Premium watch retailers make up for lost time by offering discounts

To tide over the disruption, a few players have also started creating websites for digital sales

Thrown off-balance by mall closures, austerity measures, and widespread salary cuts and lay-offs across industries, the premium watch industry finds itself  shutting down stores, cancelling contracts, and resorting to heavy discounts to clear inventory and drum up sales.

Ethos Watch Boutiques, which runs a chain of 49 high-end stores across the nation, has closed six stores. Two are in Mumbai, with one each in Hyderabad, Indore, Bhopal, and Bengaluru.

The company, which sells everything from Rolex and Breitling to Seiko and Zenith, has started offering discounts. These go as high as 60 per cent on select models, with reduced prices for others — across 1,000 watches.

“Discounts of 40 per cent and higher will apply to select and limited models,” said Yasho Saboo, chairman of Ethos Watch Boutiques, which has an inventory of 70,000 watches.

On Ethos’ website, for instance, every single model of the Favre-Leuba — a storied Swiss watch brand owned by the Titan Company — is selling at a 50 per cent discount to its MRP.

Given the cash crunch and slowing sales, Saboo said he has intimated suppliers that payments could get delayed. Close to 25 of Ethos boutiques remain closed for business, with 50 employees having been laid off.

Ethos isn’t the only one reviewing its business plans. 

Viraal Rajan, director of Time Avenue has been reducing prices and offering discounts on brands such as IWC and Roger Dubuis.

Further, it’s likely that the Franck Muller boutique that Rajan was operating through his company RNM Luxury, at Palladium Mall (Mumbai), will see them pull out of the arrangement.

Time has been passing slowly for the industry, but the big change is that Rolex has opened up its factories and started shipping to authorised dealers. For the first time in decades, Rolex had shut down production of all watches in March, before re-opening in May.

Other luxury brands have seen some action at higher price points, though they expect overall volumes to fall way below last year’s. Ashok Goel, manager of Hublot in India, said sales may crash by half this year, even as inquiries keep coming in.

Majority of sales for high-priced watches are either occasion- or milestone-led, said a salesperson at a watch boutique. The person added that what was now challenging was that “everyone expects a lockdown discount and hence a lot of haggling is going on. People who buy my watches — ranging from Rs 15 lakh to Rs 1 crore — are typically business owners or very senior executives, and for them to buy such products at a time when lay-offs and salary cuts are the norm sends a wrong signal. Otherwise, their lifestyle or expenditure hasn’t really changed.”

Rajiv Popley, MD of Popley Group that retails Swatch Group brands and Tag Heuer watches, said watches are a problem because most factories globally are not operational and retail offtake is low.

“Right now, everyone is happy to offer discounts and keep fingers crossed. As regards gifts for weddings, with celebrations slowing down, watch sales have slowed down too,” he said. Discounts range from 10-30 per cent, even for the current stock, Popley added.

Is there a recovery strategy in place? “Restrictions of some sort or the other will remain until a vaccine is launched, after which we can expect normalisation and a pick-up in buying,” said Saboo. “We hope that by the fourth quarter, some vaccine shows promise and helps sales.”

Watch makers will have to reinvent their modus operandi, come what may. “The innovation has to happen, with communication and distribution — which will include live-streaming and distance selling,” said Saboo.

Players like Time Avenue have already started working on creating websites for digital sales. 

“Our site should go live by September,” said Rajan.