Watch brands seek out local retailers to fill in the gaps

Jeremy Pragnell was only 20 years old when he purchased his first Patek Philippe watch in 1969. The British son of a jeweller had discovered the brand while working at watch retailer Meister in Zurich — and he fell hard.

A lack of proficiency in Swiss-German meant Jeremy Pragnell’s social life in Switzerland was limited, but this allowed him to save much of his wages. Combining the cash with a 1ct diamond an apprenticeship in London’s Hatton Garden had allowed him to purchase, he sought his employer’s help to buy one of the coveted watches. “The owner of the business was quite taken aback,” says Charlie Pragnell, Jeremy’s son and current managing director of British watch and jewellery retailer Pragnell, as Patek Philippe watches were “extraordinarily expensive” even back then.

Meister did not carry the model Jeremy desired, so the owner contacted the brand’s owner Henri Stern to request it, mentioning that the intended customer was one of his young apprentices. Impressed by this, Henri Stern charged his son, Philippe Stern — today Patek Philippe’s honorary president — to hand deliver it. “And that’s how the relationship began,” says Charlie.

On returning to the UK, Jeremy petitioned his father George Pragnell, owner of Stratford-upon-Avon jeweller Pragnell, to stock his favourite watches and by the mid 1970s the store became the first UK retailer to offer a full collection of Patek Philippe timepieces. Sales of these expensive and relatively unknown watches were slow, until Patek Philippe’s popularity soared in the late 1980s. Pragnell’s early commitment has paid dividends as the brand is now an important part of its business. While Charlie will not share numbers as to the commercial importance of any one particular product or brand, he says turnover at Pragnell’s three Stratford, London and Leicester stores is split evenly between watches and jewellery. In 2021, the retailer reported a 21 per cent turnover uplift to £63mn, with profits of £7.8mn, up from £4.1mn the year before.

The partnership has been so successful that when Pragnell celebrated the 50th anniversary of its Stratford-upon-Avon store in 2004, Philippe Stern and Jeremy Pragnell collaborated on a special minute repeater in the store’s black and gold colours with numerals to match the style of the numbers above the shop door. Pragnell is the only retailer Patek Philippe has collaborated with in this way, and when one of the five limited-edition watches came up for auction at Christies in 2012 it sold for $575,340 to an Asian collector. The original was sold in 2004 for £162,000.

While Patek Philippe might have needed to rely on Pragnell in the 1970s for an introduction to the British shopper, this is certainly no longer the case, however the relationship remains intact. In September, Pragnell doubled the size of its store on Mount Street, Mayfair, and an important element of the refurbishment was a dedicated Patek Philippe area, as well as one for Rolex — the only two watch brands it sells at its London outpost.

So why, when watchmakers could use established brand power, easily amplified by digital outreach, to sell direct to consumers for full margin, do many still choose to operate via retail partners? “With full margin [achieved by direct retail] comes rent, people, systems, security,” says Brian Duffy, chief executive of Watches of Switzerland Group. “So the return on capital investment and on retail is less than the brands make wholesaling overall.”

Watches of Switzerland is enjoying a strong period of growth. Full-year results for the 2021/22 fiscal year show its total revenue was up 40 per cent to £1.2bn with pre-tax profits increasing 98 per cent to £64mn. This is fuelling fresh expansion plans, much of which are focused on monobrand watch boutiques, of which the group operates 50 in the UK alone — a figure that has tripled in the past five years. This summer it opened a Breitling store in Stockholm, a Tudor boutique in Glasgow, and an Omega store in Copenhagen. It also operates Tudor, Rolex, Breitling, Bulgari and Grand Seiko boutiques in the US, where revenue jumped 48 per cent to £428mn in 2021/22.

Although these stores might be branded as if they are run by the watchmakers themselves, it is Watches of Switzerland powering the retail operation. Duffy sees these dedicated boutiques — which he believes work well alongside Watches of Switzerland’s multi-brand stores — as simply an extension of consumer choice, as “a natural evolution as the brands continue to invest and expand and elevate”.

He gives the new Battersea Power Station retail development, due to open with 100 stores on October 14 in London, as an example of this harmony. At the site, Watches of Switzerland Group will operate a Watches of Switzerland store selling multiple brands, including Rolex and Cartier, and also standalone stores dedicated to Omega, Tag Heuer, Tudor and Breitling — a total of five stores. Whether consumers pick up on the link depends “how far down the journey they go”, says Duffy.

Even watch brands that want to own and operate their own boutiques sometimes seek out the assistance of established local retailers to do so, as Oris did when it opened its first British boutique in London as a pop up in 2019 through a partnership with retailer Fraser Hart. “We took it over independently nine months later,” says Isra Shah, Oris’s UK director of sales and marketing. “We saw the commercial value in taking this over [at that point], but it was the support of our retail partner that provided the leverage and insights to explore this as a first for the UK.”

Japanese watchmaker Seiko takes a blended approach. Some of its monobrand stores are run by retail partners — such as the Grand Seiko store in New York City’s Soho operated by Watches of Switzerland — and others direct by the brand, including its store in London’s Knightsbridge and another set to open on the city’s Bond Street this autumn. “Our relationships with our retail partners work as a joint approach; acknowledging the fact that they are experts in retailing and we are watchmaking experts — which works in a well-balanced way,” says David Edwards, managing director of Seiko UK.

Indeed, the tone of conversations between watch brands and stores is changing from one that was historically transactional, and often underpinned by power plays, to something more collaborative. Federico Ziviani, general manager at watch brand Gerald Charles, says he has weekly meetings with his London stockist Arije to share local market updates, as well as discuss client feedback and requests. “We cultivate a very transparent and reciprocal relationship of continuous collaboration and trust,” says Ziviani. “Listening to each other is a fundamental component.”

While working through retailers can offer brands all manner of logistical boons, at the heart of this continued reliance on a traditional supply chain model is a more emotional motivation: an understanding that the relationships specialist retailers cultivate with their clients will always be stronger than a single brand can, and that these human touch points remain vital to watch sales. “Patek and Rolex understand that family jewellers around the world are their allies and advocates,” says Charlie Pragnell, pointing out that neither of these market-dominating watchmakers rely on direct sales. “They can’t possibly know all their customers personally. We do.”