The Richemont Group owns nearly two dozen watch brands, including IWC, A. Lange & Söhne, Cartier, Piaget and Vacheron Constantin. Days ahead of their FY21 Annual Results, the conglomerate revealed its plan to open 100 Richemont TimeVallée multibrand watch stores in the next five years. Or did they? watchpro.com’s headline exclusive on the story has gone 404. It’s been pulled, no doubt at Richemont’s behest. What the hell’s going on? . . . [UPDATE: the WP article’s reappeared online.]
The WatchPro article – saved by the tab! – described TimeVallée as a “multibrand watch showroom concept created by Richemont’s Specialist Watch division” that’s “looking to expand on 15 points of sale in China with a roll out across the Western world.”
Richemont’s already opened TimeVallée multibrand watch stores in Deagu, South Korea and Barcelona, Spain. Where to now? “I see a lot of potential for TimeVallée in a number of US states,” Richemont’s international distribution director told WatchPro. “There are a lot of white spots for us,” Michael Guenoun added, using a rather unfortunate turn-of-phrase.
What’s the bet the “white spot” expansion plan was news to all but the most clued-in of Richemont’s shareholders and financial analysts, and maybe even them? Regardless, the market didn’t share Mssr. Guenoun’s enthusiasm for the Richemont TimeVallée multibrand strategy.
To be fair, Richemont’s stock price has recovered rapidly and dramatically since it sank to $55 per share amidst the global pandemic lockdown (May 2020). To be critical, what in the world are these guys thinking?
“TimeVallée is an innovative multi-brand boutique concept offered to all luxury watch brands and operated by external independent partners,” their website reveals. Never mind the glitz and glamor. The partnerships are the concept’s core.
“The business model is that we provide to our retailer with a plug and play franchise. We provide the hardware, meaning the design, fixtures and furnishing for each store, and the software in terms of training, CRM tools and everything a retailer will need to support their customers . . .
I wonder who gets that tasty customer data. To his credit, WatchPro’s editor is skeptical of the TimeVallée expansion plan and confused about its details (Rob Corder’s honesty may account for the article’s disappearance down the memory hole). “Luxury groups have proved to be poor multibrand retailers in the past,” the writer cautions. And . . .
Rolling out TimeVallée in partnership with retail groups in the USA could be seen as reversal after years of Richemont increasing its direct to consumer sales through ecommerce and its own boutiques [Miami above].
Ya think? And then there’s the big kahuna.
Questions remain over why a major luxury watch retailer and jeweler would open a TimeVallée showroom rather than a store under their own name. The answer is the simplicity and speed that retailers can open and work with Richemont’s watch brands.
“By having a proper multibrand concept like TimeVallée, we think we are adding value for our retail partners and our clients. We do not want to run TimeVallée stores directly . . . There are many retail businesses that have strong connections to their local customers, but do not necessarily have the know how we can bring with our concept,” Mr Guenoun states.
Know-how, schmo-how. Who’s paying for all this TimeVallée multibrand madness? Mr. Guenoun “did not disclose how a partnership agreement would be structured.” I suspect it’s a straightforward franchise deal. The [theoretical] franchisee pays all the costs: rent, furnishings, labor, etc. Richemont supplies its “expertise” and the watches. Ah, but can it?
As the old expression goes, be careful what you wish for. If TimeVallée opens 100 popular stores, Richemont’s top brands won’t be able to produce enough product to meet the demand. Talk about a bunfight!
Which distribution channel gets first dibs on a hot A. Lange & Söhne watch: a TimeVallée multibrand store, an authorized A. Lange & Söhne dealer, an A. Lange & Söhne monobrand boutique or Richemont’s ecommerce division (including HoDinkee)?
The now-you-see-it-now-you-don’t TimeVallée story highlights the fact that the Richemont Group’s watch division is flailing around in all directions, pursuing growth everywhere and anywhere it can, to the point where it’s competing with both itself and its partners. Even The Robb Report – riffing on the WatchPro article – sees the folly.
The development comes in the wake of a successful few years for Watches of Switzerland, the London-based multi-brand retailer. In a somewhat ironic twist, Watches of Switzerland announced in November that it would open mono-brand boutiques for Breitling, Omega and Tag Heuer.
Lest we forget, Watches of Switzerland sells A. Lange & Söhne watches as well as other Richemont brands: Cartier, IWC, Jaeger-leCoultre, Panerai and more. I wonder how WoS feels about the journalistically suppressed outbreak of Richemont TimeVallée multibrand madness.
Lul on the turn of phrase. Their own watch brand stores makes sense excluding Cartier and the other houses that they own. No sense in not controlling your distribution.
Also, Blancpain is looking for an American Brand President, any takers here at TTAW? Tall order with no control over their ugly watches….
https://www.linkedin.com/jobs/view/brand-president-blancpain-at-swatch-group-2502233875/
Richemont owning its own retail channels doesn’t make sense on a lot of levels . . .
It puts them in competition with authorized dealers for sales (especially with “boutique-only specials”) and marketing data.
Despite Mssr. Guenoun’s assertions about the corporate behemoth’s retail experience, the conglomerate does not have the mad retail skillz required to sell watches. It lacks focus. Which leads me to . . .
A multi-brand Richmont store opens up intra-brand fighting for positioning, sales and marketing data, creating rancor amongst their competing brands. Corporate in-fighting is never pretty and always counter-productive.
The biggest challenge Richemont faces: direct-to-consumer sales online vs. real world sales. On one hand, no overhead or 40% commission. On the other, watches are sold by look and feel. They’re being pulled in two directions.
If I were Richemont, I’d focus on independent dealers. Do everything I could to make their business profitable. Check this from fool.com:
A full 82% of McDonald’s restaurants are owned by franchisees, not the company itself.
That may sound like a lot, but it’s actually a smaller percentage than McDonald’s would prefer. The company’s goal is to have 95% of its restaurants owned and operated by franchisees, leaving only 5% for the company to run. McDonald’s discusses the benefits of this bifurcated ownership model in its latest 10-K:
Franchising enables an individual to own a restaurant business and maintain control over staffing, purchasing, marketing and pricing decisions, while also benefiting from the strength of McDonald’s global brand, operating system and financial resources. One of the strengths of this model is that the expertise gained from operating company-owned restaurants allows McDonald’s to improve the operations and success of all restaurants while innovations from franchisees can be tested and, when viable, efficiently implemented across relevant restaurants.
Now you might think it a good idea for Richemont to create a multibrand watch McDonald’s from scratch (i.e., TimeVallee). But that would put them in competition with their dealers for ALL THEIR BRANDS. A scorched earth policy likely to alienate their current cash flow for a dubious chance of success, as they’d be going up against other multibrand superstores (like Watches of Switzerland and Wempe, to name a couple). Which they are not in China. Which is why it makes sense in China, but not in the U.S.A. or Europe.
You should do a podcast where you bring on a commentator and discuss some things like this rather than type them out. New level of fan engagement.
Speaking only for myself… I’ve never listened to a podcast. I much prefer written articles / discussions. I think it’s my attention span… I can read an article in fits and starts. A podcast, I imagine, is a more continuous experience. And, they tend to be LONG. Most articles are short.
Please stop those pop-ups with “a different story”. I go to your landing page every day and open the storie(s) I like in a new tab. People who are unfamiliar with your blog would do the same, only opening more tabs of older stories. This pop-up is useless and irritatting!
“Put all the brands in one shop. Think how many Luminors we can sell to the guys milling around while their mistresses get fitted for Cartiers.”
“…We are supposed to be selling CARTIERS to guys milling around while their mistresses get fitted for Cartiers!”
Giant missed opportunity for a “Fast Times at Richemont (are you) High” joke!
Damn
Haha… I mostly amuse myself!