Chicago has not been kind to luxury watch retailers over the years, with Swatch Group’s multibrand showroom Tourbillon closed in 2017 and Tourneau also giving up its multibrand in favor of operating only through a Rolex monobrand in the city. Perhaps the windy city needs more of a local touch, which is where Burdeen’s, under the leadership of husband and wife team Matthew and Rada Burdeen step in. Having conquered the northern suburb of Buffalo, the Mr Burdeen says company has invested heavily in a downtown presence with boutiques for IWC, Panerai and A. Lange & Sohne, as Rob Corder discovered in conversation with the youthful entrepreneur.
WatchPro: Burdeen’s was founded in 1980 by your parents dealing only in jewelry. How has the story developed since you and your wife Rada joined the business?
Matt Burdeen: Our first watch brand was Breitling, and that was in 1998. But to take you back to the beginning, my father Dennis was an electrician and my mother Sandy was a stay-at-home mum. The electrician’s business was not going well so my dad decided to quit and the two of them started making jewelry — just little trinkets using the same skills my father had as an electrician — and they started with a 600 square foot space in a local mall in Chicago’s North Shore suburb of Buffalo Grove. They didn’t have anything so they didn’t have anything to lose when setting up the business.
They did not have any great dreams of expansion or opening grand stores. They just wanted to make a nice living for themselves, and they ended up doing that.
I was at college in 1993 and they asked me to come home and help work with the two of them in the business. I always loved people and sales, and the industry is such an exciting place to be at the intersection of luxury and fashion. Once I was on the inside, I had bigger goals than my parents. After they had taken out enough to take care of themselves, there was not a lot left on the table for me, so I knew I had to make something happen.
Two years later, my brother Jason also joined the family business after receiving his Graduate Jewelers Degree from the Gemological Institute of America. Jason brought knowledge of manufacturing and design that catapulted Burdeen’s Jewelry into the world of haute custom jewelry.
WatchPro: What did the business look like when you joined full time in 1994?
Matt Burdeen: We had a 1500 square foot store in a strip mall and it employed just my mum, dad and me. We had around $400,000 worth of inventory, all jewelry.
WatchPro: Would that have been fine jewelry, or silver?
Matt Burdeen: It was fine jewelry, everyday jewelry at affordable price points.
WatchPro: Would it be fair to say that 15 years after it was founded, this was still a pretty small mom and pop business?
Matt Burdeen: Yes. The purpose of the business was to provide an income for my parents and our family. They were very happy to work for themselves and provide for us, which was a great accomplishment. There were no big dreams of incredible growth at that time.
WatchPro: Your North Shore flagship is up to 10,000 square feet now, which is enormous, so something must have turbocharged the business over the past 25 years. How big a part did the move into watches play in your growth story?
Matt Burdeen: Getting Breitling was a game-changer. My father was not much of a watches guy but he saw Jerry Seinfeld wearing a Breitling and that got him interested. We were at JCK one year and saw that Breitling had a suite there so my dad just went up and knocked on the door. Marie Bodman, who made Breitling what it is in the United States today, answered the door and my dad told her, “We are ready to take Breitling”. She said that was not quite how it worked, but she promised to visit our store. She came a few weeks later, saw our whole family, and left knowing that we would love the Breitling brand and make it work.
That was our first watch brand, we were all behind it and knew everything there is to know about Breitling and we built a Midwest clientele with just that brand. We didn’t have any other watch brands at the time. Marie saw the passion we would bring to the brand, and took a chance on us.
WatchPro: Other than Breitling, what else was happening to the company back then that set you on a path from a single 1500 square foot store on the North Shore to three locations across Chicago including, from earlier this year, three monobrand boutiques for A. Lange & Sohne, IWC and Panerai?
Matt Burdeen: I had an epiphany around that late 1990s time. I was in the store just before Christmas and it was packed with customers. We had this huge case of gold earrings that were $300 each, and I remember sitting at the counter with an older lady who was taking forever trying to decide on which of the earrings to buy.
There was a queue building up behind her and I thought to myself, I am a really good salesperson, I am spending a lot of time with this lady selling just a pair of earrings for $300, and I could have been doing something much more productive with my time.
That was the moment that I realized I needed to be trading at higher price points because I knew I could spend the same amount of time and make a lot more money.
WatchPro: I guess you were just thinking about moving through the gears on the jewelry side rather than luxury Swiss watches at that stage.
Matt Burdeen: We started stocking designer jewelry brands, picking them up a little at a time. My father never wanted to take on any debt, so we built up the brands slowly.
It was probably the year 2000 and I was around 30 years-old at that time, and I was getting frustrated and wanted to grow the business faster than my father. He didn’t want to take that risk, but he said that he would only work for another five years and then retire and let me run the business. That is what happened, so it was 2005 that I took over started looking at how to grow.
We were in a very bad place economically at that time, deep in a recession, but our business did not have any debt and that allowed me to take advantage of our solid foundation and the difficulties that the recession was causing others. There were a lot of opportunities to buy, and I was able to buy well.
WatchPro: Describe what was going on in Chicago at that time when it came to luxury watch retail. Were the biggest brands working with great retailers and doing well?
Matt Burdeen: Patek and Rolex were, but none of the others really were. The jewelers that had Rolex and Patek at that time were having a very difficult time financially, which gave us an opportunity to make ourselves known.
I would attend all the shows — and it was the first time for Burdeen’s going to SIHH and Baselworld — and started to network with other retailers from different cities. I was very fortunate to meet and speak to many people who mentored me and helped me to meet the brands.
I think they liked what they saw in me and how ambitious I was. And I have found that other businesspeople respect that and, in this wonderful industry, they are very willing to help. I got some great introductions and started growing from there.
WatchPro: It is widely accepted that the American luxury watch market has not enjoyed anything like the investment from the brands or the retailer side that is seen in Europe and Asia. That is changing now, but describe Chicago 10-15 years ago. Was it suffering from under-investment and was that contributing to it under-performing as a watch industry destination?
Matt Burdeen: For sure there was a lot of under-development here and we are spearheading some of that development. We have certainly invested heavily in our store in Buffalo Grove. Something I have always noticed when I am in Europe is that there are much larger branded environments. Part of my pitch to watch brands I was meeting was that I would give them those branded spaces.
When I go to Europe, I always love how people sell from the same side of the counter as the customer, whereas here in the United States we are used to being on the opposite side. It is much more intimate showing watches as if you are friends, rather than having a counter between you and the customer.
When we designed our Buffalo Grove store, each brand had a 10 x 10 foot environment to fit out as a shop-in-shop. The brands were really keen on that idea. It was exciting for them.
WatchPro: How did you grow from a 1,500 square foot store to a 9,000 square foot space? Was that all in one leap?
Matt Burdeen: The first thing we did was to cross the street to a 6,000 square foot store. There was a lot of bank lobbying that went on at that time because the economic situation meant that banks did not want to lend money to jewelers. The largest space I could afford was 6,000 square feet because that was leveraging everything I had. That project was completed in 2013 and then in 2017 we added another 3,000 square feet to take it to 9000 today.
WatchPro: So you were trying to raise money for the expansion in the shadow of the financial crisis.
Matt Burdeen: Yes, but the interesting thing about that was that it gave me an entry into another business that I launched and called Jewelers Credit Line. I collected a fund from friends, family and customers and opened a company that lent money to other jewelers because I had learned that it was so difficult for me to raise money, so it must be the same for other jewelers.
WatchPro: Burdeen’s at Buffalo Grove, for the benefit of those that do not know the geography of the city, is well outside the center of Chicago. How did that affect your business?
Matt Burdeen: It is a much-misunderstood area because within 5 miles of us are many of the Midwest’s Fortune 500 companies. We have Baxter, Wallgreens, Discover, Kraft, Motorola, UL Laboratories, and many more around us.
So all the C-level executives and senior managers who would previously have needed to go downtown to get a decent selection of watches were coming to us. We created an oasis out here.
WatchPro: It sounds like you had a lot of hurdles to overcome. It would have been a tough pitch to the banks, a tough pitch to the brands and a tough pitch to the real estate companies. What is it about you that managed to get those conversations across the line?
Matt Burdeen: What can I say, I guess I am pretty charming. I am very transparent, I am an open book at all times. Banks and brands find that refreshing. Also, I am 44 years-old now but at that time I was in my thirties and they found it refreshing and exciting that I was a younger guy.
It was a very steep learning curve. I never graduated college, I never had any financial training so going through all the pitches with the banks and brands, I was also having to learn what a P&L and a balance sheet is so that I could present my plans.
Fortunately, I had some fantastic mentors who took the time to teach me those things. Even now, I can speak to people at a very high level. If I have a problem with HR, I can call the HR director and Wallgreens for advice. If I have a problem with finance, I can speak to the CFO at Baxter and ask him what he thinks.
Aside from clients, who are great mentors, I have also worked with great people at the banks and the brands. People are willing to teach you if you are prepared to ask.
I love to be doing so many different things and learning from so many different people. That is what being an entrepreneur is all about. It is exhilarating to me.
WatchPro: When you made it into the 6,000 square foot showroom, did the brands immediately come on board?
Matt Burdeen: It was an explosion. They appreciated that we had built something in Illinois that nobody had done before and created a level of luxury that did not exist. Philippe Bonay was the first person in from Jaeger-LeCoultre. We performed very well with that brand.
Something that is very important to me and I instill into my staff is to remember where we came from. That means we treat clients very respectfully and we behave very humbly, and it is the same with the brands. We spend a lot of money market and a lot of time training. When we have a brand, we get behind it 100%.
WatchPro: That relationship must be very important to you because, if we fast-forward to this year, you are opening boutiques with IWC, A. Lange & Sohne and Panerai. You appear to be all-in on Richemont.
Matt Burdeen: Absolutely, I have tremendous respect for what they have done in the past few years with the buy-backs. It is difficult for a lot of these massive publicly-traded conglomerates not to just think about the next quarter’s results. Richemont looks much further into the future, and seeing that makes me want to get much more invested with them.
WatchPro: How difficult was trading when the gray market was stuffed with oversupply, and prices were so soft, and how have things changed today?
Matt Burdeen: Our margins were much lower, but at the same time we were using the extra product that was on the market to develop our pre-owned business. So margins may have been less on new watches, we took that as an opportunity to grow in other areas.
Pre-owned is not an easy thing to get into, and we made a lot of mistakes in the early days. I remember one of the first deals I did when the program was much smaller was for a vintage Patek Philippe triple calendar in rose gold from somebody that needed the money that same day.
It turned out to be a Frankenstein watch where the movement and case did not match. I paid $60,000 for that watch, which was about half my budget at the time, and it was worth closer to $15,000. That was an expensive lesson.
With our second expansion, which happened two years ago, we have created our own watchmaking department with two highly trained watchmakers. We are a certified service center for IWC, Panerai, Jaeger, Omega, Cartier and we keep training to get more and more accreditations.
Whenever training is available, we go for it. There is a window for Richemont training right now, and we are jumping through it. Brietling’s window is closed and they not been offering training for years to third parties, which is really frustrating.
We are doing so well because we put our heart and soul behind these big, beautiful international luxury brands. The Midwest people need to see and feel that.
WatchPro: In addition to the difficulties getting onto training programs, I hear brands like Rolex are pulling parts accounts so it is getting harder and harder to get watches serviced by anybody other than the brand. That is making repairs more expensive and takes a lot more time than working with an independent service center.
Matt Burdeen: [pause] Yes.
WatchPro: From what you are saying, it seems like your belief in around 2012-13 was that Chicago was ready for a company’s like yours to really lean in and go big. You clearly had big dreams back then, but have things played out as you imagined?
Matt Burdeen: I would say so, absolutely. Other retailers that were working with the big brands at that time were unwilling to give those brands what they wanted. When the tide turned, and the brands wanted to create much more of a luxury experience, there was a lot of resistance from retailers when they were asked to give them space and create shop-in-shops, back walls and showcases. We were willing to do that, which was a big advantage to us.
Brands are also looking for transparency. They want to share best practices with their retailers, and we want to share our best practices with them.
WatchPro: You have opened three side-by-side boutiques for Lange, IWC and Panerai in downtown Chicago this year. Tell me how that came about and how they are performing?
Matt Burdeen: That is a funny story. Giovanni Carestia, who is head of retail for Van Cleef & Arpel right now but was president for Panerai North America until earlier this year, he came out to scout our store for Panerai. He was sitting in my office and said he would not just open with us as part of another multibrand showroom, he wanted a Panerai boutique in Chicago. So I said, OK, I will open a boutique.
He laughed, but I said I was serious. He said he would come back when I had something staked out and left for his flight.
About two hours later I called him and said, do not get on your plane, I have found a great space for us. He laughed again and said he couldn’t just turn around but would be back on Monday, which he was.
I showed him the space I had in mind at the Waldorf Astoria downtown, and he loved it. And it started from there.
WatchPro: Is the space owned by the Waldorf? Was it already a retail space?
Matt Burdeen: There was existing retail space, but it was never right. It was always something pop-up or temporary. What we were proposing was not just going to elevate our business, it was going to elevate theirs.
WatchPro: Do the stores open onto the street, are they accessed from inside the hotel, or both?
Matt Burdeen: The hotel has a beautiful European-style courtyard with a fountain in the middle. It is very unique. Our doors open onto the courtyard for Lange and Panerai and the door for IWC opens onto Walton Street.
WatchPro: Does that mean you are getting traffic just from hotel guests or do regular Chicago residents know it as well?
Matt Burdeen: It is a very popular area of Chicago in the center of all the luxury hotels and the luxury shopping district. We get qualified traffic to the stores. It was a strategic move to go there instead of being on Michigan Avenue’s Magnificent Mile or Oak Street, which is unqualified.
People walking up and down Rush Street are different to the people walking on Michigan Avenue. Aside from that, the Waldorf also has residents living there, and it is the second most expensive real estate in Chicago. The most expensive real estate in Chicago is directly opposite the boutiques. We are at 11 East Walton and at 9 East Walton is the most expensive real estate in the city.
WatchPro: How much were you thinking about tourists and business visitors to Chicago when you staked out the location, and how much was your mind on the domestic customer?
Matt Burdeen: At the beginning I was not thinking about visitors at all. We do have another location in downtown Chicago called B. Young & Co, a luxury watch and jewelry boutique located inside Bentley Motors Gold Coast showroom, which is the largest Bentley showroom in the United States and sells Rolls Royce, Maserati, Bugatti and Lamborghini alongside Bentleys. B. Young is an authorized dealer for B.R.M., Ulysse Nardin, Seven Friday, Bamford London, Dietrich and we have pre-owned watches and fine jewelry. We have been there for about seven years.
At that location, I did not expect too many local tourists, but there are a lot from the Midwest area who come to Chicago to enjoy themselves and spend some money.
WatchPro: How have the three new monobrands been performing, compared to your expectations?
Matt Burdeen: Very well. It is creating more networking opportunities for us and helping us to meet new clients.
Tourbillon, the Swatch Group-owned multibrand showroom on Michigan Avenue, failed in 2017. You had Tourneau that also failed in Chicago [it now runs a Rolex monobrand boutique on Michigan Avenue]. It has not historically been a great place for jewelry boutiques.
WatchPro: Razny must be doing OK with Rolex and Patek Philippe on Oak Street.
Matt Burdeen: Anywhere with Rolex and Patek in a major city is going to do well.
WatchPro: What is next for Burdeens over the coming few years?
Matt Burdeen: I think there is a huge amount of potential in Chicago, and I would love to partner with other brands or even other retailers to exploit that opportunity. We have a unique understanding of the market that is going to allow us to expand and be successful.
I do not think we would be such a success if we did not have that grass roots understanding of the market. Richemont understood that, otherwise they would have opened their own boutiques.
I think Razny understands that, and has done a great job with the Rolex and Patek Philippe; probably better than Tourneau does with Rolex on Michigan Avenue because they are part of the community. Chicago appreciates that.
WatchPro: Do you think competition might heat up now with Bucherer and Watches of Switzerland in the USA?
Matt Burdeen: I know David Hurley [EVP of The Watches of Switzerland Group in North America] very well. He is a good friend of mine. Those sort of companies understand that Chicago is a difficult city in which to operate. And there is a lot of low-hanging fruit in other parts of the United States that they could go after first.
We are doing so well because we put our heart and soul behind these big, beautiful international luxury brands. The Midwest people need to see and feel that.
WatchPro: Thinking back to how the company started with your parents making and selling their own jewelry, is Burdeen’s still a significant jewelry retailer or are watches far larger now for the company?
Matt Burdeen: I would say we are 60/40 watches to jewelry. That feels about right to me. Jewelry is still an important part of who we are. We design and manufacture at our own workshop and we have a tremendous range of fine jewelry.
WatchPro: Do you have any other expansions or openings planned?
Matt Burdeen: We definitely have ideas, but nothing I can speak about right now.