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Small independent watch shops are doomed – Richemont CFO

Nov 12 2017 19:15
Bloomberg’s Thomas Mulier

Johannesburg - The clock is ticking for small independent watch stores, according to Richemont [JSE: CFR], the Swiss maker of Cartier and Vacheron Constantin timepieces.

“The traditional wholesale trade, especially in watches, will disappear,” Richemont Chief Financial Officer Burkhart Grund said Friday on a call with analysts. “It’s a tough place out there.”

Watch retailers are going out of business as the bigger players consolidate, an online watch market emerges and producers try to gain more control over the final sale. The obsolescence of small independent watch shops follows the disappearance of third-party distribution of other luxury-goods products, such as fine pens and leather goods.

Richemont got almost two-thirds of its total first-half sales from its own shops as the company’s brands have built up their own network, including almost 600 Montblanc boutiques. Watchmakers get a bigger share of the profit from selling timepieces themselves, and it reduces reliance on distributors.

The Geneva-based company said Friday that Emmanuel Perrin, head of international sales at Cartier, will become head of distribution for Richemont’s watch brands. His job will be to make sure third parties are clearing out their inventory levels as the company focuses on key distributors, Grund said.

Richemont has no program to “actively shut down” any accounts, he added.

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