Thursday, September 12, 2019

Created for Macy's!

Okay, grab a cup of coffee, we're going to hop in the Way-Back Machine.

Back at the turn of the century, Wendy and I moved back to the US after several years abroad - just shy of a decade in fact, and in fairness it was almost like moving to a foreign country.  I spoke the language and I understood the currency, but things in the US had moved and evolved so quickly that I was frequently left scratching my head, not unlike Rip Van Winkle after a long nap.

We lived in the heart of San Francisco, right downtown, within walking distance of one of the largest Macy's I had ever seen.  And in the basement of the main store was a fairly sprawling jewelry department.  Now just as today, lots of necklaces, rings and earrings.  And there were Invictas, Seikos, Raymond Weil and Movado.  And in fairness, those are brands that even today you would reasonably expect to find there.  Now that is not merely due to the price.  At that time, Macy's had a fair amount of high end, luxury brands in pretty much every department.  You could also buy Tissot, Omega, and if I am not mistaken, Longines.  Not to mention that "all American" brand - Hamilton...

And then?  Well, things changed.  SWATCH group essentially made it clear that most of their watches were clearly of a higher level and would not be sold in locations such as, you guessed it, Macy's!  It wasn't a sudden change, but it was something noticeable if you were paying attention.
Now in fairness to the current shot-callers throughout the fleet at SWATCH Group, this was never said explicitly.  It was, however, made known to many of us in conversations with sales reps and others within the inner sanctums.

And in fairness?  This made sense.  I mean, after all, Elegance is an attitude, right?  It's hard to be elegant when your "timepieces" are jammed in a cabinet next to some off-brand watch, with the overwhelming presence of the latest Coco Channel spin-off fragrance wafting through the air mingled with the piquant aroma's emanating from Wolfgang Puck's cafe down the hall in the food court ; )

Long story short, it was a marked sea-change and it was consistent with SWATCH group's belief that the idea of containing every element of the watch buying (and selling) process was the answer.  Remember Hour Passion?  Yeah, most of the US doesn't either.  But I you are shopping for discontinued fashions at the Richmond Outlet Mall in Vancouver, BC Canada? You're in luck!  Needless to say, here in the lower 48 it became clear pretty quickly that we prefer peanut butter to Nutella.  The higher end group boutique, Tourbillon, appears to be soldiering on in Miami, Las Vegas, San Francisco and wait for it... Seattle.  No don't get me wrong, I love Seattle.  But I don't know if this is where you're going to catch the number of customers needed to move the needle.

So, following the departure?  Well, then the retail bubble burst, grey market sales soared (and don't show many signs of slowing down), and the jewelers who used to proudly sell many of these brands (in fairness, I don't think we can really count Mido in this group as it still does not seem to be taking off here in the US), either went out of business, got their doors closed, or got so tired of getting the fuzzy end of the lollipop that they decided to cut-bait rather than fish.

And then, suddenly, Macy's (and no doubt there will be other brands out there to jump on this, and also other department stores to partner with them) is proudly heralding, wait for it, EXCLUSIVE LIMITED EDITIONS!

Tissot, Longines, Rado, Tag Heuer and yes, MIGHTY MIDO!  Each brand, unless I have read the announcement from Macy's, offers at least one model that is "Created for Macy's".

Okay, but let's get down to brass tacks - essentially this means that there is a clear strategy shift.  Macy's has a large reach, and I say this with no disrespect, but I don't think you're going to be able to have an informed conversation with the person at the jewelry counter to discuss your frustration that your COSC timepiece is not keeping chronometer-level time.

When you have to walk halfway across the men's department to buy a pair of Ralph Lauren trousers, how likely do you think the person trying to sell you this "super-limited-made for Macy's" watch is going to be readily available to help you with your purchase?

What this tells us is simple, sales are down and not showing much sign of getting better.  And the brands are getting nervous, and rolling the dice on just about anything that will staunch the flow of red ink.  

Or to once again quote that other authority on the luxury business:

"Things are going to get a lot worse before they get worse".

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