Luxury watch retailer acquired
The largest U.S.-based luxury watch retailer has been acquired by a Swiss company.
Bucherer, a leading European retailer of fine watches and jewelry, announced that it has acquired Tourneau from an investor group led by Green Equity Investors IV, an affiliate of Leonard Green & Partners.
Founded in in 1900 and based in New York, Tourneau operates 28 retail locations across 10 states and an e-commerce website. The company is renowned for its customer service and extensive selection of new and certified pre-owned watches.
“Bucherer is a dream partner for Tourneau,” said Ira Melnitsky, CEO, Tourneau. “A Swiss company with 130 years of history in the industry, Bucherer understands fine watches like few others, making them the ideal partner for Tourneau. As our business continues to perform and grow, this is a natural next step for the company.”
Tourneau’s management will join the Bucherer team. Bucherer is based in Lucerne, Switzerland.
“With this acquisition, we will immediately introduce the Bucherer brand to millions of potential customers in one of the most important global watch and jewelry markets, said Guido Zumbühl, CEO of the Bucherer Group. “This is also a great opportunity to firmly establish the Carl F. Bucherer brand in the U.S. and introduce Bucherer Fine Jewellery into the North American market.”
The Bucherer brand has 10 stores in Germany, four stores in London, a flagship in Vienna, one location in Paris (the world’s largest watch and jewelry store), and one store in Copenhagen. It is also sold in exclusive locations in Europe, with 16 points of sale in Switzerland.
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Peak Shopping Season Performance
U.S. retailers can breathe a sigh of relief. After a gloomy start to 2017 – where store closures and bankruptcy reports dominated the headlines – retailers have turned a corner, coming through the strongest holiday season in years. Their efforts to meticulously plan inventory, customer channels, pricing and staffing in the run up to and during the peak season paid off. According to latest figures from the National Retail Federation, holiday sales rose to $691.9 billion in November and December 2017, marking a 5.5% increase from the previous year.
How a retailer fares in the intense competition over the Christmas period can signal make or break. In recent years it has become increasingly tough for brick-and-mortar stores in particular due to changing consumer behavior and technology innovation. While consumers remain as unpredictable as ever, retailers saw strong in-store and online sales during the Holiday period, despite the structural shifts the industry is currently experiencing. Kohl’s, Target, J.C. Penney and Macy’s all reported increased sales – with many also raising estimates for quarterly earnings, while online sales flourished too reaching a record of $108.2 billion.
Encouraging store footfall
While the strength of the U.S. economy certainly helped spur consumer spending, strategies put in place by retailers helped engage shoppers. To drive footfall, many retailers offered BOPUS (Buy Online Pickup in Store), changing the store make-up and giving consumers added convenience while easing costs at the same time. Target reported that stores fulfilled 70% of its digital volume in November and December 2017.
Accenture’s latest Holiday Shopping study found that over half (52%) of U.S. consumers wanted to take advantage of this service during the Holiday season, and over two-thirds (68%) said they were likely to purchase additional items in store beyond their original purchase if they did.
Despite strong online sales, many etailers experienced operational challenges over Cyber Monday which they looked to resolve ahead of Christmas. According to the 2017 Holiday Shipping study from Kurt Salmon, part of Accenture Strategy, the top challenges etailers faced during this period included:
• The rise of online queues: Record levels of consumer demand saw customers being held in ‘online pens’ before they were able to browse and buy goods, similar to what many experience when purchasing concert or festival tickets. As online destinations reached their maximum customer threshold, queueing systems kicked in earlier than anticipated which impacted customer experience.
• Unrealistic shipping promises and ‘ghosting’: Some retailers tried to lure customers by improving shipping to two days, which was a difficult promise to deliver on such a big shipping day. Some retailers that experienced issues ‘ghosted’ customers by leaving them in the dark and did not communicate when orders would arrive.
• Subtly relaxing delivery speeds: The majority of retailers heard customer demands for free shipping options which 97% offered, compared to 90% in 2016. Over a quarter (27%) relaxed their delivery promises on the actual day though. While the subtle change may not have been noticed by customers, it helped some retailers live up to their shipping promises. The average delivery promise for retailers offering free shipping on Cyber Monday was 6.9 days, compared with 6.3 days on a standard day.
Due to higher than anticipated customer demand on Cyber Monday, the study found that retailers were more cautious at Christmas and consequently, nearly a third (30%) of retailers opted to not provide customers with a ‘guaranteed’ shipping date at all. The majority of etails also moved the average cut-off date for standard delivery back by a day compared to previous years to avoid customer disappointment.
Preparing for peak performance
As U.S. retailers continue to analyse their results over the last period and plan for the next peak season, many will be reconsidering the purpose, and format of their store portfolios, boosting analytics capabilities to gain deeper insights into customer preferences, and bolstering operations and supply chain infrastructure to ensure they can continue meeting increased demand for online orders.
A priority for multi-channel retailers will be to align their ecosystems to survive as etailers continue to grow without the shackles of legacy bricks-and-mortar systems. Doing so will be essential to ensure they capitalise on a continuing trend towards more online sales, and will stand them in good stead for the next peak trading season.
Jill Standish is senior managing director and global retail lead at Accenture; Steve Osburn is managing director at Kurt Salmon, part of Accenture Strategy.
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