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Luxury watch retailers eye lower-tier brands
POOR sales growth has driven big luxury watch retailers in Singapore to start or acquire a new line of stores here and in other parts of Asia that carry less expensive models.
This new trend comes as many global luxury watch brands are launching timepieces at lower price points, or blatantly cutting prices. They include some of the most prestigious names in the business, like Patek Philippe, Audemars Piguet and Greubel Forsey - the name that's synonymous with pricey tourbillons costing S$750,000 and up.
Michael Tay, co-group managing director of Singapore's largest luxury watch chain, The HourGlass, sees no relation between the two developments. But market watchers believe the big brands' move to reduce prices of luxury watches would help to attract new customers and build the next generation of watch collectors.
Cortina Watch's chief operating officer Jeremy Lim is among the first to see the coming of what he calls "the second line" luxury watch boutiques by major retailers.
Though Cortina did not join the bandwagon, it's the first of the three big luxury watch retailers in Singapore to set up shop outside the upscale shopping belts of Orchard Road, Raffles City and Marina Bay Sands.
Its multi-brand store in Chinatown Point in Chinatown, besides carrying high-priced brands, also offers customers timepieces at more accessible prices of under S$5,000.
Cortina, which is opening another multi-brand store in the re-developed Capitol Building not far from Chinatown, already owns boutiques on Orchard Road for brands like Longines, Tissot and Rado. These belong to the lower end of the luxury watch range.
The Singapore luxury watch retailer has also opened similar multi-brand stores away from city centres in Malaysia, in Kota Kinabalu in Sabah and in Penang.
The Hour Glass, which has sold timepieces with price tags of up to US$5 million and more, is a relatively latecomer in the low-price segment of the luxury watch market. But it has moved quickly into it by acquiring Watches of Switzerland (WOS), which sells more of the less expensive luxury timepieces - which Mr Tay describes as the "prestige" category of luxury watches.
The purchase, made last October for S$13.3 million, extends The Hour Glass's reach from Orchard Road to Tampines.
The latest local luxury watch retailer to jump on the "mass affluent market" bandwagon is Sincere Watch, now owned by Pollyanna Chu, a wealthy Hong Kong businesswoman. It recently launched SunTime Watch which her son Kingston, Sincere's vice-chairman and managing director, says is targeted at new buyers who are unwilling or cannot afford the expensive timepieces currently sold in Sincere's boutiques.
"SunTime offers entry-level luxury watches to first-time buyers," he says.
Mr Chu indicates that Sincere's sales have been flat in the past two years and he's hopeful that SunTime will boost its revenues by going after an under-tapped market in Singapore and the rest of Asia.
Noting that China is setting watch buying trends in the region, Mr Chu says fewer high-end stores are opening in China. Instead, more outlets selling luxury watches at "accessible prices" are coming up. "I've to make sure I don't miss it," he says.
Mr Chu said the 805-square-feet SunTime store on the third level of Takashimaya Shopping Centre on Orchard Road, which carries brands like Tag Heuer, Longines, Bell & Ross and Corum, is likely to be replicated in other Asian cities.
The luxury watch retailers, which have seen growth tapering in recent years, are counting on the customers of their second line stores to move up the watch-collecting ladder in time and buy the more sophisticated and pricier timepieces that are currently the bread and butter of their high-end boutiques.
As for The Hour Glass's recent acquisition, Mr Tay said: "The decision to acquire Watches of Switzerland and enter the prestige segment of the business is because we saw an opportunity in the market for an upgrade of watch retail experiences in this particular category - and for us to build a new clientele base that will eventually migrate to The Hour Glass."
With the once gravity-defying prices of luxury timepieces at the top end of the scale coming down to earth, the path for these customers to move up has become smoother.