swatch brand as well about. This shows how highly regarded they have become.

Another brand that has understood the moods of the times perfectly well is the family owned Swiss brand Oris. Oris used to be the watch which was offered to the young Swiss male coming of age by their godfathers. The current management has understood how to dust off the brand and position it as a manufacturer of affordable mechanical watches. Today Oris is a must-carry brand for watch retailers around the globe.

The Geneva brand Patek Philippe is playing much like Rolex in a league of its own. Being the absolute luxury brand coupled to patient family ownership has pushed them to new heights. Patek Philippe watches are the genuine investment grade watches and they even better the gains in value of Rolex watches. Their craftsmen are reckoned to be the best in the industry and their long-standing success is testimony to their outstanding abilities. If ever you can afford a Patek Philippe treat yourself to one.

In my earlier summary on the state of groups I mentioned Rolex. They are next to Patek Philippe the only brand whose watches are genuine investment grade. Their sticking to their mettle and leveraging the know-how of their watchmakers to the best is what makes their watches such an outstanding proposition. They are on their way now to replicate their hundred years of success in the USA by the rise in the number of windows they achieved over the recession in Asia.

Titoni from Grenchen is probably the winner of all the independent brands. By continuing their focus on Asia and opening flagship store after flagship store in China they have profited from the shift in purchasing power from the Western economies to the rising ones in Asia handsomely. The family owned company is an absolute must item in China and what is surprising close to never copied even in copy-happy China.

Another brand that came out of nowhere and merits a spot in the window of the discerning watch retailer is the Netherlands based brand TW Steel. Big chunky watches catering to the life style conscious set in Asia and the Middle East. From a craft’s point of view their watches are worth the money. TW Steel has understood what it takes to become fashionable without having to compete with the likes of Nixon or other fashion brands. By sticking their brand-name on the Formula One racing cars of Renault they have perfectly captured the mood of times in the Middle East and Asia where the action is. It will be interesting to see how they go about safeguarding the long-term success of their brand, however.

Of course there are other brands which did fine. Ultra luxury brands like Chopard or its brother-in-law brand De Grisogono from Fawaz Gruosi, the revived brand Technomarine or the cuttingly positioned brand Chanel spring to mind. And then there are the many, many independent niche brands like the German Thomas Ninchritz or its fellow now-German brand Wakeman that turn out low-numbers of perfectly crafted watches and cater to a well defined audience. Some of you might consider brands like Ernest Borel, Medana from Olten, Breitling as being successes. And they all are in their own right. So please do consider the above list as non-exhaustive as my yard-stick was the number of windows held on to and/or gained since this number leads to industrial scale and the thereof resulting quality of the watches.
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