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Tag Archives: Timex

Price rite

Perhaps Bob Barker has a point. When it comes to jewelry and watches, the past year has proven that consumers feel the price needs to be right.

With the exception of Rolex, Tiffany and Swiss Army Brands, most names on the category-specific top 10 list offer merchandise less than $100, and that’s an unusual feat in a sector where upscale brands have mammoth marketing budgets, frequently bombarding shoppers with eye-catching advertising visuals in media outlets from magazines and movies to prime time television.

It’s hardly surprising that the more mainstream brands have generally fared so well. In the post-2000 economic downturn, the upscale fine jewelry and watch sector was one of the hardest hit, even though it has rebounded and is now doing well. Customers typically delayed their high-end purchases, stashed their cash and stayed home to avoid the temptations offered in lofty retail environments such as exclusive jewelry salons.

Pricing became an issue and customers turned to the Internet and more moderate chains like Wal-Mart and J.C. Penney to find deals on diamonds. Brand recognition was and remains high for value-oriented brands.

Total jewelry and watch sales in the U.S. are estimated to have been $43.56 billion in 2003, according to 2 Degrees Freedom Ltd., a London-based marketing and research consultancy that began tracking jewelry sales last year. According to the Commerce Department, 2002 jewelry and watch sales were $42.3 billion in the U.S., and the department predicts 2004 sales of $48.3 billion.

To capitalize on the current momentum of better values in watches and jewelry, many companies have stepped up their marketing efforts and added value to their collections by offering more innovation and teaming up with fashionable designers.

Case in point is number one jewelry and watch brand Timex. The Middlebury, Conn.-based Timex Corp. has reengineered its legendary tag line, “It Takes a Licking and Keeps on Ticking,” after 50 years. The updated version reads simply, “Life is Ticking.” In addition, Timex is upping its design quotient and recently collaborated with industrial designer Karim Rashid, contemporary artist Dave Kinsey and fashion designer Matthew Williamson for new limited-edition Timex XFactor watches.

Number two Seiko hasn’t been resting on its laurels, either. The company, whose U.S. division is based in Mahwah, N.J., continues to wow customers with innovations, and is launching a Sportura chronograph (stopwatch) this fall.

The fourth most recognized watch brand in America is Casio, which has snared a youthful customer with its fun G-Shock collection, and also has stepped up its innovation in recent months by introducing watch designs that use solar technology. The Japanese brand also has been building consumer recognition with its growing assortment of electronic merchandise such as digital cameras and electronic musical instruments.

Placing fifth, Swatch continues to be noticed by consumers with its fun and whimsical collections, such as the recent Bunnysutra line, which featured illustrations of bunnies in suggestive positions, causing much controversy and press hype that ultimately served to heighten brand awareness.

In the women’s sector, number six Citizen has been building momentum with ladylike designs featuring diamonds, crystals and mother-of-pearl details in styles such as Stiletto, Riva and Aviara, but it, too, is playing the techno card: Its watches run on solar power instead of batteries. Citizen is particularly known to sports fans, as it is a sponsor of major tournaments.

Swiss Army Brands, which took the seventh spot, has been equally aggressive to build market share. A depressed economy might have hurt the company, known for its signature pocketknives, but Shelton, Conn.-based Swiss Army is building consumer recognition with its watches, apparel, travel gear and kitchen cutlery.

Close behind is Fossil, in eighth place. The company has been spreading its wings by making new acquisitions, such as its recent purchase of Tempus International Corp., which operates as MicheleWatches, and acquiring the licenses for Burberry and Zodiac watches.

Number nine Bulova, meanwhile, is looking to bolster its presence in consumer minds with an ad campaign this fall featuring its new diamond-adorned sport designs, as well as a renewed effort to enter the European market, particularly in Italy and Germany.

While there’s quite a bit of action in the moderate field, the high-end business anticipates a rosier future. Many upscale retailers said the free-spending customer has returned in recent months, and they look for a strong fourth quarter with up to 20 percent gains in sales, thanks to a rising stock market and a healthier job picture.

That’s good news for the likes of Tiffany and Rolex, which are expanding their assortments this year. Number three Rolex, for instance, made a departure of sorts by launching the roaringly wild Cosmograph Daytona watch featuring yellow sapphires on the bezel and a wild, animal-print strap. The new watch will surely attract a younger, if not more extroverted, customer that usually gravitates toward fashion brands.

At number 10, Tiffany & Co., meanwhile, has boosted its engagement collection earlier with the next Legacy ring, and in September, will be launching a complete “Atlas” collection of watches and jewelry.

The Top 10: Watches & Jewelry

1. Timex

2. Seiko

3. Rolex

4. Casio

5. Swatch

6. Citizen

7. Swiss Army

8. Fossil

9. Bulova

10. Tiffany

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The Guess watch line is reaping benefits from its new link with Timex

Callanen Group Inc, which produces Guess brand wristwatches, is becoming a force in the fashion watch world. The Guess line is one of the three most popular watch brands in US department stores and contributes 85% to Callanen’s sales volume. Wholesale volume is expected to be over $70 million in 1992, an increase of 33%. Timex Corp acquired Callanen, contributing technical expertise to improve watch quality and production capacity, although Callanen operates as a separate unit. Timex is also helping to fulfill Callanen’s desire to expand the scale of its overseas distribution.

The Guess brand name is getting as well known on the wrist as it is on then rear.

The licensed fashion watch line, produced by Callanen Group Inc., has turned into a powerhouse, generating sales upwards of $60 million wholesale this year.

Eight years ago Mickey Callanen, who was an executive at Monet Jewelers, decided to start a watch firm and launched the Guess collection. Since then, Guess has emerged as one of the three leading watch brands in department stores (the other two being Swatch and Fossil.)

The success of Guess watches has captured the attention of many, including Timex Enterprises. Timex purchased Callanen Group, Inc., the firm holding the license for Guess watches, last October.

Callanen, who continues as president of Callanen Group, said the firm’s volume will be over $70 million wholesale in 1992, a 33 percent volume gain. He said 85 percent of the volume is done with Guess and 15 percent with the two-year-old licensed Monet watch line.

While Callanen continues to operate independently from Timex, it’s already gaining benefits from Timex’s experience.

It was propitious timing when Timex expressed interest in Callanen Group, because, Callanen said, he was exploring the international market for distribution.

“It’s very hard to find good distributors overseas,” said Callanen, “and with Timex’s strong relationships around the world, I felt they could do nothing but help us.”

While he would not disclose the terms of the acquisition agreement, he said: “Timex paid a lot of money.” In the agreement, Callanen has a contract that keeps him in charge of the company for eight more years. His partner, Bud Polley, remains vice president, sales.

In addition to helping Callanen establish relationships with distributors overseas, Timex is improving the quality of Callanen’s watches. Callanen said when his new manufacturing facility opened in Hong Kong, Timex sent its engineers over to improve quality, and they brought the production capacity up 38 percent.

“Other than that, though, it’s like Timex is not around,” said Callanen.

Michael Jacobi, executive vice president and chief operating officer of Timex, said his firm was not looking to manage another company, but to acquire a firm with a strong existing management team.

“We are a lean corporate organization that can’t absorb companies within our management structure,” he said. “We kept Callanen’s management and company culture the same.”

Jacobi said his firm has been considering acquiring several watch firms because it wanted to strengthen its distribution in department stores. Including the Callanen brands, Timex has 11 watch brands.

Now that Callanen has Timex’s connections, the firm is aggressively going after international distribution.

“Huge growth will come from overseas business,” said Callanen. “It could be 35 percent of our business in one to two years.”

Callanen started its international distribution nearly two years ago in Australia through a Sydney-based distributor. Callanen said the firm will sell 100,000 units of Guess watches there in 1992.

A year ago, he started selling Singapore, Malaysia, Hong Kong and Korea, and last month shipped to Canada, England, Portugal, France and Germany.

“I don’t see any stores overseas that devote the kind of space to fashion watches that U.S. retailers do, with the exception of Galleries Lafayette,” said Callanen. “There’s a big business out there.”

Paul Marciano, senior vice president of Guess Inc. said Callanen does more volume with Guess label than any of his other licensees, which include fragrance, shoes and legwear among others.

“It’s Mickey’s devotion, personality and energy that has helped make this line a success,” said Marciano.

Callanen attributed a lot of the success of Guess watches to the fact that new merchandise is continually introduced. But he also said he is just in a good business.

“The consumer sees fashion watches as wonderful value for their money,” said Callanen. “In addition to being fashionable, watches are a commodity.”

Joanne Hart, fashion director for Macy’s East, said, “Guess has been phenomenal for us. The name is very recognizable and the styling is great.” She noted the chronograph, scuba and animal-print strap watches are among the top sellers.

Callanen is based in Norwalk, Conn., and all production is done in Hong Kong, where the company employes 17 designers.

The Monet watch line has been slower getting off the ground, Callanen noted, because it’s a narrower focus featuring mostly chain looks.

He said the biggest direction in watches is sport.

“Sport watches are moving the average unit sale up in the fashion watch department,” he said, noting the average Guess watch had sold for $52 retail last year and now it’s $68,

Callanen said he would consider adding more watch brands, “if they made sense with our mix and did not conflict with existing lines.”

He is as enthusiastic about the business as ever and has no plans to leave the company that he started out of his garage. “I am having too much fun to leave. I can’t imagine doing anything else but this.”

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