The fashion watch explosion

For the accessories market, it was a timely introduction. When Swatch Watch USA unveiled its plastic quartz watch in 1983 — selling for $25 to $35 — the Swiss firm started a revolution.

Now literally dozens of companies in the U.S. and abroad are aggressively trying to carve out market share in what is being called the “fashion watch” market — an amorphous category that covers everything from low-end imports, with a splash of color on the face, to sophisticated graphic pieces that have become a showcase in better department stores.

The key players have become the accessory industry’s vanguard — entrepreneurs who depend on sharp marketing techniques, imaginative promotions and advertising and a constant injection of new styles to insure the area’s longevity. No one knows how large the market is nor its potential, since even the traditional watch makers have begun adding their version of fashion watches to their lines. Estimates of total wholesale volume from executives run the gamut from $100 million to $300 million, and that number grows daily.

But even Swatch Watch did not have an easy time of it at first. Looking to rebuild Switzerland’s position in the watch market — having suffered serious incursions from the Far East — Swatch (a combination of “Swiss” and “watch”) set out to capture the lower end, which had been virtually untapped by the Swiss. The watch, test marketed in the U.S. through traditional watch channels, was made of plastic, could not be repaired and sold at price points far below what watch buyers were used to.

As Swatch began approaching department stores, response was lukewarm and sell-through was initially soft. As Max Imgruth, president of Swatch Watch, said in an earlier interview, “We had to convince the fine lady accessories buyers that the watches were chic.”

The firm expects to sell more than three million watches in the U.S. this year, with total volume for the U.S. subsidiary breaking the $125 million mark, including its expanded group of accessory items.

Competitive firms are quick to give Swatch its due as the forerunner of the trend and will concede that it holds anywhere from one-fourth to one-half of the market share.

Yet they feel there is a department store place for them as well, and are striving to differentiate themselves from Swatch and attract their own following. Said Mort Gershman, president of Lorus Products, a well-established watch firm that recently added a fashion line: “Swatch is a significant part of the market, but I don’t think it creates the same hysteria in areas outside of New York, Los Angeles, Chicago and Florida.”

While Swatch has used its watch’s customer base to create an apparel tie-in, other firms, such as Fiorucci, Colours by Alexander Julian and Guess, have been able to capitalize on the success of their apparel to build their watch business.

The Guess line, which is marketed by The Callanen Watch Corp. here and has a wholesale tag of $21, claims to be second to Swatch in department store sales, doing $12 million in wholesale volume. Since the major fashion watch business is being done in women’s department stores, where Guess has a strong foothold already, the firm has a natural distribution outlet, according to Mickey CAllanen, president.

Callahen also introduced a lower-priced fashion line, under the Brooke label, which wholesales in the $13.50 to $17 range.

E. Gluck Corp., a watch firm based in Long Island City, N.Y., which claims to be second in unit sales in the U.S. to Timex, has brought out two fashion watch lines: Awatch, a plastic watch aimed at mass merchandisers, sold through the Armitron division; and Slinkys, a watch that comes with different color metal bands that resemble the “Slinky” toys, targeted to department stores. The Awatch wholesales for under $20, while Slinkys wholesale for under $30.

Overseas Products International, based in Texas and represented in New York by Discoveries, Inc., introduced a plastic watch called Linus Q for spring 1985 that came with four interchangeable faces, wholesaling for $18. Discoveries owner Dan Thurston, who was new to the watch business, was “totally freaked” by the positive response. The company also has introduced a fashion watch with a metal mesh band for $20 wholesale.

Timex is one of the traditional watch firms that has taken the “if you can’t beat ’em, join’em” route.

“There’s no rhyme or reason why these watches sell,” said David Rahilly, vice president of marketing and sales for the U.S. “Some of the dials are even hard to read.”

Nevertheless, in the fall Timex introduced its Watercolors fashion line. Rahilly conceded his company was late in entering the market. “We had not anticipated the enormous impact Swatch would have,” he said. Rahilly added that the Watercolors line, which wholesales from $9 to $13, will be expanded and that fashion watches become a “very, very important part” of the Timex line.

Even Swatch’s sister company in Switzerland, Tissot watches, has decided to take advantage of America’s appetite for the new and different. In the fall it launched The Rock Watch in Chicago and Boston — a mid-priced watch whose granite face was chiseled from the Alps.

Swatch, however, does not believe imitation is the highest form of flattery, and has at least 20 lawsuits pending against firms that it claims have violated its patent or used deceptive advertising exploiting the Swatch nme. In Imgruth’s opinion, most of the fashion watch firms “have taken advantage of our spearheading and have copied us in every respect.” He bitterly assails the lower-priced styles, in particular, saying, “Every piece of junk out there damages our image.”

Swatch’s competitors have their own bones of contention. Since Swatch’s policy is one of limited distribution, there is frequently not enough supply to meet demand, according to several executives.

“Swatch can’t deliver, and no stores have open-to-buy because it’s tied up with Swatch,” one watch company executive complained. Commented Imgruth, “It’s better than having too much merchandise and not being able to get rid of it. Stores have become too greedy; they want to maximize their business, we want to optimize it.”

One aspect all companies agree on is the necessity of continuously bringing out new looks to maintain the fashion excitement. As Callanen noted, “If we want to keep the business healthy, we need newness. When the counters start looking staid, business will go bad.” Many firms are coordinating their colors with ready-to-wear trends and introducing their collections in conjunction with rtw markets.

But, cautions Abraham Shafir, president of Oraflex, Ltd., licensee for Bonjour Watchwear, manufacturers must be extremely careful in their designs or they will have huge inventory problems. Timex’s Rahilly agreed, “I’ve heard many unhappy stories of competitors stuck with items like all white watches.”

The need for quick turns and for shallow inventories has been “a little alien to traditional watch buyers and somewhat disconcerting,” Rahilly noted. Said Shafir, “The old-time jewelry buyers have had the hardest time. They know they have to have a fashion watch segment, but they don’t understand the fast turns. While traditional watches may take 90 to 180 days, our types of watchescan be sold out in two weeks.”

Gershman, of Lorus Products, pointed out that a lot of basic watch buyers have switched their open-to-buy, hungry for those quicker turns. But, he warned, they could find themselves short on better goods for the holiday season, and they must remember “the margin on a $25 watch is not the same as on one costing $75.”

Unlike other accessories, fashion watches require little education from salespeople; customers do not have to worry about fit, merely price and looks. Consequently, a number of firms have begun offering displays that can act as “silent salesmen” for their merchandise. Some firms, such as Callanen, have borrowed merchandising techniques from other industries. Using cosmetics’ purchase-with-purchase strategy, Guess watch customers have been able to buy a Guess clock for $15 or a Guess calculator for $5. Companies such as Bonjour and E. Gluck have used television advertisements to call attention to their products.

While the momentum for fashion watches shows little signs of subsiding, several companies have expanded their accessories offerings beyond watches to embrace a lifestyle concept. Capitalizing on its watches‘ success, Swatch introduced an accessories line last spring that includes everything from umbrellas to sunglasses. This fall, it expanded further by bringing out selected apparel items. Imgruth said watches will continue to be emphasized, but he expects this year’s product mix to be about 55 percent watches and 45 percent nonwatch products.

Fiorucci recently introduced its accessories line, including fashion watches, which ties into its rtw themes. Watches, which are priced higher than Swatch, are expected to bring in 25 to 30 percent of overall volume.

Retailers are working with manufacturers to create boutiques within their department stores to group these items. Fiorucci has announced plans to open Fiorucci Time accessories shops in Jordan Marsh in Boston; Woodward & Lothrop in Washington, D.C.; Burdine’s in Miami; and Macy’s in San Francisco. According to Carlos Martinzez, president of Time Distributors, Inc., the exclusive agent for the shops, 500 in-store boutiques are planned nationwide by midyear.

Swatch is hoping to have 400 of its Swatch shops opened by the end of February. Its ingredients for continued success call for complete watch turnover at least every month, controlling the merchandise for each store it does business with and delivering against sell-through. “As long as we stay a sharp, innovative young team, we can keep ahead of any watch revolution,” said Imgruth.

The fashion watch category is as hot as it ever was.

A number of medium-priced lines of sport wrist watches are selling well in department stores. These include the Ann Klein, Ann Klein II, Fossil, and Guess lines, as well as licensed cartoon-character watches. Most of these watches are selling in the $20-$200 range, and some industry executives believe that sales are coming at the expense of higher-priced watches. In addition, Joe Boxer and Timberland will launch wrist watch lines in 1995.

And, according to industry vendors and retailers – a segment in which merchandise typically retails in the $20 to $200 range – brands are currently the biggest news of all.

According to a variety of retailers, brand names have become a critical factor in determining fashion watch purchasing patterns. In the meantime, the price issue, which heretofore had been considered paramount, has become less important.

Much of the action right now, stores say, is happening in the Anne KIein, Anne Klein II, Fossil and Guess lines, as wen as novelty-oriented licensed lines, Looney Tunes and Disney among them.

In addition, merchants say they are always willing to test new entries. Some recent brand-name newcomers cited by stores include Nautica, Liz Claiborne, Swiss Army Watches and Hugo Maxx. Balancing out this group is a slowdown in a few other brands, such as Swatch, which some stores said has not been performing up to par of late.

Watches are one of the more explosive driving forces for main floor business,” said Kim White, merchandise manager for watches at Federated Merchandising, the buying arm for Federated Department Stores. “We’re positioned for another year of tremendous growth.

“Consumers are now building a watch wardrobe for their varied needs – career, casual Friday wear, weekend, sport and young-at-heart looks,” White noted. “It’s hip to wear a Looney Tunes watch with an Armani suit.”

Guess and Fossil are anchor brands in Federated Stores, according to White. These are followed closely by Anne Klein and Anne Klein II, which are expected to grow even more this year as a result of the return to ladylike dressing.

Sportly merchandise has also been scoring big, White said.

“It’s still `Clinton Chic’ to wear a plastic sport watch,” she noted. “And the more functions the better.”

J.C. Penney is also going strong with its fashion watch business.

“While our growth may be slightly less than last year, we’re still projecting good double-digit gains this year,” said Don McKean, merchandise manager for fashion and better watches.

Business is coming from a combination of the big brand names as well as newer entries such as Hugo Maxx and even Penney’s own private label line, Arizona.

He added that although the fashion watch category continues to grow, this is probably to the detriment of the better segment of the market, which includes such brands as Seiko, Bulova and Citizen. This segment struggled to finish last year with flat sales, McKean said, and he expects that performance to be repeated this year.

Among big-brand vendors in the fashion watch field, most reported very healthy increases in 1994 and are projecting similar growth this year. They claimed increases averaging 20 to 50 percent for last year, despite the fact that Christmas sales came very late in the season. Many are particularly optimistic because of early reports of strong retail sell-throughs in January, traditionally one of the slowest months of the year.

“The launch of bracelets and metals last fall greatly contributed to our success,” said Mark Odenheimer, vice president for the Anne Klein and Anne Klein II divisions of E. Gluck.

Those categories will be further exploited this year and, he added, “We’re being very aggressive in terms of focusing on high-performing areas like interchangeable sets and classic strap business.”

Mark Shell, vice president of sales for E. Gluck’s Armitron division, which also includes its licensed Looney Tunes and other cartoon character lines, credits his products’ growth to a surge in items priced at retail in the $20 to $30 range combined with a rebound in sport business.

Armitron’s Instalite sport line, which has a dial illumination feature, will be expanded this year to include more casual lifestyle and rugged outdoor looks with leather, suede and metal bands retailing for $35 to $45, he said.

On the novelty side, the firm has created the licensed collection of watches for “Batman Forever,” the third feature film about the caped crusader, opening in late June.

Fossil continues its focus on brand name and image expansion as well as product diversification, according to Peter Benanti, vice president of marketing.

To fill out its core watch line, this year the company is adding two new watch collections – Defender and FSL – as well as a sunglass line.

“Geared to urban sport kids, we hope FSL will attract an untapped customer niche,” Benanti said.

“We’re looking at snow boarders, mountain bikers, surfers, skate boarders and rock climbers – those leading-edge alternative lifestyle consumers that demand functionality,” he noted. “We took the utilitarian trappings of this market and made it into fashion.”

FSL’s retail price range of $85 to $90 is slightly higher than that of the Fossil brand. The firm will begin shipping it at the end of May to leading U.S. sporting goods stores as well as department stores.

Benanti declined comment on the Defender line, saying only that it will be shown at the May accessories market.

Timex is coming off a particularly strong year in 1994, which saw the launch of its licensed Nautica brand. Two more licensed collections will bow this year. The Joe Boxer line will hit stores in time for the back-to-school season, with Timberland arriving for the holidays.

Justine Jennings, manager of fashion watches, said Joe Boxer is geared to the teen and young adult market – a new market for Timex – with retail prices ranging from $40 to $100.

She would only divulge that the unisex line would represent a “unique way of telling time” and noted that the name, while known to consumers, hasn’t “maxed out yet.”

Timberland will be directed to a more upscale element. With prices starting at $60 and going as high as $200, the collection is geared for active outdoor enthusiasts, according to Susie Watson, Timex’s trend analyst.

Unlike sport, which focuses on endurance and timing, Watson said the outdoor market is geared to multiple fabrications like waterproof leather and nylon combinations, with style rather than functionality being key.

“Timberland is a global name with a strong image, which we intend to support with a large advertising campaign,” Watson added, noting that Timex will participate in the Outdoor Retailer trade show in Nevada in August in order to target sporting goods stores and other current Timberland-approved outlets as well as department stores. The print ad campaign will break in November and December.

Guess expects its projected 48 percent growth this year to come primarily from its new Waterpro line and from a new product category to be launched in August, according to Mickey Callanen, president of The Callanen Group, which produces Guess watches under license. He wouldn’t discuss any details except to say that the firm’s national advertising program, which began last Christmas, will also be expanded by 25 percent to support it.

Supreme Court to Hear Costco-Omega Case

The U.S. Supreme Court on Monday agreed to hear a case in which Costco Wholesale Corp. is challenging Omega SA’s right, as a foreign manufacturer, to use copyright law to control the distribution and resale of the watchmaker’s imported products.

The decision means Costco will have the opportunity to make the case for preventing Omega from restricting middlemen from selling its watches to discounters like Costco.

The case has significant implications for off-price retailers and discounters that often purchase imported goods from middlemen and distributors at lower prices, rather than buying direct from a manufacturer or its authorized U.S. distributor, and then selling them in the U.S. below the brand’s official price. Online auction sites such as eBay also could be affected by the decision.

Costco filed a petition for a writ of certiorari in May, on appeal, asking the court to consider the case and review whether Omega can use a copyrighted image to control secondary distribution and resale of its watches made in Switzerland once it has sold them to a foreign distributor.

At the center of the case is whether a provision under U.S. copyright laws known as the “first-sale doctrine” applies to imported goods. Under the doctrine, a manufacturer’s rights to distribution of a product end upon the first authorized sale it makes.

Costco is pleased with the cert and is looking forward to litigating the case in the Supreme Court,” said Roy Englert Jr., a partner in Englert, Orseck, Untereiner & Sauber LLP, the law firm representing Costco.

The Supreme Court ruled in the 1998 Quality King Distributors Inc. vs. L’Anza Research International Inc. case that the first-sale doctrine does apply to goods made in the U.S., exported abroad and reimported to the U.S. The specific question in the Costco case is whether it makes a difference whether the goods are manufactured abroad.

“I think what it indicates is there were loose ends that were left open in the Supreme Court opinion in the Quality King case,” said Seth Greenstein, an attorney with Constantine Cannon LLP, which represents the Retail Industry Leaders Association and the National Association of Chain Drug Stores, which filed a joint amicus brief in support of Costco. “The issue does repeatedly arise in lower courts. I would surmise the reason they took it was to resolve loose ends and give guidance to courts in an issue that continues to perplex them.”

Justice Ruth Bader Ginsburg filed a concurring opinion in Quality King, agreeing with the outcome because it involved the “round-trip” of goods manufactured in the U.S.

“That led courts, including the Ninth Circuit in the Omega vs. Costco case, to believe that the outcome would be different if the goods were manufactured outside the U.S.,” Greenstein said.

Greenstein said he was “optimistic” the High Court will reverse the decision against Costco issued by the Ninth Circuit Court of Appeals in San Francisco.

In 2004, Costco purchased 117 Seamaster style Omega watches from a U.S. distributor. It was later revealed in discovery that Omega had sold some of the watches to authorized foreign distributors in Egypt and Paraguay who subsequently resold them to a U.S. distributor, according to Costco’s court documents.

Omega filed suit against Costco in 2004 after the warehouse club sold 43 of the Seamaster Omega watches in its stores, alleging Costco’s acquisition and sale of the watches constituted copyright infringement. Costco charged that Omega created a laser-engraved emblem for the back of itswatches and applied for a copyright in the U.S. for the sole purpose of invoking the Copyright Act to “restrict the resale of its products.”

Costco also argued that “under the first-sale doctrine…Omega’s initial foreign sale of the watches precluded claims of infringing distribution and importation in connection with Costco’s subsequent sales.”

The U.S. District Court for the Central District of California ruled in favor of Costco, but the appeals court reversed the lower court’s decision, saying copies made abroad by the holder of a U.S. copyright for sale abroad are not subject to the first-sale defense.

Omega argued in court documents filed with the Supreme Court that the Ninth Circuit’s decision “gives effect to the intent of Congress to give copyright owners enforcement rights against unauthorized parallel imports.” Omega also charged that after a deal could not be reached, Costco knowingly obtained the watches from a source who was buying the watches outside of the U.S. and importing them to the U.S. without Omega’s authorization.

However, RILA and the NACS said in their brief that, “Retailers need confidence that lawfully produced goods they purchase from distributors can be resold in the United States commerce free from claims of copyright infringement and constraints on consumer rights.”

LVMH watch retailing unit: Synchrony, is first of a chain

With the debut of Synchrony, the first in what will be a chain of watch retailing units, LVMH Specialty Retail Concepts, a division of LVMH Moet Hennessy Louis Vuitton, has added another new dimension to its retail world.

The first Synchrony unit, a 2,700- square-foot space, was unveiled Nov. 18 at the Glendale Galleria in Glendale, Calif.

“We’ve picked about 50 to 75 locations that we thought would be appropriate and are going after them,” said Frederick W. Wilson Jr., president and chief executive officer of LVMH Specialty Retail Concepts.

“We are a little eclectic in our real estate approach to begin with, but we would like to end up with clusters of stores in areas [of the country].”

Although Wilson declined to provide specifics, he said targeted Synchrony locations include prime cities and major malls in Florida and New York, on the West Coast and in the Midwest.

The second Synchrony store, at 2,500-square-foot unit, is slated to open Jan. 15 in the Mall of America in Minneapolis, Wilson said.

Wilson noted that unlike merchandise at other watch specialty stores, Synchrony’s assortment is grouped by lifestyle and then by brand, rather than just by brand alone.

What allows us to merchandise by brand within category is that our assortment is strong enough and wide enough,” said Helen Neff, senior vice president of merchandising for LVMH.

“When we carry an assortment of bracelet styles within a brand, we make sure that there is enough there to make a statement.”

The categories include sport and active watches, metal bracelet pieces, classic timepieces, finewatches and children’s watches, the latter of which are displayed on an eye-level table that is shaped like a toy top.

The store features more than 3,000 watch styles and 45 brand names, including Adidas, Anne Klein, Emporio Armani, Bebe, Casio, Fossil, Hamilton, Gucci, Dior and Hermes, retailing from $50 to $3,000.

Each brand offers anywhere from 30 to 200 styles. Only one of LVMH’s recently acquired stable of watch brands — Christian Dior — is currently carried in the new store. Wilson said the company plans to bring in more of its brands at a later date.

Shoppers enter the new store, located in the Macy’s wing on the first level of the shopping center, through doors flanking a working watch 8 feet in diameter.

The watch is synchronized with the atomic clock in Denver. The 24 world time zones are displayed on clocks around the store’s interior.

Those familiar with another LVMH concept, its chain of Sephora beauty emporiums, may notice some similarities.

Open-sell is a key element of the format at Synchrony, as it is at Sephora. The majority of watchesare displayed in two open-sell wall units that run the length of either side of the store. The units feature small, box-shaped vitrines, each of which houses an individual watch on a stand, giving consumers easy access to the merchandise. The display units themselves swing out to reveal stock storage space. Fine watches are displayed in more traditional, locked cases in the rear of the store.

The center of the store is dominated by a round cash wrap station and the children’s watch stations. There are also two interactive kiosks with touch-screen computers that display product information, such as instructions for setting various brands of digital watches. Battery replacement for watchespurchased at Synchrony is available on site, for as long as customers own their watches.

A display ranking the top 10 best-selling men’s and women’s watches will be changed weekly and will note fashion trends and new watch inventions.

“We are targeting a younger audience that will be attracted by the bells and whistles of the entertainment aspects of the store,” said Neff. “The product that is there, though, covers a wide range of tastes and will appeal to everyone, from kids to grandparents.”

The store is staffed by 10 to 12 salespeople, who are referred to as “timekeepers” and who wear an informal uniform — a long-sleeved black shirt with Synchrony embroidered on the wrists, a gray vest and a black skirt or pants.

“We are extremely big on customer service,” said Wilson. “Even though this is a freedom-to-shop environment, we are very rich in staffing. We are not cutting back on staffing because of the way we are retailing. Because of the foot traffic, we have planned a high level of staff.”

“The colors are meant to be modern and inviting,” said Wilson. “From the sleekness of the walls to the warmth of the floor colors, we worked very hard to get the right combination.”

Miriam Haskell to do fashion watches

Miriam Haskell, fashion jewelry manufacturer, is making its entry in the ever-expanding fashion watch market this holiday. According to company president Sanford Moss, “The timing for our watch collection is good because sales in some of the plastic watch brands are falling.”

Haskell’s watches coordinate with the jewelry line and will be merchandised with its jewelry, rather than in fashion watches.

The collection features eight styles of watches in the form of pendants and pin fobs. The antique-looking watches are gold plated, and have a Swiss quartz movement. Wholesale prices range from $45 for the pin fob to $75 for the pendant.

Moss points out its packaging will be unusual in the fashion watch market. The watches will come in blue velvet boxes, he said. “Most fashion watches come in plastic cases; our packaging will be good for the holiday season.

Basel: putting on the glitz

The Apr 1994 Basel Watch Fair in Basel, Switzerland, attracted 80,000 visitors to view more than 2,000 exhibits and featured both traditional craftsmanship and glamorous contemporary styling. The Swiss industry holds 61.6% of worldwide watch exports, far ahead of Hong Kong and Japan, and saw sales rise 3% in 1993 to a record $5.29 billion. The strength of the industry may have been one reason for the luxurious diamond-laden styles displayed.

Both high-style glamour and old-fashioned craftsmanship shared the limelight at the Basel Watch Fair here last week.

Women’s watches were often loaded with diamonds, answering a demand for more sex appeal and greater intrinsic value. Mechanical watches were also present in quantity, a development watchmakers said was indicative of a thirst for more authentic, handcrafted pieces.

The emphasis on luxe reflected the good feelings of an industry that was able to push ahead despite the recession that prevailed in many markets.

In 1993, the Swiss industry posted a 3 percent gain in sales of watches and parts to hit a record $5.29 billion (7.59 billion Swiss francs), according to the Federation of the Swiss Watch & Clock Industry.

Moreover, Switzerland continues to dominate the world watch industry, responsible for 61.6 percent of global watch exports last year. Hong Kong and Japan came a distant second and third, with 13.3 and 11.5 percent, respectively. Also, the average price of Switzerland’s export watches was $111 (160 Swiss francs), four times that of Japan and nearly 20 times Hong Kong’s.

Attendance at the eight-day fair, which ran through Thursday, rose 2 percent to 80,000 visitors, according to show officials. The event once again took over the town of Basel. Demand for hotel rooms was so heavy, organizers brought riverboats down the Rhine to house all the extra visitors.

Networking is also a key part of the fair, with scores of launch and cocktail parties. Among the key events is the reception held annually at the Kunstmuseum by De Beers, the World Gold Council and W magazine, where one party guest, Stephen Magner, vice president of fine jewelry for Neiman Marcus, summed up the value of the fair this way: “It’s not just what you see on the stands and the exciting resources, but also the quiet deals. If you want a certain set of pearls, of rare diamonds, then Basel is the likeliest place to find it.”

The number of exhibitors increased, up 60 to 2,120, boosted by the return of South African diamond manufacturers to the international scene after years of boycott.

Among the big diamond users was Chopard, featuring sports watches highlighted with floating diamonds on the faces. It also offered the same concept in 18-karat gold earrings that will retail for about $5,000.

Chopard also went with the trend toward Australian pink diamonds. One women’s evening watch with clusters of pink and white diamonds was a work of fantasy to retail at $107,000.

A new feature of the fair this year was a Prestige Hall for 41 high-end jewelers, where designers such as New York’s Henry Dunay showed major statement pieces.

Dunay unveiled several brooches in beryl and tourmaline that he surrounded with an urban landscape shaped in gold. He also showed jewelry and watches in interwoven strands and combined with emeralds, diamonds and, in one case, a huge South Sea pearl.

“We are very happy with this new section,” Dunay said. “And business has been good, but building these stands is certainly an expensive undertaking. This place cost more than my apartment.”

Around the corner, Gianni Versace had a large stand showing his line of fine jewelry and watches, launched last year.

The Italian designer showed diamond and gold rings in his signature Medusa head motifs, set to retail at about $15,000, and a group of dramatic necklaces with retails of up to $150,000.

Elsewhere, Tiffany & Co. was displaying women’s watches with gold bracelets in a basketweave style with the weave wrapped around the watch. Central American influences popped up in Tiffany’s line of scroll jewelry, in cast gold with a soft patina.

Among other developments, John Loring, Tiffany’s senior vice president and design director for the New York-based company, said the company has been looking for a major retail space in Paris for several years.

“We’ve seen several sites, but have not been able to find a space of the right size,” Loring said. “Tiffany being an emporium, we can’t just open up a small shop of 200 square meters, but Paris is a city that doesn’t have that many large shops.”

Nearby, Tag Heuer‘s stand was packed with visitors, a tribute perhaps to the Swiss watchmaker’s international ad campaign, “Don’t Crack Under Pressure.”

“Our global concept is to communicate with an image and not the product,” said Tag Heuer president Christian Viros. “We don’t want to be tempted to change our collection every season like a fashion house. The strength of a brand is measured by whether you recognize it immediately, like, say, an Hermes scarf or a Louis Vuitton bag.”

This season, Tag Heuer introduced its first all-gold sports watch. This fall, it’s planning to launch a limited edition group of 5,000 watches, with the line being named after Brazilian race car driver Ayrton Senna.

Another trend at the show was animal motifs, dramatized at Paris jeweler Rene Boivin, with delicate elephants, bumblebees and octopuses, all in intricate gold with some featuring moving parts.

Carolee adds watches

Carolee, the jewelry manufacturer based in Greenwich, Conn., is taking her faux jewelry look into watches in a collection being launched in the January market.

Carolee Friedlander, owner of the firm, projected first-year sales of $1 million to $2 million. “Everyone has a strap watch. Our research shows there is a void in the jewelry watch category.”

The collection, which comprises about 15 styles, wholesales from $75 to $175. The watches are made with Swiss movements and are put together in the firm’s Providence, R.I., factory. While bracelet watches with stones are the mainstay of the line, there are some strap watches, including leather and faille fabrics.

Friedlander is also offering some watch fobs. “The fobs are a natural layering of the Chanel-inspired look,” she said. The watches will be merchandised with the jewelry where possible because it all relates, Friedlander said.

New collections will be shown seasonally. Friedlander said extensive lines are planned for the March and May markets. The firm is planning a advertising campaign in fall ’89 to promote the watches.

Carolee is also working with some retailers to create private label watch lines, though she would not reveal store names.