he Movado Group operates a large number of fashion brands under licence: Coach, Hugo Boss, Tommy Hilfiger, Lacoste, Scuderia Ferrari, Juicy Couture and Rebecca Minkoff, models that are assembled in Asia and therefore do not bear the ‘Swiss-made’ label. This business, which has enjoyed strong growth in the past ten years (Hugo Boss sales rose from 4 to 80 million dollars between 2005 and 2012), represents half the group’s total turnover. It is also the proprietor of watch brands Movado, Ebel and Concord.

One of the largest watch licence operators together with another American giant, the Fossil Group, it withstood the 2015 crisis better than many of its rivals, posting growth of 1.4%. Even so, its sales were down 7.1%, at 552.8 million dollars, last year. It reacted with cost-cutting measures, including redundancies, but also by developing its online presence in the face of a traditional American retail network where sales of fashion watches are flagging.

The Movado Group has also entered the smartwatch arena, both for its proprietary brands and for those under licence, in collaboration with HP Inc. It also recently announced a partnership with Google.

How is the fashion watch market faring compared with that of ‘traditional’ brands?

The situation is highly contrasted, with marked geographical differences. This is because unlike the luxury watch market the fashion watch market is not yet very highly developed in Asia; as for the American market, that’s difficult for everybody because the retailers are having a tough time. But in Europe at least, the market is still profitable, especially in the UK and in Germany. We’re posting good sell-out figures, which is far from being the case of everybody currently in the fashion segment.

Where are you positioned in this tough and relentlessly competitive watchmaking ecosystem?

We try to input high perceived value. A 200-euro watch has to have a perceived value of 1,000 euros. That’s the key to fashion. Moreover, we operate clear segmentation between our brands, our products and our collections. Lastly, we’re very selective about distribution: some competitors went into overkill and distributed everywhere. But it’s a wellknown fact that over and above 5,000 points of sale worldwide you’re not going to find quality stores.

It’s striking that some major fashion names, such as Dior, Chanel, Hermès or Ralph Lauren, opted to develop an exclusive, high-end watch product, while others seem to view it as no more than an ‘accessory’ and entrust production and promotion of it to a third party...

If we look back at history, Gucci launched the first fashion watch. And at that time, the brand positioned its products towards the top of the range (editor’s note: see interview p. 46). Then the Fossil Group proved a game-changer with its entry-level Armani watches at 200 euros. Personally, I do not believe that the high-end fashion watch model is really profitable. This is mainly because new players launch their products on the internet, like Daniel Wellington for instance, which drags prices lower and lower. I feel that the best price position for a fashion watch is between 100 and 300 dollars. Over 500 dollars, it’s more difficult.

Are you yourself feeling the competition from companies like Daniel Wellington?

Of course we’re feeling it, even if Daniel Wellington targets a much younger customer base, millennials who are less loyal than mature customers and might move onto a traditional Swiss brand like Tissot or TAG Heuer, or a fashion brand like the ones we represent under licence. We prefer to view these newcomers as a ‘springboard’ for targeting the millennials, in the same way as smartwatches. Gateways exist between these different worlds.

Even so, how can you assure your long-term future in the face of the never-ending assaults by new brands – such as the very recent example of MVMT or Cluse who have made a commercial breakthrough?

We’ve learned to live with this continuous outbreak of new brands. Every two or three years some newcomer enjoys a roll on the back of some trend, which might be a bling-bling product, or a more conventional one as we’ve been seeing recently. But the success of those brands is usually shortlived. Moreover, Daniel Wellington made the same mistake as many others: over-distributing, which in the end erodes any notion of exclusivity and wearies those consumers who are sensitive to changing fashions. But it’s true that we’re engaged in a constant battle. We’re always having to develop, reinvent ourselves. We’re not in the luxury segment, where stock turnover happens once a year. In the fashion world, boutiques have to turn stocks over at least three times a year.

Which trend is forcing you most to change at the moment: electronic sales or the advent of the smartwatch?

Online sales by a clear margin – which are incidentally much more highly developed in the United States and Asia than in Europe. That is a major change. People are always talking about the Chinese consumer who comes to see the watch in the shop and then buys it over the internet. Young people are doing exactly the same thing. In the UK, one-third of watches are already sold over the internet. We have a large presence on the web. Can luxury watches allow themselves not to venture there? I can see that consumers are increasingly engaging with the internet. Regrettable as it may be, there’s no getting away from it.

Would you be prepared to host new brands under licence?

Yes, moreover we’ve just added Rebecca Minkoff, a particular favourite of the millennials, to our portfolio. But we’re very selective about adding licences. We turn down applications every week! There are always new opportunities, because brands are always being created. But our primary criterion is that the partner has to have a global presence. When it comes down to it the number of applicants who meet our criteria is quite limited. But all our brands under licence have high potential for growth, so we prefer to focus on developing them.

Especially, we were slower than our competitors in developing into Europe – five years ago we were present only in Switzerland – but today most of our growth there comes from fashion watches. Our group philosophy is to build the brands over the long term, cautiously and without over-distributing. That’s also what sets us apart from the very fast-changing fashion market.

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MOVADO GROUP BRAND PORTFOLIO

Proprietary brands: Movado, Ebel, Concord

Licensed brands: Coach, Hugo Boss, Tommy Hilfiger, Lacoste, Scuderia Ferrari, Juicy Couture, Rebecca Minkoff