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Timet pitches bats in search of home run

Titanium Metals Corp (Timet) hopes that the new titanium ‘Tiphoon’ software bat being marketed by James D. Easton Inc. will showcase titanium as a material to consumer goods manufacturers. Finding new markets for titanium is critical to Timet since its primary market, the aviation industry, is in a slump. Titanium as a consumer goods material lost favor to composites in the 1980s, but Timet is promoting titanium as a more durable alternative to composites in consumer goods. Timet supplies the titanium tubes for the Tiphoon bat fabricated by Easton, a sporting goods company that accounts for half of the bats sold in the word.

Titanium Metals Corp. (Timet) looks for a new softball bat to score a hit as it seeks to attract more fans of titanium in the consumer and industrial markets.

Jas. D. Easton Inc., which is said to be the world’s largest bat manufacturer, recently introduced its “Tiphoon” model and hopes to begin taking orders sometime this summer after receiving approval from organized softball authorities. This could mean a berth in official tournaments for the asa slow pitch softball bats, which weigh from 24 to 38 ounces. Easton says that, judging by the features that help to make a topnotch piece of baseball “lumber,” they stack up pretty well against other materials.

“It comes down to feel, balance and width of the sweet spot, which is a measure of how forgiving the bat is,” according to Larry Carlson, general manager of new business development for Easton. The privately held Van Nuys, Calif., sporting goods manufacturer estimates it makes around 50 percent of the bats sold in the world.

“We are seeding the market with top players on no-cost basis to get feedback,” Carlson pointed out. “And some people say it hits farther, although we haven’t confirmed that.”

Easton, which manufactures a variety of sports equipment from aluminum as well as from advanced composites, has been developing the titanium bat in conjunction with Denver-based Timet for the past 18 months (AMM, Feb. 8).

“It’s been a difficult one,” Carlson said about the project. “I’ve had my best people on it. Titanium, compared with aluminum, is hard to work.”

Despite the fact that major league baseball doesn’t allow metal bats, they nevertheless dominate other areas of baseball and softball. Carlson reckons they account for all but 1 or 2 percent of the world market.

A Timet executive in Denver noted that only a few titanium bats have been tried before the Tiphoon and were reportedly made from an older alloy that was quite difficult to fabricate and gave inconsistent results. Carlson said, however, that the use of Timetal 15-3 (an alloy of titanium containing vanadium, chromium, aluminum and tin) “helped us work it into a bat.”

Timet supplies Easton with 2-1/4-inch welded tubing from strip that has been rolled at room temperature. Easton “rocks,” or cold reduces, the tubing, which later is heat-treated to double its strength.

The Timet exeuctive said 15-3, one of the beta alloys, gave titanium a chance to score on the baseball diamond primarily because it is in a “solution-treated”–or annealed–condition when worked. This allows it to be cold-rolled, welded and cold-reduced prior to heat treating.

It was developed in the mid-1970s in Timet’s Henderson, Nev., laboratories for the U.S. Air Force, which wanted a strip-rollable alloy. By contrast, titanium 6-4, the workhorse aircraft alloy that accounts for the bulk of the aerospace sheet produced, must be made “one sheet at a time.”

Not surprisingly, softball bats don’t represent 15-3’s largest likely application. That will be the new Boeing 777 airliner. The beta alloy’s biggest successes have come in applications that demand a lot of forming and high strength, such as jet engine brackets and bottle-type containers on rockets.

The Tiphoon isn’t going to come cheap and will occupy the high end of Easton’s lineup. Carlson figures it will cost in the neighborhood of $400 per copy at retail.

Most of Easton’s aluminum bats, made from aerospace alloy 7046, are priced from $30 to $50. Its top-of-the-line aluminum softball edition, manufactured of a proprietary alloy developed in conjunction with Aluminum Co. of America (Alcoa), goes for about $120 at retail. Still another bat, featuring a carbon graphite core inside aluminum tubing, goes for about $150.

As things stand now, Carlson doesn’t think even the eventual success of the Tiphoon will drive down its price tag because processing costs, as well as the cost of the metal itself, are just too great.

“This bat is strictly for the serious player willing to invest in top performance,” Carlson said about the Tiphoon.

Timet itself isn’t necessarily looking for the bats alone to chew up countless tons of titanium. Rather, the industry’s largest producer hopes success in such high-profile markets as baseball will help recapture the high-tech “sex appeal” that titanium once enjoyed in consumer goods but lost to non-metallic composites during the 1980s.

This happened with golf club shafts. The slump in aerospace, which accounts for most of the titanium market, has made it all the more pressing for titanium to regain its cachet in consumer goods–and the attention of the public.

Compared with titanium, the Timet executive argued, composites actually wear out a lot sooner, a benefit he expects to become more evident as time goes on. As for Timet, in addition to sporting goods, it is targeting automotive and architectural markets as it looks to build the metal’s visibility.

“We have a zillion of these applications coming along,” the executive promised.

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Volume resources to mix it up at NSF

Volume athletic resources plan to show a mixed bag of products — from satin athleisure to black leather court shoes — at the upcoming NSF Volume Exposition. And with the International Trade Commission’s ruling on import restrictions looming on the horizon, most resources have adopted a relaxed attitude about the impending decision, which could place restrictions or quotas on imports (see related story).

Athleisure continues to be a strong force in the volume market in both men’s and women’s categories, resources advised, with hook-and-loop closures holding firm in women’s and children’s styles, but disappearing for men.

“Velcro is basically over for men for us,” said Janet Schwartz, executive treasurer of Jack Schwartz Shoes, Inc., makers of the Pro-Players athletic line. The firm, which considers itself a trend setter in the New York area, will be showing its Midnight Collection of Black court/athleisure shoes in eight styles. “It’s been the hottest high arch sneakers,” said Schwartz. She explained that the line began as a basic, lace-up referee’s shoe that was picked up by the gay clientele when it was test marketed in New York. The success of that shoe spawned the idea for a complete line of black leisure styles suitable for both sport and casual wear, Schwartz said.

Maria Pan, vice-president of Handsome Enterprises, Inc., makers of Pro-Joggs athletic shoes, agreed that men were looking for “a comfortable, yet dressed look,” and had reduced their consumption of joggers for casual wear. When they do buy joggers, men prefer lace-up styles, she noted.

Women are gravitating toward fashion colors in joggers with lilac, pink, white and gray/pink combinations being the most popular, Pan said. Hook-and-loop closures continue to sell for women and children, she said. In addition to its joggers, Pro-Joggs will introduce athleisure styles in fashion colors at the show.

Jordache Athletic & Leisure Footwear will be showing women’s fashion joggers and athleisure styles with canvas and satin uppers for both fall ’84 and spring 85, said Tina Kang, designer. The new high and low cut athleisure shoes with aerobics bottoms will retail from $14-$20.

John Balemian, vice-president of Jordache, reaffirmed the company’s position as a fashion, rather than performance, house. He said the line for spring ’85 will be athleisure styles pastel colors, with mint, peach and bold colors dominating. Jordache also is doing sandals for the first time, he said. The line for spring ’85 is 80 per cent completed, Balemian added.

Bob Ranalli, president of Allsport, Secaucus, N.J., said he expects continued interest in children’s and youth shoes with fastener straps and women’s leather or suede aerobics shoes. “Anything in aerobics is doing well,” he noted.

Leather or mesh basketball shoes are still selling, but primarily in three-quarter height, with athleisure shoes doing best in fashion looks like Peter Pan boots, he added.

Kangaroos USA, Inc., St. Louis, will unveil a soccer and baseball line at the show, plus women’s fashion casual shoes, said David Ennion, general manager.

Autry Industries, Inc., Dallas, will show new turf shoes, new running shoe styles and introduce materials in shoe construction, said Jim Autry, president. For example, a new running shoe will include reflective material for safety. Autry also is introducing full nappa leather on court shoes and a supple, “breathable” nylon mesh material, said Autry.

Pro Specs, Avon, Mass., has added a number of performance categories at popular prices because of a perceived increase in interest in sports and physical activities by consumers, according to Richard Meier, vice-president of sales and marketing.

The firm has expanded its cleated footwear for adults and children because the higher priced, branded athletic shoe firms have ignored that market, leaving more market share to those making cleated shoes, he said. “It’s easier to crack that area and do better with it,” Meier said.

Pro Specs had three cleated styles that sold faster than expected and are already out of stock, he said. For spring ’85, the line will expand to six new cleated styles, and another five styles will be introduced the following fall, he said.

Specs also will increase its offerings in tennis shoes for plantar fasciitis with three popular priced leather models for fall shipping. There will also be a new Specs men’s basketball shoes at $27, he said.

Resources generally agreed that the volume market is saturated with athletic shoes, and although brands are strong, consumers are concerned first about value. Ranalli predicted that the oversupply has caused a tightening of competition in the market that will continue for another year. He attributed the condition to overcapacity in Far Eastern factories and the continuing trend of athletic shoe industry executives to break away from their employers and form their own companies.

As a result of the oversaturated market, Ennion said he believes volume distributors will begin promoting their own brands rather than some brands that have been saturated. Bernard Schwartz, president of Jack Schwartz Shoes, agreed. “We feel that branded is very important. That is why we’ve spent money on advertising to develop brand name awareness.” The firm has been concentrating its efforts on New York area radio stations in both English and Spanish. Schwartz said that branded discounters are becoming a strong factor, and he predicted they would break into the sales of list price retailers. “It’s not helping anyone,” Schwartz notrd.

Allsport plans to avoid the pitfall of companies selling to off-price dealers by offering exclusive arrangements with department stores and major retailers, Ranalli said. “Everybody’s trying to sell everybody, and that moves you into areas that you really don’t want to get into,” he said. By offering retailers an exclusive arrangement with Allsport, the stores can merchandise the stylish shoes for bunions better and have no fear they are being discounted by competitors, Ranalli said.

The next trend, said Ranalli, will be chain stores developing their own private label athletic brands to give them more control of the market and increase markup and bottom line retail performance. Ranalli said he expected 10-20 per cent of the volume market to be in private label sales.

Pan and Autry agreed that while brands are still strong, consumers look primarily for value. “Most people are brand oriented. But if you maintain quality and service, you really don’t have a problem,” offered Pan. Retailers are generally most receptive to the quantity, delivery and service offered by a resource, and added that some families are still in tight economic situations resulting in a focusing on quality rather than brand name.

Autry said consumers are becoming more discerning in their athletic shoe purchases and are not so quick to pay $60-$100 for a shoe “when they know they can buy as good a shoe at $40.” “Brands are still strong, but you have to give the public better value,” said Autry.

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Watches: about its origin and history

But the past 20 years have witnessed a timekeeping revolution that we should appreciate. It started in 1969 with Seiko’s introduction of the electronic quartz watch. Hamilton Watch Co. took another major step the next year and introduced a solid-state electronic watch that displayed figures on a screen. A JC-K article in 1970 called it the “most dramatic step forward in watches since [the invention of] the hairspring in 1675.”

Wilhelm Alpsteg of the Swiss Watch Federation Institute says the electronic watch not only changed the way watches are made, but also the way time products are marketed and promoted. The first story in this chapter recalls the development and refinement of quartz watch technology, as well as changes in watch marketing and the reasons we choose the watches we glance at so many times a day.

The second story recounts how the venerable Swiss watch industry lost its preeminence by concentrating too long on mechanical watches while the U.S. and Japan took large chunks of the rapidly growing electronic watch market. The Swiss have worked hard to regain some market share, but they’re still playing catch-up ball.

The new Asian watch industry jumped right on the electronic watch bandwagon, meeting the explosive demand for lower-end digitals. The third story tells how the industry nearly did itself in through overproduction. Luckily for Japanese and Hong Kong manufacturers, they were able to carve a niche for themselves by aiming for higher quality. Now other Asian countries, including China, have high hopes for their own emerging watch industries.

The fourth story in the chapter takes a look at what the past 20 years have meant for watch production and sales in the U.S.


In 1969, the watch industry entered the Space Age.

It didn’t happen on the moon, where U.S. astronauts used and wore sophisticated mechanical timepieces. It happened on earth–in Swiss and Japanese laboratories, in busy Tokyo stores and in a venerable U.S. watch factory in Pennsylvania’s Amish country.

Watchmakers in all three lands lighted a fuse to an explosion that shook the global watch industry in 1969 and reverberates to this day. The explosion was the introduction of the electronic watch; the fuse was something tinier than a baby’s fingernail–a sliver of synthetic quartz crystal that provides precise timekeeping by vibrating at very high frequencies when activated by electrical impulses.

The development of electronic watches not only changed the way watches are made. “It fundamentally altered the way time products are marketed and promoted,” says Wilhelm Alpsteg, senior watchmaking instructor at the prestigious Swiss Watch Federation Institute.

Before quartz: Electronic watches and quartz timekeeping didn’t spring full-born from some designer’s brow in 1969. Indeed, electric watches were predicted in an 1879 issue of Jewelers’ Circular. (That prediction, however, involved a cumbersome device requiring two vest pockets–one for the pocket watch and one for an electric generator, both cased in hard rubber and connected by an insulated chain!)

The first quartz “clock” (the size of an average room) was developed in the U.S. in 1929. Precise atomic clocks with quartz oscillators, used by scientists and governments, followed in the 1940s. Hamilton Watch Co. of Lancaster, Pa., marketed the first commercial electric watch in 1957. And three years later, Bulova startled the industry with Accutron, a wristwatch with an electronic tuning fork oscillator, eliminating the need for escapement and balance, with accuracy to within a minute per month.

But it was the quartz oscillator, powered by a button-size battery, that shaved electronic watches’ accuracy to within seconds annually. More importantly, the easily produced synthetic quartz crystal allowed the mass production of inexpensive electronic watches.

History in the making: Several firms worked on quartz technology in the late 1960s. But it was Hattori Seiko in Tokyo and Longines-Wittnauer in Switzerland that first went public in 1969.

Longines displayed a prototype at the 1969 watch trade fair in Basel, Switzerland, but didn’t bring out its first commercial model until 1970. Seiko started to sell its electronic quartz watch in Japan in 1969 and introduced it to the U.S. in 1970 (at $1,250 retail). But before the bulky watch even reached the hands of U.S. jewelers, Seiko in October 1970 debuted a second-generation, smaller version at half the price ($650). Company officials considered it, and the U.S. market, so important, that the firm’s rarely seen president hosted a press luncheon in New York to announce the breakthrough in miniaturization.

Just four days later, Longines-Wittnauer’s own quartz analog went on sale at Macy’s in New York (for $575). The curtain had officially gone up on the competitive quartz watch market in the U.S.

Digital debuts: Hamilton Watch Co. and Electro/Data Inc., a Garland, Tex.,

electronics firm, worked together in 1969 on another breakthrough: a solid-state watch (using integrated, encapsulated circuitry instead of moving parts) that told time with figures on a display screen.

In May 1970, Hamilton unveiled the prototype, which JC-K at the time called “the world’s first truly electronic portable timepiece” and the “most dramatic step forward in watches since [the invention of] the hairspring in 1675.” In keeping with the scientific euphoria of those moon-walk days, Hamilton dubbed the watch Pulsar, borrowing the name from the recently discovered distant stars that emitted regular radio pulses.

The watch, which went on sale in 1972 at $2,100 retail, had no moving parts. It consisted of a computer module that calculated time, an advanced quartz crystal and a specially designed 4.5-volt rechargeable battery. To see the time, the wearer pressed a button on the watch face for a digital readout (in red) on the light-emitting diode (LED) display.

Global success: Digital watches with their trendy, Space Age look captivated consumers and took the market by storm. They grew even more popular as their prices dropped. According to conservative estimates at the time, the U.S. market alone almost quadrupled in volume (from 200,000 in 1973 to more than 750,000 in 1974). Sales reached $188 million in 1974.

But the LED watch soon lost favor, accounting for less than 4% of jewelers’ digital sales by 1978. Consumers complained LEDs were hard to read in bright sunlight, and many disliked pushing a button to tell time. LEDs were supplanted by liquid crystal display (LCD) watches, which show time continuously and are easier to read. LCDs remain the leading type of digital.

No denying it–quartz digitals were hot. In 1974, more than 100 models debuted at the spring watch show in Basel. By that summer, they were a major jewelry-store item. A JC-K poll found 40% of all $150 + watches sold by jewelers were digitals. Demand was so great that many manufacturers couldn’t keep pace. And the popularity kept building. By decade’s end, one of every four watches sold worldwide was digital.

Such demand caused the watch industry’s version of a gold rush. By 1976, dozens of U.S. firms made or marketed digital watches–established watchmakers and newcomers alike. Among the newcomers were electronics and semiconductor firms such as Texas Instruments, as well as Hughes Aircraft, Motorola and General Tire & Rubber. It was boom-and-bust business: for every digital firm that went into business, another folded because of marketing or financial woes.

Overseas, the advent and global popularity of electronic watches virtually created the modern Hong Kong watch industry. In 1969, Hong Kong had a handful of firms making 3 million cheap mechanical watches and components. By 1978, it was home to literally hundreds of watch firms, exporting 49.4 million watches (most of them digital). It even surpassed Japan to become the world’s largest watch exporter (in units).

Busted boom: HMW Industries, which had been spun off from Hamilton to sell Pulsar, first laughed at suggestions that cheap Hong Kong watches could affect the market. But such overconfidence proved dangerous. In 1976, HMW reported a “sharp reversal” in earnings and a 20% drop in U.S. and foreign sales. A year later, digital sales had “virtually disappeared from all but the very lowest price levels,” said HMW. It sold Pulsar–lock, stock and logo–to a Philadelphia firm that later sold it to Seiko.

The problems that overwhelmed HMW affected much of the industry. Too many firms, especially in electronics, operated on high volume and low prices. That pushed digitals out of jewelry stores and into mass-merchandising markets.

Many small manufacturers and marketers went out of business because they were undercapitalized or lacked adequate distribution arrangements. And many foundering firms simply dumped their merchandise on the market.

Getting out: By the early 1980s, the digital boom had collapsed under a world glut of cheap digitals and cut-price competition. It hit Hong Kong’s fledgling industry especially hard. Many watchmakers there, including some of the biggest, went bankrupt or simply closed their doors.

Digitals didn’t disappear, of course. They settled into the under-$50 end of the watch market, where multifunctional digitals were popular. In the late 1980s, digital and analog quartz watches literally came together. Several firms introduced “anadigi” watches: timepieces with analog dials and digital readouts on the same watch face. Digital timekeeping also found its way to such items as pens, stick-on plastic clocks and ruler-calculator watches.

During this time, much production of solid-state watches and time products moved to labor-intensive, low-wage countries, primarily in Southeast Asia. China, already a major producer of watches for home consumption, became an important source of digitals. Manufacturers from Hong Kong and Japan set up production facilities in China to capitalize on the country’s abundant low-cost labor. In 1988, China displaced Japan as the second largest exporter of digitals to the U.S. It shipped 41.8 million digitals here that year, up 248% from 1987 and 3,383% from 1986.

Quartz analogs: Quartz analogs (with traditional watch dials and hands) quickly filled the gap that digitals left in jewelry stores. They increased from 3% of total world production in 1975 to 54% in 1988. Even Swiss luxury watchmakers such as Patek Philippe, Vacheron Constantin and Baume & Mercier added quartz models to their painstakingly handmade lines.

In the U.S., the 1980s became the decade of the quartz analog. A major factor was Swatch, the inexpensive ($35) plastic-case watch developed by Swiss watchmaking giant ASUAG. Swatch, launched worldwide in 1983, took the market by storm. Within five years, more than 50 million Swatches had been sold worldwide.

Swatch itself was a technological breakthrough, manufactured by automation in a sharp departure from Swiss hand assembly. But the key to its success was an aggressive, avant-garde media campaign aimed at young people. The campaign promoted a new concept in watch marketing: the watch as a trendy fashion accessory first and timepiece second. Like clothing fashions, Swatch offered new styles for every season and type of activity, and was sold primarily in department stores.

Swatch’s concept of watches as fashion accessories has dominated watch styling and marketing through 1989.

Breakthroughs: The electronic watch revolution opened the door to other technological advances. One short-lived trend was solar watches (electronic timepieces equipped with solar microgenerators that converted light to electrical energy).

Others have been more long-lasting. Continuing advances in miniaturization of electronic components, for example, enabled manufacturers to produce constantly thinner watches and break new ground in styling. From 1978-1980, watch thicknesses shrank from 4.1mm to 1.48mm. In 1989, Hattori Seiko produced the thinnest-yet to mark its 20th anniversary of quartz watch production. The limited-edition, handmade, gold-encased watch is just 0.85mm thick and cost 1 million yen (about $7,000).

Other advances include a watch that speaks the time at the press of a button, watches with a radio or TV, watches made with Space Age metals such as titanium, watches that show several time zones simultaneously, watches that receive messages and watches that can be linked to a personal computer.

In 1988, almost 20 years after the introduction of the battery-powered quartz watch, Hattori Seiko and Jean d’Eve of Switzerland each premiered battery-less quartz watches. The watches generate their own electrical power, converted from the motion of the wearer’s wrist. In 1989, Nepro of Switzerland introduced the world’s first clock operated by ultrasonic technology (without moving parts) and the world’s first watch without a winding crown.

Meanwhile, the public also has grown fascinated with complicated, multifunction watches. Among the most popular types are chronographs and sport watches and watches with moon phases, rim or perpetual calendars, day/date windows and subdials.

Mechanicals’ comeback: By 1988, the dominance of the quartz watch was complete. Five out of every six timepieces produced worldwide were quartz. But while the quartz watch captured consumers’ dollars, the mechanical watch may hold their hearts.

A new Swiss watch industry report says mechanicals are experiencing a revival after a dramatic drop in the 1980s. And Swiss watchmakers speak of a revival of high-quality mechanicals, including automatics (self-winding mechanicals), skeletons (open to view front and back) and open case-backs.

Watchmakers attribute the popularity to the growing demand for chronographs (many of which are mechanical) and consumers’ renewed interest in the craftsmanship of mechanical watches. Neither does it hurt that watchmakers themselves are cultivating the high-quality mechanical watch market, where they face no competition from mass producers in the Far East.

One example of the interest in mechanicals is Patek Philippe’s Calibre 89. Billed as the world’s most complicated portable timepiece, it drew much attention and brought $2.74 million at auction in April 1989. Also, several Swiss and Asian watchmakers recently introduced skeleton watches in the midprice range.

But perhaps the best example comes from Swatch. This creator of the world’s most successful quartz watch added mechanicals to its line in 1989.


One thing you’ve got to say for the Swiss watch industry: it’s resilient.

Twenty years ago, it was the world’s No. 1 watchmaker in volume, value and reputation.

Ten years ago, beset by what a leading Swiss bank called “a series of technological, economic and structural upheavals,” it seemed to be sinking into oblivion.

Now, it’s bounced back, thanks to major structural changes, innovative products and aggressive marketing. If no longer the world’s leading watchmakers, the Swiss have regained some of their market share. And they intend to keep it.

Downfall: In 1969, the Swiss were the king of the watch hill. One of every two watches — almost all of them mechanical movements — were Swiss-made. But that changed with the advent of electronic watches (quartz crystal analog and digital). Swiss technicians had been fiddling with the new technology, but the Japanese and Americans were the first to adapt it to the commercial watch market.

Many Swiss watchmakers thought digital and quartz watches were a fad, so they continued to concentrate on mechanical watches through the early 1970s. By 1975, they started to feel the heat as the U.S. and Japan snatched large chunks of the market. Swiss exports dropped 22% — serious for a land that exported 97% of its watch production — and sales in the U.S. — its largest market — were off 40%.

An enormous backlog of unwanted mechanical watches built up, tying up critical amounts of capital. Small companies closed, and for the first time in decades, Swiss watchmakers laid off workers in large numbers.

Making modules: The Swiss didn’t entirely ignore the quartz revolution. Major firms such as ASUAG, one of the country’s biggest watchmaking groups, made quartz modules (the equivalent of mechanical movements) for other firms’ electronic watches. And Ebauches S.A., a major movements producer, worked with Texas Instruments to produce liquid crystal display (LCD) digitals for a few Swiss brands.

But overall, the Swiss were slow to develop their own electronic timepieces and innovative, aggressive marketing campaigns. Other problems beset the Swiss also. Unlike the unified Japanese watch industry, the Swiss industry comprised hundreds of independent firms. And when the U.S. dollar was devalued in the mid-1970s, the Swiss franc sky-rocketed, making Swiss watches more expensive and less competitive in foreign markets.

In the late 1970s, the Swiss began to fight back. They invested heavily in electronic equipment, and by 1979 were making all their own quartz components. They entered the digital field in full force and put more stress on quartz analogs. The changeover to quartz technology also led to more coordination and consolidation among the country’s many small producers.

Facing `disaster’: But the changes came late, and the Swiss industry entered the 1980s facing its biggest crisis in decades.

In 1981, key Swiss watchmakers got a stern warning from Gedalio Grinberg, chairman of North American Watch Co., a successful marketer of upscale Swiss watches. He said the Swiss faced “disaster” if they didn’t challenge the Japanese advances in the low- and mid-price range in the U.S.

At the time, the speech seemed more epitaph than warning. Production of Swiss watches and movements was dropping (from 96 million in 1976 to a low of 45 million in 1983). Exports to the U.S. fell 50% from 1976-’81 (12 million to 6 million), and Swiss watch firms dwindled 47% from 1970-’79 (1,620 to 870).

Switzerland’s major watchmakers were in serious financial trouble. In 1980, SSIH, another large watchmaking group, lost some $80 million. In 1981, it got a $150 million credit transfusion in a rescue devised by a consortium of Swiss banks. Even so, SSIH and ASUAG lost a combined $50 million in 1982.

Shotgun wedding: In a surprise move the following year, ASUAG and SSIH announced they would merge to cut losses to Far East competition, to regain market share and to try to revitalize the Swiss watch industry. The merger included ETA, the largest Swiss movement maker and a subsidiary of ASUAG.

Actually, the merger was something of a shot-gun wedding, demanded by the bank consortium that earlier came to ASUAG’s rescue. The consortium wanted to help the two firms because they represented more than half the annual output of the Swiss industry. The bankers kicked in $300 million in credit in return for a streamlined, efficient firm with the product, financing and marketing know-how to compete with the Japanese.

The result was the ASUAG/SSIH Group, later renamed the Swiss Corp. for Microelectronics and Watchmaking Industries Inc. (SMH for short in English).

Enter Swatch: Even before the merger, ASUAG started to work on ways to beat the Japanese at their own game. In 1979, it developed the Concord Delirium, a luxury watch of record thinness (1.98mm) featuring a quartz movement integrated with the molded case, rather than assembled separately, then encased. If that one-piece construction could be applied to a mass-market watch, engineers reasoned, they finally might have something to use against the competition.

After almost two years of work, they came up with the answer: a one-piece, sealed, $30 watch called Swatch (short for “Swiss watch”). In a sharp departure from Swiss hand-crafted artisanship, Swatch watches come off an automated assembly line at ETA’s plant in Grenchen, Switzerland.

ETA test-marketed Swatch in the U.S. in late 1982 and formally launched it with an aggressive worldwide media campaign in 1983. The watch took the world by storm. Within in a year, Americans were buying 100,000 Swatches a month. Within five years, more than 50 million had been sold worldwide.

Fashion accessory: Swatch’s production was innovative, but even more important was its focus on watches as fashion accessories. Since 1983, Swatch has introduced more than 400 models in styles for every season, taste and activity. Among them have been the transparent Swatch, the Granita di Frutta Swatch (fruit-scented), Pop Swatch (oversized watches on elastic bands) and even metal-case Swatches.

The impact has been spectacular. Swatch almost single-handedly revived the fortunes of the ASUAG-SSIH group. In 1985 alone, Swatch watches accounted for most of the 12.2% increase in Swiss exports and led to the hiring of thousands of people in the Swiss watch industry.

It also spawned a variety of knockoffs and imitators, and led the movement of watch firms into nonwatch products such as clothing sporting watch logos. By the late 1980s, the firm opened Swatch boutiques in U.S. department stores and flirted briefly with Swatch merchandise (from sunglasses and towels to razors and phones), before deciding to concentrate again just on watch and watch accessories.

The innovation at SMH wasn’t limited to Swatch. Tissot, another SMH brand, brought out the RockWatch (case carved from granite), the ShellWatch and the Wood Watch. And Omega, SMH’s well-known upscale watch, streamlined its inventory and operations and made a strong comeback in the U.S. and globally in the late 1980s.

The innovation reached even the upper end of the industry. Most luxury watch manufacturers added quartz models to their lines, and some — such as Patek Philippe and Vacheron Constantin — started to use computer-aided-design technology to develop new watches and movements.

Merging: Consolidation of the Swiss industry accelerated through the 1980s, especially among high-end watch firms.

For example, Audemars Piguet acquired 40% of Jaeger-LeCoultre. Top management acquired Girard-Perregaux then agreed with Italian jeweler Bulgari to set up a new firm to produce watch movements. And Mondaine Watch Ltd., best known for its mass-market M-Watch and its Gruen Swiss watch line, bought Lusa S.A, a Swiss watch-case factory.

But much of the consolidation was orchestrated by non-Swiss buyers. Sheik Yamani, former Saudi Arabian oil minister, acquired Vacheron Constantin. Cartier bought Piaget and Baume & Mercier (giving Cartier 40% of the global luxury watch market, up from 25%). Asia Commercial Co., one of Hong Kong’s biggest quartz analog manufacturers, bought Juvenia. And Stelux Holdings, one-time owner of Bulova and probably Hong Kong’s largest and best-known watchmaker and retailer, bought Universal Geneve.

The acquisitions and mergers have injected new funding into old-line firms, enabling them to improve or expand production facilities and marketing. By the end of the 1980s, it was apparent the Swiss had regained their footing in the slippery world watch market.


In 1969, the average American would have been hard-pressed to name a single Asian-made watch brand. Now, Asian watches dominate the U.S. market. Consider this:

* The largest watch companies in the world — and some of the leading mid-price suppliers of the U.S. market — are Japanese.

* Hong Kong is the world’s largest watch exporter in volume.

* Southeast China has become a major production center of inexpensive digitals and quartz analogwatches, and is the largest single exporter of digitals to the U.S.

* Competitive pressure in the low-end watch market is building in India, Thailand, Taiwan, Malaysia and Singapore. South Korean watchmakers, such as Samsung, are moving into Western Europe and eyeing the U.S.

* Japan and Hong Kong manufacturers produce components for other watchmakers, including the Swiss. Among them are such mid- and higher-priced brands as Seiko, Lassale, Jean Lassale, Jaz Paris, Lorus, Citizen, Citizen-Elegance, Noblia, Noblia Spirit, Casio, Ricoh, Juvenia, Universal Geneve and Sharp.

Japan: The quartz revolution that spawned the electronic watch also created, in large part, the modern Asian watch industry.

Japan had a small domestic watch industry for 100 years, but the quartz watch turned it into an international power-house. Realizing the potential of quartz watch technology, Japan enlisted the top talents in its electronics and semiconductor industries. It also invested heavily in automation, computers and industrial robots for watch production. And it stressed mass production of a limited number of standardized movements and modules.

These factors also helped Japanese watchmakers:

* Low-cost labor gave their watches a competitive edge in the world market in the early 1970s.

* The government encouraged the development of a few giant watch corporations — primarily Hattori Seiko, Citizen, Orient and Ricoh — unlike Switzerland, which had hundreds of small, independent firms with little government help.

* Protectionist trade policies ensured strong domestic sales and led to vertical growth because firms produced everything they needed rather than buy from outside suppliers.

By the mid-1970s, the Japanese were breathing down the necks of the Swiss — then the leading watchmakers. And by 1980, the Swiss slipped from top watch exporter to the U.S. to fourth (behind Japan, Hong Kong and Taiwan).

Hong Kong: The watch industry in Hong Kong had an inauspicious beginning — a few small shops making cheap cases, dials and bracelets in the late 1950s and early 1960s. By 1968, the fledgling industry was assembling cheap mechanical movements and watches. It formed the Hong Kong Watch Manufacturers Association to bargain with overseas suppliers for better terms and to explore foreign markets. Still, it produced only 3 million watches annually.

Electronic stuhrling skeleton watch review changed that. Hong Kong had a reputation for small, labor-intensive firms that adapted quickly to changing market demands. That made it a natural production center for digital watches. The industry mushroomed almost overnight.

By the mid-1970s, light-emitting diode (LED) watches and later liquid crystal display (LED) watches were rolling off assembly lines. By 1978, Hong Kong was the world’s largest watch exporter (a title it still held a decade later), shipping some 49.4 million watches — mainly digitals — as well as components, bracelets and clocks.

Eastward ho!: As Asia invaded the low-and mid-priced markets, U.S. importers and producers rushed to the Orient to make or buy watches, leaving domestic watch production at its lowest point ever.

Two of the most aggressive and successful Asian brands in the U.S. and world markets are Hattori Seiko and Citizen, Japan’s best-known watch names. Seiko entered the U.S. market in the 1960s, Citizen in the 1970s. By 1988, Citizen sold 2.5 million watches here annually and Hattori Seiko, an estimated 5 million just in its mid-priced Seiko and Pulsar brands.

Overall, Seiko was the world’s biggest producer until 1988, when Citizen took the top spot by producing 113 million watches.

There was other evidence of Asia’s growing influence in the U.S. and global watch market:

* In the mid-1970s, Stelux Manufacturing Co., one of Hong Kong’s biggest and best-known watch manufacturers, bought Solvil & Titus, a leading Swiss luxury brand, and controlling interest in BulovaWatch Co. (Stelux sold its Bulova interest to the Loews Corp. in 1979).

* The Hong Kong Watch Manufacturers Association in 1982 launched an annual watch and clock fair to showcase members’ products.

* In 1986, in a belated acknowledgment of watchmaking’s eastward shift, the Basel, Switzerland, watch show — the world’s largest and most important — officially welcomed exhibitors from Japan and Hong Kong. (Earlier, Asians sold their wares from hotel suites in Basel.)

Competition: But Asian watchmakers had problems, too. Sometimes the problems came from other Asian watchmakers, sometimes from their own products.

In the late 1970s, the Japanese suffered from increased competition from Hong Kong and falling prices in the lower-end of the watch market.

In response, the Japanese shifted to almost-completely automated production to save money and moved to a higher niche in the market. Seiko, for example, bought the Swiss-made Jean Lasalle luxury watch line in 1980. Citizen launched its upscale Noblia line in the mid-1980s. The major firms also diversified — Hattori Seiko into pocket TVs, computers, printers and shavers; Citizen into computers and office equipment.

Maintenance of high-volume production caused another serious problem. A gray-market in Seikos developed in the late 1970s and continued through the end of the 1980s. (Gray-market goods are brand-name items made for foreign markets, but imported to the U.S. by unauthorized dealers and sold at prices below those of authorized dealers.)

Many mass-merchandise stores carried such watches, promoting them at so-called discount prices. The gray-market in akribos xxiv watch reviews was so extensive it forced down prices, intensified competition and led some jewelers to reduce or even abandon watch sales in disgust.

Price-cutting: Hong Kong watchmakers had their own problems. Watchmakers multiplied as demand for digitals grew, but then many tried to get a bigger slice of the global market by cutting prices. That plus rapid developments in electronic watch technology created what Roger Tsui, current president of the Hong Kong Watch Manufacturers Association, calls a time of “vicious competition.” Even the largest firms had trouble keeping up.

Albert Gazeley, executive director of Stelux, recalled those years in a recent interview with the South China Morning Post: “The key was to make the most up-to-date model at a competitive price. If we brought out a model at $1 each [factory price], the competition brought it out a week later at 50 [cents] and a better model at $1. It went on like that for several years.”

In the early 1980s, the LCD boom collapsed under a world glut of cheap digitals and cut-throat competition. Some of Hong Kong’s biggest watch firms declared bankruptcy. But others survived, even prospered, by switching to cheap quartz analog watches.

History repeated itself in 1985. Production of quartz analog watches soared, prices fell and new competition surfaced from nearby Asian countries. Hong Kong’s competitiveness wilted under inflation, higher wage and materials costs and a chronic labor shortage.

Many Hong Kong manufacturers took the same path the Japanese followed earlier — upgrading quality. They now produce mid-price quartz analogs for overseas clients and components for watchmakers in Switzerland, Japan and elsewhere. They didn’t give up on digitals. Instead, they shifted digital production to China, which has an abundant labor supply and low wages and capital investment costs.

Developing industries: Watch industries have begun to develop in other Asian countries also.

China is a major producer, making 4.7 million units in 1987 alone. And it’s become a major exporter as more Japanese and Hong Kong firms set up shop there. In fact, China was the third largest exporter of digital watches to the U.S. in 1988, after Hong Kong and Japan.

Watch industries are developing also in South Korea, Taiwan, Malaysia, Thailand, India and Thailand. Two examples:

* In 1987, Titan Watch Ltd. built a $51 million plant in its native India to produce 2 million quartz analog watches annually. The plant first used movement kits from France Ebauches SA (which owns 6%), but now makes its own movements.

* In 1988, Dilok Mahadumrongkul, the watch and clock distributor of Citizen in Thailand, set up a firm to make 1 million watches and 300,000 clocks annually with imported components. About 80% of the timepieces will be exported to the U.S. and Europe; the rest will remain in Thailand.


Americans bought 125 million to 150 million watches in 1988, everything from cheap refrigerator magnets with digital displays to diamond-studded luxury timepieces. That’s up considerably from only 43 million watches in 1969.

But even as U.S. sales grew by leaps and bounds, watches and clocks became a smaller part of jewelers’ total sales. At the same time, the remnants of the U.S. watch production industry virtually disappeared.

U.S. production: The demand for digital watches in the 1970s produced a brief boom in U.S. watch production. In 1969, for example, U.S. watch production totaled 17.7 million. By 1977, production totaled 31 million watches, most of them digital. But aggressive price-cutting and a global glut of cheap digital watches burst the balloon. Many small manufacturers and marketers went out of business because they couldn’t compete financially or couldn’t develop an adequate distribution system.

Many nonwatch firms — such as General Electric, Texas Instruments, Gillette and Fairchild Industries — also tried their luck with digitals. They all failed because they didn’t understand watch production and marketing. They thought watches could be sold in the same way as pocket calculators — which a year or two earlier enjoyed immense success in the market. Like pocket calculators, digital watches started at a fairly high price but dropped dramatically as production soared and production expertise grew. While it was possible to sell calculators through almost every conceivable retail outlet, this wasn’t possible with watches.

At the same time, rising costs led other manufacturers to go off-shore to low-cost, labor-intensive production centers in Asia. Timex, for example, shifted most of its production and assembly operations to Taiwan, Singapore and the Philippines. The result: U.S. watch imports mushroomed from 58.1 million units in 1980 to 210 units last year.

By 1988, all that remained of the U.S. watch production industry were some Japanese-run assembly operations in California, a Swiss-run assembly operation in Pennsylvania and small Timex operations in Arkansas and Connecticut.

Jewelers’ sales: Industry experts estimate U.S. watch and clock sales total at least $2 billion annually, and some say as high as $5 billion. (Major vendors in this hotly competitive market don’t like to reveal results of their market surveys). But watches and clocks account for only about 12% of jewelers’ sales, down from 17.9% in 1969.

Why? Many jewelers reduced or dropped their watch and clock departments when discount and off-price retailers stepped into the market. Jewelers and Better Business Bureaus warned consumers that off-price retailers used huge markups to allow for markdowns, and that the discount prices weren’t much different from jewelers’ regular prices. But consumers still flocked to discount houses.

The fodder for much of the off-price watch market was gray-market goods (brand-name items made overseas for foreign markets but imported here and sold at discount prices by unauthorized dealers.)

Off-price retailing of watches got a major boost in 1980 when K mart, the nation’s second-largest retailer, added gray-market Seikos to its jewelry department. Other mass-merchandisers followed suit. By 1984, gray-market watches had become a $100 million market in the U.S.

Efforts increased in the mid-1980s’ to dam the flow of gray-market watches. Watch firms, the American Watch Association and Jewelers of America were among the founding members of the Coalition to Preserve the Integrity of American Trademarks. COPIAT lobbied aggressively against the U.S. Customs Service, which allowed the entry of gray-market goods if the trademark owner was a U.S. firm or had a U.S. outlet. But in 1988, the U.S. Supreme Court ruled in favor of the Customs Service.

Counterfeit watches: Counterfeiting also affects jewelers’ watch sales. Consumers buy fake watches at bargain-basement prices, thinking they’ve bought the real thing for much less than they’d pay a jeweler. But that creates two problems: consumers end up with a watch of little value and also take away business for jewelers dealing legitimately.

Some watch vendors have started to fight back to protect their names and their profits. Rolex, for example, now spends more than $1 million annually to find and prosecute watch counterfeiters.

And as a whole, the watch industry persuaded Congress in 1984 to pass the Trademark Counterfeiting Act, which makes trafficking in phony timepieces a criminal offense.

The American Watch Association also battles counterfeiting, working with individual watch firms, the Watchmakers of Switzerland Information Center and other trade groups. In addition to lobbying, AWA funded three major investigations of bogus watch trafficking. The most spectacular was “Operation Watchcase,” which uncovered a counterfeit watch network, resulted in scores of arrests and recovered tens of thousands of bogus watches in 1987.

In 1988, AWA, WOSIC and Jewelers of America initiated a successful program built around a phone number (1-800-333-FAKE) to report suspected watch counterfeiters. AWA also produced a video warning TV viewers about fake watches, helped to develop a model state law making making counterfeiting a felony and pushed to erase weaknesses and toughen seizure provisions in the Trademark Counterfeit Act.

Repair service: As watches and clocks started to claim a smaller share of jewelers’ sales, so did repairs. For generations, jewelers and watch repairmen were virtually synonymous. In fact, many jewelers entered the jewelry industry as operators of small watch repair shops.

But from 1969-1989, the number of watchmakers in the U.S. labor market dropped from 30,000 to about 12,000. While every jewelry store once had its own watchmaker, 37% of those polled by JC-K in 1989 had none.

One reason is the smaller role that watches play in jewelry-store sales. Another reason is technological advances such as quartz watches, which need few repairs. Wages also can be blamed. In late 1988, the approximate starting salary for a watchmaker was $10,000 to $12,000.

Yet jewelers say watch repairs are a valuable service. As a result, watch repair trade shops and factories have increased, serving jewelers who no longer offer the service themselves.

Other changes: The U.S. watch market has witnessed a number of other changes in the past 20 years.

The advent of electronic digital and analog watches, with their precise timekeeping, led to great emphasis on marketing and styling. As yuppies began to prosper in the 1980s, advertisements across the U.S. promoted watches as fashion accessories first, and timepieces second.

A pioneer in this marketing concept was the Swatch, the trendy, inexpensive, Swiss watch introduced in the early 1980s.

In 1986, clothier Benneton licensed Bulova Watch Co. to produce a line of fashion watches. It was part of a fast-growing trend toward designer name timepieces. By 1989, watch and clocks bore the names of prominent designers and even leading automotive products such as Ferrari, Jaguar and Harley-Davidson.

Luxury watches ($300+) also became a growth market in the U.S. in the latter 1980s, despite rising gold prices and the devalued dollar.

Nonwatch accessories: Some watch firms even expanded into nonwatch fashion accessories. Movado offered products ranging from handbags to glasses. Bulova has a line of 14k jewelry and launched the Buly line of tote, backpack and gym bags in trendy colors with clocks affixed to the outside.

Cartier opened several in-store boutiques and reportedly considered licensing its Piaget watch name for various accessories.

Ironically, Swatch, which helped to launch the trend, is getting out of the fashion accessories business. Swatch officials said the experiment was unsuccessful and that the firm now will concentrate on its core business of watch and watch accessories.

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Bulova Corporation: congratulations on your 100th anniversary

A reputable, stylish brand-name timepiece carries a certain cachet. Bulova-Wittnauer Special Markets has earned a passionate following among consumers and corporate incentive buyers for over 130 years–with good reason. Bulova-Wittnauer Special Markets offers recognized and trusted brand names such as Bulova, Accutron, Caravelle, Bulova Precisionist Review and Wittnauer that are supported by a dynamic consumer advertising program on TV, radio, and in print. A variety of prices and styles fit every program. Products offer superior quality and durability and exceptional customization options abound. And Bulova-Wittnauer Special Markets has a proven commitment to service, fulfillment, and support.

With their universal appeal and utility, timepieces continue to be one of the most attractive and valued items for recognition programs, consumer promotions, sales and dealer incentives, and corporate giving. With The Bulova Corporation’s powerful portfolio of brands, it is your company’s definitive timepiece resource.


1875: Joseph Bulova, a 23-year-old immigrant from Bohemia, opens a small jewelry shop on Maiden Lane in New York City

1911: Bulova begins manufacturing and selling boudoir and table clocks as well as fine pocketwatches.

1912: Bulova sets up its first plant dedicated to the production of watch components and their assembly into jeweled movements in Bienne, Switzerland

1920: Bulova Watch Company, Inc. moves to 580 Fifth Avenue in New York and builds the Bulova Observatory on top of the building for the taking of sidereal time

1923: Bulova perfects a new concept in the watch industry with total standardization of parts

1924: Bulova unveils the first full line of ladies’ watches

1927: Bulova Watch Company goes public on the American Stock Exchange

October 25, 1960: Accutron, the first watch to keep time through electronics, is introduced. This revolutionary time keeping concept of a watch without springs or escapement is operated by an electronically activated tuning fork. The Accutron watch goes on to become a presidential gift to world leaders and other dignitaries. President Johnson declares it the White House’s official Gift of State

1960: NASA asks Butova to incorporate Accutron into its computers for the space program. Bulova timing mechanisms eventually become an integral part of 46 missions of the U.S. Space Program.

2001: Two of the world’s most prominent timekeeping names unite when Wittnauer, founded 1880, is aquired by Bulova Corporation

2004: With the introduction of the dramatically stylized Montserrat Collection, Wittnauer adds sleek, contemporary design to its more traditionally elegant special occasion watch collections

For more information:

Bulova-Wittnauer Special Markets

(800) 423-3553


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Consider the Invicta watches review to buy the best watches

When it comes to the watch making firms the Invicta Watch group has long been one of the most popular and reputed firm to designing and making the top quality time pieces. This respected watch making firm is based out of Florida, however all the movements of the firm is featured in Swiss. The firm was firstly started in Switzerland as it is established by the finder Raphael Picard in La Chaux de fonds that is way back in the year 1837.

Since then this firm has launched a number of luxurious watch brands such as Porger-Pietri, S. Coifman, and Technica and so on. This is the history behind the Invicta watch group.

Find the perfect Invicta watches

This firm is always having the reputation for offering the time pieces of high quality and unique designs. These particular brands of watches are well known for their utmost quality and also for the great looking designs and patterns. These prices are available at affordable price. Over the years the invicta watch group will produces a thousand of watches. Nowadays with the advent of Internet, you can get the online websites that providing the reviews on Invicta subaqua watches. This will helps to navigating the vast array of Invicta time piece models and you can easily get the perfect watches for both men and women.

Invicta men’s time pieces

So it is very difficult to find the one that best suits with your needs and desires. In such situation you can make use of the online websites that will offer the reliable and trustworthy invicta watch review. Before buying the invicta diver 8926 it is very essential to consider some factors such as prices, designs, features, colors and also sizes of the watches. To any watch collection the Invicta time pieces are the fantastic additions and it should be considered by the people those who are looking for the nice and attractive time pieces to wear on regular basis and also occasionally.

Universal appeal

The invicta time pieces for Men is the ideal gifts options for those coming age anal do looking for the best time pieces. The cast variety of models of the Invicta time pieces collections can make finding the perfect one would be adventure, so you need to do some thorough research via the online web sites, before making your final decisions on choosing the Invicta watch’s models for men.

You can also read the invicta watches review to know more info about the various models available in this particular brand. So many men’s accessories provides either quality, taste or functionality, but only few offers all the three in one package that are fits with a wide variety of preferences. Luckily the most attractive and impressive quality of the Invicta time pieces are their universal appeals.

 So many online reviews of the Invicta watch of stylish composition includes the ideas that are look might appear trendy, however still it will appears as the stylish and fashionable in another decades. This is because the Invicta watch group produces the men’s time pieces that are specifically designed for the life styles of man.

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The offerings are becoming sweeter in fashion watches

Everywhere Dina Crisco goes, she is reminded of how challenging her job can be.

Everything has a clock on it these days – even your microwave,” says Crisco, vice president of brand management for the designer timepiece category at Geneva Watch Co. in Long Island City, N.Y. “So you have to be realistic that few people have to have a watch. The main reasons most people are still wearing watches is either because they’re a status symbol or because they’re a fashion accessory.”

The former reason has led to an unprecedented surge in the prestige watch category. Women’s fine watch sales spiked 10 percent last year to $2 billion, while sales of luxury watches that retail for more than $25,000 jumped 25 percent to $150 million, according to The LGI Network, a Randolph, N.J.-based independent audit firm that measures the sales performance of watch and jewelry brands at retail.

The news has been different for the fashion watch category. It has experienced lackluster returns in the U.S. in recent years, according to many industry executives.

In its 2005 annual report, for example, Fossil Inc. stated that its domestic watch sales decreased 2.1 percent, principally as a result of a 10 percent decline in its Fossil brand watch sales and a 17.6 percent decline in its Relic brand watch sales. The Richardson, Tex.-based firm attributed the losses to a cyclical shift in consumer discretionary spending patterns away from the category. It added that it believed consumer spending would cycle back to it. Fossil is not alone in its optimism.

Today there is a growing buzz in the fashion watch segment, spurred on by the influx of new, highly desirable designer names that combine status and creativity, by the addition of new innovative offerings that emulate the look of fine watches at more affordable prices as well as by the changing attitudes of American women toward investing to build a watch wardrobe.

The evolution of the watch industry in the last 20 years has changed dramatically,” says Crisco, who reported a 3 percent uptick in spring sales at retail for Geneva and who oversees brands there that include Betsey Johnson, BCBG and Kenneth Cole. “In the Eighties there were really only three categories of watches – fine, fashion and moderate – and the fashion category was pretty much dominated by Swatch. Now you have all these brands joining the category in the last few years, taking over the marketing position moderate companies once had. It’s making the competition fierce, but it’s also creating more hype.”

In 2006 four fashion brands joined the category that already includes Betsey Johnson, BCBG, Kenneth Cole, Michael Michael Kors, DKNY, Burberry, Rocawear, Coach, Just Cavalli, Moschino, Calvin Klein and Guess, among many others. The four fashion brands include Hugo Boss and Juicy Couture, which introduced timepieces in June and October, respectively, under a licensing agreement with Movado Group Inc. in Paramus, N.J.; L.A.M.B, which added watches in a deal with Costa Mesa, Calif.-based firm the Vestal Group in July, and Marc by Marc Jacobs, which launched timepieces under an agreement with Fossil in August. Prices for the watches typically come in under $750 retail, with Hugo Boss costing from $195 to $695, Juicy averaging around $275 to $350, L.A.M.B. going for $195 to $475 and Marc by Marc Jacobs selling from $125 to $300.

Spring also ushered in the rise of the plastic sport watch, the latest high-low marriage. These timepieces, which emulate details found on fine men’s sport watches in plastic designs that open at around $150, have been snapped up at retailers like Scoop, Neiman Marcus and Bergdorf Goodman, and based on successful sell-throughs watchmakers are preparing to continue to offer fresh interpretations heading into the next season.

New fashion brands like ToyWatch, Marc by Marc Jacobs and Juicy Couture are experiencing high weekly sell-through percentages,” says Elizabeth Kanfer, fashion market director at Saks Fifth Avenue. “Customers are looking for newness and the ability for watches to offer personal expression, fun and a status symbol. ”

Kanfer adds that it’s not just brands like ToyWatch, Marc by Marc Jacobs and Juicy that have inspired women to buy these days.

“The watch industry as a whole has begun to cater more to a woman’s fashion point of view,” says Kanfer, citing luxury brands as well, like Michele Watches with its interchangeable colorful bands, Chanel timepieces and Cartier, which launched its La Doa watch this year to complement its steady business with its Tank and Santos Demoiselles styles.

Russell Orlando, vice president fashion director for accessories and juniors at Macy’s, says he believes over recent years that customers have traded up to higher-end watches.

“The innovation in the fashion watch category was amazing a few years ago and then it began to slide off,” says Orlando. “I think because of that it lost the customer because the customer decided to upgrade in the category and spend the extra money to get an entry-level Swiss watch or even a fine watch. But the business is turning around. What’s driving it are watches that offer interpretations of high-end Swiss watches with details like black ceramic bracelets or pieces that look more like jewelry than merely a functional design, like what you see by Michael Kors and Betsey Johnson.”

Sebastiano Di Bari, managing director in the U.S. for Italy’s Sector Group, says the two trends are central to designs the firm is creating for spring for its fashion watch brands like Moschino, Benetton, Just Cavalli, Roberto Cavalli and Valentino.

“I think the general trend out there is that the customer is growing up,” says Di Bari. “Customers like the feeling of having a higher-end watch at a low price, or they are looking for a watch that goes with an outfit as an accessory, so it has to be more flashy, seasonal and fashionable, and having a designer name attached to it is very important.”

He says perceiving watches as an accessory can be a challenge because in order to create them successfully firms have to react very fast to adapt to different trends, and turn around merchandise three or four times a year, similar to the apparel business. With these challenges, however, comes opportunity, he adds.

“Where I grew up in Italy, watches are considered more of an accessory,” says Di Bari. “Italian women often own seven or eight watches. American women, on the other hand, might own two or three. But that is slowly changing as women are buying more watches and are beginning to seewatches like they see their bags or shoes. So we think there is great opportunity for growth here.”

Caroline Faivet, president of Swatch Group U.S. Inc., says she often hears concerns regarding time being available from sources other than watches.

“At the end of the day, however, it is the bottom line that speaks louder than a few observations, and our sales are up,” says Faivet. “In other parts of the world, in Europe and Asia, for example, people have a watch wardrobe. Americans are now getting a taste of what it is like to have a watch wardrobe and I think it’s because of the influx in the fashion watch category. No one has an opera cell phone or a BlackBerry they take trail riding or hiking. On the flip side, there are watches for all occasions and every lifestyle.”

Saks’ Kanfer agrees: “Women have responded to the watch industry learning to cater to their fashion point of view more by buying and wearing more than an everyday and evening watch. The fashion watch category is today more about color and trend versus price point.”

That has enabled some firms to push the price points in this category, at least according to Cindy Livingston, president and chief executive officer of Callanen International, the Norwalk, Conn.-based unit of Timex Corp., which owns the license for Guess watches.

Livingston says when Swatch watches first hit, they were around $35. When Guess came on the scene shortly after it sold its watches for around $38. Today Guess price points range from $75 to $500, with Guess Collection, a group of Swiss-made watches, retailing for up to $1,000. Upping value, while moving units, has helped contribute to expectations of double-digit increases for spring.

It has also enabled other firms to push the envelope on the definition of what a fashion watch is.

“When it comes to the fashion watch category, you can’t define it by a specific look,” says Rudy Theale, president of the licensing division at Vestal, which also produces watches for Rocawear and Paul Frank. “Some people are street chic, some are more urban and so on. You can define it by a price point, but when you look at that price point it’s become a huge spread that ranges from maybe $95 to $1,000, so with a brand like L.A.M.B. that offers a couture feel, you can get away with targeting a higher price and creating with more expensive elements like enamel detailing and Swiss manufacturing.”

Alex Cushing, vice president of Fossil development and sales in the U.S., says having that range of creativity within the category will be crucial for its turnaround.

“The shift toward other forms like PDAs and cell phones to fulfill the functional timekeeping role is certainly undeniable,” says Cushing. “However, this shift means that to maintain the watch’s relevance, fashion has become more important than ever before. As watch manufacturers, we need to focus even more on personal expression, rather than simply owning the real estate on the wrist.”

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Time to grow up: fashion watches

The fashion watch market is taking a serious direction in 1990. Coming off a decade that saw the market flooded with novelty timepieces and dramatic sales increases, the fashion watch industry has headed into the Nineties with a more mature outlook.

While executives say there is always a place for novelty watches, that market is narrowing, and quality time-pieces featuring sophisticated looks will set the pace for growth in the Nineties.

Over the past six years, retail sales of fashion watches in department stores grew from an estimated $50 million to current sales of about $500 million, according to industry sources.

Some retailers and suppliers add, however, that the pace has slowed over the past 18 months. While most attribute this more to an overall lag in retail sales, some see it as a result of too much emphasis on novelty watches.

Sales of Swatch watches, the line from Swiss conglomerate SMH that’s universally credited with igniting the fashion watch business with its popular-priced plastic numbers, have declined over the last year and a half, according to Richard Shriner, vice president of marketing and sales for Swatch Watch USA, the firm’s U.S. subsidiary.

Since the whole fashion watch business hasn’t been healthy, our decline is actually less than that of the industry as a whole,” Shriner claimed, although he declined to cite figures. Many industry sources say the line still commands about 20 percent of U.S. fashion watch business.

Shriner noted that many of its novelty watches, with such treatments as oversized plastic cases with wide fabric bands, had felt the impact of increased competition. “A few years ago, we didn’t see the number of manufacturers marketing novelty low-priced watches that we do now.” For fall, Shriner said Swatch will concentrate on more heavily promoting its metal and leather lines, which are priced above its plastic watches.

Industry executives concur that future growth in fashion watches will occur at many price levels, from timeless luxury-inspired styles to whimsical popular-priced novelty watches.

“Right now, there’s really no one look or price range that is the leader in fashion watches, and I think that will continue,” said Jane Tuma, vice president and fashion director of accessories at Saks Fifth Avenue.

“Consumers are looking for variety — from fine classically styled watches that will last forever, to fun fashion looks that you wear for a season or two,” Tuma said.

“There is still a strong demand for diversity in fashion watches,” said Ken Monroe, vice president and general merchandise manager of accessories at Marshall Field’s, Chicago.

Nevertheless, industry executives expect retailers to approach the watch business more cautiously in the Nineties. Trends can heat up and cool off in quick order.

Retailers couldn’t keep Soviet-in-spired and actual Russian-made watches in stock when they first hit the market last July, but by the Christmas selling season, the enthusiasm at some stores had ebbed. In January, for example, Macy’s Herald Square had markdowns of between 30 and 45 percent in the Paketa Soviet watch line.

However, Alan Tucker, president of Time Exchange, the U.S. firm that markets the Russian-made line, contended the popularity of the watches has not diminished and he has gotten reorders from several key retailers.

Tuma at Saks pointed out that when it comes to fads of any sort “you’ve got to run with it at the right time, and then you’ve got to bail out when it’s no longer hot.”

While diversity is key, retailers and suppliers can cite some segments of the watch business they see emerging as leaders in 1990.

Jewelry-inspired watches are one category retailers say is growing. Anne Klein has traditionally been a leader in this area, but the line is now getting competition from newer resources, such as Monet and Carolee.

Jewelry firms are finding that branching out into watches is an easy transition. “Merchandisingwatches and jewelry together makes a stronger statement,” said Carolee Friedlander, owner of Carolee Designs, Greenwich, Conn. Her firm introduced watches a year ago.

Carolee’s bracelet and pendant watches, which wholesale from $75 to $175, did close to $2 million in wholesale volume the first year, she said.

Joanne Hart, fashion director of accessories at Macy’s Northeast, said jewelry-inspired watches are a key classification. Among brands she cited were Monet, Gottex and Anne Klein.

The Anne Klein watch line, which wholesales from $45 to $90, is also a top seller at Marshall Field’s, said Monroe. “I think it’s partly due to a strong designer-name recognition on the part of the consumer.”

Mark Odenheimer, vice president of Sutton Time, New York, the firm which has held the license for Anne Klein watches for 15 years, said sales have grown fourfold since 1986.

Sources put annual sales of Anne Klein watches at around $25 million.

The firm also markets a number of whimsical styles, including its Garfield and Fido Dido watch lines, wholesaling from $12.50 to $30, and produced under licensing agreements with United Media Licensing, New York.

Some industry executives point to the Guess watch as an example of the enormous volume that a line can capture. Although the line is only five years old, current wholesale volume is in the neighborhood of “about $50 million,” according to Mickey Callanen, president of The Callanen Group, Norwalk, Conn., which holds the license for Guess as well as Monet watches.

Callanen attributed most of the growth to the strong consumer name recognition. The Guess line wholesales from $14.50 to $47.50 with most styles priced at under $30, and Monet wholesales from $25 to $47.

Gucci and Fendi are among other lines that have gained prominence. Over the past few years Gucci retail sales have increased dramatically, and the newer Fendi watch line has received a good response, retailers said.

Many sources attribute the favorable response to a growing consumer interest in designer-namewatches.

Fendi is produced under a licensing agreement with Ultima Brands, Marlboro, N.J. The line, which was launched in August of 1988, wholesales from $125 to $375. In 1989, Fendi watches did about $22.5 million wholesale, according to Thomas Venables, president of Ultima Brands.

“Our U.S. wholesale volume increased from $5 million to $75 million in less than 10 years,” said Steve Hitter, chief marketing officer for The Severin Group, a Swiss-based firm that holds the license for Gucci watches.

Hitter said current top sellers in the 15-year-old line, which is distributed from its Irvine, Calif., office, include round watches with leather straps and cuff-style bracelet watches. Wholesale prices in the line range from $95 to $450.

“Our market research shows that when people talk about buying a status watch, one of the names they cite is Gucci,” asserted Hitter. “But since many of our styles are set to retail for less than $200, it’s really an affordable luxury status symbol.” He said the firm is projecting sales to increase 13 percent over last year.

The industry’s more serious attitude is not stifling new watch lines. Set to launch this spring are Perry Ellis Watches, a licensed line from CSC Time, Rockville Centre, N.Y., and Swisstime, the newest division of SMH.

This is the first time that Perry Ellis International has licensed its name for fashion watches, according to a spokeswoman for the firm. Bernie Costelli, vice president of sales for CSC Time, said 25 Perry Ellis styles, wholesaling from $47.50 to $97.50, will be introduced at the March market. The firm is projecting a first-year wholesale volume of $2.5 million for the line, he said.

Pat Quigley, president of Swisstime, said a full product launch, which had been scheduled for January, has been delayed until May. He attributed the delay to unexpectedly high demand and to a request from retailers for advertising support.

The line of watches wholesales from $22.50 to $62.50 and features classic metal and leather styles. Quigley said the firm is now planning on shipping 200,000 watches on May 1.

He said a limited test at Marshall Field’s for holiday did well, in part because the launch was supported with newspaper advertising. He said many retailers requested that Swisstime’s national advertising campaign be timed with the launch of the watches.

Swisstime is aiming at first-year sales of $33 million, a marked increase from the firm’s initial projection last December of $5 million. “I was being cautious in the beginning because of my newness to the industry, but because the initial response has been so good, we’ve had to rework our figures,” he said.

Moreover, in addition to the rash of newcomers to the watch industry, some of the oldest U.S. watch firms are moving more aggressively into the fashion watch business.

Bulova Corp. in New York and Timex in Waterbury, Conn., are two firms with over 100 years in the watch business each who see an opportunity for growth in the fashion market.

Bulova, which last year entered the fashion watch market in a limited way with its Classic Moments collection, a joint venture between Bulova and Circle Fine Art, Chicago, Ill., is now shipping a new line of novelty watches for spring called Time Effects by Bulova, using the logo TFX on all face designs.

Rob Ryan, vice president of marketing for the firm, commented: “Retailers want to deal with people who are in the watch business, not somebody who was in handbags last year and will be in scarves next year.

“Rather than introducing new styles only during traditional market periods, we will respond to the fashion trends as they happen and introduce styles throughout the year.”

Ryan said the firm is expecting strong sales in the line’s initial offerings, which include themes such as Dynamix, featuring futuristic, high-energy designs, and Escapes, which features New Age-inspired nature scenes on the dials.

Wholesale prices in the TFX line range from $20 to $34.95.

Dave Rahilly, vice president for U.S. marketing and sales for Timex, noted the firm is going after department store business with a renewed emphasis.

“When the fashion watch business really started to take off in the early Eighties, Timex added a professional fashion design staff and tried to build a fashion watch business. But because there were so many status names on the market, it was very tough to convince consumers that Timex can stand for fashion as well as for quality,” Rahilly said.

He said the new line being introduced this spring is designed to key into current fashion and cultural trends. Called Images, the line will feature 15 styles, including such ideas as oversized bezels with either metal or black leather straps, and black matte metal dials with bright geometric accents. Thewatches will wholesale from $17.50 to $25.

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Mixed metals: across the board, metals are a hot category – but which tone do you wear?

A two-tone trend in women’s wrist watches appears to be a strong one for the upcoming 1996 holiday season. The two-tone style in watches allows the wearer greater flexibility to wear either gold or silver jewelry, according to Perry Ellis Watches Pres Charles Kriete. Kriete notes that women’swatches are slimming down their silhouettes, with smaller cases and faces. Product linesincorporating two-tone designs by several other watch manufacturers are discussed.

Metals are a white-hot category for holiday watches across the board.
 Two-tones remain strong, with women opting for them because they match with other jewelry from either tone. And while upscale stores are turning to gold, silver tones continue to grow in popularity when it comes to fashion watches. Gold seems relegated to more dressy occasions.

The two-tone trend has been going on for a while lately, because it gives you that flexibility to wear silver or gold jewelry,” said Charles Kriete, president of Perry Ellis Watches, a division of CSC Time.

“It makes it a little more understated, as well,” he noted. “All-gold is flashier.”

The line’s all-gold business has, continued to decrease, he noted. There has been a growth in the market with the company’s all-silver product, especially the silver mesh and silver sports models.

Kriete said the Perry Ellis sports looks are becoming dressier and more jewelry oriented. The two-tone metal bracelet category includes a sort watch with rotating bezels and some faceted crystals.

Silhouettes are slimming down for women, he said, with smaller faces and cases. Bracelets continue to get stronger, as well.

Leather straps are slow, Kriete said. “Far and away, two-tone is the leader in sales for both men’s and women’s.”

Metals range from $30 to $40 in the Perry Ellis line.

At Guess Watches, vice president of marketing Floy Wakuya said, “The metal category is just booming.”

Guess ventured into the metal business about three years ago, when the category was just two percent of its business, Wakuya said. Now, she said, it is about W percent.

“What we really started with was gold and two-tone, because the silver trend wasn’t there yet,” Wakuya said. “The two-tone outsells the gold, probably because when people buy it for a gift, they’re not sure if it’s for a gold person or a silver person. It has a broader appeal.”

Currently, the silver mesh is outselling the gold mesh.

For holiday, Guess has a diverse line of metals, from the very dressy to sportier looks in Waterpro.

These categories include all silhouettes. “We go from the petite to the bolder Eft and from dressy to sporty,” Wakuya said.

She noted that talk of bolder pieces would likely influence their next design evolution.

Metals start at $27.5O and go to $S57.5O with the Waterpro chronograph styles.

At Fossil, executive vice president Richard Gundy said, “We are really excited about fall holiday business. This is the time to have the right anmmunition.”

About 7O percent of its business is during this season, Gundy said, and the biggest thrust will be the Fossil Blue sport watches. These are water resistant, with about @O percent designed with metal straps and @O percent designed with leather straps.

The metal trend is strong, not only in sport but m casual and dress-up. One category Fossil plans to aggressively promote for holiday is the Adjus-o-matic, which has a metal band with removable links for sizing.

“There’s just so much excitement in metal watches light now-we’re enjoying what’s going on,” Gundy said. “Were feel really good about the third and fourth quarters, and our bookings are starting to reflect that.”

At Timex, advertising director Susie Watson said, “We see silver as the number one metal for holiday. It’s been going strong all year.”

Watson feels the trend toward silver might have stemmed from the use of the metal in accessories by designers such as Donna Karan and Calvin Keiein.

“But gold is definitely not doing as well as the other metals in department stores, she said. “It would be a different story at mass. Gold and bi-metal are bigger at mass than silver, where we have a less trendy shopper.”

While Watson said metal bands have been hotter than in years past, they still haven’t outsold the leathers. In the wake of the metal wave, she said the Timex line will include more metal styles in its ladies fashion watches than this time last year, especially under the Timex Essential slabel

The wholesale range for Timex metals is $20 to $30.

At Sutton Time, the makers of Anne Klein and Anne Klein II, Susan Binney, executive director of advertising and marketing, said the Anne Klein line supports trends in jewelry.

“The silver-tone has picked up, and it makes a lot of sense. In jewelry, platinum, white gold and sterling have been good,” Binney said.

She noted, “I don’t really think there’s a most popular metal. It depends upon the region. What’s nice is they’ve all kind of evened themselves out. What’s really grown is the all-silver.”

Binney noted that there is a sense of newness to the holiday looks. “I think dress is the area for growth now. It has to be feminine, with a sense of softness to it. It has to complement a woman’s wardrobe and sense of taste, and it has to be beautiful.”

The Anne Klein line includes examples of the dressier watches in the Eclipse collection, which has silver, two-tone and gold, some encrusted with crystal stones and others in boxed sets. The sterling silver collection is also in this vein, according to Binney.

Anne Klein watches wholesale from $45 to $105.

At Carolee Designs, sterling silver watches are being added to existing watch lines for fall/holiday, prompted by healthy sales of the company’s sterling silver jewelry collection.

President Carolee Friedlander, said, “It’s a very tasteful way to produce what we think is the luxury end of Carolee.”

Friedlander said the line will include some styles with bands of chunky, hand-made links. All the sterling silver watches will include Swiss movements and will wholesale at a higher price point than the other watches ranging from $100 to $225.

In general, she said, Carolee watches look good with her jewelry because they have similar details.

As a jewelry company, we approach watches as jewelry that tells time,” she said. “Instead of watch closings, we’ll use oversized spring rings or ornamentation on clasps. We use a blue imitation sapphire cabachon on the crown.”

Friedlander said the two-tone metals present a unique design opportunity. “On two-tones specifically, we try to make it more jewelry-like,” she said. “I think that customer is more of a professional woman who wants it to go with both her gold and silver Jewelry.”

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Watching out for novelty

Watch manufacturers are thinking positive for spring. Whether introducing more technically advanced designs or sportier styling, they’re counting on novelty as the key to success and are expecting strong increases in sales.

Seiko will focus on continued promotion of the technical advancements it introduced for fall. “We will continue promoting the analogue watch — with an automatic generator rather than batteries — and the watch with a two-handed analogue chronograph alarm for spring,” said Hal Wilensky, executive vice president of Seiko.

Wilensky also expects the bulkier, sporty watch to continue selling well. “Women are choosing both man sized watch dials and oversized women’s dials,” he noted. Estimating increases in sales of between 5 percent and 7 percent, he added, “Spring is not usually our best season, but because women are changing their watches more frequently, sales are continuing strong throughout the year.”

According to Mickey Callanen, president of the Callanen Group, “Classic is still the number one look for spring.”

Guess will update its popular round case watch with a white face by casting the Roman numerals and band in red, blue green, and it retails for $50.

Callanen expectes bright colors to sell well for the season, “Women wear watches in bright spring colors to match their outfits.” He also predicted that Guess’s multifunctional watches, with date and time zone changes on the dials, will be strong for spring.

Projecting 40 percent increases in sales for the Guess line, Callanen said he felt sales would be strong for the Monet line as well. With sales 80 percent above projected figures for fall, its first season, Monet will feature a chain style for its first spring season.

“The increased space in stores has helped boost sales. It allows us to display our watches in the best possible way,” Callanen pointed out. “Macy’s was the first to give watches the space and funding, and it has really helped to maximize sales in the watch business.”

“Sports watches always become extremely popular for spring, because people are more active then,” said Steve Hitter, president of Fila Fortron Watches. He expects the F95 to be Fila’s bestseller due to the colors and relatively inexpensive price. Made of plastic in a variety of seasonal colors (aqua, pink, red, white or blue), the watch retails under $100.

Hitter projects as much as a 250 percent increase over last spring’s sales, and citing the lines official worldwide launch this November Hitter, too, sees both classic and novelty styling as popular trends for the new season.

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Perfect timing

The novelty tide in fashion watches is subsiding, according to manufacturers, who say they see a return to traditional calssics, along with continuing strength in antique looks.

We never got into that fun look,” said Diane McGowen, vice president of production, Carol Dauplaise, New York. “All we’ve really ever done is classic, and I think that look is going to be even more important now.” McGowen said “retro looks like chronographs” featured in the Dauplaise line “are very strong.”

McGowen, who projected a 12 percent increase this year, feels the fashion watch consumer is fairly price conscious. “Prices should be kept under $100 at retail,” she said, reflecting one school of thought in the market. “People don’t go to a fashion watch counter to spend more than that. In fact, we’ve found that $65 to $75 is deal for volume.” Carol Dauplaise watches wholesale from $32 to $50.

Bud Polley, vice president of the Callanen Group in South Norwalk, Conn., agrees. “There seems to be somewhat of a softness in that Swatch look now. I think the trend is very strong toward classics now.”

Polley said that “classic looks with leather straps represent about 75 percent of our business.” In May market, he said, the Callanen Group is introducing about 15 new styles, and adding green, navy and wine to the color pallete. “We’re continuing with that retro-classic feel, with the multimovement, chronograph dials and moons. We’re also doing dressier basics.”

As for price, Polley commented: “$35 to $75 is best for volume.” He noted his firm’s watches wholesale from $24 to $32.50, and he projected a 35 percent increase in sales for 1988.

Christian Dior Watches, however, caters to a different fashion customer, according to company vice president, Jim DeMattei. “We have a fashion customer at a fine jewelry price point. We’ve been able to attract the $300 and $400 customer, who is less fickle than the trendy customer.” The Christian Dior watch line wholesales from $122.50 to $362.50.

DeMattei, who projected a 35 percent increase, said the Dior offerings for fall are tailored, whith fashion details like scalloping on tank styles.

Gucci Timepieces has a similar clientele, according to director of marketing, Steve Hitter. “Our customer will pay more for quality and a name,” he said. Hitter said Gucci watches wholesale from $97.50 to $1,000, and he projected increases of 25 percent over 1987.

Hitter, too, sees strength in classics for fall. “The variety in the business is great,” he said, “but there is definitely a trend in classics.”

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