IWC: The time has come to focus on U.S.

What do Carl Jung, Miles Davis, Sean Connery, King Juan Carlos of Spain and Michael Jordan have in common?

They all wear an IWC watch.

After 125 years, the Swiss watch firm is starting to break out of its position as a brand best known among a small, elite crowd of timepiece aficionados. They looked to IWC for its upper-tier watches with highly technical, complex features — or complications, as they are referred to in the fine watch trade.

The U.S. is a prime focus of growth for the firm. Previously, the region has accounted for only about 8 percent of IWC’s total turnover, according to Marc Bernhardt, vice president and chief marketing officer of U.S. operations, who joined the firm in April.

He said that figure is projected to rise to close to 15 percent by the end of 1999. He would not give figures on the firm’s overall volume.

“In 1997, we sold about 2,000 units [in the U.S.],” Bernhardt said. “We’re expecting to sell about 2,500 units this year and just over 3,000 in 1999.”

He said only some of those units would replace sales in Asia, which has accounted for roughly 20 percent of IWC’s worldwide turnover. He said the Asian market’s performance has varied by model and that some areas, like Taiwan, continue to perform well.

Currently, IWC produces roughly 30,000 watches per year.

“The U.S. has been underrepresented,” said Bernhardt. “We deserve a fair share of the aspirational customer.”

Bernhardt said IWC should appeal to a customer who may have already purchased his or her first fine watch and is now ready to upgrade.

“If someone bought a Rolex and now wants to trade up, where do they go?” asked Bernhardt.

“Real watch connoisseurs know us, but the average person doesn’t yet. But several years ago, Americans didn’t know about premium cigars, either.”

Devoid of gemstones or the colored faces and straps currently in fashion, IWC watches reflect a look that is at once traditional and modern, with crisp, almost minimalist features.

Earlier this year, the company launched a sport collection called GST, an acronym meaning “Gold, Steel, Titanium.” The line retails for $3,200 to $4,200, and some pieces, like the Aquatimer diving watch, is water-resistant to 2,000 meters and features a uni-directional bezel and exclusive bracelet design.

IWC watches start at $1,500 for an ultraslim, classic Portofino model and reach $350,000 for complicated pieces. Most of the line ranges from $10,000 to $20,000.

Beyond new products, the firm’s strategy is to increase sales in the company’s current roster of about 50 accounts in the U.S. through promotional events planned for November, increased advertising and a new emphasis on public relations.

IWC watches are sold through independent jewelers such as Cellini, Tourneau, Wempe and Joseph Edwards here; Shreve & Co. in San Francisco; Fox’s in Seattle, and selected Bailey Banks & Biddle and Neiman Marcus units across the country.

The fall IWC ad campaign is appearing in the New York Times magazine, the New York Observer, Town & Country, Arts & Antiques, Forbes, Esquire and W.

IWC is a family affair, at least in the U.S. Bernhardt’s sister, Marcia Mazzocchi, who worked with Tag Heuer here before joining IWC, runs the firm’s West Coast sales offices in Santa Monica, Calif.

Bernhardt works out of the company’s U.S. headquarters in Winchester, Va.

The IWC brand — along with two other Swiss watch firms, Jaeger le Coultre and Lange Und Sohne — is owned primarily by LMH, a holding company for VDO, a large Swiss conglomerate that manufactures an assortment of mechanical parts.

Morellato Feels It’s Time On Fifth Avenue

The Italian watch and jewelry brand opened its first freestanding store in the U.S. on Saturday, in New York’s landmark French Building at 551 Fifth Avenue. Designed by Milan-based SGS Architects, the 1,600-square-foot boutique houses Morellato‘s jewelry, watch, writing instrument and leather goods collections.

Morellato & Sector Group, which operates the Morellato and Sector divisions, as well as multiple watch and jewelry licenses, is a major player throughout Italy, with sales of $368 million. The Morellato brand encompasses 42 percent of the country’s fashion jewelry market share, according to the company.

In the last year, it opened several boutiques throughout the world in Shanghai; Panama; CancA*n, Mexico; London, and Berlin bringing the total freestanding store count to 57 worldwide. Marco Frison, chief executive officer of the firm’s U.S. subsidiary, Morellato & Sector USA, expects that, in the next three years, 40 percent of the company’s business outside Europe will take place in the U.S. He anticipates the new store will exceed $1 million in sales after its first year.

“Morellato wants to do things in the U.S. in the right way,” Frison said. “The distribution we have in Europe and the structure is something we cannot replicate exactly in the U.S., so we’re studying the right way to enter and the right moment to enter. This is a tough moment for the economy in general, but the Morellato concept is so strong in perceived value. We’re offering prices that are unbeatable, which puts us into a special positioning. We want to let our customers have a luxury experience and an emotional experience.”

All Morellato products range in price from $35 to $300. The new store will offer the firm’s accessibly priced jewelry and watches from its own labels Morellato, Sector and Philip Watches as well as from its licensed brands, which include Roberto Cavalli Timewear, Just Cavalli Time, Just Cavalli Jewels, Miss Sixty watches, Miss Sixty jewelry, Pirelli watches and John Galliano watches, launching next year. The company’s licensed products retail at higher prices, with Pirelli watches capping off the assortment at $14,750.

As to whether the firm is planning a larger-scale U.S. rollout, Frison said Morellato would prefer to remain a niche brand.

“We need to let Morellato enter slowly into the U.S. market,” he said. “Our strategy is not to open a lot of flagship stores. Our target mission is to let American people know more by having a few important locations. We are, however, considering an aggressive marketing campaign and examining our wholesale capabilities.”

Morellato is in talks to expand distribution into department and specialty stores. The firm’s Just Cavalli collection can be found throughout Nordstrom and Macy’s East.

Morellato dates back to 1930, when Giulio Morellato opened a watch repair shop in Bologna, Italy, before going on to specialize in leather watchbands. When he died in 1965, his closest colleague, Silvano Carraro, took over the firm. In the years following, a string of major investments were made in the company as it took on a leading role in European watchband marketing and licensing.

In 1990, Carraro turned over leadership of the company to his sons, Massiwmo and Marco, who are seeking to elevate the brand into a global player.

Watch focus: scene

A band apart

With all the fashion brands moving into watches these days, it won’t be long before watches start competing for closet space with other accessories.

The latest contender is Esprit Timewear, a collection of fashion watches licensed by Geneva Watch Corp. The line attempts a delicate three-pronged balancing act: ascribing to Esprit’s clean aesthetic while incorporating trend but avoiding the junior look.

Introduced to buyers in November, the line hit department store floors last month. Geneva bought the license from Egana Goldpfeil last fall, which still handles international distribution.

The collection, which wholesales from $26 to $35, falls into the firm’s Esprit Casual division, separate from its contemporary Esprit Collection and junior EDC brands. “There are no blinking dials or noisemakers,” Mark Piccione, vice president of sales for Esprit, was quick to offer, referring to digital technologies found in other brands.

Indeed, the styles follow a rather minimalist aesthetic with red, white, pink, black, tan and lilac as the core colors. Bestsellers for spring include a style with a pink dial and chain bracelet entwined with matching leather and a lilac style with a stainless steel mesh strap wrapped over a colored leather band.

“There’s very little basic two-tones in the line because there’s really not a need for that in the market,” Piccione said. “That’s all been covered.”

Instead, Esprit Timewear is for the growing number of consumers who are buying multiple fashionwatches to fit their style. “These are not classics,” Piccione admitted, “not the kind you wear every day or with every outfit.”

Although the line is colorful, it’s still casual. An iridescent python-embossed strap with a red dial and red crystal bezel is as glitzy as it gets.

Come fall, the collection will land in Esprit’s new 10,000-square-foot flagship at Fifth Avenue and 16th Street. Until then, it is being carried at Esprit boutiques and at major department stores such as Marshall Field’s and Robinsons-May. In November, the Hong Kong-based brand will launch a national advertising campaign in major fashion magazines. The firm declined to disclose wholesale projections.

It’s about time

Nearly 40 years after presenting its first women’s ready-to-wear collection, Cerruti is finally getting its hands on watches.

In a licensing agreement with Egana Goldpfeil Group, the century-old brand is launching men’s and women’s fashion watches for fall.

“The fashion industry has an increasing influence on the watch business,” explained Marco Sieber, brand manager for Cerruti at Egana Goldpfeil. “Watches are not seen anymore as pure timekeeping pieces, but [as] fashion accessories following the seasonal color, fashion and design trends.”

Positioned alongside Michele, Omega and Fendi watches, the new 55-piece collection follows three major directions: classic, outdoor and fashion. Key items will be a minimalist style with a white leather band and round steel case and a dressier style with a stingray strap and Swarovski crystals on the bezel. Texture is an important component of the line, said Alicia Press, brand manager at Egana Goldpfeil, and will be incorporated using material like stingray. Wholesale prices range from $195 to $395.

“You have a watch wardrobe,” Press added. “You change your watches daily.” The Cerruti line, she said, follows that sensibility.

The collection, which made its debut in Basel, Switzerland, during the Watch and Clock Fair this month and will be introduced in the United States at the JCK Jewelry show in Las Vegas next month, is the latest addition to what Sieber called the “world of Cerruti.” Other licenses include fragrances and accessories.

The firm chose to partner with Egana Goldpfeil for its extensive distribution and vertical manufacturing structure. In turn, Cerruti, which began as a textile company in 1881 and launched its first women’s collection in the late Sixties, introduces Egana Goldpfeil to a more upscale, fashion-forward customer.

The line will be carried at Cerruti boutiques, upscale department stores and top-tier retail boutiques. The firm declined to disclose wholesale projections.

In bloom

Spring has sprung, so watch companies are betting once again that ladies are going to spring for a fashion watch or two in colors best suited to a beautiful tulip garden. Just in time, P. Peugeot has come out with Croma, a group of decidedly girly, stainless steel watches with a shiny, silvery finish. Colors, applied to the case and strap alike, include baby pink, sherbety orange and green and pink, as well as a baby blue and black. Most straps are leather, although there is one kickier design with a plastic jelly strap, in pink, black or blue. Faces are embellished with decorative mother-of-pearl dials representing different time zones.

Albert Eida, president of the New York-based P. Peugeot (no relation to the car company), described the grouping as updated classics with jewelry accents. They’re aimed at the fashion-conscious 25- to 50-year-old woman.

“It’s vibrant, refreshing. Colors put everyone in a good mood,” said Eida, who added that he doesn’t see the long-standing color trend fading any time soon, especially when it comes to pink. “Pink represents a major fashion trend in garments — everything seems to be pink.”

Croma watches retail for $72 at department stores, including Macy’s, Robinsons-May and J.C. Penney.

Swiss miss

It may have a century-old heritage and a logo that’s based on a cross, but don’t confuse Zodiac with, well, that other moderately priced Swiss watch brand. The newly evolved Zodiac, recognizable by its distinctive use of color and retro flair, is a key focus for the ever-expanding Fossil, which purchased the brand in 2001 and sees it as a key means of reaching a coveted young customer.

The casual-yet-sporty collection boasts 61 styles encompassing six different color combinations. Of these, only 20 percent or so were specifically designed for women, but the company is banking on capturing the woman who typically steals her significant other’s timepiece as a new customer. Indeed, the company’s signature ad depicts a woman standing in a sleek, votive-lit hotel room, sporting nothing but a man’s Zodiac watch.

The stainless steel watches have a retro flair, particularly one style that features an Art Deco-influenced, cushion-shaped face and a brightly hued dial. Color choices for the women’s watches include an allover vibrant royal blue and a powder blue-and-burnt orange combination. A solid black-and-bright orange style with a hole-punched caoutchouc-rubber band comes closer to a jock aesthetic, however. “You can wear a Zodiac every day, but it’s not restricted that day you decide to go diving,” said Jaime Noris, Zodiac’s assistant brand manager, who pointed out that many of thewatches are pressure-proof up to 1,000 feet.

The line hits primarily Tourneau stores in the United States starting this May, with global expansion planned for Italy, Austria, Germany, Switzerland, Japan, Singapore and China. Prices range from $150 to $750, with the higher-priced watches having superior internal movements and a greater water resistance. However, the company is standing behind its commitment to offer a Swiss-quality watch at affordable price points. “We’re seeking out the active 18- to 35-year-old who’s looking for a modern watch with the quality and tradition of the Swiss make,” said Noris.

Music and movements

It’s hard to imagine a suit-and-tie-wearing businessman jamming away in a music studio, but Dennis Phillips clearly defies convention.

Few in this industry know that after hours, the current president of Taramax USA, which manufactures and distributes Fendi watches worldwide, has a knack for music. Prior to joining the watch firm in 2002, he even had a stint as executive producer on jazz artist Loston Harris’ latest CD, “Timeless.”

“Growing up, I liked rock ‘n’ roll, but I moved onto jazz very quickly,” said Phillips, who learned to play the trombone in his youth and now favors tunes by the likes of Harris, Diana Krall, Bobby Short and Ben Sidran.

Phillips, a watch veteran who has been in the business for 27 years with a resume that includes president of Ebel and Rado, met Harris in the mid-Nineties when Rado had outfitted the artist with a watch.

“From then on, it was a friendship,” he recalled.

Harris agreed: “The best thing that I like about our collaboration is the passion for music that is at the core. And we have fun.”

Phillips can’t help but swoon over the music. “It’s romantic, it appeals to women and men, and the words take you to another era,” he said.

Harris has another fascination, and not surprisingly, it’s watches. He currently only counts four in his collection, but he still considers himself a bit of a fanatic. “There are times when I put them on the piano so I can always see what time it is,” the musician said.

Harris currently has a gig at the Carlyle Hotel’s Bemelmans Bar, where he plays the piano and sings tunes made famous by the likes of Frank Sinatra and Cole Porter every Tuesday through Saturday from 10 p.m. to 1 a.m. His “Timeless” CD is available at for $12.99.

Cherokee Stretching Out: A sportswear firm tries its hand at accessories.

The Cherokee Group, Sunland, Calif., is establishing a presence in the accessories market. The sportswear firm is taking its name into handbags, belts, small leather goods and watches this year and is exploring the possibility of adding sunglasses and fashion jewelry.

Cherokee executives do not fear the competitiveness of the burgeoning accessories market because they feel they are filling a niche with their brand name at moderate prices.

“Most of the latest accessories entries are designer names. We are going after a different audience, at a moderate price point,” said Joseph Gaspers, president of marketing and licensing.

“We are starting an extensive accessories business, targeted at the Cherokee customer,” said Gaspers. He projected first-year accessories sales of $7 million.

The firm has licensed its name to small artisan-type firms to produce the accessories, with the exception of the handbags, which are made by Sirco International, Mt. Vernon, N.Y. Cherokee has also hired a marketing firm that will handle sales and marketing of the accessories, excluding handbags.

Alan Bobin, vice president of sales and marketing for licensing at Cherokee, said, “We approached top retailers across the country to find the best resources we could to produce the accessories. We found companies that specialize in each classification, but who needed exposure through a brand name.”

The handbags and small leathergoods are being produced by Sirco, the watches by Clox Time Design, Inc., Fallbrook, Calif., and belts by Streets & Avenues, Inc., Santa Monica, Calif. SKU, Santa Ana, Calif., is the sales and marketing firm responsible for the watches, belts and small leathergoods.

Bobin said the firm ultimately would like to see a shop-within-a-store concept, housing all the Cherokee accessories together in department stores — though retailers, he said, want to wait and see how the accessories perform before committing a lot of space.

The accessories lines will coordinate to a degree. Gaspers said, “Each licensee will design their line, but Cherokee will have total approval. The accessories lines will all coordinate and project the Cherokee image.” For example, the belts and watches will use some of the same leathers and beading.

The accessories will also go along with the firm’s sportswear and swimwear as much as possible. The watch firm, for example, has created a beach group, which uses the colors that are featured in the swimwear line.

The bags wholesale from $8 to $40 and small leathergoods, from $4 to $12. Sirco produces the goods in the Orient and is launching both lines in the March market for fall I delivery. There are about 25 handbag styles and 20 small leather goods styles, all made of leather, vinyl or fabric.

The watches, which use Swiss movements and are assembled in Hong Kong, wholesale from $18 to $24. The firm launched 15 styles for the November market. The watches have brass cases and a variety of bands, including beaded and braided leather.

The belts wholesale from $8 to $22 and are made in California. Twelve belt styles were launched in the November market with 15 different buckles, which are all registered Cherokee designs.

Chanel goes platinum

Chanel is building on its watch business, with platinum its latest addition.

The platinum-case watches with grosgrain straps will retail between $4,400 and $5,300, and will be in stores in November.

“Our watch business has been excellent,” said Holli Perone, executive director of watches for Chanel Inc. “It’s probably the fastest-growing division at Chanel.”

Chanel introduced watches in 1987, and now has 14 styles, including a diamond watch. The collection retails from $1,375 to $45,000, with the bulk of the watches at $2,000 to $10,000.

In addition to being sold in all of the firm’s 11 U.S. boutiques, the collection is offered in 25 department store doors and jewelry stores. Perone said distribution will be limited to the addition of less than a dozen doors over the next few years.