The Emerging Market for Chinese Made Luxury Goods

Chinese Shopper Go On a Luxury Clothing Shopping Spree


by John Sealander  

When Chinese Manufacturers Stop Copying and Start Innovating

China became a global manufacturing powerhouse largely by copying the ideas of others. The Chinese became experts at creating knock-offs of popular brands and the copies became so good that the luxury labels they copied began manufacturing their own products in China as well. Now, practically every major brand manufacturers many of their products in China.

The tremendous demand for China’s ability to manufacture almost anything less expensively than their competitors in other countries has created a large and increasingly wealthy Chinese middle class. These newly affluent Chinese quickly developed an appetite for luxury and began buying the most popular high-end labels from around the world. As Chinese sophistication and buying power continued to increase, some Chinese designers began wondering why China couldn’t create their own high quality luxury goods.

Chinese pride, a booming economy, and the rise of Chinese creativity, has created a growing demand for products that are not only manufactured in China, but designed there as well. Chinese fashionistas are no longer flocking to the West for the latest trends. They are turning to exciting original collections by a new generation of emerging Chinese designers instead. Designers like Uma Wang have already been profiled in Italian Vogue. Chinese designer Qiu Hao was a recent Woolmark Prize winner, a prize that was previously reserved for European luminaries like Karl Lagerfeld and Yves Saint Laurent.

Chinese Develop Luxury Taste Buds

Everywhere you look, the Chinese are making the transition from fashion followers to emerging tastemakers. The huge changes in tastes and attitudes of the growing Chinese middle class has created opportunities for a new generation of talented Chinese designers who are extremely proud of the “made in China” label. These designers are not satisfied with creating knock-offs. They are determined to be the best on the world stage.

“My heritage is full of beautiful craftsmanship and history with a strong understanding of femininity and luxury,” says influential Chinese designer Huishan Zhang. “It is only a matter of time before the avant-garde taste for individuality in China further evolves into a ‘Made in China,’ homegrown style that will be applauded at home and abroad.”

Luxury Watch Manufacturing in China

Chinese watchmakers were quick to recognize the almost insatiable demand for tourbillon movements by their Chinese customers. About 15 years ago, they decided to meet this demand by manufacturing their own tourbillons. As their expertise in manufacturing tourbillon movements grew, the reputation of their intricate timepieces grew among the world’s watch aficionados. Now, the demand for a Chinese made tourbillon timepiece is almost as high outside China as it is among the Chinese.

High quality Chinese-designed watches and clothing are relatively new to the global market but are growing in importance every day. The Chinese have become self-aware and are proud of their heritage and skills. They no longer are satisfied to make economical goods for the rest of the world. They are determined to design and create the world’s best products and have customers comes to them.

China Produces Its Own Luxury Watch Brands

The Chinese love wristwatches and Chinese watch manufactures have already made the transition to producing high quality luxury products of their own. Although every major watch manufacturer has manufacturing facilities in China, the Chinese are doing something that none of them expected. They are no longer satisfied with copying and are starting to produce their own high quality timepieces filled with genuine homegrown innovation.

The Chinese Fiyta Spacemaster timepiece is prized by collectors around the world and has a reputation that puts it in the same league with popular Fortis and Omega space watches. The limited edition Spacemaster features a superb mechanical moment of Chinese design and includes innovations like an anti-clockwise locking crown to prevent accidental crown release and a unique 8-hour rotating bezel that serves as a life support indicator for the Chinese Feitian EVA spacesuit. Chinese Taikonauts wear this watch on space missions and a growing number of sophisticated collectors are starting to wear them as well.

The Future of China’s Growing Luxury Market

The emergence of Chinese creativity and a new appreciation for Chinese excellence has implications for every manufacturer of luxury goods. The world has already seen the power of the Chinese economy. When the Chinese turn their energies to producing top-quality, original designs, the world better watch out. The Chinese are already learning, as the Europeans and Americans did before them, that creativity is the key to homegrown success. Combine China’s emerging appreciation for the role of creativity with China’s proven manufacturing prowess and you’ve got the recipe for a true luxury powerhouse.

Will “China made” eventually replace “Swiss made” on the dial of your favorite timepiece? Only time will tell.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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5 Reasons Why Every Millennial Needs a Good Watch

Millennials


by Bonnie McEwan  

When Your Phone Is Not Enough

Picture a classroom full of undergraduates at one of New York City’s progressive universities. Everyone in the room is of the Millennial Generation, which means they were born between 1982 and 2000. Most students are about 19 years old. Many are hoping to snare summer internships in the city’s fashion, financial or professional service sectors.

The professor has forgotten her watch and, unaware that she is about to show her age, asks for the time by saying, “Does anyone have a watch?” Several students pull out their smart phones and call out the time. “We have our phones,” someone says, “not watches.” It turns out that, of 25 students, only one is wearing a watch. This is more than just a sign of the times. For aspiring Millennials, it’s a lost opportunity.

Here are five reasons why every Millennial should have a good watch:

1) A watch is functional and easy to access. With just a twist of your wrist you learn the time and, depending on what brand you choose, perhaps the current phase of the moon or how many seconds it took you to chase after that cross town bus. No rummaging around in your pocket or backpack for a phone. No moving through multiple screens before you can simply find out what time it is.

2) A watch makes a statement. It signals what kind of person you are — a focused minimalist (Johan Eric); a fashion-forward creative (Versus Versace); an athletic executive (GV2). An interesting watch is a conversation starter. It gives little hints about your unique blend of professionalism and personality. A watch is distinctive.

3) A good watch is a fashion accessory. You can change watches to match outfits. Watches offer thousands of options and features for you to choose from. Colors, shapes, dials, metals, leather, diamonds, solar, atomic, bangles and buttons, in just about any combination you can imagine. Meanwhile, everyone’s phones look pretty much the same.

4) Watches signal achievement. They say you got that great job. Passed the bar. Made it to an office with a real door that closes. A good watch is a gift worthy of marking an occasion. Engrave it, treasure it, wear it as an emblem of success.

5) A quality watch becomes a family heirloom. If you’re lucky, you inherit one from your grandfather. If not, start your own tradition by investing in a watch you love that you can pass down to your children. Watches get better with time, but nobody hands down an old smartphone.

There’s one other big advantage of a watch over a phone. Watchmakers don’t take their customers hostage with a two-year contract. They don’t send you a bill every month and no matter how much you use your watch, there will never be any overage charges.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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Will Swatch Sistem51 Revolutionize the Watch Industry or Be Rejected by It?

Swatch Sistem51

by John Sealander  

Is the watch world ready for a super accurate, maintenance free, “Swiss made” mechanical timepiece that is mass-produced with only 51 parts?

SwatchThirty years ago Swatch revolutionized the watch industry with the introduction of the world’s first line of stylish, inexpensive quartz watches. Now, many say they’ve turned the world upside down again with the introduction of the world’s first high quality, all-mechanical movement assembled entirely by machine.

The innovative Swatch Sistem51 is unlike any mechanical watch ever made. There are only 51 components, compared to over 600 in most modern mechanical watches. The assembly of this watch has been 100% automated, using high-tech robots to weld together the individual components to create a single assembly centered on one screw. This unique timepiece has no regulator and is adjusted for life at the factory using a laser. The all-mechanical movement features a 90-hour power reserve and is hermetically sealed so that no moisture, dust or foreign objects can enter the watch or interfere with its operation.

Swatch Sistem51 Red Swatch Sistem51 White
Swatch Sistem51 Red Swatch Sistem51 White
Click to Enlarge Image Click to Enlarge Image

The watch is 100% Swiss made, is self-lubricating, and is accurate to 5 seconds a day. Typically a Swiss made mechanical watch with these specifications will cost thousands of dollars, but the Sistem51 is expected to retail for less than $100. This mass-produced mechanical marvel is made using a special alloy of copper, nickel and zinc. It is non-magnetic, so the movement will never need adjusting. Since all the components are attached using a single screw, there is very little wear and tear.

Is There a Demand?

The big question now is whether there is a market for such a watch. Although extremely reliable and accurate, it has none of the snob appeal of its pricy handmade Swiss cousins. The Sistem51 is more expensive than equivalent Swatch quartz watches, yet offers far fewer features than the latest generation of “smart watches” that are starting to hit the market.

What the Swatch Sistem51 does offer is a super accurate, extremely reliable, all mechanical Swiss made movement in an inexpensive plastic case. Like any Swatch design, the Sistem51 can be easily customized with an unlimited number of color variations and face designs. Although the innovative watch has received wide praise for it’s technological innovations, it remains to be seen whether it will be commercially viable.

Does the market really want an inexpensive all-mechanical watch, or will people continue to prefer the exclusivity of handmade mechanical timepieces costing thousands more? Since the technology itself is revolutionary, it would not be surprising to see Swatch incorporate the new movement in some of its own high-end brands. Will there eventually be an Omega, Breguet, or Blancpain watch with a Sistem51 movement? Only time will tell.

Potential Game-Changer

The Japanese and Chinese already offer a wide variety of affordable mechanical timepieces. Currently however, when a watch says Swiss made on the dial, it is usually quite expensive. The breakthrough Sistem51 design might change all that.

If the Sistem51 design turns out to be as reliable as has been initially claimed, it could even cut into the sale of quartz watches. Why would people want to keep changing batteries when they could get a high quality self-winding mechanical watch for the same price?

Although the Swatch Sistem51 was introduced over a year ago at Baselworld 2013, it has only recently become available in retail markets. As people begin to discover this revolutionary new design, it could have a major impact on the entire watch industry. Nobody denies that this watch is a breakthrough. The only uncertainty at this point is whether it will be a commercial success.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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The 3 Most Popular Watch Bezel Types

Watch Bezel


by Adrian Herscovici  

Interval meters, dive and GMT: The most popular types of watch bezels

One watch component that is referenced regularly is the bezel – a rim attached to the case and surrounding the dial that usually serves the purpose of holding the watch crystal in place.

Audemars Piguet Royal OakAt its simplest, the bezel is an unadorned ring, usually made from the same material as the watch case. Other bezels are decorated with inset gems or ornamental stones. Some even achieve iconic status because of their unmistakable shape and brilliant design – just look at the Royal Oak and others designed by the inimitable Gerald Genta.

Given the conspicuous position of the bezel on the front side of the watch, it also provides a convenient area to assign other useful tasks.

Interval Meters

A bezel is a great place to put markings for a chronograph interval meter. The most common of these is a tachymeter, which is typically used to calculate speed over a distance. The Fortis Official Cosmonauts Chronograph employs a tachymeter on the bezel. Other variations of interval meters include telemetric (to measure the speed of sound) and pulsimetric (to measure a pulse). A more thorough explanation of all three is here.

A rarer bezel in this category is the aviation-themed “slide rule” or “calculator rule.” Ferragamo features one on these on the Ferragamo F-80 Pilot. The bezel works in conjunction with the flange and interior markings for use as a pilot’s tool to calculate various operations including speed and fuel consumption. Learn about how to use one here.

Dive Watch Bezels

The most recognizable bezel of all is the dive bezel. The look is so popular that some brands incorporate it into watches as a non-functional design element. A dive bezel has a 60-minute scale, usually with large markers at the five-minute increments and smaller markers at the one-minute increments (at least between 15 and zero). The zero position is usually marked by an arrow and a luminous dot. The Fortis B-42 Marinemaster Chronograph employs a dive bezel of this description.

Originally designed to monitor elapsed time underwater, dive bezels can also be used in more practical scenarios like monitoring how much time is left in a parking meter or when to flip a steak on the barbecue. When used in scuba diving, the countdown measurement is a matter of life and death since divers use it to track how much oxygen remains in their tank*. A genuine dive bezel rotates in one direction only (counterclockwise) so if it moves, it will signify less air in the tank, meaning the worst case scenario is the diver surfaces with leftover oxygen. If it were to move in the opposite direction, the diver might think he or she has more time than oxygen remaining in the tank.

*Note: Most divers now rely on a dive computer rather than a dive bezel.

GMT and World Time Bezels

Another familiar bezel is the bidirectional GMT, usually with 24-hour markings. The bezel can be used in a few ways: one, to track a second time zone in conjunction with a dedicated GMT hand; to establish whether it is daytime or nighttime in that corresponding time zone; or to follow a third time zone altogether. A GMT watch is a favorite among pilots who regularly travel between time zones. For a detailed explanation visit this web page.

A variation of the GMT bezel is the world-time bezel, which displays the names of world cities. To use it, set the local time on the watch and turn the bezel to match the current city name with the local time using the 24-hour track – the times in all of the other cities now appear concurrently on the 24-hour track. The Fortis B-47 World Timer GMT has a world-time bezel (the watch also displays a second time zone by way of a rotating middle disk).

Other types of bezels will surely emerge as watch design evolves. The new RM 60-01 by Richard Mille, for example, has a rotating bezel with a compass. But whether you prefer the simplicity of a watch with nothing more than a traditional unadorned bezel, or something bejeweled in colorful stones, or a purpose-built dive bezel, the abundant options are part of what makes watch collecting so enjoyable.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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The Domino Theory in Retailing

Circuit City Store Closing


by Bonnie McEwan  

The Progression of Retail Store Closings

Cold Warriors loved an idea called the Domino Theory, which held that once a country “fell” to communism its neighbors would also fall, like dominoes in a chain reaction. While that didn’t happen in geopolitics, it may be happening in retailing. One retail store closing can trigger a series of events that serve as the tipping point for a host of related financial problems.

At the macro level, the first groups to feel negative effects are real estate investors and commercial property owners. For example, Morningstar estimates that there are 262 unpaid commercial mortgage-backed security (CMBS) loans that are secured by mall properties where JC Penney is an anchor tenant. Ninety-eight of those mall properties are already on Morningstar’s watch list.

Nine of those malls are on the list for a JCP store closing. All are located in small markets where replacement retailers will be hard, if not impossible, to find. If the malls go down, then it’s not just Penney employees who are out of work, but the many more people who work in other stores at those malls, some of which also house vulnerable retailers like Sears, Abercrombie & Fitch and American Eagle Outfitters.

The Community Conundrum

Retail store closings make waves throughout a community. Take Compton, California, for instance. When Circuit City closed its store there in 2008, it derailed revitalization efforts throughout the whole area, which was already in dire economic straits. It wasn’t just the direct effects of the store closing, but the message sent by the closing: business is not good here.

Consumers were affected by Circuit City closings too. The chain generated serious revenue by selling long-term product warranties. It assured warranty holders that their coverage would continue, but if a customer had a problem he would have to travel to a Circuit City outside of Compton. For the similar reasons, gift cards were harder to redeem and returns more difficult to negotiate.

In December of last year, Dominick’s, a grocery chain owned by Safeway, announced it was exiting Chicago. This left some low-income neighborhoods without a full-service grocer, where they had access to fresh, healthy food choices. To top it off, when a new food store wanted to move in to an abandoned Dominick’s, community activists learned that the closed property was encumbered by a restrictive covenant that prohibited another grocer from opening in the space.

Far-Reaching Effects

Further along the domino chain, wholesalers and suppliers are hurt when retail stores close, as are other retailers. Orders are cancelled and consumers who are now living on unemployment can’t afford to purchase anything other than necessities. Goods that people bought routinely when they had paychecks suddenly become luxury items that remain on store shelves.

It’s not fair to blame retailers for all of this. After all, it only makes sense to close stores that are under-performing, and those are most often in areas of high unemployment. In early 2012, for example, Sears Holdings closed 17 Sears or K-Mart stores in three states with substantial unemployment. They included Florida, with a 10% unemployment rate at the time, Michigan, with 9.8% unemployment, and Mississippi, with 10.5% unemployment.

A Cyclical Cycle

Worst of all, it turns out that the retail dominoes aren’t really in a chain at all. They’re in a circle, where each one influences the next and where the negative effects of store closings can build into a spiral that takes everyone further down the economic scale. People lose jobs, which communities can’t replace. These communities gradually become what labor economists call intransigent jobless areas, where the hurdles are high for attracting new business because the consumer base is low-income. This reduced purchasing power translates into fewer places to work and shop, as well as a lower tax base for local government.

In December 2013, the US Bureau of Labor Statistics reported the lowest annual retail sector unemployment rate (7.7%) since 2009, when it was a full 10%. Things are getting better and with the current round of store closings the health of the retail sector overall is improving, but it may still leave bodies on the ground, especially in areas of the country that have yet to show signs of economic recovery.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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Hublot Chairman Accuses Apple of Stealing Watchmakers

Hublot Watchmakers


by John Sealander  

Will your next smartwatch say “Swiss made” on the dial?

When Jean-Claude Biver, the head of the Watches and Jewelry division of LVMH and the Chairman of luxury watch brand Hublot, accused Apple of trying to poach some of his best Hublot employees, it started a firestorm of speculation within the watch industry. What was Apple up to? It has long been anticipated that Apple will instantly become a major player in the burgeoning smartwatch category when it introduces its almost inevitable iWatch. Why was the company looking to Switzerland?

Although nobody knows when an iWatch will reach the market, almost everybody agrees that it is coming. With Apple’s design expertise and proven record at popularizing new technology, expectations for Apple’s upcoming smartwatch are high. The market clearly expects something spectacular from the Cupertino giant.

What the Swiss Have to Offer

While nobody expects Apple to include a tourbillon or a moon phase complication in its upcoming iWatch, there is still a lot that Swiss watch experts have to offer a potential smartwatch powerhouse. Watchmakers take metallurgy seriously. For hundreds of years, Swiss watchmakers have been experts at creating entirely new metals and alloys, just to solve a watchmaking problem.

Hublot Watch with Magic GoldOne of these high tech alloys is called Magic Gold, and it was developed by the very Hublot that Jean-Claude Biver says Apple was trying to raid. Magic Gold is a proprietary combination of ceramic and gold that Hublot has used to make watchcases virtually scratch proof. Is it just coincidence that Apple tried to license this special alloy for use in the iPhone 5 in 2013? Later that year, Apple released an all-new gold version of its popular phone and it is still looking for a way to make its cases scratchproof.

Some industry experts say that Apple may want their upcoming iWatch to say Swiss made on the dial. While this is a possibility, it is highly unlikely, since the company has always been extremely proud of its California roots. The term “Swiss made,” which has long been associated with high quality mechanical watches, would hold little value to a customer buying wearable technology. There are no springs and gears in a smartwatch and there never will be.

Swiss Expertise

What is more likely is that Apple is considering opening a new R&D facility in Switzerland. Steve Jobs was always fond of borrowing ideas from other disciplines and incorporating them in Apple designs. “Good artists copy. Great artists steal,” he said once, lending credence rumors that Apple actually is poaching talent from leading Swiss watchmakers.

It makes sense. The Swiss have been experts in manufacturing all sorts of things for hundreds of years. In Switzerland, Apple could recruit from an amazing pool of watchmaking talent. While Apple doesn’t need the Swiss to put a tourbillon in a smartwatch, they do need Swiss process engineering, ergonomics, metallurgy, and miniaturization expertise. Hiring the best talent they can find from well-respected companies like Hublot, might just give them the competitive edge they are looking for.

While it is fun to speculate whether your new iWatch will say “Swiss made” on the dial, the accusations of talent poaching do have serious implications. Watchmaking is a billion dollar industry and the market for wearable technology is potentially even larger. The Swiss should actually be happy that Apple is looking at them. If Apple hires a few watch experts from Hublot, it won’t hurt the industry. Instead, it will probably help. By acknowledging Swiss expertise, Apple is telling the world what watch aficionados have known all along: Swiss watchmakers are the best in the world at what they do.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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The Evolution of Watch Case Shapes

Unique Hamilton Ventura Watch Case


by Adrian Herscovici  

Taking Shape: Watch Case Basics

A watch case, simply described, is a container that houses a watch’s significant components: namely, the movement and its many parts. The case protects these vital workings from dust and moisture, and it assists in shielding the movement from the bumps of daily wear.

From this simple purpose, the watch case evolved into more than a protective shell. Through innovation, watchmakers found reliable and efficient solutions to deal with the elements, and so they turned more attention toward perfecting case-finishing techniques – the sort of detail-oriented work that, at one time, was limited to movement decoration.

In The Beginning

By default, the earliest wristwatch cases were round – round because that was the shape of pocket watches, and when watches made the transition from pocket to wrist, they were merely pocket watches fashioned into wristwatches. Round is still the most ubiquitous shape as it provides the best space to display analog configurations.

Besides round, the most common case shape is rectangular. Popular variations include tonneau (barrel shaped) and cushion (pillow shaped or rounded square). Some watchmakers go in completely new directions – check out the asymmetrical Hamilton Ventura or any watch by the brand MB&F – but in general, most watch cases are based on one of the two rudimentary forms.

Some watch cases are icons in their own right. The innovative Rolex Oyster is known the world over; Cartier’s Tank, released in 1917, is unmistakable, as is the legendary Reverso by Jaeger-LeCoultre. Every watch brand hopes to achieve this sort of lasting success – great design, after all, never goes out of style.

The Modern Era

While case shapes remain more or less consistent, size is on the rise. Contemporary watches are quite large, around 42 mm in diameter on average. By comparison, watches of the mid-20th century usually maxed out at around 34 mm. Now it is not uncommon to see watches that are 45 mm or larger.

Cases were originally made from metals, especially steel and gold. Today, plastic is used to make a majority of watch cases, since it is durable, lightweight and inexpensive. Applied coatings such as PVD, DLC and IP are also popular. For higher-end watches, stainless steel is the standard along with an array of precious metals, unique alloys – and even ceramic. Watch cases made from prized metals such as gold or platinum are more exclusive and therefore more expensive.

Excluding mechanical watch collectors and other purists who treasure the centuries-old practice of watch-movement decoration, the appearance of the case is, for many, the reason to buy a watch, since watches today are for fashion as well as function. And while it may be difficult to imagine a new shape finding a permanent place in the watch spectrum (and on our wrists), it is perhaps more rash to underestimate that our forward-zooming, information-toting selves won’t find need or want of something else in the ongoing quest to be original and to stay one step ahead.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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America’s Changing Shopping Habits

Researching a Car Purchase Online


by John Sealander  

Why People Buy Watches Differently than they Buy Cars

New studies are showing that people around the world are changing the way they buy things. Increasingly, multiple visits to a series of retail stores to comparison shop are out. Consumers are doing their research on the Internet ahead of time these days and many have already made a purchase decision by the time they arrive at the store. This is especially true when people are buying automobiles.

Hans-Werner Kaas, a senior partner at the prestigious McKinsey & Company consulting firm says that average car buyer visits just 1.6 auto dealerships before making a purchase, down from 5 dealerships only 10 years ago. “This is the most dramatic change we’ve seen in the auto industry and how people buy cars in the last 50 years,” says Kaas.

Simon Soaf, General Manager at Mossy Volkswagen in Carlsbad, California, has witnessed this change himself. “Those days of going to six or seven dealerships to shop for a car are over. It is not going to happen again. Customers are more savvy,” he said.

There are many reasons for this change in buying habits. Cars are still a practical necessity. In a difficult economy, people want to arm themselves with as many facts as they can before they make a decision on an expensive but necessary item like a car, a major appliance, or even a healthcare provider. When money is tight, customers don’t trust sales people any more than they trust Congress. They want to make their own decisions.

Watch Retail Industry Continues to Expand

One product category seems to be bucking this trend. At a time when automotive and electronics dealers are consolidating, watch manufacturers are actually expanding, adding brick and mortar stores at a rapid pace. Just a few years ago, about the only place you could buy a fine watch was at a reputable jewelry store. Now, all the major watch manufacturers are opening their own stand-alone physical stores.

Go to any major shopping mall and you will see impressive brick and mortar stores for well-known brands like Omega, TAG Heuer, Swatch Tourbillon, Officine Panerai, Montblanc, Cartier, Audemars Piguet, and many more. Most of these brands sell through online retailers as well.

The Watch Buying Experience

Is there a reason why people are purchasing watches much differently that they purchase cars? Many experts think it is because watches are no longer a necessity. Nobody needs a watch to tell the time any more. They have their cell phones for that. Watches have become a fun discretionary item. Low to mid-priced watches are considered a fashion accessory now. They are often impulse purchases made to match a particular outfit.

High-end luxury watches are a little different, but buyers still seem to like to do their shopping in physical stores. A luxury watch is a status symbol and buyers often consider themselves to be timepiece connoisseurs. They are a lot like collectors of fine art in this regard. Going into a well appointed store and talking with a knowledgeable sales representative is all part of the process for these high-end buyers.

Watch Buyers vs. Car Buyers

A luxury watch and an economy car can cost just about the same these days. However, while frugal car buyers do research in an effort to find reliable transportation at the best possible price, watch aficionados are more like art collectors. And the fashionistas who are buying more affordable watches just want a stylish accessory that matches their new dress. These shoppers are more concerned with whether the watch is cool than they are with the price.

When watches were essential as timekeepers, shoppers bought them for essentially the same reasons as they bought their cars. They needed a watch to tell the time. The irony of the situation is that now that wearing a watch is no longer a necessity, watches have become more popular than ever.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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What’s Behind Retail Store Closings?

Retail Store Closing


by Bonnie McEwan  

Out of the Malls and Onto the Internet

Most of us who follow the retail industry are aware of the wave of store closings that has taken place over the last few years. Since closings occur intermittently, however, you may not realize that roughly 5,759 stores in the US have shuttered since 2012. These include apparel companies like Jones Group and The Gap, restaurants (Wendy’s, Qdoba, Applebee’s), home furnishing stores (Kirkland, Pier One) groceries (Food Lion, Kroger, Stop ‘n Shop), toy and entertainment outfits (Build-A Bear, Game Stop) and tech companies (Cellular One, Apple). You can find an alphabetical list of all US retail store closings through September 25, 2013 here.

Certainly the Great Recession has something to do with this, but that doesn’t account for the fact that many of the same companies closing brick-and-mortar stores are expanding their online operations. These moves to the Internet have dramatic consequences that reach well beyond employees and consumers to affect communities and related industries, and not in good ways.

Shopping Malls

The obvious example is shopping malls. Most real estate professionals acknowledge that vacancy rates are high in many malls across the country and rents are depressed. Green Street Advisors, an analysis firm that tracks commercial real estate funds, predicts that 10% of the 1,000 largest malls in the U.S. will fail within the next 10 years. Some mall CEOs think that’s a conservative figure.

There’s a website called Dead Malls that tracks those shopping centers that are already abandoned or well on their way. Of the 33 JC Penney stores slated for closing, three are on the Dead Malls site: Muscatine Mall in Muscatine, Iowa, Military Circle Mall in Norfolk, Virginia, and Singing River Mall in Gautier, Mississippi. Macy’s plans to close stores in two more: Fiesta Mall in Mesa, Arizona, and Medley Center in Irondequoit, New York. Abercrombie & Fitch is closing a store in yet another mall on the endangered list, Oaks Mall in Gainesville, Florida.

It appears that these particular malls, along with most of the others listed, while not going gentle into that good night, they are slouching toward oblivion, dragging community spirits down with them. Part of their woes are caused by the oversupply of mall real estate. The US has so many malls that when one closes shoppers can easily drive 10 or 20 miles to another. Add to this the ‘smart growth’ and walkable cities emphases in current urban planning theory and you easily see that the curtain is descending on the malls’ last act.

Malls Repurposed

So what happens to these dinosaurs littering the suburban landscape, becoming eyesores in the communities they once served? Sometimes mall owners just call in the demolition equipment. Occasionally, though, more creative solutions are devised. Although not located in a mall, an abandoned Wal-Mart in McAllen, Texas was turned into the largest, single-story library in the country by Minneapolis-based architects Meyer, Scherer & Rockcastle, Ltd. The conversion plan included space to establish a community gathering place, which serves as an updated version of the town square.

Wal-Mart, once roundly criticized for letting its abandoned stores lie empty to prevent competitors from moving in, now has a subsidiary called Wal-Mart Realty. According to its website, “Walmart Realty’s mission is to find businesses to open in our former stores and clubs and to locate in available property around our stores. At Walmart Realty, we believe we have a responsibility to work with communities to find a use that generates economic growth and opportunity.”

Online Rising

While this is a positive development, it assumes that there are companies interested in opening brick-and-mortar stores, a debatable idea. “If I were thinking of starting a new retail brand right now, I would unquestionably start it online,” writes Jeff Jordan, a partner at Andreessen Horowitz and board member for several online retailers. He points out that online retail will continue to steal business from brick-and-mortar stores and that will place even greater pressure on shopping malls.

Even online retailers that do move offline to open physical stores are doing them as Internet showrooms, where customers view samples and then place orders. This is a stark departure from the traditional retailer that stocks inventory in its stores. Jordan cites two, Bonobos and Warby Parker, that began online and are now employing this showroom model.

There’s a joke going around that says Best Buy, which recently closed 10 stores, has become a showroom for amazon.com. Consumers visit Best Buy, check out the product they’re considering, then go home and order* their preferred model online. I’ll admit that I’m guilty of doing this exact thing when shopping for a high-definition television, not because Amazon had a cheaper price, but because the delivery is so much less hassle than dragging a TV home myself. It’s small conveniences like this — and probably others that are less apparent — that are driving consumers online.

All this does not mean that the retail industry is in trouble. Only that the mechanics of selling are changing. As Bette Davis said, “Fasten your seat belts. It’s going to be a bumpy night.”

*Or order then and there from their Smart phone.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

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Is Gucci Losing Its Luster?

Gucci, New York City


by John Sealander  

When luxury logos lose their luster, can the kings of bling survive?

GucciWhen the economy imploded in 2008, luxury goods seemed relatively immune to the carnage that the ensuing economic downturn created. Analysts speculated that even though the economy was weak, companies like Ralph Lauren, Tiffany, Coach, and Gucci would thrive because even after the downturn, the rich still had plenty of money left to buy all their favorite luxury items.

All that may be changing however. There are growing signs that luxury logos are losing their luster. While the ultra-rich can still afford their yachts and Ferrari automobiles, a growing group of “affordable luxury” companies are beginning to suffer.

The latest luxury brand to falter is Gucci, the flagship label of Paris based Kering SA. Gucci profits fell dramatically during the fourth quarter of 2013 to 50 million Euros, down from 1.05 billion Euros a year earlier. Kering CEO François-Henri Pinault in a recent CNBC interview said he was unconcerned about the slowdown, but many financial analysts think that Gucci’s stagnating sales growth signals a change in the way consumers view luxury goods.

Luxury Industry Slowdown

The slowdown in luxury sales has been well documented. Around the world, and particularly in China, well-known luxury brands are suffering from what many call “logo fatigue.” As recently as a few years ago, the Chinese couldn’t get enough bling. If it was gaudy and gold, they had to have it. Now, discriminating Chinese shoppers seem to prefer understated luxury and are buying less flashy labels.

A slowing global economy is causing many to change their priorities. Paul Lejuez, a New York-based analyst at Wells Fargo & Co. calls this phenomenon “wallet-share shift.” Instead of buying Hermes scarves and diamond bracelets, they are spending their money on practical items like cars, electronics and home furnishings.

Survival of the Grandest?

It remains to be seen whether this trend will continue. If the economy improves, luxury retailers like Gucci could quickly return to their former glory. If conditions continue to deteriorate, all bets are off. In a declining economy, there will still be rich people, just not as many of them. Luxury companies will be forced to focus their efforts on a much more targeted audience, which will create winners and losers. “The whole ship isn’t sinking,” says Aurora Investment Counsel president David Yucius, “It’s a matter of which brand is winning the fashion trend of the moment.”

Will Gucci and the luxury industry recover in 2014? With the top 2% of Chinese earners accounting for fully one third of all global luxury sales, the fortunes of a very few people could make a big difference. Whatever happens, one thing is certain: customers will continue to evolve, and successful companies will need to reflect their changing needs in the products they sell.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

Join the conversation! Follow Gevril Group on Facebook, Twitter and LinkedIn.

Please subscribe to the Gevril Group newsletter and blog digest.

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