The Fossil brand is known for selling fashionable timepieces at its own stores in malls as well as department chains like Macy’s and Nordstrom. These watches sell for around $100 to $500, making them a popular favorite. That could be changing as Fossil will be expanding its lineup to include much pricier models that will come with a “Swiss made” label.
A few months ago, Fossil opened a design-and-development center smack dab in the middle of Swiss watch territory right across the street from a Rolex SA factory. Do they plan to hire spies to sneak across the street and steal secrets? Not likely but Fossil does have plans to manufacture up to a half-million watches in Switzerland over the next year. As you would expect, these timepieces are expected to carry much heavier price tags than those standard Fossil models you can buy at the local mall.
That’s still thousands less than you’d pay for a Rolex or other luxury watch, which is why Fossil is hoping to create a niche for its Swiss made products in between the current batch of mass-market pieces and the entry-level luxury timepieces starting under $2,000.
Since Fossil is the fourth-largest watchmaker in the world by revenue, this could be a very big deal for the industry. Fossil’s strategy chief Greg McKelvey admitted that the brand aims to bring the craftsmanship of Swiss watchmaking to less expensive timepieces. “There’s a vacancy in the market for accessibly priced lifestyle timepieces that marry brands with the craftsmanship of Swiss watchmaking. “‘Swiss Made’ is a long-term growth strategy.” According to Swiss law, a watch can carry the label “Swiss Made” only if 60% of its value is generated in the country.
This seems like a smart move by Fossil coming at a pivotal time in for the watch industry. The Apple Watch will make its debut in 2015 and with prices starting at $350, it could steal a significant chunk of the under-$500 watch market away from brands like Fossil. Moving up a few notches into a higher price range could lure buyers who have been desiring the prestige and cachet of a Swiss made watch but have been driven away by the astronomical cost of some luxury timepieces.
One goal of the new Fossil facility will be to manufacture more Swiss watches for the makers of luxury clothing like the Burberry Group, which has sold branded pieces made by Fossil since 2002. Fossil has recently started producing Swiss Made watches for Emporio Armani and Tory Burch LLC.
Earlier this month, Fossil announced another way that the watchmaker would be expanding its brand. Fossil and Intel will be partnering up to design wearable devices—meaning smartwatches. The timing seems ideal as 2015 is shaping up to be the year of the smartwatch.
Fossil seems to be prepared to widen its scope in more than one direction, which is what a company has to do to stay alive these days.