Citizen Hopes to Capitalize on Its High-Flying Eco Drive Series
This spring, Citizen introduces 68 new models of Eco Drive, the battery-less watch that’s sparking consumer interest and energizing sales. Launched in 1996, Eco Drive is already Citizen’s best seller, accounting for 20% of sales.
The spring rollout is spearheaded by the Eco Drive, Elegance Signature, and Promaster series. The Lyndhurst, N.J., company is launching 18 Eco Drive watches, which convert light to power quickly and efficiently. These watches are mostly sporty and made with titanium, which complements their advanced technology.
Eco Drive sales are an indication that consumers are finally accepting titanium. Citizen claims to produce more titanium watches than any other company. The brand is introducing four new Eco Drive chronographs and five 200-meter water-resistant Solar Tech 180 models, among other eco-friendly dress models. Solar Tech 180s feature a six-month power reserve and retail from $295 to $550.
Elegance Signature is the pinnacle of Citizen’s dress watch offerings, representing 10% of sales. The brand is introducing 18 new models this spring in two-tone, all stainless, or gold-tone, from just $250 to $335. Citizen is also unveiling the Stars & Stripes Navisail yacht chronograph, which will be the official watch for captain Dennis Conner’s team in the next America’s Cup finals in Auckland, New Zealand, in 2000.
Overall, Citizen’s sales last year rose about 20%-30%. Laurence R. Grunstein, president of Citizen Watch Co. of America, attributes this performance to focused collections, better merchandising, and internal sales-tracking systems. Citizen invested $30 million in marketing in 1998, two-thirds of it going to its huge advertising campaign, which encompasses sports marketing, promotion, and cooperative ads. The company also extended its sponsorship of the U.S. Open tennis championships through 2004.
As the leading advertiser in the mid-priced category for six consecutive years, Citizen helps drive consumers into jewelry stores. “Most retailers want pre-sold, highly advertised brands, those that offer good turnover and return on investment,” says Grunstein. “Citizen is one of the best-performing lines for GMROI [gross margin return on investment]. Two times is average for a good watch brand, and Citizen exceeds that consistently.”
Don’t look for Citizen to acquire new brands any time soon. While the company explores new opportunities – the licensing of Yves Saint Laurent watches is one example – it’s concentrating mostly on bolstering existing business. And although Citizen’s average retail sale is rising, Grunstein says the brand intends to buck the upscale trend, keeping its core range from $100 to $600. “It’s where we’re going to stay,” he says. “When you jump around, you confuse consumers.”
Citizen’s consumers are generally 18 to 54 years old with incomes over $30,000. The brand also has a niche consumer: the sports enthusiast who cherishes the Aqualand diving watch series. Its popular and sporty Promaster series accounts for 10% of sales as well.
Collections aside, Citizen offers watches for all tastes. And since Americans generally favor stylish yet moderately priced watches, it’s no surprise the brand is a strong performer. “Retailers need to look at new opportunities all the time,” says Grunstein. “But eventually they come back to the tried and true – brands that are regular performers financially.”
Movado Sells Piaget Rights
After two years of speculation, Movado Group announced its intention to sever ties with Piaget by selling the upscale brand’s U.S., Canadian, and Caribbean distribution rights to VLG North America, which also distributes Cartier. The sale, subject to regulatory and customary closing conditions at press time, is estimated at $30 million.
The handwriting was on the wall as far back as 1997, when Movado Group’s Concord brand introduced a highly complicated and jeweled watch collection with diamonds, emeralds, rubies, and sapphires. As Movado Group concentrated intensely on boosting Concord’s prestige, brand awareness, and performance in subsequent seasons, some predicted Piaget’s days with the power distributor were numbered.
Piaget was the founding business for Movado Group, formerly known as North American Watch Company. Movado Group president Efraim Grinberg says the transaction allows the Lyndhurst, N.J., company to focus more on its remaining business and frees up capital for reinvestment. Concord is now the main high-end focus of Movado Group’s portfolio, which includes Movado, Corum, Coach, and Esquire.
For its part, VLG North America, a wholly owned subsidiary of the Vendôme Luxury Group, adds Piaget to its exclusively luxury offerings, which include Cartier, Vacheron Constantin, Baume & Mercier, and Panerai. The company will also operate Piaget boutiques. Simon J. Critchell, president of VLG North America, sees “great potential for future development of the Piaget business in the North American marketplace.”
In the initial weeks following the Movado Group announcement, the watch distributor’s shares climbed 25% to $27 a share, up from $21, according to Individual Investor Online.
Helen Neff Leaves Hermès
Helen Neff, president of Hermès Watch Co. USA, resigned Feb. 15 to rejoin her former employer, DFS Group, as a senior vice president of merchandising. Neff, one of seven women to head a watch company in the United States, had run the San Francisco company’s watch business since 1992. At press time, a successor had not been named. However, Hermès’ parent company, La Montre Hermès, will continue with its current sales and marketing strategy.
Neff was responsible for sales, marketing, and distribution of the Hermès watch brand, including the successful H-shaped “H-our” watch and the “Kelly” watch. Along with Breitling’s Marie Bodman, Jaeger-LeCoultre’s Nancy Fox, Baume & Mercier’s Margaret Siegel, Tag Heuer’s Susan Nicholas, Hamilton’s Linda Passaro, and Gerald Genta and Daniel Roth’s Andrea Suriano, Neff boosted women’s influence in the heavily male watch industry.
Steven Kaiser, Benedom’s CEO
Kaiser Time, the exclusive U.S. distributor of Delance Swiss Watches, signed an agreement with Swiss watch manufacturer Benedom S.A. to distribute Christian Dior watches under the new company name, Benedom Inc. Steven Kaiser is Benedom Inc.’s chief executive officer and a shareholder.
The new agreement ends the former Kaiser Time’s deal with Honora Industries, with which it partnered to launch Delance last October. Benedom Inc., New York, will assume distribution of Delance, the first watch line created, designed, and produced exclusively for women, by women.
Benedom launches the new Christian Dior collection this spring in selected stores. Christian Dior watches, formerly distributed by Swiss Watch Corp., retail from $700 to $7,000 under Benedom. Benedom S.A., an associate company of LVMH, holds the worldwide license for Christian Dior watches.
Rolex Chairman to Retire
He presided over what’s regarded as the most successful watch company in the United States. During his tenure, gold watches wrapped more American wrists than ever before. Now, after 31 years with the company, Rolex Watch USA chairman Roland Puton has announced he will retire on June 30. He will continue to serve on the company’s board of directors.
Puton joined Rolex’s Canadian division in 1967 and transferred to the United States in 1975. In 1984, he was named president of Rolex Watch USA, where he guided the brand during its heyday. Puton assumed chairman duties in July 1998 when Walter Fischer came on as president.
The news comes on the heels of Rolex’s appointment of Allen Brill to executive vice president of sales and Douglas Meine to national sales manager. Jean-Noël Bioul, the former executive vice president of the U.S. subsidiary, relocated to Rolex Paris, where he’s performing similar duties in sales.
Brill joined Rolex in 1978 as an area sales manager. Before his promotion, he was senior vice president and national sales manager for the company. Meine joined Rolex in 1984 and was sales director for the western United States before his promotion.