n 1998 Europa Star published an opinion piece I wrote, titled “Distribution will be the battlefield of the next century”; a look at the state of the markets and the industry in the wake of the Basel and Geneva (SIHH) fairs. And here we are, in that next century!

One of the topics I touched on was the early signs of concentration and the rumours doing the rounds at the fairs. My thoughts were that “today’s business climate is moving towards consolidation, an unavoidable phenomenon.” Events would prove me right: a process of mergers and acquisitions began in the late 1990s/early 2000s that strengthened groups and produced the industry’s major players.

Vendôme/Richemont became the new proprietor of brands previously owned by Mannesmann/VDO (Jaeger-LeCoultre, IWC and A. Lange & Söhne), having already added Vacheron Constantin to its stable; Breguet came under the Swatch Group umbrella; LVMH joined the circuit with TAG Heuer, Zenith and Ebel (later sold to the Movado group), then Hublot. A non-exhaustive list.

Pascal Brandt’s 1998 article, to be read in the light of what we know today!

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Having continued throughout the 2000s, albeit at a slightly slower pace, consolidation remains part of the landscape but this landscape has fundamentally changed. With very few heavyweights potentially up for grabs, the tendency has shifted towards acquisitions of smaller, independent brands with high added value, collaborative partnerships, etc.

When I wrote the piece, in 1998, the debate was essentially upstream, centred around brands and entities in the process of solidification.

At that time, the downstream end of business was largely uncommented on. One of the people I spoke to did, however, predict that “distribution will be the battlefield of the next century. A few major players will try to take control of distribution.” More than a quarter of a century later, his words carry an almost prophetic ring.

Watch distribution in the 1990s stuck to a relatively simple schema that hadn’t changed in decades. The handful of (mostly independent) brands followed the agent/distributor/retailer model. Few took the alternative route of brand-owned-and operated stores; a model which, by cutting out intermediaries, brings bigger margins.

In the same issue, Europa Star reported on watch retailing in Argentina and Chile. At that time, distribution followed the traditional model of brand-distributor-retailer.

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For those that did, the essential condition for keeping business ticking over was a multiproduct approach, selling watches but also fragrance, leathergoods, eyewear or writing instruments. As an aside, some brands are now opening boutiques that sell only watches. Good luck with that if you are not called Patek Philippe, Audemars Piguet, Rolex, Omega or one or two others...

The internet was the next gamechanger, with an acceleration in recent years that has impacted every aspect of distribution. In a nutshell: the emergence of platforms specialising in sales of second-hand timepieces, some of which don’t (didn’t) think twice about hosting brands looking to destock; the launch of brand-controlled e-commerce sites; a stream of content on social media, now a touchpoint between brand and customer; also on social media, an explosion in the number of KOLs and influencers who, often, have no influence at all; digital experiences and virtual stores in the metaverse… and by the way, who remembers this digital fantasy, after brands extolled its virtues? All intended to make direct contact with the customer on the other side of the screen.

The COVID pandemic reinforced this dynamic and brought profound changes to distribution. Brands still had to sell their watches and, with no physical contact, were forced to adapt quickly. The pandemic playbook, now operating at cruise speed, has become embedded in the landscape but hasn’t spelled the end of brick and mortar stores, which are still a reference point. Few would purchase a minute repeater by a storied Geneva manufacture on a chatbot’s recommendation…

Which brings us to a parting of the ways: distribution is not the same for a large established brand as for a small label struggling to survive. The “majors” – world-famous names with nothing to prove in terms of desirability - are at the head of their own network of boutiques and/or authorised dealers. They make careful, deliberate use of social media to convey an aspirational image, not as a business channel. Online sales, when they exist, are strictly filtered and limited.

In a 2023 report on The State of Retail, Europa Star analysed trends in watch distribution, including the formation of “super retailers” with sufficient clout to speak with brands as equals. This directly echoes ideas set out in Pascal Brandt’s opinion piece, written when consolidation was still in its early days.

©Archives Europa Star

Many well-established, lower-tier brands play across the board by combining a physical presence with digital channels and online sales. Which leaves everyone else: brands which make use of every digital means available to hook potential customers’ attention as they scroll through their socials feed. They are the niche brands with no distribution network of their own, not much of a foothold in retail and no budget, treading water in an overpopulated pool with even more diving in. The fact is, there are only so many customers/watch lovers/collectors for an abundance of brands and a torrent of products targeting more or less the same audience.

The latest stage in this consolidation came when Rolex bought Bucherer, pocketing its more than 100 doors in the process. It now oversees the entire chain of production and distribution, and has control over certified pre-owned sales of its watches – a position many must envy. Hot on the heels of this transaction, the newly minted The 1916 Company is a merger of WatchBox, Govberg, Radcliffe and Hyde Park Jewelers. This global entity encompasses a network of authorised dealers and an online pre-owned marketplace. The cherry on the cake: The 1916 Company has joined the Rolex Certified Pre-Owned programme.

This consolidation is the logical consequence of the subsuming of individual brands into large entities that began in the late 1990s and was bound to have a long-term impact on watch distribution in a hyper-saturated, fiercely competitive market.

The brand-distributor-retailer model is a thing of the past. The Rolex/Bucherer and The 1916 Company mergers are very likely the first of many.