World of Rolex: the world’s premier watchmaker taps into a new market for luxury

After decades of selling its diamond-encrusted and oyster-faced watches through high-end retailers, Rolex is bringing its version of luxury directly to the storefront. Last week in Toronto, Rolex opened its latest exclusive branded boutique location–one of just a handful of similar outlets around the world. Now, Canadian shoppers looking to spend anywhere from $4,000 to upwards of $150,000 on just the right timepiece can browse around a shop that is entirely and unmistakably Rolex–a strategy that promises benefits both for the company, and jewellers running the stores.


Beautiful Oyster-faced watch

“The move by Rolex is brilliant,” says Milton Pedraza, chief executive of the Luxury Institute, a New York-based independent market research firm focusing on high-end goods. Now the company can exert more control over the retail setting and the buying experience, he explains. “It’s a way to cultivate loyalty with customers and build a relationship.”

That’s increasingly important as luxury products gain popularity in the mass market. In 2006, jewellery and watch sales hit US$62.2 billion in the United States, up from $58.4 billion a year earlier, according to research by Unity Marketing in Stevens, Pa. Better yet, the biggest sales growth happened in the luxury watches segment, which jumped 39 per cent from 2005. (Sales of costume watches, meanwhile, dropped 20 per cent over the year.) “There’s enough critical mass and growth [in sales]” to warrant these distinct shops, concludes Pedraza. In fact, specialty jewellery stores are fast becoming the preferred place to buy fine accessories. Fully half of all jewellery purchases were made at these shops last year rather than at department stores or fashion boutiques.

Capitalizing on these trends, Rolex shops have recently popped up in several of the world’s biggest cities. In Beijing, for example, a 500-sq.-foot “flagship store” opened last October. Don’t expect to see Rolex opening at local malls, says Victor Royce, chief executive officer of Rolex Canada, but he anticipates that within five years, there could be outlets in Vancouver and Montreal.


Here in Toronto, the Rolex boutique has been a year in the making, says Irit Shay, co-owner of Royal De Versailles jewellery store, which hosts the Rolex boutique. Previously, Shay sold Rolex alongside other watch brands, but after meeting with company executives in 2006, they agreed it was time to have a Rolex-only area within the store. Now, Royal de Versailles has a separate entrance into the Rolex shop, where a security officer controls by remote who enters. Green marble floors contrast medium-dark wood and glass counters that hold hundreds of shimmering watches made of various metals and gemstones. “We are now the centre of Rolex in Canada,” says Shay, adding that the store has more than doubled its inventory to fill the boutique. “If you want to sell, you have to show.”

And if retailers want to show the watches, they’ll have to pay up because, as Royce explains, while the Rolex boutiques are approved and overseen by the company, the operating costs are usually incurred by the jewellers. But Shay says that retailers will benefit too. “Customers have more space to wander, there is more product selection, it’s more convenient and luxurious, and it’s a concentrated way to shop,” she explains.

The key challenge for Rolex will be finding a way to break through with younger consumers. While the brand is synonymous with exclusivity and status among anyone over the age of 35, young people appear to be less and less interested in luxury timepieces. Instead, youngsters take more interest in other stylish devices, such as: smart phone, luxury camera & rangefinder, jewelries, etc. Moreover, the fact is that, roughly half of those aged 18 to 34 don’t even wear a watch, according to a recent report by Unity Marketing. “This category may start to slide as many younger consumers reject watches as a ‘status symbol’ and turn to their cellphones as their essential timekeeping accessory,” the report says. And while the Rolex store should help brand awareness, Unity has found that sales through the Internet, television and mail-order are becoming increasingly common.


The question is whether the company’s exclusive status will set it apart from other mass-market watchmakers. Pedraza, for one, thinks Rolex has nothing to worry about. “There aren’t too many pure brands that started with retailers and [have gone] to standalone stores. It’s unique to Rolex,” he says. “It seems to hold a fascination with people, and it’s a rite-of-passage brand: you become a millionaire, you get a Rolex.”

Spring 2014 watch report

New trends for the red carpet–or corner office–include everything from transparent timepieces to tickers that could withstand even a James Cameron shoot

Choc-ablock Clocks

Classic timepieces get a mouthwatering makeover with cocoa-hued details


Rolex’s Oyster Perpetual Day-Date now features a chocolate-hued dial; $23,550, at Wempe, New York, and Gearys, Los Angeles


Graff’s ScubaGraff features a 47mm rose-gold case and chocolate dial; price on request, at Graff, San Francisco and New York


Breitling’s Navitimer 01 Panamerican includes an aviation slide rule and tachometer; price on request, at Breitling, New York, and Tourneau, South Coast Plaza A


Ulysse Nardin’s Executive Dual Time sweetens the hour with a chocolate dial in a rose-gold case; $22,200, at Ulysse Nardin, New York


Jaeger-LeCoultre’s Grande Reverso Ultra Thin Tribute to 1931 sports a cocoa dial and pink-gold case; $18,800, at Jaeger-LeCoultre, Beverly Hills and Palm Beach, Fla.

Divers for Everyday

The new street-smart and sporty water-resistant watches look good in the surf or out



IWC’s redesigned Aquatimer Automatic with an innovative rotating bezel can go down to 300 meters, or just downtown; $5,750, at IWC, New York and Beverly Hills


Blancpain’s 50 Fathoms Bathyscaphe updates a classic with lightweight titanium; $11,600, atTourneau, New York, and Westime, Beverly Hills



Maurice Lacroix’s classic Pontos S Diver offers serious specs like water resistance to 600 meters; $3,400, at Kenjo, New York, and Feldmar, Los Angeles


Cartier’s Calibre de Cartier Diver, its first diver, merges elegance and function, with water resistance to 300 meters; $8,200, at Cartier, New York and Beverly Hills

Inner Beauties

‘Skeleton’ watches that reveal intricate mechanics are getting more glam by the minute



Vacheron Constantin’s Metiers d’Art: Fabuleux Ornements Ottoman Architecture, with pearls and mother-of-pearl, merges the house’s specialties of openwork and engraving; $154,800, at Vacheron Constantin, New York and Beverly Hills


Roger Dubuis’ Excalibur 42 Skeleton Flying Tourbillon is revamped with 60 baguette diamonds and an alligator strap; $230,500, at Wempe, New York, and Milano Bijou, Los Angeles


Piaget’s Altiplano Skeleton sparkles with more than 400 diamonds and eight black sapphires set on the movement; $96,000, at Piaget, New York and South Coast Plaza


Cartier’s diamond-set Tank Louis Cartier minimizes the scale of the brand’s 9616 MC movement so it appears to float between sapphire crystal plates; price on request, at Cartier, New York and Beverly Hills


Jacob & Co.’s Brilliant Northern Lights shades its workings behind a mineral crystal dial; $59,800, at Westime, Beverly Hills, and Jacob & Co., New York

Luxury watchmaker winds up in LIC

High-end watchmaker and retailer Tourneau Inc. is consolidating its back-office operations in Long Island City. The privately held firm will move its distribution, repair and merchandising departments–currently in three offices in Manhattan and Queens and on Long Island–into 27,250 square feet at 31-00 47th Ave., between 31st Street and 31st Place. The asking rent at the site, known as the Falchi Building, is $15 a square foot.

“We are in a mode of expansion, and we wanted a central facility that could house all of our needs,” says Bill Matias, Tourneau’s vice president of store development.

The company, headquartered on East 54th Street in Manhattan, has offices at 488 Madison Ave., between East 51st and East 52nd streets; on Borden Avenue in Long Island City; and at the Roosevelt Field Shopping Mall in Garden City, L.I., where it also has a store.


Its new fifth-floor space in Long Island City is nearly twice the combined size of the other locations. Tourneau will vacate the Borden Avenue office immediately and the Madison Avenue space by year-end; it is moving its administrative workers out of the Roosevelt Field mall, but is keeping the store open.

A number of jewelry companies, including Samuel Aaron International and OTC International, have manufacturing and back-office operations in the Falchi Building, says Josh Dolgin, a vice president with Kalmon Dolgin Affiliates Inc., which bought the property last year.

“The building is very convenient,” Mr. Dolgin says. “It’s near the No. 7 train and the Hunters Point Long Island Rail Road station.”

–julie satow

Umbrella shop opens in new space


Things are looking brighter for Peggy Levee, owner of umbrella store Rain or Shine. Ms. Levee recently signed a 10-year lease for 725 square feet at 45 E. 45th St., between Madison and Vanderbilt avenues.

Rain or Shine was in a tiny shop at 18 W. 55th St. for nearly four years until August, when the landlord sold the building.

The new store, which will also sell parasols and walking sticks, is slated to open in the Roosevelt Hotel in early November. “It’s a great place to catch someone’s eye as they come out of Grand Central,” says Lori Peddrick, a broker with Rice & Associates, who represented the tenant.

Robert K. Futterman & Associates negotiated for the hotel, which aims to lure high-end retailers to the Roosevelt’s shopping gallery, dubbed 70 Vanderbilt. “We’re trying to drag the Madison Avenue retailers over to 45th,” says Ariel Schuster, a managing director at RKF. He says four upscale stores are negotiating to divide the remaining 5,000 square feet of retail.

–elisabeth butler

Face-lift pays off for 485 Lexington


Three companies have each signed 10-year leases totaling approximately 68,000 square feet at 485 Lexington Ave., a 32-story building that has just undergone a $20 million rehab. The asking rent in the building, between East 46th and East 47th streets, is $68 a square foot.

Consulting firm Novantas will relocate in January to 41,150 square feet on the 20th through 22nd floors from smaller offices at 100 Park Ave. A month later, Global Realty Outsourcing, which offers mortgage lending and other real estate services, will move into 13,800 square feet, or the entire 25th floor, from Stamford, Conn. Gregory P. Joseph Law Offices is leaving 805 Third Ave. and taking 13,700 square feet, or the entire 30th floor, in the first quarter of 2007.

“We are just now completing the renovations,” says Steven Durels, director of leasing at SL Green, which bought the building from TIAA-CREF in 2004. Improvements include a new lobby and 4,000 new windows.