American jeweller, Manfredi Jewels, which has stores in Greenwich and New Canaan, Connecticut, was closed for two months during the covid quarter. Despite the shut down, the business’s owner Roberto Chiappelloni says trading has already bounced back to pre-pandemic levels and the experience has left him more convinced than ever that multibrand physical stores remain critical to the success of the luxury watch industry.
Greenwich, Connecticut, has long been a favorite town for Wall Street’s masters of the universe. It is just an hour’s commute, but its leafy avenues, seaside location and surrounding countryside are a world away from the towering intensity of lower Manhattan.
But on a visit to Greenwich just weeks before stores started to be closed across the United States by the pandemic, WatchPro was told by Betteridge CEO Terry Betteridge that the town had been hollowed out of its wealthiest residents by a progressive cranking up of taxes on the super-rich that drove them to warmer and more welcoming jurisdictions like Palm Beach in Florida.
That drain has not exactly been reversed by Covid-19 — nobody has been flying from Florida to ride out the lock down in the northeast — but a new cohort of New Yorkers have been pouring out of the city into Long Island and Connecticut, where they have taken up permanent, or at least semi-permanent residence.
One block up Greenwich Avenue from Betteridge is Manfredi Jewels, a luxury watch business created by CEO Roberto Chiappelloni in 1988.
There are two Manfredi showrooms in Connecticut, the flagship in Greenwich is an emporium of haute horlogerie offering more than two dozen watch brands, many of them low volume independents like F.P. Journe, Voutilainen and Ressence, that make fewer than 1,000 watches per year. The other, a Rolex-anchored boutique is 15 miles away in New Canaan.
Both boutiques have benefited from New Yorkers escaping the city during the pandemic, not least because Connecticut has opened up its economy and society far more quickly. While much of New York City remains shuttered seven months after Covid arrived, Greenwich was locked down for only two months and its non-essential stores were back up and running on May 20.
Mr Chiappelloni is full of praise for the way Greenwich governor Ned Lamont led the response in March and April with support for businesses that allowed Manfredi to keep its entire staff employed, and then the way he acted quickly to get the economy moving again by allowing stores to reopen.
“The biggest blessing was that our governor had the wisdom to see that, with the proper precautions, our stores could reopen. That was amazing because trade immediately went back to the level of before the pandemic,” Mr Chiappelloni told WatchPro in October.
His gratitude for the governor’s response is palpable, not least because the early days of the pandemic were so challenging.
In the very early days, Mr Chiappelloni paints a picture of spending time alone in his deserted store on Greenwich Avenue, contemplating what was coming next. “It was very unsettling. It was a bit scary. Everybody was reacting differently. Personally, I only stayed at home for one day during the lock down, but I was very cautious and respectful of other people’s space. I would come in through the back door of my building and walk around in my empty store and try to make sense of it all,” he describes.
Manfredi might be benefiting from New York’s ongoing challenges, but Mr Chiappelloni is looking forward to the day when the city gets back on its feet. “My God, New York has hardly reopened, what with the pandemic and all the demonstrations, they are tied in knots. I pray New York gets moving again. I do not want to get into politics, but it is very simple. We are half an hour away from New York, here in Greenwich, and it is a different world. People are smart enough to come in out of the rain. Advice is out there that you need to follow certain guidelines to stay safe, and that is what people are doing.
“We need New York back. We need the restaurants, the theater, life to return. We cannot live like it is the dark ages. I am not exaggerating. I had a doctor’s appointment in June in New York City. I had some time to kill so I walked from 50th Street to 90th on Madison and it was so depressing that I could not wait to get back on the train to come home,” he describes.
The two months Manfredi stores were closed was tough, but the business was well-prepared thanks to a record-breaking performance in 2019. “Last year was amazing. We were ahead 18-20%. The entire US economy was strong and we had almost full employment. Stock market was at a record high so pension pots were full,” Mr Chiappelloni recalls.
Business support from Greenwich authorities allowed Manfredi to keep its whole team employed, even though they could not come into the stores. They kept in touch with their best clients, ensuring they had the chance to buy pieces for special occasions, and kept ecommerce sales turning, albeit slowly. “This did not really amount to enough to sustain our business. We got through it because of the assistance from government and the healthy position we were in ahead of the pandemic,” says Mr Chiapelloni.
Sales may have slowed to a trickle in April and May, but the town around Manfredi was filling up, according to Mr Chiapelloni. “Almost immediately after things escalated in New York, it sent a flood of people to Connecticut because the message was that we would keep schools open and try to function. For a while we saw real estate prices on fire,” he describes.
Starved of the opportunity to eat out at fine dining restaurants or travel to hotspots across the country and abroad, these new Greenwich residents were desperate to cheer themselves up with a bit of retail therapy. Manfredi was primed and ready to serve them.
“As soon as we reopened, we noticed that half of the people coming in were people we had never seen before. The conversations were all about how they had moved out of New York City and they had rented or bought in Greenwich. They were able to work from home and keep their lives as normal as they could,” says Mr Chiapelloni.
“People were queueing at our door because they wanted to taste normality again. They wanted to buy something that marked the celebrations that had happened during lock down.”
Many chief executives in the luxury watch business have described a burst of activity once stores reopened, and business has remained comparatively strong since because of pent up demand and also thanks to people shopping with more purpose. The theory goes that, if you are going to venture out into the covid-ridden streets or shopping malls, you had better make it worthwhile.
Conversion rates have gone through the roof, WatchPro is frequently told.
“I am seeing strong momentum continue,” agrees Mr Chiapelloni. “We have had one of our busiest Junes, Julys, Augusts, Septembers and it looks like it is continuing into October. My staff and I are prepared to have the best inventory we have had in years. We just finished the expansion and renovation of our Greenwich Avenue store. Both stores are in perfect shape for a very strong holiday season,” he adds.
Demand is so strong that many of the brands Manfredi works with cannot supply enough watches.
“We have incredible brands like Voutilainen, Parmigiani, Laurent Ferrier and F.P. Journe. Most people have not even heard of these brands, but because we have always had these rare grail watches throughout our history, our clients seek them out with us,” Mr Chiappelloni describes. “Right now, if you look at my François-Paul Journe cabinet, there is not a single piece in there, and next year’s production is already pre-sold with deposits paid. I do not have a single Grönefeld in the store, I have maybe one Voutilainen. It is really a very interesting dynamic what is happening right now.”
These independent brands are having a golden moment right now, with demand far greater than supply. This is causing prices to rise at auctions, which is fueling desire even more. They are not the sort of watches that tend to sell online with a picture and a price, according to Mr Chiapelloni, which is why he remains such a strong advocate for brick and mortar stores. The pandemic, he suggests, has only made the importance of face-to-face contact between retailers and clients even greater.
“I think there will be more confidence in brick and mortar. People have been so scared about investing in physical stores in recent years. They thought a picture and a price was going to be enough, but the industry is discovering how limited ecommerce is for luxury watches. There is no substitute for the many professional jewelers we have in America. We do not say no to anything our clients ask of us,” he says.
The major luxury groups have been burned more than most as covid wildfires have ripped through the world’s greatest city centers of New York, London, Paris and Geneva. It is tough enough at the best of times to make a profit from the most expensive retail streets on the planet, but in periods of lock down, and with continuing travel bans keeping high-spending tourists away, the boutiques of 5th Avenue, Bond Street and Place Vendome are cripplingly expensive liabilities.
Mr Chiappelloni has little sympathy. “They have tried to run their own boutiques and most of them failed miserably. They wanted to have it all, but maybe they cannot,” he says.
The greatest brands in the world, such as Rolex and Patek Philippe, work in harmony with the best multi-brand retailers. “Look how successful Rolex is, that is because they deliver more than they promise. Great customer service, product that is priced right, innovation. That is what makes you successful. It is not making boutique-only models that they expect to pay the rent,” Mr Chiappelloni scoffs.
He is also dismissive of brands trying to sell luxury watches to consumers through their own websites. “I am not saying ecommerce will not continue to grow. There is a place for it. Brands should use digital to market their watches, but when people want to buy a watch, they should be encouraged to go and try it on in a store like Manfredi where they will get the full service,” he urges.
Looking forward to 2021, there is still enormous uncertainty how the world will adapt if a vaccine or cure are not found for covid. Mr Chiappelloni speaks about his hope that the big Swiss watch shows will go ahead. He is gloomy that the events had to be cancelled this year, not least because he was planning a grand tour of Europe with his wife to celebrate their 25th wedding anniversary.
He remains an optimist that the world will find a way back to normality and the joy that will bring. “The glass is always half full for me. My feeling is that we will have a vaccine that will be proven to work and therapeutics that will give people confidence that they can get back to their freedoms. Our industry will have a strong holiday season, and after that we are going to have an amazing 2021,” he predicts.