Let it Grow: the boom in licensed fashion watches

Licensed fashion watches appear to be the watch sector du jour, becoming bestsellers in stores as fashion fans generate a buzz on the web that makes the timepieces must-haves. Kathryn Bishop finds out how licensed brands are born, why they appeal to consumers and what might be next in this sector of the market.

Last month two big-name fashion brands, one a US accessories label, the other a heritage UK brand, announced plans to launch watch collections.

Tory Burch and Barbour, the two brands in question, will appeal to very different clientele but are guaranteed to grab their slice of the fashion watch pie as the market for licensed watch brands enters the big time.

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To clarify, a licensed watch brand is one that is made by a watch manufacturer – which often doubles as its distributor – on behalf of a fashion, sports or lifestyle brand. The two companies typically work together to create a collection of watches that represent the brand while appealing to their target market, which is where the manufacturer’s knowledge of the watch market comes into play.

In the UK, brands such as Michael Kors, Hugo Boss, Armani Exchange and Vivienne Westwood represent just a handful of licensed fashion brands, while Asics, Adidas and Braun represent sporting and lifestyle brands, which are making their own mark on UK shoppers with advertising campaigns and exciting, colourful collections.

The Appeal of Licensed Brands
Everyday exposure to brands is not a new phenomenon, but today, compared to even a decade ago, brands characterise the day-to-day lifestyles of shoppers, who will opt for items with recognisable names over another product as they shop, whether buying a coat, a car, a handbag, new trainers or a knitted jumper. A brand logo not only symbolises who has made it, but reveals much about the wearer and how they hope others will see them.

Though we continue to work through a recession, style and substance have remained just as important to consumers, but with less disposable income out there to grasp for, brands have had to seek out new ways to keep customers on board and ensure their products remain desirable and accessible. For fashion and lifestyle brands, from Adidas to Armani, watches have provided a solution. They offer an item that is worn every day – a key selling point for any brand hoping to gain exposure – while also showing off the personality and style of the wearer.

The majority of licensed watch brands offer timepieces priced between £100 and £500. GfK figures for the first 10 months of 2012 showed that the value of watch sales between £100 and £500 – a category sure to represent a number of licensed watch brands – grew 1.8% in that period, the second highest rate of growth in terms of price point during that time.

Retailer Andrew Warner, director of Identity the Jewellers’ in Derby’s Westfield mall, describes the impact that a well-know brand name can have on sales. “Licensed brands that did well over the Christmas period were Michael Kors and Marc by Marc Jacobs where national advertising and a desire for the brands increased sales,” he explains. “From this I can say that there is a particular market for customers who choose brands over more established or less well-known watch names.”

Emma Cole, assistant product developer at watch manufacturer Zeon explains why licensed brands are a growing sector. “Like accessories and perfume, a watch is a simple way for aspirational customers to buy into their favourite brands without committing to a high-cost purchase. For brands such as Michael Kors, Vivienne Westwood, DKNY and Marc Jacobs, a beautiful watch priced under £500 that captures the essence of the brand will appeal to a customer [more than] an £800 handbag.”

Not all shoppers will be able to afford a brand’s mainline collection, be it suits or luxury handbags or even a sports car. But that does not mean the brand should ignore them. Stuart Kenrick, sales manager at Peers Hardy – which produces branded watches for Radley and Moshi Monsters, among others – believes that companies at the forefront of their sector realise that they can grow their customer base by opening up their product lines. “Brands with strong profiles appreciate that accessories, and watches in particular, offer a method of reaching new consumers who may previously have been excluded from access to their brand,” he explains.

Creating a Licensed Collection
As the announcement of Tory Burch and Barbour licensed watches show, despite a plethora of brands already in the market with licensed watches, more and more are looking to add to their product offer.

In the case of Tory Burch it already boasts a line of shoes and handbags, so watches were a natural extension of this. At the time of the launch, the brand’s founder Tory Burch said: “Expanding into timepieces will perfectly complement our accessories collection, an integral part of our brand DNA.”

But how does the brand, and more so the watch manufacturer that will be creating its timepieces, ensure that the watch collection represents the brand as suitably and commercially as possible?

At the north London headquarters of Zeon, which has licenses for brands Paul’s Boutique, Vivienne Westwood, Bench and Braun, the process begins at a UK level. The company’s assistant product developer Emma Cole outlines the process, using Vivienne Westwood as an example. “For brands with a distinctive handwriting, such as Vivienne Westwood, it’s all about collaboration with the in-house creative teams,” she says. “We work together to determine the direction the brand wants the collection to go and to ensure that new ranges complement the brand’s main collection. From there, Zeon’s in-house design team and product developers work to create designs and source samples. [Vivienne Westwood] is involved each step of the way, ensuring a design-led yet commercial product will find its way to market.”

A similar process takes place at Seiko, which has licenses for UK fashion brand Ted Baker and American brand Kenneth Cole, among others.

Seiko UK marketing manager Kirsten Crisford explains how Seiko works to ensure it portrays the brand as accurately as possible through its watch designs: “We have a merchandising and brand team that work with the fashion designers to ensure that the watch collections represent the brand accurately, while remaining commercial and practical for the high street. [Both sides] look at trends, in watches and wider fashion, to ensure that we are moving in the right direction. It is definitely a collaboration as the watches have to represent the brand in the right way and be desirable to the consumer.”

Ensuring this desirability is a core part of the design process. For example designs that are popular in China or the US might hold little appeal to UK consumers, and vice versa. As a result, manufacturers often spend time assessing what is missing, or needed, in the market sector.

MGS Distribution, which holds the licenses for Hugo Boss and Juicy Couture among others, works with the licensed brand’s team in both the UK and at its international HQ to ensure the delivery of appropriate watch collections for the UK. MGS commercial director Steve Brydon explains: “We have regular meetings with the brands themselves both at local UK level and at head office level. We can then guide them in particular styles that our market requires.”

Together the companies identify what is already successful in terms of design, and where there are gaps in the market.

Getting The Brands to Market
Once finished, momentum must be built to raise awareness of the watch collection beyond simply relying on the brand name itself. Marketing tends to take place through traditional advertising in magazines and online, but more than ever brands are utilising multichannel initiatives involving print and social media to win consumer attention at a global level.

Crisford says that Seiko tends to promote its licensed brands itself, often because its knowledge of the watch sector is stronger than a fashion or sports brands’ understanding. “We undertake the selling and promoting of the collections [but] the support of the brands is always used where we can,” she says. “They provide us with fantastic graphics and other POS. Having the final say on what support goes where allows us to get the right messages out to the market and tactically support our retailers to drive sales. The benefit of licensing a well-known brand is that the awareness levels are huge. Anything Ted Baker or Kenneth Cole do to promote the rest of their products reflects positively on the watches, and vice versa from us.”

At MGS Distribution its marketing team undertakes specific promotion, depending on which market the brand sits in, utilising in some cases the brand’s larger financial budgets. “We are responsible for promoting the watches in the territories we cover,” explains Brydon. “We can often access the multi-million pound sponsorships that the mother brand takes part in to do this. We use a combination of traditional and online advertising. We will select the media that we believe is most appropriate for the individual brand whether this be TV, magazine or online.”

Last year, for example, MGS hosted an away day for Hugo Boss watches at the famous Isle of Wight sailing event, Cowes Week, at which guests were able to enjoy a sailing trip and a chance to meet its ambassador Alex Thomson. At a consumer level, the watches have been promoted to tie into events such as Valentine’s Day and past competition to win watches through the Hugo Boss watches Facebook page.

Identity the Jewellers’ watch shop offer is largely licensed watch brands retailing for less than £500, including Calvin Klein, Diesel, Armani, Vivienne Westwood and Marc by Marc Jacobs. Warren explains how the store is promoting the brands it sells in partnership with the parent companies, and the impact this has had on sales.

“We receive in-shop advertising displayed as posters,” he explains. “The advertising created by the licensed suppliers had an input on sales over the Christmas period, especially with the Diesel, where the desire for their advertised lines was mirrored within the store and online.”

Reaching out to press is also very important for the manufacturers and brands, which want to ensure their licensed brands are in the right magazines, being read about by their target customers.

Cole describes the type of magazines Zeon aims to win coverage in or run advertising campaigns through: “Once the range is ready to go into stores Zeon will focus on marketing our new key lines with fashion publications, including Tatler and Vogue, depending on the brand and their marketing strategy.” The marketing is handled by Zeon but the company works as closely as possible with the brands’ PR departments to organise press days and brand events. “The main focus is print advertising in mainstream fashion magazines,” adds Cole. “However, as there is a growing lean towards utilising social media as a means of creating brand awareness and direct consumer contact, this is something Zeon are working on for future marketing campaigns for our brands.”

For certain, the arrival of the internet has provided numerous outlets through which licensed watch brands have been able to market their products, in particular through interactive campaigns that encourage consumers to interact directly with the brands in exchange for opportunities to win new watches, products, goodie bags or even days out with the brands.

Future Potential for Licensed Brands
There remains certain areas of the licensed watch market that are stronger than others. For example, fashion brands hold the majority share, while sports brands follow and others, such as Braun, a brand born from the functional German product maker of shaving fame, show new areas that could hold future potential.

But where does the industry see the next big brand coming from, and which areas hold untapped growth? For Crisford at Seiko, it is a case of keeping an eye on the younger generation of emerging shoppers. “We, like many others, are keeping a keen eye on what is happening in our market and beyond. It would be interesting to look at brands that are specifically tailored to a younger dynamic, but for now our product mix is strong and we feel more than happy with what we have.”

That said, Crisford states that the sporting market could be developed in terms of branded watches. So far Seiko produces Asics watches, with a focus on having functions tailored to running, as well as stopwatches. “If anything more can be made of sports brands, it is a growing market as more and more can be done to improve performance and assess progress through technological and nutritional advancements,” she explains. “A strong sports brand that has integrity can traverse a wide range of product sectors.”

Peers Hardy’s Kenrick says that the company is now in a position where brands are approaching it to discuss making a watch collection, rather than Peers Hardy seeking them out. While he hints that there will be several forthcoming launches in the latter half of 2013, Kenrick is sure not to give too much away when it comes to pinpointing new routes for branded watches. “Potential lies within all areas but the opportunity lies very much with the strength of the brand in question” he states.

Similarly, Zeon, while already manufacturing and distributing a solid stable of brands, hints that there is more to come in 2013 in terms of branded watches. Brydon reveals that the company will launch a collection of licensed Ferrari watches later in the year but teases that others may follow. “Finding a truly global brand that is not already offering licences is rare,” he says. “There is, however, one or two that I would love to work with. I am not going to say which as we may already be in discussion with them.”

Something specific that Brydon does feel is missing from the licensed watch market is a truly modern brand. “I believe that a truly contemporary, über-modern look is missing from our industry at the moment,” he explains. “So many brands go down the traditional, heritage look. I think we are crying out for a change to this and would love to find a brand to do this with.”

Wes Suter of retailer Watch Works at Steffans agrees and says that he believes younger product designers should get a chance to test their design mettle. “I would love to see a design-led range of watches with a bespoke feel using simple generic parts but individually designed by, say, a design student,” he says. “That would be very cool.”

While fashion dominates, it is intriguing to see which areas could offer a future opportunity to license a brand, product or designer name to a contemporary collection of watches in a time when consumers are savvier and more discerning than ever about what goes on their wrist.

This feature was taken from the March issue of WatchPro. To read the issue in full online, click here. 

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