When WATCHPRO last spoke with Eugene Tutunikov, CEO of Atlanta-based pre-owned luxury watch specialist Swiss Watch Expo, it was late March and the entire Western world was in lock down. This was the very beginning of the pandemic when nobody appeared to have a clue about how bad things were going to get. Every company in the country was bracing for the equivalent of a nuclear winter.
Not Mr Tutunikov.
Blind optimist or far-sighted oracle, he predicted over a zoom call from his hastily constructed home office that 2020 would be a record year.
And so it transpired.
Within weeks of that call, a number of other pre-owned specialists, all of which have built their businesses around ecommerce, were reporting that an initial freeze of around a fortnight had not only thawed, it was turning into a melt water flood of buying and selling.
Mr Tutunikov’s confidence was not simply the positivity of a born entrepreneur. It came from his business model, which is to take maximum advantage of the tight knit teamwork that comes from operating as a lean family-owned and run firm. This keeps overheads lower than wealthier rivals, and ensures that when things were getting tough, they simply work harder to make up for any shortfalls.
“We are proud to be a family business and we all pull together. In those early days of the pandemic, we knew we would find a way to keep the company going, even when we were forced to close the store,” Mr Tutunikov recalls.
As the year progressed, the bounce was higher than even he predicted. “Not only did we keep things going, but actually added to our fulltime headcount in 2020,” he tells WATCHPRO.
Business confidence was not helped in Atlanta by a political spat between Georgia’s Republican governor Brian Kemp who took a pro-economy position to keep stores open and the city’s Democratic mayor Keisha Lance Bottoms who wanted to bear down on covid cases with harder restrictions and mask mandates.
By July, Swiss Watch Expo (SWE) was open and has not closed again since, but it took time for customers to return. “It was a gradual process, but everybody who came into the store was delighted to see us all still there and happy to talk to them about their watches,” says Mr Tutunikov.
The vast majority of sales are made online, but serving the local Atlanta community is an important part of the SWE story, particularly as it brings a sense of community to the family-run business.
Mr Tutunikov is proud of the brick and mortar store, which is possibly has a greater density of watches per square foot than any other retailer in the country.
On any day, a customer is likely to be able to browse around 2,500 timepieces, all authenticated and serviced before being put on display, and virtually all owned by SWE because the business does not really believe in consignment.
It is a modern space with bright lighting but dark cabinets. Mr Tutunikov calls it a “hip, industrial design”.
The sheer volume of watches means there is something for every taste, but SWE deliberately focuses on the most desirable pieces from the likes of Rolex, Omega, Cartier, Breitling and Patek Philippe. This means stock turns fast, but it is also the most competitive part of the pre-owned market, which means margins are tight.
Again, Mr Tutunikov refers to the way his tight family approach helps in this regard. Where other certified pre-owned dealers will send watches away to authorized service centers for any repairs or renovations, his team does all the work themselves. This keeps costs down, which means when SWE is buying even the hottest watches, they can make competitive offers and still make a profit on the resale.
It is a bit like a budget airline like Southwest versus a full service carrier like United. By concentrating on a fast paced turnaround with a large number of customers, smaller margins can turn into healthy profits.
Fast paced does not mean poor customer service. Quite the opposite, argues Mr Tutunikov. In a world where the hottest watches are almost impossible to find — particularly at authorized dealers — SWE is delighting punters by finding the watches they want.
The company also makes it easy and enjoyable to buy and sell with an expert team ready to make an instant trade-in offer on one watch for another. If people want to spread payments, that can be arranged as well.
“Whether it is someone buying a watch to celebrate a promotion, a present for a loved one or friend, commemorate a retirement, wedding, graduation, or first bonus, if we can ensure they end up with a watch they love, we play a role in that events memory staying alive and celebrated through the years. And that is certainly something to be proud of,” Mr Tutunikov asserts.
There is also no compromise when it comes to ensuring every watch is sold as promised and with an 18 month limited warranty in addition to any warranty still remaining from the manufacturer, which is five years for brands like Rolex, Omega and Breitling.
The company also guarantees that every watch is 100% authentic and says it has not had any issues with over 35,000 watches bought and sold over the years.
After a record 2020, despite the pandemic, Mr Tutunikov is even more confident that growth will continue this year and expects sales to be up by more than 50%, even though the delta variant of covid is causing a fresh surge in cases and reigniting the political battle between hawks and doves.
Mr Tutunikov errs on the side of keeping the economy motoring and giving people the freedom to go about their lives and assess their own risk. “Around 50% of the people in Georgia are vaccinated now, and there is pent up demand for people to go back to living their lives the way they enjoy them,” he suggests.
Whether customers continue to come into stores will not dramatically affect the outcome for the company this year, but it is to see people face-to-face. Right now, local sales are growing faster than online sales, although from a much lower base, but the experience of a full showroom is restorative. “We are happy to see our local repeat customer faces again coming into our showroom, view some watches, try them on, and complete a purchase or exchange for something in their collection already. I think they missed us and we certainly missed them in 2020 where face to face interaction was rare,” Mr Tutunikov describes.
SWE’s approach appeals to a younger demographic, and they are shifting more quickly to a pattern of buying and selling watches as an enjoyable part of their love for traditional mechanical timekeepers. “We are seeing the continued fast evolution of the way the consumer thinks of luxury goods and especially watches. They are no longer purchased to be owned forever in many cases, and we see more and more people buying watches with the intent to trade them in or sell them at a later date. The mindset around the category from the consumer continues to shift. This spurs the continued growth of luxury resale players like us. We have been the trusted partner on this journey for many customers around the country. We are here to inspire our customers’ passion for luxury watches, and support them in the process to learn, buy, sell and collect,” Mr Tutunikov concludes.