More watch companies flex brand muscle at boutiques

April 15, 2007

The new Charriol boutique at Fashion Island in Newport Beach, Calif.

By Beth Braverman

New York—Clothing manufacturers have done it for years, and now watch manufacturers seem to have caught the retail bug, too, as they increasingly open up branded boutiques in significant shopping districts and in malls throughout the country.

The trend spans a growing spectrum of watchmakers, with companies at both the high end (brands such as Audemars Piguet, Movado, Omega, Chopard) and entry level (Subchrono, Breil) opening up their own retail spaces and expanding upon them.

The boutiques generally showcase a brand's entire collection as well as offer couture and one-of-a-kind pieces that are unavailable at other retail stores. Manufacturers may also use the boutiques to try out new initiatives and products before offering them untested to partner retailers.

But while manufacturers tout the move as important for marketing and brand-building purposes, a growing number of retailers worry that having watch boutiques nearby will only cause difficulties for their businesses.

"I would look at it as new competition," says Mike Lee, owner of Carol's Watches in Lake Worth, Fla.

Lee says that he spends $20,000 annually with one brand (he wouldn't say which) and that the brand now has an outlet store in close proximity to his jewelry store.

"That kills us because we don't sell out of all the watches we buy every year," Lee says. "But at the end of the year, they will put their watches in the outlet. Then our customer can get the same watches we're selling for a whole lot less than what we are selling them for."

Lee says he would have less of a problem with watch boutiques that sell timepieces at the watch manufacturer's suggested retail price, but he still would not want such a shop in his neighborhood.

"They're kind of like landfills," he says. "I'm all for them, but I don't want them in my backyard."

Many other retailers who spoke with National Jeweler agreed with Lee but declined to go on the record for fear of reprisals from the watch companies. Others had a different outlook on the trend.

"I think it would be good for business," Philip Narong, owner of Reno Watch and Clock in Reno, Nev., says of the prospect of a branded watch boutique opening in his city. "There aren't many watch stores in Reno, and I think it would drive up interest overall."

Tourneau Senior Vice President Andrew Block says his company welcomes the branded watch boutiques.

"We love them," Block says. "They don't hurt us, and they support the brands."

Block cites Tourneau's New York City flagship location to illustrate his point. The store resides just blocks from the retail locations of Cartier, Piaget, Blancpain, Breguet and Jacob and Co. Each retailer has its own watch brand, and Tourneau sells them all.

"I have a watch customer, but they have a brand customer," Block says. "People go into their stores and they are looking for one brand. People come into my store and they can choose from hundreds of brands."

Watch companies maintain that the boutiques allow them to reach a wider audience in addition to the core collectors and enthusiasts who are already aware of the company and its offerings. Boutiques also allow the brands to communicate with the customer in a clear manner, and offer products in a brand-specific manner. Sales professionals in branded boutiques can offer specific expertise on a brand and its products that not all retailers may have, manufacturers say.

Ori Zemmer, vice president of Charriol North America, says many of his retail partners express concern when they learn of Charriol's plans to open a boutique in their area. But once the store opens, they change their minds.

Since the opening of Charriol's most recent boutique at Fashion Island in Newport Beach, Calif., sales of the brand at retail partners in the surrounding area have increased 15 to 30 percent, according to Zemmer.

"It's not direct competition," he says. "We offer the full line of products, including eyewear, leather goods, watches and one-of-a-kind items. But customers are very loyal to their retailers, and they will even go to them to buy the jewelry they saw in our store."

Zemmer says that Charriol tries to get involved in each community in which it opens a store, to further drive brand awareness in the region.

Charriol currently operates four boutiques, but it has plans to open a fifth boutique in Las Vegas early next year. Zemmer says he would eventually like to operate 10 stores in key U.S. markets.

Having a location in a major shopping and tourist destination can also boost a brand's international image.

Chopard, for example, announced in January plans to open a new, larger international flagship store on the corner of Madison Avenue and 63rd Street in Manhattan this fall, to provide what it calls a "superb shopping environment for the international luxury consumer."

When Audemars Piguet opened its second American boutique in Bal Harbour in South Florida, its president Francois Henry Bennahmias said that he hoped it would raise the brand's profile in the gateway city to Latin America and the Caribbean.