Collectible watches: an introduction

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Constant exposure and study are the keys to expertise in any area. But here are some tips that can help even novices avoid costly errors when buying and selling old watches

Watch and clock collecting is growing ever more popular, with some jewelers among its devotees. Jewelers, of course, are in better-than-average positions to acquire such items. Customers who require appraisals or want to dispose of a relative’s estate often turn to their jeweler for help.

Antique watches appear alongside antique jewelry and modern items in many jewelry shop windows on New York’s 47 St. One jeweler believes that offering antique items for sale builds respect among customers and shows he loves his business. It also attracts new customers who want to sell old family items or add to their own private collections.

The jeweler who decides to set up a department of vintage wrist and pocket watches needs some guidelines. But no courses on old clocks and watches are available. And while experts do give lectures at watch and clock collectors’ meetings, these are offered on an irregular schedule.

The good news is that many stuhrling automatic watch review by leading authorities are available as references and guides. JC-K’s Book Club catalog, for example, describes volumes covering many facets of collecting, with current values, advice to beginners and tables listing the age of an item, its comparative scarcity and appeal.

Expertise in any area is acquired by constant exposure and study. Here are some tips to help avoid costly errors in buying and selling. Let’s look first at the types of watches collectors seek.

What’s in demand: Scarcity is the key to value for any collectible. A watch becomes scarce because it was produced in limited numbers or because it contains special features that make it unique. (See Fig. 1.)

Scarcity also arises from reduction in numbers of older items because of irreparable damage, loss, fire, neglect and the simple passage of time. For example, the cheaply made Ingersoll Mickey Mouse watches were produced in the millions about 50 years ago. Today, the few still surviving bring multiples of their original cost in the vintage watch market.

Quality items hold their value — and their quality — longer because their proud owners generally take better care of them.

Skeletonized watches with artistically pierced movement plates through which the mechanical movements may be observed appeal to collectors. In fact, this design now is in vogue in many new top-of-the-line watches.

Animated watches with applied subjects on their dials also attract collectors (see Fig. 9).

Sturdy railroad watches (Fig. 6) with bold Arabic numerals and dials bearing the maker’s name appeal as well. Some names with special appeal to collectors are E. Howard, Waltham, Elgin, United States Watch Co. (at Marion, N.J.), Studebaker, South Bend, Illinois, Hamilton, Rockford and Seth Thomas.

Highly jeweled railroad watches (Fig. 4) — some with 19, 21, 23, 25 and even 26 jewels — are sought after. Some also have an extra dial-ette that records the amount of mainspring power remaining in the watch. These so-called “Up and Down” indicators use a tiny differential, not unlike that in the rear end of your auto. Railroad watches and precision timekeepers with such features are more valuable.

Still rarer and especially attractive to knowledgeable collectors are 19th century European and English watches with unusual escapements. Also desirable are multicolored gold watch cases carved in high relief and “box” cases with engraving or multicolored gold applique and steam engine, horse or other animal motifs. Masonic emblems or portraits of historic figures also are appealing. (See Figs. 3 and 5.)

Ladies’ pendant watches strangely have not appreciated in value, though they often are attractive and well-made.

Some younger collectors are on the lookout for Mickey Mouse models and for pocket or wristwatches featuring dials with such characters as Spiro Agnew, Babe Ruth, Orphan Annie and the Lone Ranger.

U.S. factories have produced more than 125 million watches in their 100 years of productive history. For that reason, many watches offered to jewelers are of U.S. origin. Many are collectible, and most collectors naturally like to acquire top examples of their country’s horological art.

Movements in U.S. pocket watches were highly decorated with a type of engine-turning called damascening (see Fig. 10). Most U.S. factories embellished their quality watches with these intricate designs. Factories also placed a serialized production number on each movement, regardless of grade or quality. Thus reference akribos mens watch reviews (some of which are listed later) can be used to pinpoint authenticity, exact age or year of production, jewel count and other details. These books also indicate a comparative current value depending on watch condition.

Grading watch quality: Dealers grade watches as mint, near mint, fine and fair. The term mint condition often is used loosely to describe an item that appears factory-new. To an experienced collector, however, a watch would have to be in its original box and virtually unused to deserve that term. Observation under 5X magnification should reveal no scratches on the case or movement. Its steelwork should be devoid of even the tiniest rust spots — or, heaven forbid, fingerprints! The steel work on higher grade watches should exhibit a dead-flat black mirror finish. Dials, if porcelain, should be devoid of any hairline cracks, fissures or chips discernible under high magnification.

In near mint watches, all parts should be original, with wear marks visible only under the 5X loupe inspection. Fine also requires all original parts and little case wear. In a watch in fair condition, the porcelain dial reveals hairline fissures, the gold or gold-filled case shows wear along the handling edges, and engravings show some wear. The movement may have repairable rust spots or minor scratches.

A watch in mint condition is worth about four times as much as one in fair condition, excluding its metal content. Cases in cheaper watches often were marked with the number of years their gold plating might last — a practice no longer permitted.

Numerals and logos on metal dials almost always were printed over an applied layer of silver. These may be tarnished, with fading colors or logos, and are less desirable than porcelain dials.

In many older U.S. watches with porcelain dials, numerals were hand painted and fired into the enamel surface. Dial painters were indeed artisans; many could divide the small hour circle into 60 minute divisions accurately by eye. You can distinguish the newer machine-painted dials by observing the uniformity of tint in figures or numerals. Tints seldom were uniform in hand-painted dials, discrepancies depending on how and how often painters dipped their brushes into the paint-wells.

Silver dials with applied numerals in very high karat gold are desirable.

Railroad watch dials in which minutes are marked 1 to 60 around the outermost circle are called “Montgomery dials” after their designer and patent holder (see Fig. 7). Numbers at five-minute intervals (ie 5, 10, 15) on the outer circle often are red, which enhances the watches’ value. The main numerals are in bold arabic — a requirement of “official” railroad watches.

In many highly-jeweled watches, the jewels were set into solid gold with dead-flat highly polished surfaces. Steel screws with polished heads blued by heat-treatment held the jewels onto their plates and bridges. The condition of these jewel settings and their screws, plus the polish and condition of the finely adjusted escapements, balances and blue-steel hairsprings must be inspected closely. Watch for fingerprints etched into their surfaces, which polishing won’t remove. These reveal that a careless workman put his unskilled hands into the movements.

A few of the cheap watches made by Waterbury Watch Co. — a forerunner of Timex — are desirable collectors’ pieces. These watches, with their loud-ticking duplex escapements and sunburst-style brass escape wheels observed through skeletonized movements and dials, are much sought after. (See Fig. 11.)

True collectors covet 17th and 18th century watches. But new collectors shouldn’t jump at such items without consulting an expert. Watches with so many years behind them often have gone through many repairers’ and owners’ hands. Some repairers are better than others; some who attempt restoration know too little about horological history or how the watch appeared when new. Such knowledge, plus a look at museum pieces of those ages, are needed before purchase.

In addition, clever reproductions which might fool the novice are apparent to the experienced. For example, a group of clever Viennese craftsmen created many watches, some with artistic enameling, in the early and mid-19th century (see Fig. 8). These are attractive and collectible in their own right, but should not be confused with the 16th and 17th century pieces on which they were modeled (see Fig. 2). Examine the quality and intensity of color in both groups and the sharpness of detail in the originals. Note, too, the price estimates (these photos were taken from auction catalogs, which include pre-sale estimates).

Fakes, forgeries, imitations: If one is famous, he or she faces the prospect of imitation or outright forgery of one’s name on an inferior product.

Thomas Tompion was the first watchmaker to have his name thus forged. The story is told of a gentleman who came to Tompion’s shop, suspicious of a watch with Tompion’s name on it. He asked the Master to verify its origin and authenticity. Tompion took the watch and smashed it to the stone floor, then went to his drawer and took out a watch, which he presented to the astonished on-looker. “This, sir,” he said, “is a genuine Tompion!”

Others, such as Graham and Mudge, were similarly imitated. But Breguet of Paris had perhaps the most forged name on watches of the late 18th and early 19th centuries. To overcome this nuisance, he perfected a reverse pantograph which he used to create a secret signature on his dials (see Fig. 12). This signature was so small that a knowledgeable person could observe it only through high magnification when holding the watch at a certain angle under good lighting. Breguet also documented each watch minutely, and in duplicate. One record was kept in a parchment book, separated from its duplicate by hand cutting the parchment with a straight razor in an irregular scalloped stroke. The duplicate, with its tell-tale scalloped edge, went with the watch.

Breguet also gave each watch a serialized production number, and when that reached 5999, he started a new series. Forgers, who knew their work could be easily discovered in the Breguet establishment, almost always used serial numbers above 6000. Any “Breguet” with numbers above 6000 is certain to be an imitation.

The house of Breguet still exists and will verify any watch for a fee. A copy of the original bill of sale listing costs, the assistants who worked on the watch, its timekeeping performance when delivered and, of course, a copy of the famous Breguet signature will be provided.

Jewelry and watches: brand report 96

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It was the best of times, it was the worst of times.

On the up side, early projections based on government figures show an overall modest 4% growth in sales of watches, diamonds and karat jewelry, to a $13.5 billion market. Jewelry store sales alone, estimated by the 1977 retail census to have a 52.7% share of the market, were up 8.4% for the first 11 months of 1983.

But negative pressures, more widespread, may have a greater effect on all three industries. The current relative stability of diamond prices may be a relief to jewelers, but the industry as a whole is on less firm ground. Sales are up on the low end, but most of the prestige houses are being forced to increase their inventories of high-quality stones.

As the price of gold continues to slip down, consumers are buying once again. Mike Roman, chairman of Jewelers of America, notes that daily gold prices helped maintain awareness of the precious metal even in the recession.

“Even when the price of gold was at its peak, sales weren’t bad. A disproportionate amount of jewelry is bought as gifts, and daily quotes helped establish gold’s worth as a lasting value.” Even so, some jewelers fear that a continued downward trend in prices may forestall consumer spending, in anticipation of yet further price drops.

But the real bad news is reserved to the watch industry. Technology has turned a once-skilled industry into a battle of the bulk. As usual, the pressure has come from Japan and Hong Kong. Mechanical watches, which accounted for over 40% of the market in 1980, have dropped to an estimated 15% for 1984, while digital watches, most priced under $25, dominate with an almost 50% share.

Economies of scale in digital production have prompted the glut. Last year, Japanese and Hong Kong manufacturers put some 382 million units on the market, about 30% more than the demand for watches in the world. As a result, prices have fallen dramatically, to as low as $2, and some U.S. companies like Texas Instruments, once a major player in digital watches, have beaten a hasty retreat.

“Everything points to a continued glut,” says Roman, who adds that the high volume of utility watches has sharply segmented the market. “There has been a great expansion in outlets for these watches. They’re stamped out with a cookie cutter, with no care about where they will go.”

Tony Collado, executive director of the American Watch Association, says that the majority of the 140 million units that entered the country last year — about twice the level of American demand — were grey market goods: “Watches sold in this country by unauthorized dealers, containing a trademark but produced overseas to be sold through channels other than the U.S. registered trademark owner.”

It might be tempting to think, as Roman does, that a highly segmented marketplace would reduce competitiveness overall. Not so, says Collado. Even though the wide array of watches are sold through different types of outlets to different buyers, even if the average rate of ownership has increased to 3.5 watches per person — the highest ever — the American marketplace is approaching saturation. Some even think the point may be already passed.

Fear, or at the very least concern, has gripped the larger manufacturers. Low-end producers will continue to compete with price wars and competitive discounts, while high-end producers are falling back on the quality of their products.

“The companies that will fall by the wayside first,” says Roman, “are likely to be in the middle range. The greatest strength is being seen among the more accepted brands, although it’s difficult to pinpoint where weaknesses lie. But the casualties are sure to be the watches brands that have no identity with either of the two strong segments, price and quality, dominating the future.”

Individual manufacturers have been devising distinct strategies to combat an anticipated high volume of imports. Some of the lesser spenders, like Hamilton, Elgin or Gruen, have been relying more on mail order, while the larger manufacturers are making an effort to build recognition and tighten links with traditional outlets–jewelry stores and jewelry departments of department stores.

Hattori

The Japanese firm of K. Hattori & Co. covers all price ranges with the Seiko, Pulsar and Lorus brands. By far the biggest part of the business is carried by Seiko, which is first in world unit volume.

Even though Hattori manufactures only quartz watches, the three divisions do not compete. Set apart by price, the watches are also marketed and sold distinctly by each division.

David Straus, vp, marketing at Seiko, says the watches, priced between $80 and $300, will not be “too affected by the glut.” Seiko has been the leading brand for the past five years because it has concentrated distribution of its watches in jewelry stores and jewelry departments, and maintained a high advertising to sales ratio.

After a level year in 1982, Straus says sales turned around in 1983 and show every sign of continuing to get better in 1984. Since the average price of a watch in 1983 was $177, he is confident that Seiko has its “mass-class” franchise well secured.

Of the $10 million spent in consumer advertising in 1983, 80% went into spot tv, and the rest into print, mostly magazines. Straus describes the target as between 18 and 45, “slightly skewed to higher income levels.” Digitals represent a decreasing percentage of the 490 models marketed under the Seiko trademark, while quartz analogs, up to nearly 30% of the total from 10% four years ago, make up 70% of the line. Advertising is so weighted.

Straus notes that the market for watches is becoming broader, both in terms of age range and occasion. “Even in the teenage market, they are buying better products than they used to. We’re finding that the tendency toward quality and a love for technology show up pretty early on.

“There’s also more multiple watch ownership than there used to be. People tend to buy watches for occasions now — sports, for example, and for dress.” Straus notes that this trend has just about eliminated seasonality in the watch industry: where Christmas and graduation used to account for about 80% of Seiko’s business, that proportion has dropped to little over 60%.

Pulsar Time was started at just about the time Seiko had fully stocked its authorized dealers. The brand, Pulsar, has just come out with a mechanism calculated to a revolutionize the industry: a solor-powered quartz analog watch that can run for up to 48 hours without exposure to any light source.

Arthur Cohen, president of the company, says that Pulsar’s marketing strategy is unlikely to change: “Our customer base is sound and has not been threatened by low-end digitals.”

He notes that Pulsar has adopted a “shotgun” approach to marketing, with a broadly determined target of 18-45 in the +$20,000 income range. With models currently priced between $50 and $200, he hopes that the target will be expanded to the +$18,000 range soon.

Media has been principally spot tv, with network interspaced throughout the year at key buying times. In the fall, Cohen says, tv advertising tends to be pretty evenly split between net and spot.

Print accounts for only 10% of the media mix, with a heavy seasonal emphasis on women’s books in the fall. In the spring, Pulsar uses Newsweek and Playboy, “trying to attract the male and gift-giving audience.” Media budget has been running at about $7 million for some 500 models, which represents about 65% of the total spent on advertising and promotion.

“The retailers depend on display and co-op, and we’ve found that an in-store feature is our best advertising.”

Lorus is the latest addition to the lineup, only a year old but already accounting for 35% of Hattori watches sold. Vern Louden, vp, sales and marketing for the company, says Lorus has just embarked on a five-year growth plan calculated to differentiate it from its “panic-stricken” adversaries.

Distribution is broad-based, covering outlets from jewelry stores to drugstore chains. Louden says the diversity of the product line reaches into both utilitarian and fashion-oriented interests. “We haven’t honed in on one particular area,” says Louden, stressing that the below-$55 price range answers a wide array of needs.

Advertising budget for the brand has been increasing at a startling pace, up 50% in 1984 from an estimated $2.5 million in 1983. Louden notes that marketing strategy has focused on media selection.

An eight-month consumer campaign is concentrated in the top 60 spot markets, with some cable thrown in for additional weight. “We don’t use print,” says Louden, “although we’re considering using it in 1985 to reinforce the tv.” The main reason to rely on broadcast, he explains, is that the company is “thirty years behind” in terms of exposure. The campaign has been calculated to render 928 grp’s in each four-month half.

The consumer campaign is supported, in a sense, by an equally heavy trade campaign, increased 100% over 1983. “We will be covering each trade publication — and there are some 20 of them — four to six times in the year.” Strong links with retailers, and an emphasis on service, will help to maintain high growth rates.

Timex

Long the volume leader, Timex Corp. has slipped to fifth place — and that’s not the only area that’s seen sliding. After an ill-conceived foray into computer marketing, the company has undergone some quick change. The new strategy: to put its weight and strength behind what it had done best: produce and market watches and clocks. More than $100 million have gone into a complete retooling and redesign of the entire line — which doesn’t include the investment pulled out from under the computer and health care items.

But if it was a squeeze on profits from low-end watches that prompted the diversification in the first place, can Timex seriously expect to regain lost ground, even with redesigning? Dave Rahilly, director of marketing, certainly hopes so.

“Timex had gotten complacent about its success until a few years ago,” he says, adding that the effort to regain its competitive position is reflected in the massive restructuring of the product line — to say nothing of executive changes.

He points to Timex’s traditionally superior manufacture of small parts and its high level of awareness among consumers as two strengths that will help the company. “We’re really not planning a change in marketing strategy,” he says. Budget has been increasing since 1982’s $15 million, and may reach twice that in 1984. Tv will continue to be the primary medium, with much of the emphasis on network. Print plays a more important role for some models, especially sporty ones. For women’s models, the emphasis is on styling, with ten-second vignettes created to be strung together for :30 spots, or used for :10 news breaks.

While price, as low as $9 for a digital model, has always been a dominant selling point for Timex, the new advertising, which broke on Mother’s Day, has been focused on function and styling. “We are going to be readdressing price for our quartz models,” Rahilly says, adding that these models are a growth area for the company, with a high potential for profitability.

A new move for the company is the introduction of a more expensive watch, a quartz analog priced as high as $120–perhaps to take a little heat off the lower end, where Lorus has been carving up Timex’s market share. The new line will be marketed differently, from its packaging and display, to its advertising. For tv, the watch is being included in the ‘Great Watch’ campaign Timex has launched, but in print, advertising will appear in upscale publications like The New Yorker–“not typical Timex vehicles,” says Rahilly. The skew is to a slightly older and slightly more affluent audience than the traditional Timex consumer, but still an audience “that recognizes a good value.” Rollout is scheduled for the middle of the year, but the weight of the advertising will be in the fourth quarter, because, Rahilly explains, “this is more of a gift item than an everyday purchase.” The watch will be marketed through jewelry and department stores, though potential competitors. Bulova and Hattori remain unconcerned about the incursion.

Bulova

Bulova came out of the recession “pretty well,” according to Jerry Josephson, vp, marketing at the company, and is now in its best position of the last five years.

But, even with help from its parent, Loews Corp., market share has dropped rapidly, to 2%, within the past decade.

By moving production out of the States and abandoning its digital line, Bulova hopes, at least, to see a profit in 1984.

Although relatively unaffected by low-end price wars, Josephson notes that the emphasis on price has turned watches into a commodity, instead of an image item. Bulova is the only manufacturer ready to tackle the problem head-on. Its advertising emphasis will be on the trade this year, in an effort to make the watch-maker the stabilizing force in the industry.

“We feel the major problem for 1984 is to get jewelers and jewelry departments to make a profit on watches,” explains Josephson. He says that the mark-up on which these outlets make their profits has been chipped away by forced competitive discounts — which he lays at the feet of Japanese and Hong Kong distributors. Watchers are important to jewelers, says Josephson, because they are the only name brand items in the store; they can’t afford to be loss leaders.

In a sense, the active trade campaign Bulova is embarking on will attempt to reestablish class lines in the watch industry: “Jewelers make a mistake when they compete with the low-end of the market.” The campaign will be marked by heavy use of multiple page advertising in all of the industry’s publications, as well as promotions.

For its consumer campaign, Bulova has revamped its old tag line with, “It’s Bulova time again.” The campaign will run in fashion magazines, to stress styling–55% of the line is new as of January 1984.

Part of the reason behind the resuscitation of a tag-line familiar to traditional Bulova customers is the target: at 25-50, it is slightly older than the regular watch audience. “We want to appeal to people review of bulova watches who are familiar with Bulova–after all, we’ve been around for 109 years.” By 1985, Josephson adds, the company hopes to reach an 18+ demographic, by adding more fashionable models in the Caravelle price range ($50 ot $100).

The consumer campaign will be supported by a tie-in promotion that offers rebates to Bulova purchasers, to be used toward travelling expenses. “There will be a separate advertising starting on April 1.”

But the main thrust, Josephson stresses, will be to the trade. “we think it’s a good idea, given the amount of money the Japanes will spend to grab market share. And research shows that 60% of consumers, despite what the “Buy American” studies show, are uncommitted. Only 40% ask for a particular brand. The other are influenced by point of purchase material, by the salesperson. We’re after that 60%, so we’re investing with the dealers.”

And how much will all this good-neighborism cost? Josephson is reluctant to pin down a figure, but estimates range upward from $5 million.

“We’re looking to have a good year,” he concludes.

North American Watch

Four brands on the fine watch end come out of this company: Corum, Concord, Movado and Piaget, all of them handled by an in-house agency. Expenditures have risen from $12 million, to an anticipated $15 million in 1984, with the recent addition of Movado.

Each of the four brands has a distinct campaign. “We advertise each product differently, with a different media mix,” says Harry Viola, president of the in-house agency, Harry Viola & Associates. “Even if we were to base media selection on demographics alone, the difference in each audience wouldn’t be hard to pinpoint.”

Movado, at the low end with prices ranging from $200 to $300, is the closest product to a mass item. Viola uses spot tv, mostly news, to reach a mass audience that is more affluent and more educated than the average tv viewer. He says the television part of the plan allows him more flexibility, with room for specials and prime time: “We’re looking for the numbers.”

Print is divided into two categories: fashion and “intellectual.” He notes that the Movado is the only watch included in the Museum of Modern Art’s design collection — hence the intellectual slant. Magazines include Vogue and People, for the first category, and Smithsonian, National Geographic, Atlantic and The New Yorker, for the second. “Movado gets very different positioning from any of the other brands,” says Viola of his schedule.

Concord, at $900 is targeted at incomes of +$60,000. Positioning has been shifted from simply upscale to focus on sporty attributes. Media has changed accordingly. Television is news and sports. Print is the two newsweeklies, with Sports Illustrated, a useful vehicle, since advertising features well-known sports personalities, such as Mark Spitz and Bjorn Borg.

“The Concord is positioned as a sports watch in the copy. We use the personalities to reinforce that with a tag line, ‘Makes the bulky watch passe,’ that emphasizes the styling.”

In ever-increasing price range, the Corum line uses print alone. Two of the models, the Admiral’s Cup and Clipper Club, get some attention in special interest books like Sailing and Motorboat. Tagged a watch for achievement, the line is also featured in business books, with a similar schedule to the highest priced line, Piaget.

Piaget is perhaps the best-known name in the high price categories, with ultra-thin models that run as high as $10,000. The target for the brand is household incomes of +$150,000. “No matter what we do in terms of media, we’ll have some waste.”

Advertising is uniquely print, and concentrated on the fashion books — Town & Country, Vogue, Harper’s, with some support from business books like Forbes, and regionals like Texas Monthly, LA Monthly and the New York Times Sunday Magazine. Even With sponsorships such as the World Cup for polo, “advertising has been and will continue to be an important part of the whole picture.”

Viola emphasizes that the brands are all distinct companies, each with its own sales force and ad budget.

Diamonds

The industry divides the market into three segments: diamond engagement rings, which represent about 10% of the market; women’s diamond jewelry, which accounts for an overwhelming 80% of all diamonds sold in the U.S.; and diamonds for men, a relatively new category, but one that has shown much promise in the post-men-can-cry-too years.

It is in second category that a significant trend has been developing over the past ten years, according to Harkness Cram, senior vp, management supervisor for the De Beers consortium at N W Ayer.

“With the advances in mining and cutting, we’ve seen a democratization of the diamond. The stones are now available in all sizes, at all price points; they’re no longer exclusively for the very rich. And they have been popularized without losing mystique, or their desirability.”

Diamond jewelry for women can be subdivided into three groups. Diamond anniversary rings are but a small part of the segment, since they are occasion-specific. The basic gift of diamond jewelry is a category that has grown, especially in the range of commercial grades of the stone.

Diamonds of one carat or more, a segment one might assume to be self-defining, actually has a very precise target audience. About 25% of the women’s diamond jewelry budget goes after these women, in the 25-50 range, with incomes over $50,000.

“The bulk of likely prospects are actually in the 34+ range, with incomes higher than $50,000,” Cram says, adding that television advertising for this segment of jewelry “doesn’t turn off people with more moderate incomes. And we’ve found that there’s a halo effect. The advertising seems to reinforce that diamonds are a highly desirable gift.”

Among older, more affluent women, the catch seems to be size. “At that point, it’s less a gift of love, than one of status. This isn’t a first purchase, but a third, a fourth, a fifth.”

Despite the fact that “the dynamics of diamond acquisition soar with incomes over $100,000,” Cram says that the diamond industry has been making an effort to broaden its messages. De Beers itself has just initiated a new campaign that focuses on quality, in an effort to educate consumers an potential consumers about the stone.

Not that past campaigns haven’t been effective. Cram says that the diamond industry tends to be recession resistent. The dollar volume of diamond jewelry sold at the rental level rose form $5.5 billion in 1982, to “close to” $6.25 billion in 1983, with more pieces sold in that year than earlier.

De Beers itself plays a watchdog role in the industry. An ever-increasing ad budget “helps the industry generate spending for diamonds.” Out of a total budget of $26 million in 1983, $22 million went to advertising–the rest, to promotions. 1984 will see a 26% increase in the total, to $34 million, with about $25 million allocated to advertising.

“De Beers’ principle responsibility,” says Cram, “has been to provide stability.” Hence, he explains, some price cutting measures in an effort to reduce inventories of high-quality stones that continue to block complete recovery.

De Beers’ own use of media varies by segment, with advertising weight allocated by each segment’s relative importance.

The diamond engagement rings are advertised only in print–a more effective way to reach that has continued to be, despite a ballooning divorce rate, a young demographic. For the 500,000 repeat marriages each year, Cram points out, there are 1.2 million first go-rounds. “We acknowledge the repeat marriages in our creative without actually addressing them.” He notes that, where the age range used to be 18-24 fifteen years ago, it has risen to 18-34 now.

Magazines range from Seventeen, Glamour, Mademoiselle, and the bride books, to Cosmopolitan and Playboy.

The mix for women’s diamond jewelry is evenly split between tv and print, itself covering a broad range of titles. “We don’t buy dayparts, we buy programs,” Cram says. He describes the buys as “quality-related, upscale and romantic — avoiding gratuitious sex and violence.” This characterization covers programming such as the U.S. Open (tennis and golf), footbalL, some specials like Kennedy, and some prime time–60 Minutes and Dallas.

“We also look for markets of opportunity, markets where diamonds are more likely to be bought.” These tend to be largely in the sunbelt, in cities, predictably, like Dallas, Houston, Oklahoma City, Atlanta and L.A., “–not because of a population shift, or anything, but simply because the measure of a diamond jewelry acquisition is greater there than in more traditional, conservative, and older established communities.”

As an example, Cram says that the national average in 1982 showed 9.6 out of every 100 women bought a new piece of diamond jewelry.

In Boston, the index was 6.0%. In Dallas, the highest in the world, it was 13.5%.

Diamond jewelry for men is currently exclusively in print. Acquisition has been increasing, to 2.0% in 1981, up from 1.5% a few years before.

“We find that the trend has been similar to the one for cosmetics–men are more willing to give in to self-expression, to wear jewelry.” Vehicles include GQ, Esquire, Playboy and some women’s magazines–“the overwhelming percentage is bought by women for their men, especially round Christmas.”

Cram says that seasonality varies in each segment, but that it tends no longer to be as pertinent as it had been, except for women’s diamond jewelry, 60% of which is bought in the Christmas season.

Despite continued bottlenecks at the high-end of the market, prospects for diamond jewelry sales are very good, according to a survey conducted by Jewelers Circular/Keystone. The trade publication found that 78.1% said diamond jewelry was a good or very good sales prospect for 1984, with almost half the sales expected to come from necklaces and earrings. Larger, high quality stones are still expected to be sticky; the most popular price range is below $1,000.

Cram does not seem concerned. “It’s a strong business. And the desire to give gifts — and diamonds’ share of that does not seem to have diminished over time.”

Gold

The mood at International Gold Corp., the industry leader, is optimistic, after what Jana Brady, general manager of the U.S. Jewelry division, calls “an excellent year.” By Christmas, she notes, sales were 15% to 20% over 1982’s holidays and some chains reported an increase of as much as 30%.

Surveys conducted by International Gold indicate that most of the major chains expect the price of gold to remain stable throughout 1984. “This year will be an opportunity to build. The business and economic indices are good. We expect to see a continuation of consumer spending, barring any economic or international crises–unlikely in an election year.”

Ad budgets have been increasing steadily since 1982’s $3.3 million. Brady, loathe to release a figure, notes that the media budget for 1984 will be double the 1983 allocation. Apart from a co-op program with jewelers and manufacturers for certain name brands like Saks and Kristin Moore, most of the advertising is generic. Brady says that advertising for gold is divided into three segments: adult gift-giving, targeted at men and women; female self-purchase, and men’s jewelry. All three groups are in the 25-54 demographic, with household incomes of +$25,000.

“Our media selection differs for each group. People is the only magazine in common to all three. For the first group, we use dual audience books, like U.S. News, Food & Wine, Atlantic, New Yorker. The second group tends to be more affluent, since you’re talking about a single income of +$25,000. We go into fashion and lifestyle books, like for the adult gift-giving segment, but with a female skew. The third group, we advertise to in dual audience books and male skewed ones, likes Money, Fortune, Forbes, Travel & Leisure.”

Brady adds that all three campaigns are supported by advertising in regional magazines in the areas where the research has shown a higher level of gold buying: Boston, California, New York, Philadelphia, Texas and Washington, D.C. “Basically, it’s an overlay to our national campaigns.”

Patterns in gold buying have been changing, much as diamond purchases have. A stable, favorable price has encouraged consumers to buy more gold. And refined manufacturing techniques now allow a variety of price points, making gold jewelry available to anyone. “Anyone can afford it now,” says Brady says, is the growth of the female self-purchase category.

That segment, Brady adds, is grow-with the gift-giving opportunities ranging from Valentine’s Day to graduation, and Christmas–are giving way to a year round buying. One reason, Brady says is the growth of the female self-purchase category.

That segment, Brady adds, is growing so fast that it is eroding the 60% share of the adult gift-giving segment. Much of the growth comes from the use of gold jewelry as a fashion accessory. “You’re seeing gold more in depatment stores and boutiques,” says Brady.

Advertising weight is distributed propotionately, with 60% of the budget behind the adult gift-giving segment, and 40% behind women’s gold jewelry. “We have very little advertising for the men’sjewelry, and it comes out of a different budget,” says Brady. “If it were added to the total, it would represent maybe 10% to 15%, mostly out of the adult gift-giving segment, where there is an overlap.”

Helicopter venture seen as poor deal

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There was a time when Canadians could dream of a chicken in every pot, two cars in every garage and a helicopter on every oil rig.

But those heady times, which led Canada to invest $275-million to bring helicopter manufacturing to Montreal, now seem about as certain as Quebec’s loyalty to the Liberals.

It is just over a year since the Canadian and Quebec governments signed a mammoth $514- million deal with manufacturing giant Bell Helicopter Textron Inc. of Fort Worth, Tex., and the helicopter market is now a pale version of its former self.

The sluggish market only adds to the problems of what some observers already consider a bad deal for Canada – a deal in which Canada pays the bulk of the risky, up-front costs of the project.

Canada is also contributing $100-million to Montreal-based Pratt and Whitney Canada Inc. to build a new engine for one of the best drones models Bell will be building in Montreal.

One of the most dreary predictions for the Bell project comes from Craig Dobbin, chairman of the board of Sealand Helicopter Ltd., a St. John’s-based company with a fleet of 28 helicopters and one of the few survivors in the helicopter-leasing business.

Mr. Dobbin strongly suggests that Industry Minister Sinclair Stevens reassess the Bell deal, which was signed by the former Liberal industry minister, Edward Lumley. “I believe that this thing requires an awful lot more close scrutiny than has been given up to this point,” Mr. Dobbin said. “I would urge Mr. Stevens to look very closely or we could have another Canadair on our hands.” He fears that if the Bell project ends up being a commercial flop, Canadian taxpayers will end up bailing it out in order to preserve the jobs. Bell estimates that 800 to 1,000 jobs will be created at the Montreal plant.

Mr. Dobbin’s concerns spring from the fact that the Bell plant in Canada will be producing a line of light twin-engine helicopters to compete with several other brands of light twins already on the market.

He argues that, in Canada at least, the market for light twin helicopters is extremely limited. Of his fleet of 28 helicopters, only one is a light twin. He says that although it is an excellent machine, there is so little demand for it that he is trying to sell it.

The problem, he explains, is that because of its two engines it rents for about twice the hourly rate of a single-engine helicopter of the same size. A single- engine rents for anywhere from $350 to $500 an hour, while a similar-sized twin-engine goes for about $1,000 an hour, he said.

The main purpose of a second engine is to provide an extra measure of safety on precarious flights, such as flying to oil rigs over bodies of water.

But even though light twins offer the needed extra engine for flying over water, they are often too small to make it all the way to oil rigs if the rigs are far from land, according to Sealand executive vice-president J. C. Jones.

For instance, he said, a light twin-engine unit is not really able to make it to oil rigs off the coast of Newfoundland, which average about 190 nautical miles, nor those off the coast of Nova Scotia, which are on average 175 nautical miles out to sea.

Instead, it is necessary to use a heavier twin-engine helicopter, Mr. Jones said. Bell is only planning to manufacture light twins in Canada.

Although Bell considers Canada an important market for its new best quadcopter for beginners, Mr. Dobbin is convinced that in Canada there simply is no market for them.

Certainly, few light twins have been used in Canada so far, despite the fact that light twin-engine models produced by other manufacturers have been on the market for more than 10 years. In 1983, Canada had only five of them in its entire commercial fleet of 950 helicopters, according to statistics from the Canadian Transport Commission.

Nevertheless, Jim Schwalbe, president of Bell Helicopter Textron Canada, said Canada is an important market for the new Bell helicopters and he remains optimistic that the machine will sell well.

But Bell’s key hope is the larger U.S. market. There, Bell’s prospects seem unclear. Many industry observers argue that while Bell has a good reputation as one of the world’s major helicopter manufacturers, its new light twin-engine models will not offer any technological breakthrough.

Furthermore, Bell will be trying to force its way into a branch of the helicopter market already dominated by foreign competitors, chiefly Aerospatiale of France and Messerschmitt-Bolkow-Blohm GmbH of West Germany.

Mr. Schwalbe said potential customers have made down payments on about 230 of the new helicopters to be built in Canada. But he concedes that these down payments do not actually mean much since they are refundable with interest.

Petroleum Helicopters Inc. of Lafayette, La., the largest U.S. commercial helicopter company, has made down payments on four new Bell twins. But the chairman of the company, Robert Suggs, said this does not mean that the company necessarily plans to purchase the new models.

His company currently owns 50 light twin-engine units built by other manufacturers and he said he does not really see any advantage to the Bell model. “Not the way they price. They’re going to have to price very low. The competition is already here,” Mr. Suggs said in an interview from Lafayette.

Some industry analysts say that Bell’s sales estimates are simply overoptimistic.

Bell estimates that there will be a total worldwide demand for 250 to 300 light twins a year and that Bell will be able to corner 40 per cent of this market, amounting to about 120 machines a year to be produced at the Canadian plant.

Yet in the past three years, the two leading manufacturers of light twins have between them delivered only a total of 144 light twin-engine helicopters, according to Aerospatiale executive vice-president Philippe Orsetti.

The social stigma with six legs

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M OST Torontonians wouldn’t recognize a cockroach if it crawled across their plate,” says Professor Stephen Tobe, cockroach expert at the University of Toronto’s Zoology department.

The curious and the concerned often come to Prof. Tobe with home-grown samples, and are “horrified and disgusted” to learn what uninvited house guests really are. “People associate them with filth. They’re a real social stigma.” By contrast, Prof. Tobe tells how he watched as a waiter in a very expensive New Orleans restaurant calmly reached over and crushed in a napkin a large, southern specimen climbing up the wall. “They’re used to them down there,” he explains. “If you lived in Florida you’d be used to having the house sprayed once a month.” Torontonians, however, are rapidly becoming acquainted with these little beasts. Some might say it’s about time. Cockroaches have been around for literally millions of years and fossilized remains prove that they’ve changed very little over the eons. Obviously, they are well designed for what they do.

Everyone agrees they’re unpleasant, but are they harmful? Toronto is fortunate in having two world- class cockroach experts. Besides Prof. Tobe, there is Mrs. Janet Avery, Educational Consultant for the City of Toronto’s Health Department. Unfortunately, they disagree.

While Prof. Tobe almost comes across as the roach’s apologist, claiming the beast is no more dangerous than the house fly, Mrs. Avery is less charitable. When asked if the cockroach is a health hazard, she answers an unequivocal “yes.” Having completed an exhaustive study of Toronto’s roach population, she has no illusions. “I’ve been in apartments where they’ve dropped from the ceiling onto my head, crawled up my pant leg and hidden in the rubber door seals of fridges,” she recounts in grisly detail.

The cockroach itself doesn’t bite or sting but, according to Mrs. Avery, it can carry such unappetizing microbes as Salmonella and urogenital infection bacteria. Both the World Health Organization and the Public Health Act identify the cockroach as a health hazard. The main problem is their affinity for warm, damp places. They frequently create “runways” between the bathroom and the kitchen.

Prof. Tobe doesn’t see this at all. “The organic pest control companies like to spread this around because it’s in their interest. But when you challenge them, they back down, because they can’t support it.” He does acknowledge that a cockroach from the worst New York slum may carry dangerous bacteria. The cockroach is apparently the product of his environment. In relatively clean surroundings the cockroach is relatively clean.

Then, is a Rosedale roach better than a Parkdale roach? “I don’t think so,” laughs Mrs. Avery. “No one can tell where they’ve been.” While roaches don’t travel far under they’re own steam, they do get around. If they lay their eggs in a potato warehouse, anyone who buys a bag of those potatoes at their local supermarket may subsequently have a cockroach infestation.

Mrs. Avery also raises the important psychological stress factor. “Some people are so terrified, they can’t get up at night when the cockroaches are out. Or there’s the woman who won’t have guests over because she’s afraid a roach will pop its head up at the dinner table.” This sort of stress can be very unhealthy.

One thing Mrs. Avery and Prof. Tobe agree upon is that the numbers are growing. No one has taken a census, but when you consider the average female cockroach only has to be fertilized once to produce 20,000 eggs, their abundance is not surprising.

Perhaps, though, people are just becoming more aware of the cockroach. With a wave of young professionals migrating from the antiseptic suburbs to the sometimes funky inner city, one is tempted to dismiss the roach phenomenon as “a new sensitivity to an old problem.” Not so. According to Mrs. Avery, North York and Scarborough both have burgeoning cockroach populations. Even Brampton has a few crawlies.

The chief culprit is, of course, the high-rise apartment building where the sheer number of people carrying food, furniture and garbage in and out of the building increases the odds of infestation. Once a colony has established itself in a highrise, the plumbing and heating conduits provide safe havens even if the building is sprayed.

Mrs. Avery’s recent cockroach study focused on non-toxic pest control, Integrated PestManagement. Because of the controversial nature of the chemical sprays normally used, the Health Department has found another option. Integrated Pest Management (IPM) uses non-toxic compounds such as Boric Acid (dangerous if swallowed) and Diatomaceous earth, an abrasive substance which works well in tight crevices. When roaches rub against it, their shells are scratched, their bodies lose moisture and the roaches die of dehydration. Mrs. Avery also mentions such home remedies as crushed bay leaves or garlic. Both work as repellents. But the real secret, she says, is to “think like roaches.” Apartment dwellers should be aware that it is the landlord’s responsibility to control cockroaches where they are in sufficient numbers to be judged a health hazard. Some people object, however, to having their home regularly sprayed with dubious chemicals. In these cases the City of Toronto’s Department of Health tries to encourage landlords to adopt an IPM approach. This method does, however, demand a much greater time and energy commitment on the tenant’s part.

Perhaps the future hope resides in Hydroprene, a juvenile roach hormone which renders adult male roaches sterile. Although already being marketed in the United States, Hydroprene is still not available for use in Canada.

Like the upstairs neighbor who is suddenly invaded when the apartment below is sprayed, we may be in for a massive trans- border infestation of American roaches fleeing this new hormonal spray.

It may already be happening. Prof. Tobe tells of a hitherto absent southern species called the Carolina Cockroach which has recently been sighted in Toronto.

5 types of Invicta watch reviews for working professionals

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When you seriously want to make a powerful statement about themselves with unique identity, there is no other better way than buying a wrist watch of Invicta brand. Invicta is one of the most recognized as well as time honored quality pieces. It is a type of watch which is mainly used to attract the watch lovers.

Here are listed with some of the best Invicta watch reviews on invicta model 8926, so that you can choose the best time piece and turn your head up in the group.

Invicta women’s pro stainless steel watch bracelet

This belongs to women’s watch category. It makes every moment special at home, at the office, at the dining table or at the golf course. This timepiece is available in different straps, face color as well as material combinations. When it comes to the matter of coordination, this piece is highly versatile. Each combination has a unidirectional rotating bezel having scallops. It gives a dashing style to the professional’s wrist. The invicta dive watch review gives the best description about the product, so that the people can choose their required product without any sort of confusion.

Invicta men’s vintage style date leather strap watch and swiss quartz day

This timepiece is mainly designed for traditional mined business men. Invicta leather strap watch just has numbers on its dial. This particular timepiece is designed with a classic patchwork etched on the leather strap and also a round colored thin case is available in gold or silver color. The dial is available both in silver, champagne or black colored. The face of the dial is designed with gold color Arabic numerals at all the 12 positions and the main two sub dials situated at 3 and 9 o’clock.

Invicta men’s croduba chronograph emu strap watch

This particular time strap has a genuine leather strap made out of emu material as well as attractive gold tone accents. The Corduba chronograph will make you stand ahead from the rest of the watches in style. The bezel draws attention of the people towards it and also on the two push buttons present on it. The sub dials of the watch are situated at the north and south directions.

Grand diver Swiss GMT mesh, Invicta men’s  stainless steel watch

This antique piece speaks about the bold design of the timepiece. This unique timepiece is of stainless steel mesh bracelet which would stand ahead of all other watches. The watch features with designs like attractive eye catching bezel which is available in orange and blue colors. The bright colored bezel is surrounded by a sunray dial which is available in blue and black color.

Men’s Specialty and exclusively designed  Subaqua GMT silver tone case, strap watch

This timepiece is mainly meant for the business people and gives formidable looking which is featured with quality looking craftsmanship with an attractive and sturdy look. This watch has stainless and silver tone bezel with safely secured 6 rivets and frames with practical and uncluttered face, which is adorned with power reserve scale, day and date windows as well as minute counting the sub dial.

The top 10 watches/jewelry brands ranked by consumer awareness

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It’s a booming business for the world of fine watches. What’s boosting those bottom lines? The tiniest of details, including minute repeaters and tourbillons, one of the most highly regarded and expensive watch mechanisms. In addition, products that are sold in limited quantities are highly coveted among consumers. “Limited edition is one of our fastest-growing categories,” Karl-Friedrich Scheufele, vice president of Chopard, told WWD in April. Candy Udell, president of London Jewelers, agreed. “The very upper end is really driving the market,” she said. Below, a look at top brands inwatches and jewelry based on consumer awareness, updated from its original printing in July’s issue of the WWD 100.

1) TIMEX

Consumers who were very familiar with this brand: 68.8 percent

Even this well-known Middlebury, Conn.-based watch brand, which has prided itself on well-made items at fair prices, has added diamonds into its collection for women. “These timepieces bring the extravagance of hand-selected diamonds to an affordable accessory, meant to be gorgeous but versatile,” said the company. The brand also has introduced its Hi-Ti line, a fashionable yet sporty collection for women that uses lightweight titanium on resin straps and a digital face.

2) SEIKO

52.1 percent

Coming it at number two is Seiko, the 126-year-old watch brand that continues to introduce innovative products within its collections. Recently, the brand has offered its Elite collections, which feature the Sportura, Arctura and Coutura collections – all of which have unique incentives, including tachometers, chronographs and solar conversion panels. In October, Seiko – headquartered in Tokyo – relaunched its Web site to feature its own line of watches to the site’s visitors. Stated the company: “For the past several years, Seiko’s global Web site has witnessed rapid expansion in the number of visits; in 2007, so far the increase over 2006 is more than 30 percent. This surge in demand is a reflection of the growing importance of the Web as a source of ‘consideration’ information for prospective buyers of Seiko.”

3) SWATCH

42.4 percent

In August, Swatch Group reported a 39.4 percent jump in earnings for the first half of the year, boosted by continued demand for watches and jewelry worldwide. The Sweden-based company said earnings rose to 460 million Swiss francs, or $377 million, on sales that gained 17 percent to 2.7 billion Swiss francs, or $2.2 billion. “With its 18 brands in all price categories, the Swatch Group continues to benefit from strong worldwide demand for watches and jewelry,” the company said. Current watch collections for the brand include Sweet and Fantasy, Spirit of the Night, Winter-Sport, Olympic and Puzzle Motion.

4) FOSSIL

41.4 percent

In November, Richardson, Tex.-based Fossil announced its most recent financial results: For the third quarter ended Oct. 6, net sales increased 19.6 percent to $358.6 million compared with $299.7 million in the same period a year ago, while gross profit grew 26.2 percent to $187 million. Mike Kovar, senior vice president and chief financial officer, stated, “Successful innovation in our watch offerings, capitalizing on the worldwide acceptance of our portfolio of watch and jewelry brands and expansion of our direct-to-consumer businesses are providing us with a sustained platform for growth in sales at increasing rates of profitability.” Fossil lets consumers design a watch at the “Watch Bar” section of its Web site.

5) ROLEX

41 percent

Headquartered in Geneva, Rolex was founded in 1905 by Hans Wilsford and first became known as Rolex in 1908. With 4,000 watchmakers in more than 100 countries, the company continues to expand its long history of innovation with its limited edition jeweled styles, which feature sapphires and rubies. In addition, the brand’s oversize watches – which are created for both men and women – are also highly coveted by consumers.

6) BULOVA

40.4 percent

Founded in New York City in 1875 by Joseph Bulova, a 23-year-old Bohemian immigrant, Bulova remains an American-owned-and-operated company to this day. In order to cater to its luxury consumer base, Bulova has developed its new Caravelle collection, which features diamonds on a stainless steel bracelet. They can be worn during the daytime right into evening. Other popularwatches for the brand can be found within the Accutron and Wittnauer collections.

7) CITIZEN

38.9 percent

This watch company was established in 1924 in Tokyo. Today, it remains focused on sporty yet sophisticated timepiece offerings. The brand features its Eco-Drive technology, which uses a solar conversion panel and energy cell as the power provider for its quartz watches. Additionally, Citizen manufactures collectors’ watches, including the Skyhawk Collection, which bears the colors and logo of the Blue Angels, the U.S. Navy’s flight demonstration squadron.

8) CASIO

38 percent

This electronics giant, with headquarters in Tokyo, fuses digital and analogue technologies into its Waveceptor and Dress watch lines. In addition, it has expanded its G-Shock series to include a line of watches that are “dressy enough to be worn with a business suit and casual enough for other occasions,” Dave Johnson, senior general manager of the Casio timepiece division, told WWD in a statement in July. He added, “A watch is an essential style element for any consumer, and Casio is paying attention to these kinds of details with this new line.”

9) SWISS ARMY

35.7 percent

Though the Swiss Army knife remains the centerpiece product of Schwyz, Switzerland-based Victorinox’s business, the brand also features a vast collection of fine watches, as well. A military-inspired look remains popular for the watch collection, and prices for its limited edition pieces can run consumers into the tens of thousands of dollars. For example, its Legacy-Rserve de Marche Platine, which is limited to 60 units, is currently listed at $19,500. The timepiece carries a new mechanical self-winding movement equipped with a power reserve indicator and is decorated with perlage and Ctes de Genve finishes.

10) TIFFANY

33.4 percent

Known best for its fine jewelry for the masses, New York-based Tiffany & Co. also has hit it big in the world of fine watches. The brand has ramped up its evening watch collections with a number of different diamond styles. Paloma Picasso, for example, who designs a line for the retailer, created a limited edition watch within her Queen of Hearts collection. And The Tiffany Mark collection carries The Tiffany Mark round watch, which features a quartz resonator, round brilliant diamonds, 18-karat white gold and a black satin strap. The Tiffany Mark small bracelet watch is offered in stainless steel, with self-winding hour, minute and second hands and a date window.

New Ideas Have Swatch Ticking Again

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We went from being a dying brand six months ago to having a huge success with the chronograph watch,” said Chris Keigel, vice president of sales for Swatch Watch USA, here.

Indeed, Swatch, fueled by the chronograph, probably has had one of the most dramatic turnarounds in U.S. brand merchandising annals.

Since its introduction in mid-June, the chronograph, retailing for $80, has sold out in department stores across the country. Swatch has kept the distribution limited, but that’s the way Swatch likes it, and apparently that has only helped to whip up the excitement. The chronograph is currently sold in only 300 of Swatch’s total 3,000 U.S. doors.

“That figure will eventually double, but we will always keep it somewhat limited,” said Keigel.

“We’ve had 100 percent sell-through on the chrono, and my only concern is that we’re not going to have enough for the holiday season,” said Helen Welsh, vice president and divisional merchandise manager of women’s accessories and handbags at Saks Fifth Avenue.

“When we launched the Swatch chrono this summer, the response was absolutely incredible,” said Joanne Hart, fashion director of accessories at Macy’s Northeast.

Hart said the chrono has been a huge success because “it has the same mechanisms found in high-price watches, plus the whole active and sport watch area has been a phenomenal category.”

Swatch’s parent firm, SMH, Inc., based in Biel, Switzerland, declined to cite any figures, but industry sources estimate Swatch currently has worldwide sales of $300 million to $400 million.

Swatch Watch USA’s 1991 volume is estimated at more than $50 million. Keigel said sales are 50 percent ahead of 1990.

Worldwide, our business has been growing at a phenomenal pace, with a growth rate of 20 percent, but we’ve had some problems in the U.S.,” said Ernst Thomke, acting president and chief executive officer of Swatch Watch USA and a creator of Swatch. He divides his time between Biel and New York.

Keigel said sales in the U.S. declined 10 percent annually between 1987 and 1990.

When Swatch was first introduced in the U.S. in 1983, the $25 plastic watch took the market by storm. It changed watches from functional, basic timepieces to fashion accessories.

Watch executives cite several reasons for the downfall of Swatch. One reason is that the market was flooded with plastic fashion watches. After a couple of years, the consumer grew tired of the look.

Thomke said the failure of the short-lived apparel line, which was introduced only for the U.S. in 1986 and discontinued in 1987, was another reason Swatch watch sales dropped.

He said the apparel failed because the firm tried to expand too quickly and ran into problems with production and quality.

Swatch opened in-store shops in department stores across the country to house the apparel and watches, along with Swatch novelty products.

“When we phased out apparel, we lost an enormous amount of real estate in the department stores, and our visibility dropped dramatically,” said Thomke.

The high turnover in management also may have been a factor in the brand’s decline. Thomke is the seventh president in five years at Swatch Watch USA.

“People in the U.S. didn’t believe in Swatch anymore, both internally and externally, and we needed to rebuild confidence,” said Thomke.

This week’s launch of Swatch’s newest watch was another indication of the brand’s popularity today.

Swatch said hundreds of people lined up outside stores in New York, Los Angeles and Minneapolis to purchase the new Swatchetable, the firm’s newest art series, designed by France-based artist Alfred Hofkunst.

The Swatchetable was launched at the Dean & Deluca, an upscale food store here, on Tuesday. Hundreds of people were waiting outside for the store to open while the press had a preview and breakfast inside the store.

The three oversize watches are made to look like a red chili pepper, a cucumber and an egg on a strip of bacon. Only 9,999 units were made of each design. They retail for $100 each.

In eight U.S. cities, the watches are being sold exclusively at fruit and vegetable markets. A total of 5,250 of the watches were sold to retailers. The other watches went on sale in Europe in the spring.

The collectible Swatch watch craze, which started in Europe in 1989, also helped bring Swatch into the spotlight again.

Limited-edition Swatch watches, created over the past eight years, are commanding high prices this year in the U.S. as well. One of the hottest collectibles here is an art series of four watches designed in 1986 by artist Keith Haring. The Haring Swatches originally sold for $50 and are now commanding prices in excess of $2,000, according in Edward Faber, president of The Aaron Faber Gallery, here, which has been selling a wide range of old and new Swatch watches since June.

What’s the next hot style on the horizon for Swatch? A watch featuring a built-in electronic pager will be introduced next spring, and others are on the drawing board.

Sector Group USA brings an expanded line of watch and jewelry licenses to the U.S. market

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After a major yearlong restructuring, 2007 will end up being a crucial year in the life of Sector Group USA.

The New York-based watch and jewelry distributor, a subsidiary of Padua, Italy-based Morellato & Sector, which last year had a turnover of 195 million euros, or $276 million at current exchange, is out to increase its infiltration in U.S. stores, bringing to retailers an impressive array of designer watch and jewelry brands.

We have completely restructured the company this year because we want to aggressively expand the distribution of the brands that existed before, and to launch all the new brands that exist under Morellato & Sector,” says Marco Frison, chief executive officer of Sector Group USA.

The umbrella company that owns Sector is regarded as one of Europe’s leading watch and jewelry companies. In November 2006, Morellato – which began in the Thirties as a maker of leather watch straps and now makes a full line of men’s and women’s watches and jewelry under that name – joined forces with Sector, a popular brand of sporty watches. The new group now runs a hugely successful timepiece and jewelry retail business in Europe, where it operates some 287 multibrand stores under the name Bluespirit.

“The DNA of Sector Group USA is totally different now with respect to what it was before the acquisition,” Frison says. “Before, it was oriented toward independent business, mainly with the Sector brand. Today, the scenario is much wider, because where before we focused just on watchesfrom one brand, today we have watches and jewelry in different positionings and through different brands.”

The alliance also brought together the various licenses held by both companies, including high-fashion name Miss Sixty and red-carpet favorite Roberto Cavalli. Morellato & Sector also recently announced it would launch a collection of John Galliano watches at the Basel Trade Fair in April 2008.

In September, the Miss Sixty watch line was rolled out nationwide, while Miss Sixty jewelry was shown at the JCK show in Las Vegas in June. JCK was also the launching pad for Just Cavalli women’s jewelry. Just Cavalli jewelry for men entered stores for fall 2007. Sector jewelry was also at JCK, and the existing watch collection is being repositioned nationwide. Morellato jewelry andwatches will be introduced to the U.S. for next year. Philip watches, another brand under the Morellato & Sector umbrella, celebrates its 150th anniversary next year, which will coincide with a deeper rollout in the U.S. And Pirelli – the company best known for high-end tires and a famous calendar heaving with supermodels and A-list actresses – is redesigning its signature rubber-strap watch, with new styles coming on line next year.

Massimo Carraro, president and ceo of Morellato & Sector, says the alliance with John Galliano, one of the most prestigious names in couture, would give the company even greater visibility and penetration.

“We are working with him personally on the collection,” says Carraro. “He’s an incredibly creative artist and is very involved with the line.”

The Galliano collection will join the Roberto Cavalli line at the top end of Morellato & Sector’s brand pyramid. Frison says the long-term objective of the company is to have something for every customer at every price point. The Miss Sixty jewelry and watch lines retail from $50 to $190; Morellato will go for $55 to $250, and Just Cavalli from $100 to $300 for both jewelry and watches. Sector will carry pieces from $65 to $900. Roberto Cavalli watches cost up to $1,900 at retail, Philipwatches are priced between $230 to $1,300 and Pirelli between $500 to $2,000. The anticipated retail prices on the John Galliano line will be between $1,200 and $3,000.

Frison adds that he anticipates being in 1,500 doors by the end of 2008 – up from between 600 and 700 now – including majors like Macy’s, Saks Fifth Avenue and Bloomingdale’s, as well as specialty watch and jewelry stores.

“There will be a big difference in our visibility from December of this year,” says Frison. “Next spring will be a real switching point in our business.”

Fossil falters but watches tick on

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Fossil Inc. has seen its sales and profits fall at the same time that the fashion watch category has grown. Fashion watches are a growth category at retail, with Anne Klein, Guess, Timberland and Joe Boxer brands selling well. Fossil reported a 38.6% drop in profits for the quarter ended Sept. 30, 1995. Retailers say Fossil overproduced its successful licensed watches and has been introducing too many styles. The best performers in the category are those that are dominant in a particular niche.

Fashion watches, traditionally a leading category at retail for holiday, are turning in a strong performance this season despite recent stumblings from one of the field’s biggest players.

Fossil Inc., which has been one of the brightest stars in the business for the last five or so years, hit a snag recently and experienced slowdowns in sales and profits. Executives at the company noted that this was not completely unexpected, since it had intentionally cut back on its production of licensed products and even announced that it anticipated a resultant downtrend.

This has not been lost on retailers. While some said they continue to do strong business with the brand, others have been having their problems.

“Fossil had really captured the market in licensed products at one point, but then they got to a stage where the were producing such big quantities of them that the merchandise just wasn’t that exclusive anymore,” said one merchant from a major department store company who asked not to be named.

“They have also become much too overassorted in their core watch line,” the merchant added. “They introduce way too many new watch styles at every market, and it has caused them to lose their focus. In this business, staying in a niche is the best thing for a vendor, and if Fossil had stuck more closely to their retro theme, everyone would have been better off.”

In Fossil’s most recent third quarter ended Sept. 30, profits fell 38.6 percent and sales dropped 2.2 percent; for the nine months., earnings dropped 10.6 percent to $8.2 million, but sales were still ahead 17.3 percent, reaching $122.4 million. Prior to this, quarterly increases in both sales and profits had regularly been in the 20 to 25 percent range or more for the last several years.

Nonetheless, the fashion watch category has continued to grow at retail and a number of stores said they experienced double-digit growth for the fall season and are expecting the same for the holiday period.

“Fashion watch business has been extremely good,” said Kim White, merchandise manager ofwatches and jewelry for Federated Merchandising, the buying office arm of Federated Department Stores, Cincinnati. “We’ve had tremendous increases in the last two to three years.”

White said that her current top lines are: Anne Klein and Anne Klein II, “which are our number-one growth resources”; Guess, “our number-one volume resource,” and Timberland and Joe Boxer, both produced under license by Timex.

These vendors have been selling well White said, because they have pursued a specific segment of the business aggressively.

“To do very well. a vendor has to want to own a certain corner of the market,” she noted. “Then, if a company does do that, we as merchants have to respond by taking the merchandise and exploding it onto the consumer through presentation and marketing. The philosophy for retailers has to be, `How fast can we get the business and distort it?”’

However, trying to keep up with these demands was one of the roadblocks that Fossil ran into, according to Richard Gundy. executive vice president of the company.

“The reason we cut back on our production of licensed products by about 60 percent this year was because they were not being viewed as very collectible anymore.” Gundy noted.

“Our original idea for the licensed lines was to do limited editions in very small amounts and keep the demand high, but the stores started asking us to make more and more of them so that consumers would buy more.” he added. “But then, at the end of a season, they would have inventory left over and no one would want to buy it because it just didn’t look that exciting anymore.”

In order to replace volume that has been lost with the cutting back of the licensed lines. Gundy said, Fossil has introduced several new lines since the beginning of the year. The new FSL line, for instance, is made up of high tech look, sport-oriented watches. It was introduced at retail this fall.

Fossil’s strategies have been paying off in at least some cases. Dave Harris, senior vice president and general merchandise manager of accessories for Carson Pirie Scott, said that both the licensed limited-edition goods and the new merchandise have been selling well.

“Fossil is still our number-one brand,” Harris said. “I think the situation they’ve come into recently is fairly predictable, and all it means is that the brand is maturing. I just think they need to concentrate more on accelerating new products.” Harris added that his other best-selling lines include Anne Klein II, Liz Claiborne and Joe Boxer.

“We’ve been tracking gains in the mid-teens all fall in the fashion watch category, and I think we’ll end up having another outstanding holiday season as well,” Harris said.

“We’ve been far exceeding our plans in fashion watches,” said Lizabeth Bailey, divisional merchandise manager for fashion watches, jewelry and accessories at Bloomingdale’s. “It’s true that Fossil is not running the same kind of increases it used to, but that’s because it’s already a well-developed business.”

Bailey said that the strongest recent performances have come from Fossil, Guess, Anne Klein and Anne Klein II, Joe Boxer and Swiss Army watches.

Bailey, as well as other merchants, also pointed out that Swatch, a line that had its own share of woes just a year and a half ago, has seen a major revival.

“Swatch really made some changes in marketing and management.. they introduced new products such as the Irony line that have really led to a comeback,” Bailey said.

Martin Grossenbacher, president of Swatch U.S.. acknowledged that his firm had suffered a loss of market share due to a sloping off in demand for the company’s core product, the whimsical plasticwatches that had been building its business since the mid-Eighties.

“We decided to take a new direction in product and introduce watches that were more conservative and classic,” Grossenbacher said. The result was the Irony line, which has metal cases instead of plastic ones and more simple, straightforward styling and colors than the core products do.

“Of course, we still offer the same fun, brightly colored watches that we always did, but now we have a wider selection, so that consumers can come to us for both their casual and more seriouswatches,” Grossenbacher said.

He noted that the firm also opened a new design lab here about six months ago in order to better tune into trends in the U.S. market. It also operates a design lab in Milan.

“On a worldwide level, we are still gaining market share,” he said. “In the U.S., we have had our ups and downs and the last up was around 1991 and 1992,” he said. “But right now our U.S. business is up 30 percent from the same time last year, and I think we’re swinging back in a positive direction. In any case. we are committed to the U.S. market for the long term.”

Ultima Brands, U.S.A. set to unveil Fendi watches

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Ultima Brands, U.S.A. Inc., will unveil its line of Fendi watches next week. The line represents the first U.S. licensing agreement for Italian-based Fendi.

Thomas Venables, president of Ultima, which is responsible for manufacturing and distributing thewatches, expects to sell about 200,000 watches worldwide the first year.

Initially, Bloomingdale’s will have the exclusive on the watches for the month of September.

Venables said the women’s and men’s watches are designed by the Fendi sisters and coordinate with Fendi’s leather goods.

The 18 karat goldplated watches, wholesaling from $125 to $375, come in bracelet styles or with a leather strap. The line, produced in Switzerland, consists of eight styles in 74 different versions. New designs will be added yearly in August.

Venables said the watches will be sold in fine jewelry departments and in Fendi boutiques. Thewatches are being shown in the Ultima showroom at 153 East 61 St.