Istanbul is a bustling, thriving city – full of life, business and excitement. In the heart of this city, the only one in the world to span two continents (Europe and Asia) is the Saat & Saat Company, run by Ramazan Kaya, president. Saat & Saat has its hands in just about every part of the watch business – the company is a distributor for brands in Turkey (selling wholesale to other retailers), has its own retail stores, works with department stores and does its own service. Saat & Saat recently bought the distributor LPI Turkey, adding Maurice Lacroix and TAG Heuer to the stable of brands it distributes in Turkey.
Europa Star met with Mr. Kaya in his offices in Istanbul to find out more about the Saat & Saat operation.

Europa Star: How’s business?

Ramazan Kaya: We are growing almost every year. The reason is retail, we are making huge investments in this area, and we get paid back by the growth. When you look at the Turkish market, the strongest distributor is Saat & Saat, and the strongest retailer is Saat & Saat. I think we are the most reliable, professional company in the market.

ES: Please give us the background of your company.

RK: In 1994, we started distributing Adidas watches. We got into retail because that is where the world was and is going. We started in 2006 with one store, and now we have 82 Saat & Saat stores. By the end of next year, we will have 100 of our own stores, and we will be in a total of 155 points of sale.

ES: What is particular about the Turkish market?

RK: The wholesale market is very difficult here. We have to give huge credit terms and big margins. The retailers also like to give discounts. The strength of the market is that people know watches. The Turkish customer is a great watch customer, very knowledgeable and likes to bargain. We have our standard discounts, like 15 per cent if they pay cash, but we don’t go below that, unless it’s a liquidation sale.
The traditional style for retail stores here in Turkey is like a bazaar, with hundreds of watches in the store. We like to have a more European approach with fewer watches on display, and customers love it.
I love creating brand identity – it doesn’t matter where you go, you will get the same experience in Saat & Saat stores all over Turkey.
We were planning to go into Iran, but because of the unrest there, we have decided to wait. We did see a copy Saat & Saat store there, with the same logo.

ES: You just recently acquired LPI to distribute high-end watches. Is this a direction in which you want to move?

RK: We are already very strong in fashion brands. Our weakest point is high end. With this new company, we are showing the high-end brands we are going to be a big player. Turkey is becoming a bigger market. In a very short time, Turkey will be a major vacation destination, so we believe that we should be in the high-end business in Turkey. We don’t think the competition is doing it well enough, which gives us opportunity.

ES: How is the high end different from the fashion brand market?

RK: I love to learn, and we will gain a lot of experience. We are always improving. We have to choose the right point of sales to get the right service and presentation. Our sales people are very important. Then we have to have the right merchandising, the right advertising channels.
With TAG Heuer, for example, there are some points of sale that are better than Saat & Saat. I have to be objective. I am not happy that some Saat & Saat stores are not at that standard yet. If there is a retailer who is better than Saat & Saat or Campanola, we can work with them. For us, the most important thing is the brand, so we look at who is best for the brand. We look at the strengths and weaknesses of each store, whether it is ours or not, to decide where to put it.
We love working with the brands and listening to their suggestions. We run our ideas by the brand managers to get their permission. I think in the future, 80 per cent of the brand business will be done by Saat & Saat and 20 per cent will be by other retail partners.

ES: Is it difficult to manage being a distributor and a retailer?

RK: When you look at Saat & Saat, we do so many different things – we are a distributor, we have general retailers, we have higher end retailers, we have jewellery wholesale and retail, we have kiosks in the shopping malls, we work with department stores where we run our stores, we have on-line sales and we have individual retailers for distribution.
This is a benefit for our customers, because they only have to deal with us and they know the quality and standard of our company.

ES: Which business do you prefer?

RK: I love wholesale because I grew up with it. I also love retail, because you can feel the market right there in the store. When you do something well, you feel it immediately, just as when you make a mistake. It’s always learning and it’s amazing, it’s so active. But, retail takes the money like a vacuum cleaner; you always have to invest money. At the same time, however, I love spending money, because if you do it right you get paid back.

ES: What is the secret of your success?

RK: Wanting success so much. We wanted to be a key player in the industry and that is the reason we concentrate so much and we have success today. In 1999, we became a real retailer. We have had some really big difficulties becoming a retailer, because department stores didn’t care about us. In 2008 and 2009, during the crisis, most of the retailers were afraid and stepped back. We pressed the accelerator and every two weeks we opened a new store, and where stores left, we went in. Then everyone began paying attention to us, and they started to give nice locations to us. Now, we are the biggest retail player in Turkey. The number two has 12 stores, and most of them are franchisees.

ES: What do you like about your job?

RK: I am the type of person who misses working on the weekends. I like to see the success and the growth. When I make an investment and see it succeed, it makes me very happy.

ES: What don’t you like?

RK: I don’t like not achieving our targets. I also don’t like reading e-mails and paperwork. I am not a paperwork guy. I am a marketing guy.

ES: What is the biggest challenge facing your company right now?

RK: Finding high quality, knowledgeable employees is a challenge. For retail, it’s a nightmare. If you have the right person in your store, the turnover can go up 30 per cent, but if you have the wrong person it can go down. The most important thing in retail is the employee. We work with the trainers, the consultants, we spend money on the employees, and then the next day they leave, because they are all young and they don’t have much responsibility or loyalty. We always have to have extra people, and that costs money, but we have to make the investment.

ES: What is the biggest challenge facing the watch industry right now?

RK: Designs. Design is the big risk. If you find a beautiful design, you are flying. If you don’t work with the right designer, God help you. Product design is the most important thing in the watch industry.

ES: How do you market your store?

RK: We do our own magazine, twice a year that goes to two million people. We even give the magazine out by hand to people on the street.
We do billboards, magazines and newspapers. We don’t use TV or radio very much.

ES: Who is your customer?

RK: Mostly, the young generation, 50 – 50 men and women. We reach other consumers too, but the young generation is stronger than the older generation. Young customers, once they get into the Saat & Saat family, they will stay with us.

ES: How important is after sales service?

RK: Very important and not fair. We have an average of nine days between receiving and sending it back to the customer, which is really good timing. That’s why we have over 50 people in the after sales service department. For us, after sales service is not a profit centre. I don’t want to risk it, because we don’t want customer complaints and we don’t want to harm our future. Even so, I cannot make everyone happy. Sometimes, the watch is eight years old and the customer wants me to solve his problems and you don’t have spare parts and the brand takes time to ship the spare parts, and the customer starts to complain.
If I have any e-mails from customers or retailers concerning after sales service, I pay attention and follow up on them right away.

ES: Are you optimistic about the future?

RK: In ten years time, we will have 500 points of sales here in Turkey, so I am very optimistic about the future. There are brands we would love to carry in Turkey. Saat & Saat would like to carry the brands that are performing well around the world but not in Turkey. We could help those brands here. With TAG and Maurice Lacroix, it’s a good chance for us to prove that we can do higher end brands.

ES: What is your favourite watch?

RK: I wear the TAG Heuer Carrera Calibre 1887.

ES: What brands would you like to carry that you don’t right now?

RK: We don’t want to be a brand collector. We get inquiries every week from the brands. If we have one brand that is not performing well in Turkey, we stop it. We have never lost any brands, because we follow the rules. What the brand owner wants, we try to do.

Thanks to Mr. Kaya and his staff for their hospitality and their willingness to give Europa Star insight into their organisation.

Facts and Figures:

• Saat & Saat operations:
• 82 Saat & Saat stores
• 8 Campanola stores,
• 45 Department stores (25 Boyner, 19 YKM, 1 Bigmall)
• 13 Saat & Saat Kiosks
• 5 Pandora shops
• Saat and Saat supplies 400 wholesale doors (independent retailers) across the country.
• Total turnover is approximately 50 per cent Saat & Saat operations and 50 per cent by independent retailers.
• Employees: 750
• Size of store: average size is 60m2
• Range of price: US$150 - US$10,000
• Best selling watches: Guess, Diesel, Fossil
• Brands: TAG Heuer, Maurice Lacroix, Burberry, Emporio Armani, U-Boat, Gc, Welder, Cerutti 1881, Pandora, Glamrock, Tommy Hilfiger, Guess, Diesel, DKNY, Michael Kors, Jacques Lemans, Citizen, Esprit, Fossil, Adidas.

Source: Europa Star February - March 2013 Magazine Issue