There was another thread about this or a very similar topic.

I quoted Mike France from a recent video and he basically said: they have no plans for retail and no plans to ship from anywhere other than the UK. He did reference the Dallas showroom as a model they were testing for a place to try-on, but not purchase, watches. Meaning, you might be able to place the order in a showroom but the product would still ship from the UK. No explanation as to why other this model has worked for the past 20 years.

If someone has more insight, please do share.

Well CW wouldn't be the first UK company to try trading in the US and not be successful. Was it M&S or Tesco, I forget which. I just checked. It was Tesco, with a brand called Fresh & Easy that failed to take off.

Costs.
The retailer needs a cut.
CW has always said that their pricing model works retail price at 3 times cost price. This enables sustainable margins and competitive price.

Since the retailer would need a cut to make it worth their while, the retail price would have to go up. In an instant the VFM advantage would be lost. Plus CW would also have a bunch of dealers trying to help 'manage' the distribution/pricing model.

Many other manufacturers are now using direct sales with no dealers. Canyon Bikes are a good example.
Tesla Cars have wholly owned showrooms, but no dealers.
DTC has worked for CW since the beginning. Why change something that isn't broken?

JAFO wrote: ↑Tue Aug 20, 2024 8:20 am Well CW wouldn't be the first UK company to try trading in the US and not be successful. Was it M&S or Tesco, I forget which. I just checked. It was Tesco, with a brand called Fresh & Easy that failed to take off.

Didn't Pret-a-manger try and mostly fail too? There still may be a shop in NYC.

There is a fundamental difference between when:

1). Brand sells via authorised dealerships and then adds to that by selling online direct to customers from their own virtual store.

2). Brand sells online from own virtual store and determines the business model accordingly and then adds an additional channel by appointing authorised dealerships at a later date.

In version 1 - happy days, as the brand will make more from each sale from their own virtual store.

In version 2 - Maidenhead we have a problem!

Either…

a) give the retailer part of the margin.
b) sell to retailers at existing direct pricing and let retailers add their margin.
c) push up prices to the extent required to give the retailer an acceptable margin and sell on CW online for the same RRP as the retailer.

Neil

Question prompted by a discussion today with a watch retailer who said they’d love to stock CW

It would be interesting, as part of that discussion, to learn how much of a cut the watch retailer would be expecting to take from selling CW watches and at different price points. But some of the answer to to OP question must be around:

1) Would CW sell more watches (overall) by having AD's?
2) Have CW the production capacity to meet increased demand (if demand doesn't increase - what's the point)?
3) Would changing a successful business model actually be worth it?

I would say that MF has sufficient retail experience to have considered the options, and knows why he's doing what he's doing.

Paul Drawmer and nbg got it right. Selling directly or even having distribution in another country will add costs. An increase in cost means an increase in price to the consumer.

Even a distribution centre means:
Warehousing
Staff
IT
Business taxes (?)
Duty, etc, etc.

I'm sure other people do it but right now there doesn't seem to be any advantage to CW doing it. Do you want to volunteer to pay more for your watch just so that distribution is more local (and maybe a day or two faster for delivery or so that you can see the watches in a shop? The "Watch On Wrist" or Wow moment is well served by watch shows/local events.

I doubt a watch company wants to expand, or initiate, any "model" when a downturn has just started.

Have you seen the pre-owned watch market prices lately? I wish there was something I really wanted because now is the time to buy.

I brought this up last year after listening to a podcast interview with one of the owners of Monta. They believe that above a certain price brick and mortar retail is essential.

A year on, I still don't think that there is a definitive answer but it does seem that CW has moved the goal posts down the field in this regard.

One thought I have had after reading the discussion from last year is that I wonder how much the 'I would never pay x for brand x' plays a part. It could easily be confused with I need to handle the watch before buying. Although I would admit that a persons mind could be changed about a brand after they have handled it in person. I have heard this more than once about Fears for example. 'I would have never paid x for a Fears but when I handled one they are definitely worth it.'

If I can dig up the podcast, I will post it here. It is worth a listen. I do wonder if things have changed in the intervening year. It would also be interesting to know what the actual breakdown in sales between online and retail partners is for Monta. They don't seem to push the retail partnerships much (at least to a casual follower like me - they might to fans of the brand). It could also be that I am not in their market being on the East coast and I believe the partners are in the Midwest where Monta is located (they are in the St. Louis area - they are I just checked). The link to the retailers is kind of buried on the website which I think tells us something.

Here is the interview.

I only mention Monta here because they can be seen as a direct competitor to CW with a different take on distribution.

It could also be that there is more than one way to crack the nut and there is no 'winning strategy'.

^^^^ About 6 to 8 years ago, I recall Mike France speculating about going the 'Bricks and Mortar' route.

I guess CW decided not to.

Guy

^^^^Opening a showroom could be seen as only a couple of steps removed though. It is also an interesting middle ground having your own stores and not retail partners. You don't need to share margin. You do have to have the volume though to make the expense of operating the location worth the expense and effort.

I don't think it necessarily means B&M shops, or ADs.

It could just be simplifying delivery by moving finished goods to the US and despatching them.locally.when sold.

But if you move stock to the US there are added costs for double handling, and possibly you could end up with the wrong stock.in the wrong place.

So it probably depends a lot on whether there are production cost savings by moving unsold stock to the US.

A few AliX brands, and Invicta fit instance have established European despatch points, so maybe it can work..

JAFO wrote: ↑Tue Aug 20, 2024 8:55 pm I don't think it necessarily means B&M shops, or ADs.

It could just be simplifying delivery by moving finished goods to the US and despatching them.locally.when sold.

But if you move stock to the US there are added costs for double handling, and possibly you could end up with the wrong stock.in the wrong place.

So it probably depends a lot on whether there are production cost savings by moving unsold stock to the US.

A few AliX brands, and Invicta fit instance have established European despatch points, so maybe it can work..

The initial post wasn’t about holding stock in the USA. It was about whether CW had thought of selling through retail outlets that someone could visit to try on and buy watches. I.e. the usual retail AD model.

Neil