Checking the Time

The fashion watch category has been experiencing some significant challenges, thanks in large part to the fact that smartphones have replaced wristwatches as many consumers’ primary tool for keeping track of time.

In one illustration of the issues facing the industry, exports of watches from Switzerland—the source of many higher-end, fashion-driven watches—declined 10% in February and 6.2% in January of this year, compared to the same months in 2016, according to the Federation of the Swiss Watch Industry. These results continue a steady string of monthly declines that has lasted more than 18 months.

Still, a number of fashion designers are forging new deals for traditional watches, both analog and digital:

  • Perry Ellis announced an agreement this month for men’s, women’s and children’s watches with Optimo Group.
  • Two Italian brands, accessories label Furla and watchmaker Morellato Group, signed a five-year deal for a line of fashion watches to be distributed globally.
  • Rebecca Minkoff licensed Movado in November for a line of traditional analog watches sold at Nordstrom and at Minkoff’s stores and website.
  • Timex has been expanding its licensed traditional watch collections, which include Nautica, Salvatore Ferragamo, Versace, and Versus.
  • Sportswear and sporting goods brand Head Sport licensed Aion Time last year to create 10 models, five of them digital (but not connected) and five analog.

In contrast to traditional watches, smartwatches ended up representing a growth market in 2016, according to several researchers, despite sales declines during the second and third quarters of the year. The numbers vary significantly by researcher, however. Strategy Analytics estimates global smartwatch shipments were up 1.4% year-on-year in 2016, Gartner estimates global unit growth of 66.2% for smartwatches in the same period, and IDC’s estimates put smartwatch shipments worldwide up 16.9% in 2016 over 2015.

As a result of this growth pattern, a number of fashion labels are focusing their attention on smart watches of various sorts, from designs that are fashion-driven but have some connectivity to products that are multi-functional and connected but also have a sense of fashion.

Fossil has been a key player in bringing together smartwatches and design labels, launching 140 fashion-branded wearables (licensed and proprietary) last year and adding 300 new products this year. Designers getting into the smartwatch and wearables arena in 2017 with Fossil include DKNY, Marc Jacobs, Tory Burch, and others; they join labels already on board, including Chaps, Diesel, Emporio Armani, kate spade new york, and Michael Kors.

The Apple Watch is also partnering with a growing list of luxury and fashion brands. Some deals, such as with Hermès and Bucardo, a jewelry design label, allow for the creation of new designs for the watch itself, while others, such as with Toms, are for watchbands that add a fashion flair to the basic Apple Watch. In the latter case, the straps will retail through Toms’ stores and on its e-commerce site, but not at the Apple Store.

In addition, Movado partnered with Google for a Movado Connect smartwatch collection powered by Android Wear 2.0. Watches in the range include licensed varieties, Tommy Hilfiger and Hugo Boss among them.

Fashion licensing remains an effective tool in both the traditional watch segment and in smartwatches, but for different reasons. In the former, licensing helps a mature and declining product transition to its new positioning as a fashion accessory rather than a functional tool. And in the latter, it helps an emerging category lower a barrier to purchase by adding a fashion flair to what can be a functional but unattractive and clunky product.

For more on the intersection of fashion and function in the smartwatch sector over the last two years, read our previous coverage here, here, and here.

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