Prestons, with boutiques in Wilmslow, Guildford and Leeds, sells only watches from Rolex, Tudor and Patek Philippe; plus pre-owned. It is a hyper-focused operation on selling the world’s most desirable timekeepers that aims to stay on top by deepening its relationships with these key brands and their customers. A Rolex-only boutique has just opened in the upmarket Victoria Gate mall in Leeds that sets a new standard in selling the world’s biggest brand, and WatchPro was given a tour by Prestons managing director Karl Massey a week after the ribbon was cut.
WatchPro: What can you tell me about your brand new Rolex monobrand boutique in Leeds?
Karl Massey: The store is located in Victoria Gate, which has been open for around three to four years. Victoria Gate is not like a shopping centre, it is more like an upmarket mall leading to John Lewis, who are the anchor tenant.
We have been in Leeds for seven years and been very happy in Commercial Street, but we started looking at relocating last year because the street had changed. It has been a magnet for jewellery and watch customers but had become quite crowded with other brands.
We wanted somewhere more selective and we got the opportunity to move into Victoria Gate because Aspinal had taken on a unit that was a little too big for them and they wanted to move out. We found out about that and we took their lease over along with the unit behind theirs to make it a little larger.
WP: It is important to understand the geography of Leeds city centre to appreciate the significance of moving your Rolex store from Commercial Street to Victoria Gate. Effectively, the entire shopping district of Leeds runs from the top of a hill where you have the railway station and Trinity shopping centre all the way down to the east with John Lewis at the bottom. Trinity, Victoria Quarter and Victoria Gate are indoors while the rest of the shopping district, including Commercial Street up near Trinity are pedestrianised outdoor spaces. It really is a fantastic city for shopping with its mix of historic and modern spaces and you have moved to the most gleaming, modern mall that gets lower footfall but is more exclusive.
KM: Commercial Street has multiple retailers including H. Samuel, Ernest Jones and Beaverbrooks who know their mass market, Chisholm Hunter is moving in there too and you have Berry’s offering their various brands. It is a destination for watch shopping, but when we opened the unit in 2012, we were the only boutique on Commercial Street. Since then we have had Omega open to our left, TAG Heuer to our right, Longines over the road, Breitling down one door, and all the other watches in the multibrand windows.
We felt it was time to move somewhere a little more upmarket for Rolex.
WP: You represent Rolex in Leeds and Berry’s does Patek Philippe. Very often one business represents both so is the split good for Leeds?
KM: I do not think it is a problem. I would like to have Patek Philippe in Leeds and they would certainly like Rolex. They are the two brands that every retailer in this industry aspires to, there is nothing to touch them.
I have them both in Wilmslow, along with Tudor, and that is ideal for me. Those are the only three watch brands I work with across Wilmslow, Leeds and Guildford.
WP: You moved ahead of the market by rationalising the number of brands you worked with to just Rolex, Tudor and Patek Philippe. The rest of the market appears to be heading in the same direction now with retailers and supplier working together to give more stock and better presentation to a smaller number of brands.
KM: The logic was there for me several years ago. A lot of retailers have an underlying fear that if they drop a brand then somebody else will take it and steal their customers.
That has never bothered me. I just wanted to devote as much space as I could to the two main brands I have. Also, we have really lovely stores in Wilmslow and Guildford, and I am not going to be pressured by another brand to put a small corner in.
In Wilmslow I have a store design that is beautiful and it flows from Patek Philippe’s space into Rolex but it is a Prestons store people are walking into. That is really important to me. It is not just a multibrand store.
Opening a store and throwing in eight corners does not make luxury. It makes a big box full of brands, and that is not what we are about.
WP: At the end of the day customers will decide whether they want to see many brands together in one place or far fewer with more space as you prefer. But regardless, there is always pressure from the brands who want more space in the best locations.
KM: I cannot really comment on what other brands want or do, but I have never been pressured by Rolex or Patek Philippe to do anything I do not want to do. Giving so much space to Rolex in Wilmslow was entirely my idea. The shop next door became available and I went for it. I wasn’t asked or told to do it.
The whole retail sector has changed. If I go back 30 years, I would be in a multibrand shop with Rolex, TAG Heuer, Omega and one or two others. A couple might come in and the man would say they were looking for watch for his wife. They were not brand specific. Nowadays, a lady might come in knowing exactly what she wants, including what reference. The whole browsing for any watch has gone. People know exactly what they want, which is down to the rise in social media and all the information online.
Brand boutiques look great, but they have to work commercially, and I do not think I could run a monobrand boutique for any other brand than Rolex or Patek Philippe if they wanted to, but they have their own beautiful boutique on Bond Street. I cannot see it working commercially for any other brands.
If somebody comes in for a Rolex, I would not consider showing them any other brand, even if I had them the same goes for Patek Philippe.
WP: Is there any way as a customer to know what watches are available at any particular Rolex or Patek Philippe dealer before they come in?
KM: No. They can ask by e-mail or telephone, and many people do. Most professional models today are waiting list products. Even more mainstream watches like DateJust 41 models sell out in steel. People will travel to find them.
WP: So the infection of wait lists is spreading deeper into the Rolex catalogue?
KM: [laughs] I would call it infectiousness, not infection. Thirty years ago a Daytona in steel was the only model you could not buy and would have to wait for. Everything else was in the window. It was not until the last few years that it has gone whoosh.
WP: I was visiting John Robinson, managing director of David M Robinson, in Manchester last month. He says he has two full time staff tied up answering phone calls and e-mails from people asking about Rolex and Patek Philippe models they cannot find. It is an expensive business taking calls to explain to people what they cannot have.
KM: We also have people in each store responding to inquiries as they come in. We are a little different to John because He has more stores in more city centres, but we face the same challenge.
WP: The point he was making is that flippers are an organised army these days that are desperate to get their hands on the rare Rolexes, and they are costing him time and money.
KM: We get a bit of that as well, but we qualify people by asking where they are calling from. If they are calling from Liverpool, where we do not have a store, we suggest they try their local retailer. We only sell the most desirable product to people we know that have bought before. And we also withhold the warranties for two years to protect ourselves from them being flipped. Nobody objects, and if they do it is because they have the wrong intentions.
WP: There appears to be no sign that demand is softening at all, or that the current shortages are doing any lasting damage to the brands. So I suppose it is a good news story for Rolex, Patek and their authorised dealers, and if the brands could increase the supply a little bit, things would just get even better.
KM: People that get the most frustrated are the people that could have bought the watches they want now quite easily a few years’ ago. The fact they cannot get them today just makes them want them even more.
WP: Is it now impossible to buy these watches or even get on a waiting list of reasonable length?
KM: Relationships are important. Anybody coming in fresh of the street asking for a steel Submariner is competing with regular customers that might already be on waiting lists. It is very difficult for them. There is no easy answer for them.
WP: How does allocation work among Rolex authorised dealers? Is it mapped out for a whole year at Basel or is it adjusted on the fly?
KM: Each store is given the number of watches that are going to come through in a whole year, so we will know the number of Submariners and Daytonas we are going to get in a year. It is then managed at store level, not through me centrally. The phasing of deliveries is known for a full year.
We don’t get everything we want, of course. We sit with Rolex at Basel and tell them what we think we can sell, and they then tell us what we are going to receive. I am not personally the person that gets deep into those conversations so I am not the best person to give you the details of how it works.
WP: You have said you design your stores to be first and foremost Prestons stores. Do you ever worry that having all your eggs in the Rolex and Patek Philippe baskets by only working with two companies? Are you comfortable handing over so much control of your business?
KM: I worry all the time but you have to have the trust. I have worked with Rolex for 30 years and with Patek Philippe for 16 years. Both the companies are run by super people in the UK from the top downwards. I have met the people in Geneva as well. There is always a risk, but it is a risk I am happy to take and it does not give me sleepless nights. We also focus very hard on our jewellery and our pre-owned watch collection so it spreads the risk.
WP: I consider the UK market to be among the strongest in the world for watches because we have great multiples and equally strong independents competing for the brands and competing for customers. The way Rolex and Patek have managed to maintain a balance between working with all the right retailers in every part of the UK has been instrumental in their success and largely down to the strength, depth and stability of their leadership.
KM: You are right. Watches of Switzerland Group have done a great job over the last 10 years compared to where they were. And then you have the family groups that have transformed themselves as well. Look at Pragnell getting the agencies in London. That was a masterstroke. John Robinson has done a great job at DMR. The decision to open in Canary Wharf was really bold, and it has come good for them. We look at the people around us and many of them do it really, really well.
WP: Competition in this country has driven up standards so that, unless you are investing at the same level per square metre as a Watches of Switzerland, a Boodles or a Pragnell, you are going to backwards. Against the quality of this competition, what has Prestons done to keep pace and nudge ahead in some areas?
KM: We are opportunistic and adapt. I love store design; that is my thing. I came from a very small jewellery background 40 years ago and to be able to open the stores we have today when I am still in my fifties is fantastic. I have the desire and passion for it, but I also act where I see opportunities. There are limits to what a small to medium sized business like Prestons can do, but making the right moves at the right time is the key.
It is also about getting out at the right time. I sacrificed Bolton, which had been very good for me in many ways, but I got to the stage three years ago when I did not need it so I closed it. That was a good decision. It was an amazing store, but it did not fit with our vision. I bought it out of administration in 2004 and closed it at the start of 2017 having made the decision to surrender Rolex in 2016. A lot of people do not do that, they feel the need to hang on.
WP: Few people have as much experience at closing stores as you do because you have a significant business specialising in helping business owners when they are looking to retire or are forced to close shops.
KM: The reasons people come to us are mainly that people want to retire but cannot sell the business, or they have lost a major brand and that makes the business no longer viable. What we do is market and promote a closing down sale with the goal of liquidating as much money as possible that is tied up in stock.
We finished one recently in a small town outside Preston called Longridge. The jeweller had been run by a husband and wife team for 30 years. They had a great reputation locally and were turning over £200,000 to £250,000 per year and just about making a living but they wanted to retire and it is almost impossible to find anybody who would buy the business. There are no buyers out there, so they came to me and we helped them generate sales of £800,000 in eight weeks.
The market has made it important that consultants like us can help family-owned jewellers like that. We have just completed our 32nd project in three years and we have two more coming up.
WP: From your vantage point you see how tough things are for these smaller shire jewellers. What would you say are the greatest causes of distress?
KM: The biggest thing is Pandora. It started life in these small shops and then moved to better shops and finally moved to franchised boutiques. These small jewellers were losing 70% of their turnover when they lost Pandora and there was nothing to replace it.
WP: What is the watch market like for jewellers at that Pandora end of the spectrum?
KM: You tend to find residual stock of watches at the low to middle end price points and we clear them through. The only stock we inject on consignment is quality diamond stock, not watches.
WP: What is the secret of thriving in the current market? How much is it about having the right brands?
KM: At our level it is about the retail experience. For example, we have been hosting a fireworks display at our Wilmslow store for five years. It started out small, but now it is a huge event with a themed play, music, a massive firework display, champagne and food. Customers love coming to it, we don’t try to sell them anything, we just give them an experience.
Luxury retail encompasses so many things from the individuality of the store to the people to the fresh flowers. Everybody is putting bars in shops these days, but that really is not the answer. Serving Moet champagne is a nice touch, but that is not enough. It has to be an all-encompassing experience.
We are very fortunate to be in the Rolex and Patek Philippe bubble — not the kind of bubble that bursts, but a bubble where everything is different on the inside compared to the outside. I would be a bit twitchy if I were outside the bubble doing business with other brands. If Corbyn got in I would be even twitchier.
WP: John Robinson told me that he has around 70 bits of information about everybody he invites to his DMR events. Is that the level of detail you go into?
KM: We do not have that. We know who we are inviting and what they have bought. We believe they like coming. But we do not know that a guy’s wife likes wearing yellow. I think John must go deeper than we do.
Our website is another area where we have made a huge investment. If you go to Prestonsdiamonds.co.uk, you can see the quality of the site, but you cannot buy anything online. It is designed to draw customers into stores. The minute you put ecommerce on a website, it tends to look crap. Ecommerce sites are always promoting discounted stock, but we are a luxury retailer. We want people to come to our stores.
WP: Market data is showing that ecommerce is not growing for watches in the UK.
KM: I buy bird seed online because I do not want to pick it up and carry it around. If I am buying something special for myself or as a gift, I want to try it on. It is not like a dress where you buy it in three different sized and send back the two that don’t fit.
We tell our watch brand partners that we do luxury well, and our website does luxury well. For me, that means bringing people to stores, not selling online. Ecommerce is driven by price and convenience; that is not luxury.
WP: Do you worry that your website is engaging in fake advertising because I will go on there and see every Rolex and Patek Philippe watch displayed and the site, as you say, is designed to encourage people to come into your stores. But we know that in very many cases, the watches being advertised are not available. Does that not detract from the luxury message you are describing because it erodes trust?
KM: There is a disclaimer at the bottom that says watches on offer are subject to stock availability.
WP: And I am sure you hoping nobody reads that. Is it not technically possible to show live information on what is available to actually buy? On some sites, a watch could either be bought immediately, and it will say “add to basket”, and with other watches it will say something like “enquire in store”. That seems a little more transparent than what you are describing.
KM: We did a pilot with Rolex about four years ago that looked into real time availability of stock at our stores. We made it work, but it was a monumental effort to have all our product availability displayed in real time because the system had to be linked to our tills. It was ultimately deemed as too challenging to roll out because we stopped doing it six months after we started.
We felt very clever but it did not sell any more watches. We are doing better now than we did then.
WP: If Rolex told its authorised dealers that the price of keeping the account was investing in that sort of system, then I assume you would get on and make the investment.
KM: Rolex decided not to go that way.
WP: Today’s customers expect to know about availability when they look online. For example, if I shop at Amazon it will give me options on when I would like products delivered. That can only be done if they have perfect oversight of their inventory, and Amazon has millions of products. I am pretty certain if Amazon were a Rolex dealer, it would have real time oversight of its stock.
KM: We are not Amazon. It is an amazing business but what we are trying to do is sell the finest product in the best way for the customer. They get the proper store experience, they get the relationships with knowledgeable salespeople. I do not want to be posting diamond rings that I have sold online to somebody I have never met.
WP: I understand that, but I am being quite specific about the point of what customers expect when they are doing their research online. Every one of your customers will also be an Amazon customer, and their expectation is that when they see something advertised online, they can find out how quickly they can buy it. Right now, that is not something you or any other Rolex or Patek Philippe authorised dealer is offering.
KM: Fifteen years ago, we were sending out catalogues from our stores offering Rolex watches that might not have been available. We do the same today but it is a digital catalogue. It is not saying that we have these watches for you to buy now.
Am I frustrated? No. I pinch myself every day that I am in this position as a retailer.
WP: I have to say that when I just walked into your new Rolex store here in Leeds to meet you, I found a happy man. Tell me about how you brought it to life
KM: I am a happy man. I am proud of that store. It took us six months from the point at which we gutted the old store and completed it as you see it today.
We worked with Rolex in Geneva on the design. We sent them the footprint and images of the store as it was. They then came up with the design and we never even tweaked it because we were so happy with what they came up with. We love it and the response from customers has been knockout.
WP: You have been open only a week and have had the official launch party. How has the store performed since then and has it met or exceeded you expectations?
KM: I did not really know what to expect. I have seven years’ experience in Leeds, six months as a solus retailer of Rolex in Leeds, but this has taken us to a completely new level.
WP: The perceived wisdom in Leeds has been that Victoria Gate is too far down the hill away from the city centre and it does not get the footfall. Were you worried about that and moving away from such a high traffic area as Commercial Street?
KM: I was never concerned about the location. I thought it was a quality retail environment that was lacking an amazing store. I think having our Rolex boutique there will transform the centre over the next three years and allow the owner to market its units to a different level of retailer or brand.
WP: I could not agree more. You have done the owner of Victoria Gate a huge favour opening with Rolex there.
KM: I know. It is bringing the right customers to the mall. If you were buying a Rolex, would you rather be going to Commercial Street to a nice unit, but a small unit, or would you rather go to the most beautiful mall and our brand new boutique? Nobody could describe Commercial Street as the Bond Street of Leeds. It is too much of a mix. With Bond Street you have luxury stores one after the other. Commercial Street is a mishmash of jewellers.
WP: Are you keeping the old unit on Commercial Street?
KM: I am, and have signed a new lease. I am going to retail all our pre-owned watches there and fine jewellery. It is small and cost-effective and I can move my trade-ins. The pre-owned watch market was always less respectable but that is changing with big players like Bucherer getting into it. Brands like Cartier and Audemars are looking at it. If I was a customer, I would want to buy a pre-owned Rolex from a business that is also an authorised dealer and has the service centre.
We currently have pre-owned watches selling in Wilmslow and Guildford, but I am taking them out and putting it all into Commercial Street with a big eye-catching window display. It will be a beautiful Prestons store with new marble, new furniture and decoration. The only thing staying is a fantastic staircase and chandelier, which we had put in. It could not resemble its previous use.
WP: Your Rolex boutique could alter the centre of gravity when it comes to watch boutiques in Leeds. They could all be drawn into Victoria Gate because it is a more luxurious environment than Commercial Street.
KM: It could happen. I do not think Commercial Street will change any time soon. People do well there, it is a good location.
WP: How much is the current economic and political situation in the UK affecting the high street and retailers like Prestons?
KM: We are very fortunate to be in the Rolex and Patek Philippe bubble — not the kind of bubble that bursts, but a bubble where everything is different on the inside compared to the outside. I would be a bit twitchy if I were outside the bubble doing business with other brands. If Corbyn got in I would be even twitchier. I do not think we can have another referendum on Brexit; that would be an insult to the electorate, so I just want it done.
WP: How does the whole Prestons empire look today, and where are you looking to take it in the next year or two?
KM: Leeds is the current project and that is finished and trading. We then reopen Commercial Street in December as fine jewellery and all our pre-owned watches. We then move onto Wilmslow, where we are doubling the size of our Rolex room, and then in June we start work in Guildford where we are relocating across the road into a bigger unit. The new Guildford store will be four or five times bigger, spread over two floors. It will have a lovely frontage with character.