Dan Broadfoot worked in his first jewelry store aged 16 and paid his way through college with a job at Tourneau. Now aged 36, he and his wife Anna have built a thriving business in Plano, north of Dallas, TX, having traded up from a 350 square foot micro store to a gleaming emporium in one of the country’s fastest growing cities. Through a mix of naivety, luck, hard work, passion and risk-taking, the entrepreneurs now have a loyal following for their eclectic mix of high end timepieces as Rob Corder discovered in conversation with Mr Broadfoot.
WatchPro: You have a fascinating portfolio of watch brands on sale at your store. How do you find the experience of dealing with the Swiss when you are working out how to put your layout together?
Dan Broadfoot: It was really interesting for me to read in WatchPro about Bucherer wrestling with brands that want X amount of space in their stores. That is something as a business owner I struggle with as well, so it was good to read that it is not just independents like Timeless Luxury that find themselves on the end of these types of issues.
It is funny to me that powerhouses like Bucherer and Watches of Switzerland are dealing with the same thing. The industry does not like to speak about this sort of stuff too much, but when we go to SIHH and Basel and meet with other retailers, we learn that we are all going through similar experiences.
WP: One thing I will tell you about WatchPro is that we re on the side of retailers who are investing their own time, money, expertise and passion. I want brands and major groups ever to forget of take for granted how much retailers live and breathe the watch business and represent these brands every day in a way that delights their customers. That should be recognized and rewarded.
DB: The customer is king. They want to know you are passionate and your team is passionate. They love coming into stores like ours where they are more than likely to meet the owner, like me, who shares their passion for watches. That is something the multiples struggle to replicate. Customers come to us and say that they have gone into one of the chain stores and bought a bunch of watches from a guy who is not there anymore. Relationships are everything in this business.
WP: How has that shaped your approach at Timeless Luxury?
DB: We think like an independent and have a lot of fun with brands like Nomos, Meistersinger and Grand Seiko. These are smaller brands and may not look as great on the balance sheets of the larger groups, but they make fantastic watches. Some of them might not be Swiss, and shareholders of a major company might prefer to focus on the biggest brands with the biggest advertising budgets rather than have to work hard to build a business around the types of brands that we love. We can do whatever the hell we want, which is kind of the fun of it.
WP: But you are also an authorized dealer for brands from the big groups, such as A. Lange & Sohne, IWC, Tudor, Blancpain and Omega.
DB: Yes, the groups are all different. We work with LVMH on TAG Heuer and Zenith, Swatch Group is Omega and Blancpain, Richemont gives us Lange, IWC and Montblanc. Plus we deal with Rolex for Tudor and Seiko for Grand Seiko. They work well alongside independents like Nomos, Meistersinger, Oris and others.
Dealing with the groups is totally different to dealing with independents. You cannot treat those relationships the same way.
One of my favorite things we do is to work with brands to create limited editions for Timeless Luxury. We have done that with Zenith, Grand Seiko, Bremont, tons of Nomos models. Doing that with small independent brand can be done over a couple of beers. It is as simple as that. I have only done it with one group brand, which was Zenith, and it was a much, much longer and more structured process. That can be a good thing, and the Zenith limited edition was a great success, but you need to know it is going to take time.
WP: Is it not as difficult for you to speak to Swiss or German executives? Both the big groups and the likes of Nomos are pretty centralized in Germany or Switzerland. Have you found a way to chat over a beer in Texas?
DB: With Nomos, we have sat down on the side of a trade show like JCK in Las Vegas. There is such a family feel to that business. We are partners, we are family, we are going to make money together and respect each other. It is much different to dealing with the corporate world, which is just business.
WP: I think this is key and will be an increasingly hot topic over the coming years because luxury, where customers are spending thousands of dollars, needs customers to feel like they are getting a beautiful experience. They want to feel like they are speaking to experts and enjoying it. If the process becomes too corporate, they might as well shop on the Internet. No matter how hard the groups try to come up with a formula that can be cookie-cuttered across every retail partner in the world, it will not work without passionate individuals building relationships with customers in their local communities.
DB: One of the big keys we have at Timeless is experience. We are asking them to make big ticket purchases, and the whole experience has to be valuable to them. You lose so much when you click a button online and the watch shows up in the mail.
But if a customer goes out to a beautiful store with knowledgeable staff who greet you with champagne. You are taken on a tour of amazing watch brands by professionals; that is a really special experience. That is what we try to give each of our customers.
We also do an event every month, for example we have a Zenith event coming up. We just had a massive Grand Seiko event. We try to make these really special, not use them to push watches. We will have live music, a cool cocktail, we bring in watchmakers from the brands. With Zenith, people will be able to play with an El Primero movement. It is huge amount of fun and there is no obligation to buy.
That is the sort of thing that creates customers for life and they are forming into friendship groups that did not even know each other before, but now they come in and hang out together to talk watches and enjoy their hobby of watch collecting. We take groups to outside events like a track day at Indianapolis where they could still talk and see watches, but also get behind the wheel of a racing car. These are the things that people miss out on if they just shop online.
WP: That sort of relationship-building cuts both ways these days. Customers need to show loyalty to their favorite dealers so they can get their hands on limited editions or hard to find pieces.
DB: You are exactly right. We specialize in limited editions, not just the once we co-design, but anything we love and can source from our suppliers. If we get a couple of Omega Snoopy pieces, for example, they are going to go to our very best customers. They are loyal, they come to our events and support us. It pays to be part of our circle when it comes to these collector’s pieces, and it is fun.
We are not a Patek or Rolex dealer, but we know that people cannot just walk in off the street and expect to get the hottest Daytona or Nautilus from them. You need to have been a customer with them for a long, long time. We have the same thing with our customers. If a key piece comes in, I will hold it for my most loyal customers.
WP: Do you spend part of your working week looking at what is coming up from your suppliers in terms of limited editions or key watches and construct a mental map of who you think they are right for? Do you effectively pre-sell them?
DB: I live and breathe watches so I am constantly on the feeds reading about the industry and what is coming up. I also get to see information from the brands that is under embargo and not even on the blogs yet. We can’t send that news to our customers but we can tell them they need to be ready and put their names down for them. Customers love that because they know we are thinking about them even when they are not in the store.
WP: Tell me about your store and its location. Are you in a place where you get walk-up traffic or do people make a pilgrimage to find you as a real watch destination?
DB: We are in Plano, North Texas, 20 miles north of Dallas in one of the fastest growing cities in America. We have been in this location for a year and a half in a $3 billion outdoor mixed dining, residential, office and entertainment location called Legacy West. It is the hub for North Dallas of high end restaurants and retail. We get tons of walk-in traffic. Thursday to Saturday, the line of cars to get into Legacy West is stretched around the block. Everybody likes to bring their high end sports cars and cruise up and down the strip.
Before this location, we were in a much smaller destination location a couple of miles north. I just thought the industry was changing so much towards brands selling direct to customers, so I felt I needed to be in a much more prominent location where I would get a lot more walk-up traffic.
I am really glad I did now I see how fast everything is changing here.
WP: Paint us a picture of what is around you in Legacy West? Is it high end Italian fashion brands and that sort of boutique?
DB: Nothing like that, it is more high end restaurants. There is shopping, but it is not the monster shopping brands. We stand out because we represent a lot of recognizable watch brands. People who come here are from Frisco and Plano and do not want to drive into the center of Dallas.
Recently, there have been a lot of businesses moving here like JP Morgan Chase, Toyota headquarters, FedEx corporate, Liberty Mutual, and Boeing. The list goes on and on for businesses that have moved here, not just to Dallas but to Legacy West. They are estimating that a couple of hundred thousand people could move here in the next few years if they can build the houses quickly enough. All these people are moving from places like California and New York because it is so much more reasonable here.
WP: What is driving that boom?
DB: It is tax incentives that major cities are giving to companies to move their headquarters here. That is what is bringing them in. They might be given the land for free and they are moving from incredibly expensive parts of the country for the companies and for their employees. It is so interesting because it is not an economy that existed before. If you looked at a map of where Legacy West is right now, you would have seen just cattle fields. Now we have skyscrapers. It is turning into a major city because of the incentives that the city is offering.
WP: Are you catching a piece of the shale oil money?
DB: Not at all, they are way further south. We get more tech guys. That is fine by me because relying on a boom in a commodity like that does not appeal so much. The value of property is creating a lot of wealth. House prices here have pretty much doubled in the past four years.
WP: And being away from the center of Dallas where you will have competition from Patek and Rolex dealers with old money customers going back generations. It sounds like you are creating a whole new cohort of watch customers.
DB: A lot of these older jewelers have not embraced the future like social media, digital marketing, etc, and I think they will have a tough time in the future up against young companies like ours or the really well-run companies like Bucherer and Watches of Switzerland. The older mom and pop stores, a lot of them carrying Rolex and Patek, are going to have trouble staying up with the trends if they don’t change fast. A lot of them have gone out of business in the past five years because they have not kept up.
These are really interesting times in the watch industry and we are going to see a lot of businesses drop off and we will see more aggressive businesses rise up. I am not really talking about Timeless, it is more about these giant retailers because they are a great way for brands to control their distribution. With Bucherer and Watches of Switzerland, the brands can really control how their product is sold.
WP: If you look at what is happening in Europe, the investment that is required from retailers to keep the key watch brands is enormous. If they do not spend the money, they lose the brands.
DB: What is great about Rolex and Patek Philippe is that they only sell through wholesale, so retailers can make that investment with confidence. I really admire that. With most of the other brands, retailers worry that they will compete with them through their own stores or online. Then they funnel their limited editions and special watches into their own boutiques and cut their retail partners out of the equation.
WP: Rolex and Patek do not even need to open their own monobrand boutiques because their retail partners will do it for them, and pay for it. I am amazed that other brands do not appear to have woken up to that, although I feel that is changing. I have heard a number of times this year that brands are pulling back from opening their own stores and are swinging back to backing their wholesale partners.
DB: I think so. You have a lot of monobrand stores that are not profitable. We were contemplating opening a monobrand boutique in Caesar’s Palace in Las Vegas. I was talking to the leasing agent and doing the math and I can tell you the amount of product you would have to sell to break even was absolutely crazy. There are so many branded boutiques in Caesar’s and most of them are not profitable. I expect the same is true of Madison Avenue and Rodeo Drive. They are there for their advertising value.
The relationship with retailers must come first for brands. The retailer must never feel like it is getting shafted by their partner brands. That is where Rolex and Patek have it right.
WP: How did things start for you?
DB: If have been in the industry for 20 years. I am 36 now and started at the age of 16 working in a mom and pop jewelry store in New Jersey and I worked at Torneau as I went through college.
Ten years ago my wife and I decided to open Timeless as a watch store. We did not have any money, so it was a tricky thing to do. I found a tiny location with just 350 square feet for the showroom. It was uncomfortable if we had more than four people in the store.
We were given a $200,000 loan from my father to get started. He really believed in us. Out of that I spent $100,000 on the build out because I wanted it to look high end. There was wood everywhere. It was like an Old English library. We had five or six watches per showcase when we opened the doors and we had eight small showcases so about forty pieces in total that I had bought on eBay. I had a watchmaker who cleaned them all up and polished them and put them on sale. I didn’t pay myself for over a year when we started and we had to live off my wife’s salary.
By comparison our inventory now is roughly 1,800 pieces total and 1,200 pieces in the showroom. It’s crazy to think about but one of the pieces we currently have in stock cost us more than our entire inventory and build out when we started the business. Of course we don’t have a large inventory of pieces on that level, our bread and butter is $5-15k.
In time, we started talking to brands. Most of them were high end, unique watchmakers like Linde Werdelin. One brand led to another and eventually we got talking to the groups. Hamilton was the first, which got us started with Swatch Group. From Hamilton we got Longines. I would call people every day and try to get the next brand. I was naïve as hell so I was calling up Vacheron, Omega, Patek and Rolex. I was constantly selling them on why they needed to open with Timeless. I got shut down all the time, but I just kept calling.
Eventually, I got meetings with Tudor and Omega at JCK. It was right at the point where Tudor was coming into the States and they were opening with accounts other than their Rolex partners. They both agreed to open Timeless as long as the other one would. I told Tudor Omega was in and I told Omega Tudor was in, so they both agreed. Once I had those two brands, I was able to pick up many more.
Now we are at a stage where we are very happy with our portfolio of brands and will only add or change one or two per year.
WP: How long were you in that 350 square foot store?
DB: Our lease was for three years. But there was an ice cream store across the road from us that was three times as large as we were so we made a move into that. We spent another four years there out of a seven year lease, and that was when we heard about Legacy West. The location we have moved into was originally promised to a much larger Rolex dealer.
The story goes that my wife and I were hiking in the area where Legacy West was being built and we snuck into the building site when a guy pulled up kind of aggressively in a big Cadillac and demanded to know what we were doing. We said we were really sorry and that we were just locals nosing around. It turned out he was the developer of Legacy West and he had just got into a fight with this jewelry store Rolex dealer that was going to go in. He was ranting about how he was fed up with them and we got talking about our store and he told me about this incredible A1 location. That is how the conversation started and we ended up striking a deal on the space.
Even though we had three years left on our existing lease, Anna and I said we just had to buy our way out of it and make the move. The whole thing was by chance and the rest is history. We have been here a year and a half and it has been fantastic. It was fate.
WP: How does the business look today? How many employees do you have?
DB: It has built up a lot so we now have a team of eight who are all die hard watch guys and girls. We have great brands now. We do a ton of Grand Seiko business. We are one of the top few independent Tudor accounts in the country, we kill it with IWC and Omega.
WP: What are your plans for the next year or two?
DB: We have the space here to grow significantly right where we are. We have such a great local base and this where we want to grow. The customers we have locally are so loyal to us, and we just want to keep bringing new ideas to them.