DM London chairman David Coleridge spent more than 20 years at Richemont before starting up his own watch business that has led to a series of lucrative deals with Selfridges, Asos, John Lewis and Rolex. Now as he snaps up The Watch Hut and The Watch Gallery Rachael Taylor interviews him about his plans to become one of the biggest watch retailers in the UK.
If you believe David Coleridge, all of his best business manoeuvres with DM London have come from casual cups of coffee, right from his very first – the acquisition of David Morris’s watch business.
Rather than pursuing an aggressive business plan, he claims that the things he’s wanted for his watch retail business have just fallen into his lap since his return to the UK in 2006, following a 21-year stint working for Richemont in faraway markets such as Russia, Japan and Hong Kong.
No doubt with a CV like his – which includes five years at fashion label Hackett in addition to his background in fine watches – Coleridge has built up an impressive little black book, and when you have one of those, business deals do tend to come to the table that much easier.
His first coup, and the one that kickstarted his whole empire, came after a chance meeting with jeweller David Morris shortly after Coleridge had returned to the UK from a role with Richemont in Russia and was on the hunt for an opportunity to branch out into business outwith the luxury goods group that he had built his career in.
“I had just come back from Russia and David Morris, who is a lovely chap, asked me to advise him on the Russian market, which I did,” recalls Coleridge. “He then asked me what I wanted to and I told him I wanted to launch a business and he said ‘Well, why don’t you buy mine?’. So I did.”
The business that he bought was a concessions model with four watch concessions in Selfridges and Harvey Nichols. Coleridge rebranded as DM London, the name which his company still carries today, and as he puts it “expanded slowly from there”.
In the six years since that first acquisition, DM London has ballooned. It has continued to work through the concessions model and now provides watch counters for department stores John Lewis and Selfridges as well as online offers for both retailers’ websites. It also runs its own stores under its own Time² retail fascia, does a booming trade providing the watch offer for Asos and last year opened a Rolex monobrand store in London. All in all that tots up to 16 outlets.
Now DM London is set to expand once again, this time with two separate acquisitions that have fallen into place, coincidentally, at exactly the same time. But unlike past ventures which have often left the company a little under the radar due to the unbranded nature of concessions, these two new business ventures will see DM London pushed into the limelight as a frontline retailer. The ventures in question are the acquisition of The Watch Hut from
TH Baker and of The Watch Gallery from Jura Watches.
While Coleridge actively pursued these businesses, he also puts the success of the deals down to yet more casual coffee meetings and “pure luck”.
“The Watch Hut was run by TH Baker, which is a family business, and they had grown it as much as they thought they could so when I phoned up they weren’t planning to sell it but it turned out to be something they wanted to do,” explains Coleridge. “As for Jura, I was having a cup of coffee with [Jura co-founder] Alistair Laidlaw in the Royal Exchange and it became apparent that we were both interested.”
The reason that Coleridge wanted to acquire watch retail businesses rather than start from fresh was a simple case of funds. In terms of bricks-and-mortar retailing this strategy offers some leniency on pricing, but where it really comes into action is e-tail websites, which is a key facet to Coleridge’s business plan.
“The perception is that it’s cheap to set up online but it’s absolutely not,” he says. “To establish a good site and get good traction with Google can take two to three years and cost you £1 million a year.”
Coleridge says that the cost of setting up online for designer brand watches is even higher than breaking into the online retail space for luxury watches because of the sheer number of players in the market. This is why for designer watches, which DM London plans to funnel through The Watch Hut fascia, it was even more important to snap up a company that has already been through this process and expense.
DM London sells both designer and luxury watch brands, from Rolex and IWC through to fashion brands such as Fossil and Michael Kors. In its present business model all types of brands are sold through its Time² retail outlets, both online and in stores, side by side but now with the acquisition of The Watch Hut and The Watch Gallery Coleridge plans to split the two out and keep them completely separate, selling luxury watches through The Watch Gallery retail outlets and thewatchgallery.com and its designer brand watches through The Watch Hut stores and thewatchhut.co.uk. The Time² fascia – which Coleridge admits he’s “never really liked” – will be evaporated as all the stores and online shops are rebranded.
“We have known for a long time that they needed to be separated out,” says Coleridge. “They really are different markets and it is something that the brands want and that the consumers understand.”
While the brands will be divided up into luxury and designer, what will work very closely together is the online and offline strategies for each fascia. Coleridge explains that the multichannel mix is hugely important for his business, with customers using all outlets within their arsenal to make a decision. While he estimates that only 2% of the group’s luxury watch sales are made purely online – with designer watches being the reverse of this figure with only 2% being made purely in store – he knows that shoppers are using both channels to make purchasing decisions.
He illustrates his point with a customer profile that he likes to call The Saturday Morning Watch: “At 9am, as soon as the doors open in Selfridges, a guy will walk in, point to a £5,000 watch and say ‘that one, please’. He has probably decided to buy that watch on Friday night, sitting with a drink in his hand, having discussed it with his wife or his partner, then first thing in the morning he’ll think ‘God, I hope they still have it’ and rush down to the store.”
By selling more brands online, DM London can service this Saturday Morning Watch customer much better by allowing him to reserve online or even buy through the website and have it delivered to him the next day. While some luxury watch brands are still resistant to change, Coleridge says that they are starting to come round to the idea that as long as they work with a partner that can deliver a quality online experience, selling on the web should not be seen as downmarket discounting option, but as an opportunity to facilitate more full-price sales as the market evolves.
Christmas 2011 hammered home to Coleridge just how important the online sales channel is to watch retailers. While business at DM London’s bricks-and-mortar outlets slowed in the last few weeks of the year, after strong sales throughout the year as a whole, Coleridge describes the business the group did through online channels as “awesome”. He expects this trend to continue and in its budgets for the coming year DM London expects online to capture 23% of its total sales, equating to a £50 million turnover from online watch sales alone, with the largest proportion of that generated from designer watch sales.
The other area for growth that has Coleridge’s attention is monobrand stores. “Every brand is trying to push monobrand stores, and I could see the trend for monobrand stores for big brands,” he comments. “We sat down and asked ourselves if we could do a monobrand store with any brand in the world who would it be?”
The answer was Rolex, and their wish was answered when the company approached the watch brand to state its interest. In July last year DM London opened its first monobrand store, a shop dedicated to Rolex at One Hyde Park in London’s Knightsbridge.
Coleridge says that he while he has no firm plans or deals on the table to open any more monobrand stores it is definitely something that the company would consider.
Since 2006, DM London has been quietly taking over the UK retail watch market in a low key manner, and Coleridge admits that “nobody in the industry probably realises the sort of numbers we’re doing”. He adds: “The business we bought was a concession one, so one is not a brand, one is under the radar.” But with the advent of two very much branded watch retail businesses in the form of The Watch Hut and The Watch Gallery now under its ownership, Coleridge and DM London might not be under the radar for very much longer.
DM LONDON & ASOS
DM London has been running Asos’s watch offer – everything from fashion brands like Ben Sherman to vintage Omega – since September 2009 and it is the fastest growing facet of the DM London business.
In the week before Christmas DM London sold 7,000 watches through Asos and sales in 2011 were up 57% on the year before, which had also registered a steep year-on-year rise of more than 60% on 2009’s figures.
This deal, once again, was the result of a casual chat over coffee when Coleridge was introduced to Asos chief executive Nick Robertson OBE through a mutual friend who used to publish Asos’s magazine.
At the time DM London signed the contract to begin working with Asos the fashion retailer was struggling to find watch brands willing to sell through the site. “Asos’s main business is fashion and we’re an accessory to that,” explains Coleridge. “We could bring the brands to them and its a nice complement for our business.”
Asos is all about the hottest fashion, regardless of price points, so when vintage came into vogue the directors asked DM London to source pre-owned watches – not an area that it specialises in or intends to go into – for the site. The team did as asked and Asos began selling vintage Rolexes and Omegas, among other luxury brands, with price tags as high as £5,000. “They sold them all in the end,” says Coleridge. “Albeit very slowly.”
This interview was taken from the March issue of WatchPro magazine. To view a digital version of this issue online click here.