Three and a half years ago, at the start of the pandemic, many feared for the future of physical retail. Would shoppers ever want to buy things in stores again?
Today, prospects for brick-and-mortar retail in the luxury watch industry, especially in America, Europe and the Middle East, have never been stronger.
Consider the slew of openings that have taken place over the past six months in New York City alone: Panerai opened its largest flagship boutique, Casa Panerai, on Madison Avenue, on June 1; TAG Heuer opened a new flagship on Fifth Avenue with a star-studded party in early July; and A. Lange & Söhne, the German watchmaker, opened a new flagship on Madison in October. Then there’s the three-level, 7,000-square-foot Citizen flagship, scheduled to open near Rockefeller Center next month.
For a from-the-trenches perspective on the explosive growth in U.S.-based watch retail, just ask David Hurley, deputy CEO of the Watches of Switzerland Group, which has stores across the globe. “You’re seeing the strong malls and strong streets getting stronger,” Hurley tells Gem + Jewel. “The U.S. market is still incredibly strong in general.
“There’s a constant elevation happening across the best malls, whether it’s Aventura in Florida, South Coast Plaza in California or Hudson Yards in Manhattan,” he adds. “Bulgari is about to open in Hudson Yards. IWC is opening there as well.”
The difference between today’s store-opening frenzy and the one that took place a decade ago, in the wake of the 2008 financial crisis, when luxury watchmakers opened their first direct-to-consumer boutiques, is that those same brands are now opening flagships in cities they once considered second- or even third-tier – including Boston, Minneapolis, and Austin, Texas.
Georges Kern, chief executive of Breitling, can attest to that. By the end of this year, the brand expects to have 43 boutiques across North America including locations in New Orleans, Salt Lake City and Laval, a suburb of Montreal. And by the end of next year, the goal is to have 350 boutiques around the world, up from just 56 in 2017.
“The whole luxury industry came to the conclusion that retail is a fantastic experience for the consumer because you have the 360-degree brand experience,” Kern says. “There are market studies that show that millennials in particular want to have a physical boutique experience because they know the stock is there and they know they can get the storytelling.”
Part of the appeal of a monobrand approach is that watch lovers can see the full breadth of a brand’s collection, including coveted limited edition models simply unavailable anywhere else. “Those monobrand boutiques are the best example that brands can put forward to protect their brand image,” says Andrew Block, president and chief executive of the luxury consultancy Second Time Partners, in New York City.
But for watch buyers in search of a wide selection of brands and the advice of a brand-agnostic seller, a more attractive option is to patronize a multibrand retailer such as Watches of Switzerland and Bucherer. Both companies stock numerous watch brands, including Rolex, and are as gung-ho about the future of physical retail as their counterparts in the monobrand world. Bucherer, for one, just opened its 1888 TimeDome, a 19,000-square-foot jewelry and watch emporium in Las Vegas.
Among the Swiss watch brands that still prefer to partner with multibrand retailers as opposed to focusing on their own boutiques is Girard-Perregaux, a venerable watchmaker founded in La Chaux-de-Fonds, Switzerland in 1856. “For some brands, it’s probably good to go direct,” chief executive Patrick Pruniaux says. “But I’m still a strong believer that some retailers can do a great job.
“I don’t fear competition,” he adds. “It’s cool for consumers to browse and discover our products. It’s part of an overall excitement we can create.”
Prior to the pandemic, many watchmakers used to feel similarly excited about their digital prospects. E-commerce was one of the watch category’s biggest growth areas and the boom in online sales during the lockdowns of 2020 only bolstered the impression that the future of luxury was mostly digital.
Then Swiss watch executives studied the numbers, and discovered something else was happening. “When we asked our customers, 80 percent told us they get their information online but only 10 to 15 percent buy online, whilst the majority are buying offline in a boutique where they can try on the watch,” Kern says.
At Watches of Switzerland, the growth in physical retail has only one downside: It’s never been harder to find the right location. Hurley described the effort to secure real estate as a “luxury land grab.”
“We’ve got One Vanderbilt opening later this year, in New York,” he says. “It’s next to Grand Central. When we opened up our stores in Soho and Hudson Yards in late 2018, early 2019, there weren’t many people opening or expanding their watch locations. At the time, we were confident in the investment, but I didn’t think we’d be looking at ourselves a couple years later with Hudson Yards at 6,500 square feet and Soho at over 8,000, going, ‘Wow, I wish we had bigger stores,’” Hurley adds. “And that’s why we’re opening up another location in New York — because it’s either that or elastic walls. That’s the reality.”
Photo: Watches of Switzerland store in SoHo in New York City
