The same holds true among companies looking to cater to fashion mavens, says Alessandra De Martino, public relations and communication director for Versace Watches & Fine Jewellery.
The brand follows the signature styles of the house of Versace in its designs, creating a broad collection from which retailers can choose styles that will appeal to their specific markets. At a time when consumers are still cautious about opening their wallets too wide, the need to up the price-to-value ratio in a piece remains a key concern among Swiss watch manufacturers, particularly with Europe’s economic crisis still making headlines. Brands continue to stress the need to ensure pricing matches a consumer’s perceived value.
“I think companies sometimes think that if they charge more, their brand becomes more exclusive,” says Leonid Khankin, managing and creative director of Ernst Benz. “For me, everything must have the right price and if you can charge appropriately, you don’t need to offer a discount. If you price appropriately and control distribution naturally by forming long-term, collaborative partnerships with retailers that look after their interests, you can protect the retailer’s margin. I think retailers should make money selling watches because if they are a successful retailer, they will choose to continue to support the brand so that we can continue producing watches.”
Finding the right distribution channel is part of the challenge to building a brand. Ryan Gonçalves, director of operations for Toronto-based Time Central, says department stores can help establish a brand by getting it in front of more consumers relative to an independent retailer, which may have less traffic comparatively speaking. While some may bank on the expertise an independent retailer can offer when it comes to product knowledge, Gonçalves says there should be no comparison, given the expectations of the client base and the more fashion-forward product department stores tend to stock.
“While a department store customer expects quality and value in their purchase, the details about components are not always the first thing they ask about,” says Gonçalves, whose company recently became the Canadian distributor for Festina and Candino.
Patrick Mooney, CEO of Valangin in Montreal, takes a slightly different approach, preferring instead to offer lines through a buying group and working with an established dealer base. “When dealing with 100 small stores, for instance, you have demand for product, the shifts in the market are slower, and you can more easily adapt,” he explains, adding the overall impact of losing a dealer is also much less.
Although manufacturers for the most part celebrated strong results in 2011, overvaluation of the Swiss franc, particularly against the U.S. dollar and euro, presented a significant hurdle for the industry, putting a strain on profit margins and selling prices. The Swatch Group alone reported currency corrections impacted its sales by about 700 million CHF ($763 million Cdn).
While some brands increased their prices to compensate, others like Switzerland-based Sequel converted to billing clients in U.S. dollars to remain competitive in some markets, Livingston says. Although Sequel doesn’t bill at one price across the board, it operates in more than 20 currencies. While she is unwilling to say how much converting to U.S. dollars cost the company, Livingston says the long-term outlook works in Sequel’s favour.
