(Bloomberg) -- Roger Dubuis, whose watches cost an average of $60,000, is shrugging off a slump in Swiss timepiece exports to the U.S. by pushing ahead with a North American expansion.
The 21-year-old brand, part of the Swiss Cie Financiere Richemont SA luxury-goods group, opened its first retail store in New York in November and is planning additional locations in major U.S. cities such as Los Angeles and Miami, said Chief Executive Officer Jean-Marc Pontroue.
The move comes at a difficult moment for the timepiece business. Swiss watch exports posted the biggest drop since 2009 in the first quarter, according to the Federation of the Swiss Watch Industry. Shipments to the U.S., the world’s second-largest market for Swiss watches, dropped 33 percent, while they fell 38 percent in Hong Kong, the No. 1 market.
Against that backdrop, building the luxury brand in the U.S. is the division’s major priority, Pontroue said in an interview in New York at the TimeCrafters trade show.
About 45 percent of Roger Dubuis’s business comes from Chinese consumers, including tourists. While Chinese tourism has dropped, hurting sales, Pontroue said 70 percent of the brand’s business in the U.S. comes from Americans.
“That’s where our growth will come from in this country,” he said.
Richemont doesn’t break out sales or profit for its watch brands, which also include Cartier and Piaget. Mario Ortelli, an analyst at Sanford C. Bernstein, estimated that Roger Dubuis has annual sales of 50 million euros ($56.7 million). Roger Dubuis, whose brands include its best-selling Excalibur line, Velvet and Hommage, has been hurt by sales declines in Europe, Hong Kong and China, Ortelli said.
Because Roger Dubuis has only a small presence in the U.S., any sales growth there won’t “offset the weakness in the core markets” in Europe and China, Ortelli said.
The New York store on Madison Avenue, its 25th global outlet, is a testing ground for expansion in the U.S., Pontroue said.
“Building a brand takes time,” he said. “We need to make sure it works before we go to the next stage.”
--With assistance from Corinne Gretler To contact the reporter on this story: Stephanie Wong in New York at firstname.lastname@example.org. To contact the editors responsible for this story: Nick Turner at email@example.com, Mark Schoifet
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