Fashion Brands Remain Key for Timex Group Luxury Division
MILAN — Interesting opportunities are on the horizon for Timex Group, according to Paolo Marai, president and chief executive officer of the watchmaking company’s Luxury Division.
Following the acquisition of a 65 percent stake at the end of last year by an affiliate of Boston-based investment firm The Baupost Group LLC, Timex Group is seeing an acceleration in its investments to further develop key markets and product segments, while growing its brand portfolio, observed Marai.
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The Baupost Group is signaling confidence in Timex Group’s long-term future and, with a history spanning 166 years, there is no doubt the watchmaker has consolidated its stance in the industry. That said, the executive noted that leveraging online sales and strengthening the relations with its distribution partners has helped weather the impact of the COVID-19 pandemic.
Timex designs, manufactures, and markets timepieces under licensing agreements with brands ranging from Guess and Versace to Salvatore Ferragamo, Furla, Missoni, Gc, Nautica and Ted Baker.
Speaking from Lugano, Switzerland, where the Luxury Division is headquartered, Marai said the target is to reach sales of around 100 million Swiss francs and earnings before interest, taxes, depreciation and amortization close to 20 percent of that figure in the next 18 to 24 months.
A cost containment strategy, given the limited number of business trips, events and marketing or communication initiatives contributed to weather the impact of the pandemic last year.
“Turkey, an extraordinary performance in Korea and the Arabian countries all contributed to solid results last year,” said Marai. “We’ve seen all markets showing strong signs of recovery, in the U.S., the U.K., but Europe and Italy, with their splintered distribution, are still difficult. And the lack of tourism is affecting locations such as Dubai.”
Timex has invested in developing its online business with a dedicated team and Marai said that 80 percent of online sales are made at full price.
“We rely on existing platforms, personally I don’t think that independent brands can compete with specialized players in the sector,” observed Marai. “For example, sales through Zalando in Germany are booming, while we were having problems selling in that country before working with Zalando.”
Likewise, Marai ticked off “key players” Timex works with, such as Farfetch or Tmall and JD.com, which are helping to build a strong business in China.
Local sites are “less generalist, they know how to target the local consumer” and are strong allies, he said, citing a positive experience in Korea, for example.
Fashion continues to be a stronghold for Timex.
“We are evaluating other licenses in fashion because we do want to expand our perimeter,” said Marai.
He admitted the pandemic has brought many changes — including smartworking, which affects real estate, restaurants and bars among others — and has impacted the spending power of many. “We have barely started to see the consequences of the pandemic. Watches gratify us, but obviously it’s an expense that is not considered a necessity.” That said, Timex relies on “the ability to create distinctive and recognizable designs in line with the style of each brand,” he said.
For example, Missoni’s first collection by Timex was launched in October last year. “It was the wrong moment but despite this, the collection has been restocked. The watches are instantly identified with Missoni, they have a strong and special design, and there is a history behind,” Marai remarked.
In March, Timex launched the Missoni 331 automatic chronograph limited edition, a tribute to the late Ottavio Missoni, founder of the fashion house, and his athletic prowess. Tai, as he was affectionately called, wore the number 331 on his sports bib at the 1948 London Olympics, where he met his wife Rosita. Missoni would have turned 100 last February, but he died at age 92 in 2013.
A sportswear classic produced in 331 individually numbered pieces only, the model features this number inlaid in blue on the continuous seconds counter.
The second Missoni collection will be launched in January.
Through the collaboration with Salvatore Ferragamo, Timex is “progressively embracing sustainability,” also in terms of recycled materials and packaging. Marai praised the investments Ferragamo is making in sustainability, citing for example the brand’s use of the Orange Fiber fabrics.
On the occasion of Earth Day 2021, Ferragamo will introduce the F-80 Skeleton Sustainable, a sustainable re-edition of one of its most successful timepieces.
Available in green and blue versions, each made in a limited series of 200 pieces, the new F-80 Skeleton Sustainable has a black satin case that contains an automatic movement visible through the transparent caseback and the skeleton dial, on which the double Gancini symbol stands out.
The strap is made of materials with a low environmental impact; a thin layer of FSC certified cork covers the inside, while the outside is of post-consumer recycled PET fiber fabric, with hole covers made of vegetable-tanned leather.
The climate impact of the manufacture of the F-80 Skeleton Sustainable has been measured according to the ISO 14067 Product Carbon Footprint standard, which quantifies the emissions due to all of its production stages.
To obtain the carbon offsets necessary to make this exclusive model carbon neutral, Ferragamo has made use of the support of Rete Clima, a nonprofit organization fighting climate change, with which the company will support the realization of the Burgos Wind Project, the largest wind farm in the Philippines.
In addition to reducing the emission of greenhouse gases into the atmosphere by generating large-scale electricity from a clean and renewable source, the project will create jobs and concrete economic opportunities for local communities.
Timex itself has a new sustainable project “on the back burner. “We are waiting for the right moment to launch it,” said Marai.
Timex is also aligning with Versace’s “higher positioning” now that it is part of Capri Holdings. “Versace’s products are increasingly recognizable and more sophisticated and linked to the brand’s fashion designs and image,” noted Marai.
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