Consumers and business leaders in Europe are used to importing innovation and ideas from the United States but, when it comes to the Swiss watch industry, Europe tends to lead and America follows.
Which is why, in The Big Interview for WatchPro’s September edition, we will publish the views of Bucherer UK’s chairman David Coleridge, a 20 year veteran of the British watch industry, where his company, The Watch Gallery, was acquired by Bucherer in 2016.
Not only is his insight important for the UK and European watch industry, it gives pointers to what may happen to Tourneau, which Bucherer bought in 2018.
Mr Coleridge believes the world-wide roll out of monobrand boutiques that are owned and operated by the major groups has peaked and will likely to into reverse, although his views are based on the more crowded UK market where most branded stores are clustered in central London.
“In a UK watch market worth around £1.5 billion, I do not think the brands will open more monobrand boutiques because they need them to make money and there are very few places left where they could go profitably,” Mr Coleridge says.
“All of the groups could easily afford to open flagship stores, even if they were not making money. But I do not see many more being opened as from a customer journey point of view clients like to have a bigger variety of choices when shopping. Swatch Group appears to me to be reducing their monobrand retail network around the world. There are certainly more closing than opening. I think the direct selling in monobrand boutiques owned and operated by the groups has gone as far as it is likely to go,” he adds.
At the same time, Rolex’s commitment to work exclusively through retail partners has led to far more investment from its authorized dealers than any individual watch brand — even Rolex — could make on its own.
Rolex has reduced the number of doors in the UK from around 170 to 115 today in the UK, but almost all of those are now shop in shops or branded boutiques paid for and run by its authorized dealers.
Mr Coleridge says he would not have invested anything like as much in building Rolex retail space were it not for his belief that they would not compete with his company either online or with monobrand stores.
“When we were still The Watch Gallery back in 2011 [before Bucherer bought the company], we were considering opening a Rolex boutique in [affluent central London hot spot] Knightsbridge, which was a huge investment from our side. We were looking at a 15 year lease on the retail space which at the time seemed like an incredible investment and commitment for a company our size, but we knew that, while they had a Rolex boutique in Harrods and were also in Watches of Switzerland in Knightsbridge, there was no way they would open their own shop on our doorstep. We would not have done this store without that assurance,” he recalls.
Ecommerce is proving equally problematic for brands choosing to run their own online stores, Mr Coleridge believes. “The problem for an awful lot of companies today is that they have invested massively in ecommerce and are not making any money at it. They can hope that sales will increase and turn that side of their business profitable but, in the watch world, that can only be done by winning market share. In an overall market that is growing in low single digits it is now impossible to sustain massive online growth as it was 5 years ago,” he suggests.