Argento Fine Products is marking 20 years distributing fine jewellery and watch brands in the UK this year. The family-run business, co-owned by Giuseppe and Claudia Ferro, has a reputation for building lesser-known brands into winners in this market including the introduction of Roger Dubuis and Frederique Constant to this country. In 2017, the company is launching three fresh brands, as Rob Corder discovered in conversation with the passionate husband and wife team.
Watch distribution is a brutal business. The biggest luxury brands and watch groups have their own subsidiaries in the UK, so independent distributors like Argento Fine Products do not get their hands on top tier brands like Rolex, Patek Philippe, Cartier, Omega or TAG Heuer.
At the value end of the market, Timex Group, Movado Group, Citizen Group and Fossil Group all have their own UK operations.
That leaves Argento Fine Products and its peers battling to bring brands that few retailers or customers have ever heard of. Sometimes, as was the case with Roger Dubuis and more recently Alpina, brands promoted by Argento have become so successful they are acquired by larger groups. Roger Dubuis was swallowed by Richemont Group, while Alpina and its stablemate Frederique Constant, were bought by Citizen Group last year.
Inevitably, the groups want control of the brands they have acquired, and the distributor is jettisoned. This has happened this year with Alpina and Frederique Constant shifting distribution to Citizen’s UK subsidiary.
If Giuseppe Ferro, managing director of Argento Fine Products, is angry at the loss of Alpina and Frederique Constant, he isn’t showing it. “We don’t feel bitter about it unless they stab us in the back, which one did many years ago. Roger Dubuis have probably been the most elegant people we have ever worked with. Some people launch brands, some people buy brands, some people buy watches; we all have different roles. Provided the divorce is amicable, we have no regrets, it is fine. Maybe what we are good at is launching new brands,” he tells WatchPro.
Argento’s skills at launching new brands will be put the test again this year as it introduces three new watchmakers to the UK: Dietrich, Bruno Söhnle and GaGà Milano.
The three brands could not be more different. Bruno Söhnle is an independent watchmaker from Glashütte in Germany, and creates affordable luxury watches based on classical German design. Bruno Söhnle produces a relatively low volume of watches because it assembles and hand-finishes every watch, using Swiss movements and German precision for a family of watches that includes quartz as well as automatic and hand-wound mechanical pieces. “The quality is very high with Bruno Söhnle. Even with the quartz movement, the quality of the finishing is a real point of difference,” Mr Ferro describes.
Claudia and Giuseppe noticed the quality of Bruno Söhnle at Baselworld this year, when they were touring the show looking for new brands to take on. “I was just staring at this beautiful hand-finished movement. I thought it must be a hand-wound mechanical watch, but it turned out to be quartz,” Mr Ferro recalls. “There is a lot of versatility. On the whole, it is accessible luxury; very good quality at a reasonable price. In some brands, at certain price points, the most expensive component is the sapphire glass. This brand shows even their quartz movements through their case back in a £600 watch. Bruno Söhnle will be attractive to people that want simplicity, high quality, at a good price.”
GaGà Milano could not be more different. The Italian brand is loud, brash, supersized, fun and impossible to ignore; just the sort of thing that gets noticed on social media and in a retailer’s shop window. “Gaga Milano will be for somebody that wants to show off or have something noticeable, and fun. They are not very expensive,” Mr Ferro pitches.
GaGà also has social media pulling power thanks to a deal with FC Barcelona’s Brazilian footballing superstar Neymar, who has been signed as a brand ambassador through to 2020. “Neymar has 75 million followers. That is a huge traction that this guy has on the brand.”
If rumours are true, Neymar will be playing in the English Premier League next year. Manchester United and Manchester City are currently fighting for his signature, according to current newspaper reports. If that happens, he will be one of the biggest stars in British football, and he’ll be promoting GaGà to his millions of Instagram fans.
Dietrich was taken on by Argento in 2014, and is the most expensive brand on the roster. It already has an enthusiast’s following thanks to stockists including The Watch Gallery, Frost of London and Banks Lyon taking it on. Dietrich was founded in Besançon, a town in the northeast of France on the border with Switzerland, and creates unusual timepieces based on modified Swiss movements.
Nobody, least of all Claudia and Giuseppe Ferro, will say that Bruno Söhnle, GaGà Milano or Dietrich are household names at this time. That is the nature of distribution today, with relationships, passion, integrity and hard work making up for a lack of brand recognition from both retailers and consumers.
Mr Ferro is both a realist and a philosopher when it comes to describing the challenges and opportunities Argento faces in today’s market. He understands that the biggest brands have the power to dictate terms to their retail partners, while passionately expressing the view that retailers need to cherish their independence and not pass over control to the watch brands.
“Personally, I think that the large groups are very good at exploiting brands, but not necessarily as good at launching brands. They tend to acquire brands and make them commercial,” Mr Ferro says. “Big brands tend to cater for followers, not leaders,” he adds.
Perhaps it is the Latin heritage of Mr Ferro (Italian) and Mrs Ferro (Brazilian) that makes them passionate advocates for smaller independent watchmakers and the progressive retailers prepared to work with them. They are in the business of bringing something new and different to a market they perceive as corporatised, Darwinian and cutthroat. “People out there seem to want something different. Some large brands are saturating the market and selling directly to consumers now. They told their retailers they were not allowed to sell online and then started selling online themselves. They set up their own boutiques in the areas where there retail partners are doing well-enough to justify that investment. If the retailers are not doing well enough, they take away the agency from them,” Mr Ferro says.
The more retailers hand over control of their businesses to the biggest brands, the more they are at risk of losing sovereignty of the family business, Mr Ferro argues. “What I tell my retailers is: don’t expect this tree to bear fruit forever. Once the lemons have all been squeezed, there is no more juice left. If you do not have plan B, you are vulnerable,” he warns. “Many jewellers today are being run by third or fourth generations of the original founders. Those founders 100 years ago were true pioneers and innovators that created these businesses from scratch. We hope that the current generation will be as creative and as innovative,” he adds.
The rise of online shopping compounds the risks for retailers that rely on an ever-shrinking line up of top tier brands. These brands want all their retailers to look the same, to have the same furniture, to stock the same watches, to sell them the same way. Mr Ferro says this will lead to customer apathy. “If retailers forgo their role to provide their customers with good service, which is not just offering swaps and discounts, but also a little bit of old fashioned professional advice, suggestions etc., consumers will undoubtedly end up staying home and buying online,” he predicts.
Argento says that its mission is to work with leaders, not followers. He defines these retail leaders in terms of their attitude: do they have the vision to be creative, to try something new, to find interesting products that their customers will embrace, to take the sort of risks that their parents and grandparents took when they established their shops. “There are people out there who always want to innovate, they are driven, they are dynamic. They want to try something new. Their customers love them because they can be trusted to bring in something new for them to try. Everything is exciting. The next group goes along with the flow. Then there is the bottom 30% that catches the wave only when it is about to crash onto the rocks. They always pick up things after they have gone,” Mr Ferro defines.
When Argento is introducing new brands like Dietrich, Bruno Söhnle and GaGà Milano, he is looking for the leaders. “We work with the top 60%. For the first year or two it is the top 30% that pick up new brands from us. Then the core group in the middle follows on as the success builds,” Mr Ferro says.
Argento says that it can divide its history into seven year cycles, with new brands coming in at the start of the cycle, taking a couple of years to get established and successful before settling down with a solid network of loyal partners and customers. Right now, the distributor is at the beginning of another cycle, as Alpina and Frederique Constant are taken over by Citizen Group and its new portfolio is introduced to the market.
Could one of those brand become an instant success and force Argento to expand into more than the tight knit business it runs as today? “If it happens, it is fine, but I do not think anybody could plan for that. If it happens, then thank you, we would be very happy. We are not allergic to success or big numbers,” he laughs.