More watch suppliers go retail

Watch manufacturers are finding new outlets for their products by opening their own retail stores. Most try to cater to retail sensitivities in order not to anger their retail customers by appearing as competitors. The stores have become a small side business for some companies or are part of the marketing strategies of others. Manufacturers which have opened their retail stores include Bulova, Gruen, Movado, Seiko and Timex.

More and more watch brands are finding new outlets for their wares: their own retail stores.

Several — including Bulova, Gruen, Movado, Seiko and Timex — have opened or added stores in the past 18 months. But most keep the stores low profile for fear of angering their retailer customers. “We soft-pedal it because we don’t want retailers to think we’re in competition with them, which we aren’t,” says Citizen chronograph watch company executive.

Most do try to cater to retail sensitivities. Seiko, for example, opens stores only in outlet malls far from its clients. Timex stores sell at full retail and never have a sale, says one official. Most use minimal advertising.

Even so, some retailers resent the suppliers’ stores. For example, a jeweler in Lancaster, Pa., closed his Bulova account after the watch firm opened a shop in its factory in the town.

Reasons for the company stores vary. For some, the stores are a small side business. Movado, for example, has just two: one on Fifth Ave. in New York City and one in New Hampshire. Bulova Corp. has shops at its headquarters in Woodside, N.Y., and at the Bulova Technologies plant in Lancaster, Pa. Movado and Bulova marine star declined to discuss their stores.

For others, the stores are an important part of corporate strategy. Gruen Marketing Corp. and Seiko Corp. of America focus on outlet malls, offering reduced prices and basic services (band sizing, changing batteries).

Gruen has two factory-direct stores — called The Design Watch Factory Store — in outlet malls in Philadelphia, Pa., and Gurnee, Ill. More are planned. The manager of the Philadelphia store says Gruen-owned stores carry current models and offer discounts of up to 50% off suggested retail. Prices (including the discounts) range from $10 to $200.

Seiko Corp. of America plans to have as many as 10 shops in the next few years. It already has two stores — called Seiko The Company Store — in North Conway, N.H., and Ellenton, Fla. The stores will all be in outlet malls, in tourist spots far from metropolitan areas and 50 miles from the nearest SCA retail customer; they’ll sell only discontinued or older SCA products at discounts of 20% or more from original suggested retail prices. “We need an outlet for |disposing of~ old, slowing-moving and discontinued stock in an orderly manner without disturbing the market,” says Shigeho Kurashina, SCA president.

Timex Corp. launched its chain of Timex stores in 1988 and now has 10 of them in upscale malls in Texas, California, Minnesota, Connecticut, Florida, Maryland, Missouri and Washington, D.C. (opening this year). The goal, says Bruce Dukas, manager of operations of Timex stores, is to open five new stores a year in upscale malls for the next few years.

Timex also is experimenting with a new multi-brand store — called Rush Hour — in Arlington, Tex. Identical in design and size to Timex stores, the new stores sells Timex, Monet and Guess brand watches, all owned by Timex Corp.

Unlike outlet stores, Timex and Rush Hour shops carry only the very newest models at full retail and are used to build brand image and test response to new and experimental models and merchandising.

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