Branded shop-in-shops are already a dominant feature of shop floors, but for retailers that want to go further franchise stores are the next step. two rolex franchise partners share their stories with Kathryn Bishop.
When the Rolex boutique opened on the ground floor of luxury apartment block One Hyde Park in London last year, few people were aware that it was in fact a franchise store rather than an owned and operated store boutique.
The new store was opened by DM London, the watch company that also owns The Watch Hut and The Watch Gallery. The company was the first to open a Rolex boutique of this kind in the UK and has since paved the way for a similar venture in Leeds, which is run by Cottrills, owner of Prestons of Bolton.
DM London chairman David Coleridge explains that the idea of running a Rolex boutique in the affluent Knightsbridge area of London seemed like the perfect way to aid DM London’s expansion. “Strategically as a company, two years ago, we targeted two areas for expansion,” he explains. “Those were Rolex and online sales.” While online sales have certainly followed through the likes of Asos, for which DM London provides a watch offer, the Rolex store also came to fruition and opened with a fanfare in July.
In Yorkshire Karl Massey, the group managing director of retailers Cottrills and Prestons of Bolton, has overseen the two retailers’ expansions with a view to both a large-scale Rolex shop-in-shop space at Cottrills, and a new licensed Rolex boutique in Leeds, which is set to open on June 2.
“When we became aware that there was an opportunity to open with Rolex in Leeds I approached the managing director of Rolex UK, Richard de Leyser, to express our enthusiasm and then set about locating a suitable property,” explains Massey.
The new boutique is an expansion under the retailer Prestons of Bolton which itself houses a Rolex room in-store, as well as brands such as Omega, Breitling and TAG Heuer, and will be dual-branded as Rolex at Prestons.
Massey explains that, when it comes to working with such a luxury brand, there has naturally been some regulations to follow to ensure that the brand’s message and styling is perpetuated globally.
“Rolex have very specific guidelines and we worked closely with their design team in Geneva through our London contact to ensure that these were followed,” he explains.
The new Leeds store will feature Rolex’s “global corporate identity” but its dual branding has meant that Massey and his team have had the opportunity to request specific design features. So, says Massey, “it has been very much a collaborative exercise”.
Within such collaborations Rolex offers a number of approved contractors around the world for the supply of its shop furniture, however items such as the wood veneer panelling it has in the store can be made by companies of the partners’ choosing, but naturally have to fit with styles and colours typical of Rolex’s global store design guidelines.
Luckily for Massey, such work has been undertaken previously. Beyond the Rolex room at Prestons of Bolton, the company’s sister retailer Cottrills, based in Wilmslow, Cheshire, has also ventured into the world of large-scale Rolex areas, albeit a supersized shop-in-shop space.
For the space at Cottrills, which appears as a separate shop from the outside but can be accessed through the Cottrills store, Massey hired Yorkshire-based company Spa Laminates, a specialist in veneer panels that has also worked with the likes of luxury fashion brands Tom Ford and Paul Smith.
Spa Laminates worked with Massey, designing in strict accordance with Rolex Geneva’s brand guidelines. Such must-haves included the use of a lacewood veneer featuring a “strong horizontal grain and a flecked grain feature that should resemble snakeskin”. Lacewood is one of Spa Laminates’ specialties.
Cottrills also had to ensure that all veneered wall panels matched perfectly and met stringent colour and grain profiles with tolerances of less than a millimeter.
Likewise any glazed walls or illuminated display had to be framed with perfectly aligned veneered panels, which were themselves used to divide the spaces and create zones within Cottrills, allowing the watches to be viewed from three sides.
Coleridge’s experience echoes that of Massey’s, explaining that the store was jointly designed with Rolex, to its worldwide design guidelines.
But while the process of overseeing a luxury branded store has a number of standards to adhere to, for Coleridge one of the biggest and most important investments has been the time spent on staff training to ensure that all of its Rolex boutique sales associates are confident with the product at hand.
“The key investment in time is the staff, ensuring they have the knowledge and ability to present the products,” he said.
In terms of monetary value, Coleridge adds that a great deal of cost has been spent on Rolex stock, with the Rolex boutique at One Hyde Park housing about 600 timepieces.
“We have the largest stockholding of the product in the country giving customers the widest possible selection,” he explains. “We purchase it outright.”
The impending Rolex at Prestons space will house about 250 timepieces, with a mix of designs and styles to suit the varying clientele in Leeds.
“We have ensured we have available a comprehensive collection encompassing all of the Rolex Oyster models for both ladies and gentlemen,” says Massey. “Of course over time trends will develop and it may be that in Leeds white gold proves to be more popular than yellow or that Explorer II is a better seller than GMT Master II. We will wait and see with interest.”
In London Coleridge has tailored the collection to fit with the affluent shoppers coming to the area, including those from the Far East, Russia and China. “There is a very strong demand for the more unusual pieces, particularly diamond embellished and special dials,” he reveals.
While Rolex has declined to comment on its activities in the UK with a view to past or future franchises, these two examples show that there is scope for other retailers to seize an opportunity or approach the brand about opening a dual-branded or franchised store. Locations such as Cardiff, Edinburgh or Birmingham could be seized upon by savvy retailers looking to work more closely with the luxury watch brand.
And would Massey or Coleridge consider opening a second Rolex store? “Today no, but who knows for the future,” says Coleridge. Meanwhile Massey – who will open the Leeds venture in the summer – says that he has no solid plans but “would always look at an opportunity if it arose”.
And what about other luxury brands? In a sector where competition exists between different watchmakers, should retailers be aiming to please all their partners and should other brands be sitting up and taking note of Rolex’s innovative expansion techniques?
Patek Philippe, for example, is already well underway with similar operations, but is focused on doing so outside of the UK. It owns three standalone stores that are owned and operated in-house – one in Geneva, one in Paris and the third on New Bond Street in London. However it also has about 20 Patek Philippe boutiques that are run in partnership with distributors or retailers. In China, for example, two Patek Philippe stores are operated by the brand’s distributor Melchers, while the Zurich Patek Philippe boutique is run by jeweller Beyer Chronometrie and the one in Milan by Pisa Orologeria.
Would Coleridge of Massey ever be tempted by other fine watch brands? Massey is far from enigmatic with his view. “We work very well with Rolex and I’ve no plans to open a standalone store with any other brand,” he says.
Coleridge on the other hand is ever a man on the lookout for a new or exciting venture in the UK watch market and notes that several brands “clearly have ambitions to have stores in the Bond Street vicinity”, but says he is not yet planning to make any more franchise deals right now. “Everybody needs long-term objectives for [a franchise] to be a success,” Coleridge offers. “One Hyde Park has been exceptional; it is one year old this week, and in the first year it has achieved the sales target set for its third year – this is the exception, not the rule.”
While franchising of luxury watch brands’ stores is relatively new territory, the success of the Hyde Park venture shows that successful deployment of such boutiques can offer fantastic results. And as leading brands shift retail strategies to favour single-brand stores, franchising is a way to expand in this manner but without cutting the independent retailer out altogether. While brands loose a small portion of control by doing this, what they gain in independent retail partners is ready-made local experts that must surely make such strategies worth serious consideration.
This article was taken from the May 2012 issue of WatchPro magazine, out now. To view a digital version of the magazine click here.