London’s Knightsbridge has always been a shopping paradise for the world’s wealthiest citizens thanks to the global reputation of Harrods, Harvey Nichols and the cluster of luxury boutiques stretching along Brompton Road and down towards Sloane Square. The weakness of the pound following last year’s vote to leave the EU made the capital’s top end retailers even more attractive to overseas visitors, and one of the greatest beneficiaries was the Harrods Fine Watch Room, as WatchPro discovered in conversation with the legendary store’s chief merchant Helen David.
“The luxury watch market has had a very strong year in London following Brexit and the resultant weakening of the pound,” says Harrods chief merchant Helen David with admirably cultured understatement. “This has been apparent in Harrods throughout all hard luxury areas, not least in Fine Watches, where we have seen sales soar,” she adds.
WatchPro has been writing for the past 12 months about the impact of the weakened pound on central London luxury watch sales. High spending visitors have been flocking in from Asia, the Middle East, Continental Europe and America; lured by prices for prestige timepieces that cost 25% less than the same watches bought in their home countries.
The spike helped Aurum Holdings, owner of Mappin & Webb, Watches of Switzerland, Goldsmiths and Watchshop, increase sales by 25% to £565 million last year. Turnover at The Watch Gallery, which runs The Wonder Room for watches at Selfridges, rose by 34% to £74 million. Wempe, the haute couture jeweller on Bond Street that sells only Patek Philippe and Rolex alongside its jewellery, enjoyed a 37% rise in sales.
The London market is so hot right now that Europe’s biggest luxury watch retailer Bucherer, swooped to acquire The Watch Gallery at the start of 2017.
London’s reputation as a global heavyweight for fine watches has never been higher. Only Geneva and Hong Kong come close.
That reputation has been hard-earned over decades, but the post-Brexit boost has been a game changer, drawing in foreign money that is paying back the massive investment made by Aurum Holdings in its golden triangle of stores in Knightsbridge, Oxford Street and Regent Street. It was also perfectly timed for The Watch Gallery, which had only recently opened a Rolex boutique in Knightsbridge, a multi-brand store in Covent Garden, and invested in a major refurbishment at Selfridges that increased its footprint by 25%.
The competition has been getting stiffer, but Harrods continued to attract the highest-spenders because the 10 branded boutiques in the Fine Watch Room are directly managed by the watch maisons, and they use them to present exclusive limited edition models that are not typically made available to multi-brand stores. Some are so limited in supply that only a handful are made for the entire world. Harrods is often the only place in the UK where they can be bought.
“Limited editions, one-of-a-kind, bespoke and Harrods exclusive pieces continue to prove popular with our clients throughout all departments in store. This trend is further magnified in Fine Watches and Fine Jewellery, with an increasing collection of our brand partners offering Harrods clients one-of-a-kind creations that cannot be found anywhere else, or allowing our clients the opportunity to design bespoke pieces for an even more personalised experience,” Ms David explains.
Harrods hard-earned advantage is under threat from more and more competition. The Watches of Switzerland flagship at 155 Regent Street uses the same technique of clustering branded boutiques, designed and run by the watch houses, and brought together in one location. This strengthens the store’s hand when it comes to negotiating for exclusive limited editions.
The rising intensity of competition is good for London’s global reputation, and Harrods is not standing still while its rivals improve. The Fine Watch Room is being upgraded and extended in a project that will see it almost double in size.
Architect Rundell Associates has designed an entirely new environment that aims to keep Harrods at the forefront of global haute horology retail. The new Fine Watch Room will expand across two floors, connected by a central sweeping, marble-lined staircase beneath a vaulted ceiling.
The new room on the lower ground floor will include ten large boutiques, an elevated multi-brand area allowing each brand greater visibility, enhanced customer experiences and larger collections across each of the brands, Harrods promises.
“The redevelopment of the Fine Watch Room showcases our commitment to offering the best in class to our customers. There will be nowhere else like it in the world and we pride ourselves on retaining our position as the ultimate luxury shopping destination,” says Ms David.
“The new space will pay tribute to our exceptional watch portfolio and will provide the perfect environment to showcase some of the world’s most sought after timepieces. The Fine Watch Room will be one of the first areas in-store to be redeveloped as part of Harrods’ masterplan and we’re very excited to unveil the new department once complete in 2019,” she adds.
There will be new boutique concepts, featuring a number of exclusive elements to Harrods from Rolex and Richard Mille, to Audemars Piguet and Hublot, as well as three dedicated VIP suites located across both floors.
There will still be just 10 full boutiques when the space re-opens, but each will be given more space, a Harrods spokesperson told WatchPro.
Harrods will also create a dedicated Fine Watch and Fine Jewellery entrance to the store, located at Door 1 on Hans Road.
Although there will be no new boutiques, it is expected that a number of prestigious names that currently compete from multi-brand counters in the centre of the current Fine Watch Room will be negotiating to grab additional space.
There will be an enhanced focus on service and after-care within the department, as well as introducing horological expertise with the addition of three dedicated on-site watchmakers, a first for Harrods.
Exhausted fine watch customers will also be able to refuel at a new outpost of the Italian restaurant Chucs, which has two other restaurants in the West End of London.
“The Fine Watch Room at Harrods is an area of key focus for the store this year and we have recently undertaken a large-scale project to expand and refurbish the department to the highest level of luxury. London has a very established watch market; we will be creating a fine watch destination with a unique brand proposition within an extremely elevated environment, offering something quite different from our competitors,” Ms David describes.
Adding VIP suites, along with the overall upgrade of the luxury environment is important to making sure that a visit to the Harrods Fine Watch Room is not just a shopping trip, it is a multi-sensory experience for the world’s most discerning citizens. “Most luxury customers now are cash rich and time poor, so there is a need for a greater emphasis on experience, over just selling beautiful products. We strive to offer each customer an experience that is truly unforgettable, through a combination of exceptional product, elevated environments, innovation, and world-class service. Customer experience is of paramount importance to us, and herein lies one of our main areas of focus, ensuring that each client enjoys a luxurious experience, whether they are buying groceries or a fine watch. We work with some of the world’s best architects to create bespoke environments to showcase our product offer, whilst also hosting exclusive pop-ups hosting retail theatre to elevate customer experiences and offer newness, each time they visit,” Ms David describes.
The Fine Watch Room upgrade will build on what was almost certainly the most successful year the department has ever had. Harrods does not disclose details of financial results by department, but Ms David says that the business saw an exceptional performance from the Fine Watch Room in 2016. “This growth was certainly bolstered by the favourable exchange rate post-Brexit, however we also saw an extremely strong first half of 2016, indicating that Harrods was already a global destination for fine watches. This year has also started very well, including the anniversary of a very strong summer season last year,” she describes.
The summer of 2017 has presented unique challenges. Ultra-wealthy Arabs from Qatar are not travelling abroad in such significant numbers this year because of an embargo imposed by neighbouring Saudi Arabia and United Arab Emirates. They are not prevented from travelling, but there is anxiety that difficulties could escalate and they could find it more difficult to return, according to Middle East analysts.
Harrods, which is owned by the Qatar Investment Authority, has not commented on the effect of the Qatar embargo, but Ms David does say that this year has started very well and that the department has experienced a significant increase in high value sales, especially on pieces over £200k.
The post-Brexit bonanza is unwinding slightly in London as watch brands have increased UK prices to reduce the differential to other countries. However, Ms David believes that the stature of London as a city and the quality of its watch retailers will continue to draw in high-spending visitors. “We have now seen multiple price increases from almost all of our brands, as a result of the weakened pound; there are still however a number of styles and brands where London still has a price advantage over other territories. This, in combination with the fact that visiting London is currently a more attractive proposition than other international destinations, has in turn further bolstered our customer base and helped to grow our Fine Watch trade. London is the number one destination for luxury watch retailers in the world. I also believe that London is really enjoying a ‘moment’ as a city, not only in terms of unparalleled retail offer, but also as a financial capital of the world,” she suggests.
Ms David is optimistic that the second half of the year will be strong because the refurbishment and extension of the Fine Watch Room will start to open up. “For the remainder of this year we expect to have a phenomenal run up to Christmas, which is always a busy season anyway, as we will be celebrating the opening of phase one of our large-scale refurbishment works. Phase one will see the opening of six new boutiques, a VIP suite, our elevated multi-brand area and an entirely new after care department, complete with in-house watchmakers,” she discloses.
Harrods may be the most venerable and traditional of retailers, but it is not blind or indifferent to the importance of engaging with customers online, and recently re-launched its e-commerce site. Watches are not currently a significant part of the online store, but that is likely to change, according to Ms David.
“Following the recent re-launch of our e-commerce site you will soon notice a greater watch presence online both visually and with an expanded product offer, across a number of new brands to the Harrods.com portfolio. This development will ensure that Harrods’ Fine Watch brands have strong visibility throughout our online channel and this is a key strategy for us, in line with an increased appetite from our brand partners to increase online visibility. The key for us will be to ensure that the customer experience whilst shopping the Fine Watch Room on Harrods.com is as close to the rich experience they would receive in-store,” she adds.
The Fine Watch and Fine Jewellery Rooms will be a little more integrated following the refurbishment, particularly as they will share their own entrance directly from the street. Ms David also points to a major change to the way watch and jewellery brand Cartier is presented helping to bridge the divide between the two departments.
“We are really excited about the second half of 2017, with the first phase of the refurbishment of Fine Watches opening, as well as major developments in Fine Jewellery in conjunction with this, which will see a very large new boutique for Cartier, within an entirely bespoke concept for Harrods, as well as a number of other new boutique concepts and expansions. The two projects in tandem will create a combined footprint of circa 44,500 square feet, creating an emporium for the best of the best in Fine Watches and Fine Jewellery worldwide. Given the remaining favourable exchange rate, the high rate of high value purchases, Fine Watches and Fine Jewellery remains a growing part of our business, and one which we expect to see continue in half two of this year,” she concludes.