Last October, in a move executed with the precision of a fine Tourneau timepiece, century-old watch retailer Tourneau, Inc. transitioned from a closely held family company to one owned—but not managed, stressed president and CEO Howard Levitt—in large part by outside investors. Leonard Green & Partners, a private-equity firm known not only for its stakes in Neiman Marcus, The Sports Authority and Rite Aid Corp., but also for its decidedly hands-off management style, formed an affiliate group with members of the Wexler family that has owned Tourneau since 1975 and members of the Tourneau senior management team. It acquired the 107-year-old watch retail giant for more than $300 million.
Levitt isn’t new to the helm of Tourneau. With the ownership change, CEO Robert J. Wexler moved to chairman of the board and Levitt, president, added chief executive to his title. Although the newly crowned CEO’s role in the company hasn’t changed noticeably, the much-publicized transaction will add fuel to a domestic and international expansion program launched by Levitt and the Tourneau team about a half-decade ago.
Levitt spoke with senior editor Katherine Field about the acquisition of the leading U.S. watch retailer, and how the transition will—and won’t—impact the rhythm of the company.
Chain Store Age: How do you expect the recent ownership change of Tourneau to impact what traditionally has been a family-owned company?
Howard Levitt: The persona of the business will not change. Frankly, maintaining our persona was top-of-mind when I was looking to pursue a transaction. Leonard Green has a long track record of allowing management to manage; they look to invest in companies that they think are well-run, and they encourage the business to continue. So I don’t see any significant change in the way the business was run in the past vs. how it will be run in the future.
CSA: So you see the direction—the plan that was in place prior to the acquisition—remaining intact?
Levitt: Yes. We’re not going to suddenly become ultra-aggressive in building out stores. Nothing is going to change. At least, we did not do the transaction with that thought in mind. Obviously, times change and we will respond to those changes in the same manner as we would have responded with or without the involvement of Leonard Green.
CSA: Your role was expanded from president, to president and CEO. How has this changed your day-to-day responsibilities—or has it?
Levitt: Frankly, it hasn’t changed it much at all, because for many, many years I’ve been operating the business on a day-to-day basis. But what has changed is that I now am responsible for letting our private-equity partners know what I’m up to.
CSA: What is it like to manage a century-old brand? Does Tourneau’s history make your job easier, or harder?
Levitt: That’s a really interesting question—and a hard one to answer. Because it’s an older brand, changes take time. If we’re known for something good or bad, because it’s an old brand, changing that is not an overnight process. Nor should it be. So, in that regard it’s a little more difficult. But, obviously, the good things we’re known for also are deeply ingrained, and you can leverage off of that. So, it’s harder and easier—it depends on what you’re trying to do.Tourneau, Inc.
Headquarters: New York CityAnnual sales: $300 million-plus (est.) for fiscal year ended Jan. 31, 2007Number of stores: 40Areas of operation: United States, Carribean and China
CSA: Has the move in the last decade or so to expand the brand from an exclusively luxury-watch market to one that is younger proved to be the right decision for Tourneau?
Levitt: We opened the Tourneau Watch Gear division to better address the emerging luxury-watch purchaser, the customer who may not have been a Tourneau, Inc. customer yet, but wanted to be. Through Watch Gear, we offer that younger customer, that aspirational customer, an opportunity to buy from Tourneau. And that did help us take the customer base down a little younger, because we feel that once they buy from Tourneau Watch Gear, they are ready to buy from Tourneau Inc. a little bit sooner. And that’s been a good thing for us, because it’s expanded our customer base.
CSA: And it has allowed you to manage for the future, correct?
Levitt: Yes. It’s a cradle-to-grave approach. We get them in younger and strive to have a relationship with them for the rest of their lives.
CSA: How would you describe the culture at Tourneau? Has your own personality played a part in defining that culture?
Levitt: I hope it has. I’m entrepreneurial in spirit and I’m a little bit informal. I encourage my senior management team to speak up, and I like to hear what they have to say. And I like a fun environment. I think we all have fun here and enjoy what we do. And I think when you do have that type of environment—one that isn’t stifling—you get the very, very best out of people.
CSA: How do you relax when you’re not working?
Levitt: I’ve been an avid boater for a long time. I call it my hydrotherapy!
CSA: Do you sail or are you on the water rowing like mad?
Levitt: (laughs) No, we have a power boat. Almost every year at this point we’ll take one trip up to northern Maine, and we’ll take another trip down to the Chesapeake region. As well, we do a lot of smaller day and weekend trips. We really consume the summer that way. It’s a great activity for my family; it keeps us close together.
CSA: One last personal question: What kind of watch are you wearing right now?
Levitt: A Tourneau. Specifically, a Tourneau Gotham piece. I change every year or two, but it’s always within the Tourneau family. I like to say that it’s like test-driving a car—you get to know every little nuance about the product when you wear it.