Tag dumps stockists

[phaedo 0]

April 20, 2010.

 

TAG HEUER CLOSES ACCOUNTS

from http://www.jewellermagazine.com/

 

 

A decision by Tag Heuer to reduce supply has angered Melbourne CBD retailers and the controversy is set to occur again in Sydney.

 

Watch supplier Tag Heuer has become the target of an angry backlash following a controversial decision to close the accounts of all Melbourne CBD stockists except one.

 

The strategy was designed to coincide with the opening of the brand’s own flagship store in Collins St, Melbourne and has directly affected The Hour Glass, Saleras Jewellmasters and Monards, as well as Angus & Coote – all of whom were informed in a letter from LVMH general manager Philip Richards on October 19, 2009 that their accounts with Tag Heuer would be closed.

 

 

The move prompted an angry backlash against Tag’s parent company LVMH after it was revealed that another Melbourne CBD stockist, Watches of Switzerland (WOS), would continue as normal, despite being the outlet closest store to Tag’s new flagship store.

 

 

In the October 19 letter that informed retailers of the forthcoming account closure, Richards justified the decision by stating that WOS had “a significant shop-in-shopâ€.

 

 

When contacted, Richards was guarded, refusing to answer questions and saying only, “It’s pretty clear what we’re doing with our flagship store, and we’ve spoken to all of the traders involved.â€

 

 

Having confirmed that the WOS store’s account was not closed because of the shop-in-shop, Richards was asked, “If Angus & Coote had had a shop-in-shop would he (Richard’s) still have closed Angus & Coote?†Richards hesitated before answering, “No comment.â€

 

 

Industry speculation suggested that Tag may have been committed to a lease on the shop-in-shop section of the WOS store when it was renovated and enlarged in 2007, a factor that might stop the company closing the account; however Richards again declined to comment when asked whether that was true.

 

 

While it was unlikely that Tag’s name would appear on any retail lease in which it was stocked, it is not unusual for a brand like Tag to pay rental costs for the floor space it occupies in such retail outlets, and therefore not out of the question that the WOS account was retained because Tag remained legally tied to the floor space.

 

 

Prominent chain store Angus & Coote has reacted angrily to the decision, dumping Tag Heuer from all 12 of its stores in Australia and seven Stewart Dawsons stores in New Zealand, thus ending a relationship dating back over a decade.

 

 

The decision followed lengthy negotiations between Angus & Coote and the brand that commenced with the arrival of Richards’ letter last October and concluded with the decision in April to remove the brand entirely.

 

 

Andrew Nock, General Manager, Angus & Coote said the decision to dump Tag was not one he took lightly.

 

 

“We need to be able to work with our supplier partners to back our brand so that we back theirs. It needs to be a win-win, and in doing so we must take into account our customers.â€

 

 

“It is not sensible for a retailer to have different product offerings in different stores. We need consistency, and not having Tag in our flagship store but available in our other, smaller stores is not something we view as sensible,†Nock said.

 

 

Other affected retailers have responded similarly with a representative of one, who asked to remain anonymous, saying he was investigating whether the decision could be a breach of the Australian Consumer and Competition Commission’s Trade Practices Act (TPA).

 

 

“We believe restricting stock to just two outlets could be a restrictive trade practice because it could have a detrimental effect on competitive pricing,†the retailer said.

 

 

He added that large Swiss watch brands were known to be ruthless, using retailers as short-term platforms to help boost the brand’s image.

 

 

“They will use you for the necessary cash flow to achieve their objective. Eventually they’ll find some excuse to close you down so that their own boutiques get greater strength,†said the retailer, adding that he believed many of the Swiss watch giants were following a similar path to Tag Heuer: “There is a global tendency for the Swiss brands to be opening their own boutiques, which may or may not be successful for them in the long run.â€

 

 

In direct contrast to Angus & Coote’s bold decision, a third affected-retailer anonymously advised his peers to take a more pragmatic approach: “The type of heavy-handedness that exists amongst the Swiss brands, you can go two ways with it: you can dig in, or you can negotiate your way around it so there’s a win-win,†he said, adding, “At the end of the day, if we’re an important enough account to them and we do what they want, they’ll keep us. If they don’t, I don’t think anyone can control that.â€

 

 

Tag’s decision to retain the Watches of Switzerland account has raised further eyebrows because the original Australian distributor of Tag Heuer in Australia is actually WOS founder Eric van der Griend.

 

 

Numerous attempts to seek comment from Eric van der Griend were unsuccessful.

 

 

Richards has subsequently notified Sydney retailers of similar plans ahead of the opening of a flagship store in New South Wales. "

[greg_r 81]

You know, I really dislike some manufacturer's restrictive business practices - it's as bad in the audio field too. I dislike companies that feel they have to create this level of 'artificial exclusivity' - it's manipulative and contrary to the best interests of their buyers. When I was selling audio, I refused to deal with companies who worked like this...

[phaedo 0]

What is more bullshit Greg, is the size of the cities here - it is bad enough if I want to look at some watches I have to go into the city, but Tag?? Come on, it is the 'entry level' of Swiss brands. Now it looks like I will have to spend a good hour commute each way just to look at them.

Actually, I have heard Omega are doing similar - not dropping the watches from all stores and just selling out of their own boutiques, but dropping a lot of stores to drive the prices up through percieved extra exclusivity since there are so few stockists.

[Silverspeed 10]

Welcome to the wonderful world of selective distribution

[GC 4,512]

You know, I really dislike some manufacturer's restrictive business practices - it's as bad in the audio field too. I dislike companies that feel they have to create this level of 'artificial exclusivity' - it's manipulative and contrary to the best interests of their buyers. When I was selling audio, I refused to deal with companies who worked like this...

 

I can only agree, but... when it comes to items that represent social/economic status (cars,watches,jewelry,electronics...) preception/image & exclusivity is everything, even if it's "artificial exclusivity".

 

one of my all time favorite quotes sums it up nicely

"you think that's air you're breathing?....hmmmm"

[Member X 91]

And this just highlights another benefit of reps... lol :gday_mate_haveabeer:

[Member X 91]

I can only agree, but... when it comes to items that represent social/economic status (cars,watches,jewelry,electronics...) preception/image & exclusivity is everything, even if it's "artificial exclusivity".

I think this is one of the most interesting things about the arguments that gen owners use against reps.

 

No matter what they say, it seems that gen forums cannot take a good-looking watch to be just a good-watch - they are entirely sucked into the "this watch represents this status and this lifestyle" thought process, so when they see a rep that is really good and they are fooled by it, rather than saying "nice watch, I can see some work has gone into that and it looks great", they get angry and on the attack because they think the person wearing the rep may not be truely representing the status/lifestyle that they are aspiring to themselves (even though they are basing a judgement entirely on the fact that the watch is a rep rather than actually getting to know the person first).

 

The gen owners are buying the 'lifestyle' rather than buying a watch simply for the nice design, and I would imagine that to a certain extent they feel cheated out of their $$$$ if those they feel 'less worthy' than them have a watch that looks identical and cost 1/10th of the price of theirs! :gday_mate_haveabeer:

[GC 4,512]

I can only agree, but... when it comes to items that represent social/economic status (cars,watches,jewelry,electronics...) preception/image & exclusivity is everything, even if it's "artificial exclusivity".

I think this is one of the most interesting things about the arguments that gen owners use against reps.

 

No matter what they say, it seems that gen forums cannot take a good-looking watch to be just a good-watch - they are entirely sucked into the "this watch represents this status and this lifestyle" thought process, so when they see a rep that is really good and they are fooled by it, rather than saying "nice watch, I can see some work has gone into that and it looks great", they get angry and on the attack because they think the person wearing the rep may not be truely representing the status/lifestyle that they are aspiring to themselves (even though they are basing a judgement entirely on the fact that the watch is a rep rather than actually getting to know the person first).

 

The gen owners are buying the 'lifestyle' rather than buying a watch simply for the nice design, and I would imagine that to a certain extent they feel cheated out of their $$$$ if those they feel 'less worthy' than them have a watch that looks identical and cost 1/10th of the price of theirs! :gday_mate_haveabeer:

 

ok, my version was the cliff notes...i admit it

I think you summed it up perfectly!

 

it's scary how much I agree with you on the "and this just highlights another benefit of reps..."

[greg_r 81]

You know, I really dislike some manufacturer's restrictive business practices - it's as bad in the audio field too. I dislike companies that feel they have to create this level of 'artificial exclusivity' - it's manipulative and contrary to the best interests of their buyers. When I was selling audio, I refused to deal with companies who worked like this...

 

I can only agree, but... when it comes to items that represent social/economic status (cars,watches,jewelry,electronics...) preception/image & exclusivity is everything, even if it's "artificial exclusivity".

 

Real quality doesn't need the artificial boost. This kinda behaviour is the preserve of upmarket, over-rated 'fashion' brands (whatever the product we're talking about - not singling out Tag here. I like some of their watches). Real exclusivity - married to real quality - sells without this kind of BS.

 

Certainly in audio most of the brands we were involved with were and are highly exclusive - simply because of the amazingly high standards to which they were produced and the fact that relatively few were ever made. We gave the bum's rush to manufactures such as Linn, Sony and others who tried to push up demand by creating this artificial exclusivity - no great loss either as they weren't up to standard anyhow...

 

This style of marketing is simply an attempt to con the consumer into believing the product is better than it actually is. Nothing more, nothing less.

[Member X 91]

it's scary how much I agree with you on the "and this just highlights another benefit of reps..."

lol Joooooiiiinnnn uuuuuusssss...... :gday_mate_haveabeer:

 

 

I'm not saying I wouldn't feel partly the same if I had the cash and was buying gen watches for $$$$ myself, but I hope that I'd be self aware enough to realise why I was feeling what I was feeling!

[Member X 91]

You know, I really dislike some manufacturer's restrictive business practices - it's as bad in the audio field too. I dislike companies that feel they have to create this level of 'artificial exclusivity' - it's manipulative and contrary to the best interests of their buyers. When I was selling audio, I refused to deal with companies who worked like this...

 

I can only agree, but... when it comes to items that represent social/economic status (cars,watches,jewelry,electronics...) preception/image & exclusivity is everything, even if it's "artificial exclusivity".

 

Real quality doesn't need the artificial boost. This kinda behaviour is the preserve of upmarket, over-rated 'fashion' brands (whatever the product we're talking about - not singling out Tag here. I like some of their watches). Real exclusivity - married to real quality - sells without this kind of BS.

 

Certainly in audio most of the brands we were involved with were and are highly exclusive - simply because of the amazingly high standards to which they were produced and the fact that relatively few were ever made. We gave the bum's rush to manufactures such as Linn, Sony and others who tried to push up demand by creating this artificial exclusivity - no great loss either as they weren't up to standard anyhow...

 

This style of marketing is simply an attempt to con the consumer into believing the product is better than it actually is. Nothing more, nothing less.

+1000000 to that!!

[GC 4,512]

You know, I really dislike some manufacturer's restrictive business practices - it's as bad in the audio field too. I dislike companies that feel they have to create this level of 'artificial exclusivity' - it's manipulative and contrary to the best interests of their buyers. When I was selling audio, I refused to deal with companies who worked like this...

 

I can only agree, but... when it comes to items that represent social/economic status (cars,watches,jewelry,electronics...) preception/image & exclusivity is everything, even if it's "artificial exclusivity".

 

Real quality doesn't need the artificial boost. This kinda behaviour is the preserve of upmarket, over-rated 'fashion' brands (whatever the product we're talking about - not singling out Tag here. I like some of their watches). Real exclusivity - married to real quality - sells without this kind of BS.

 

Certainly in audio most of the brands we were involved with were and are highly exclusive - simply because of the amazingly high standards to which they were produced and the fact that relatively few were ever made. We gave the bum's rush to manufactures such as Linn, Sony and others who tried to push up demand by creating this artificial exclusivity - no great loss either as they weren't up to standard anyhow...

 

This style of marketing is simply an attempt to con the consumer into believing the product is better than it actually is. Nothing more, nothing less.

 

you my good sir have a way with words...

 

of course coming from :gday_mate_haveabeer: I have to wonder if you are "crazy eddie"

who's prices were "insane"!!!!

[greg_r 81]

[fakemaster 0]

You guys talk about quality, artificial boosts and entry level Swiss. Those perceptions are exactly why they are doing it. Their problem is after the Heuer merger they took the commercial route and it has made them look 'less' exclusive. Tag is a very good brand. I know the reason most people here piss on them is because they make quartz models which is silly. Their main focus is on timing and sports. Of course they'll make quartz. But they've also made some of the biggest advancements in automatic watches. Companies like Rolex have been doing the same tired shit for the last 30 years. I think it's a great move.

[trailboss99 994]

Not just the retail stores guys. They have also made it impossible for non AD watchmakers to get parts. The supply has been totaly cut off for folk such as myself and Offshore. We can't get a circuit board, crystal, coil, crown, or even a bracelet/strap let alone mechanical MVT bits. Guess what that does to the cost of having your Tag serviced.

 

 

Col.

[phaedo 0]

You guys talk about quality, artificial boosts and entry level Swiss. Those perceptions are exactly why they are doing it. Their problem is after the Heuer merger they took the commercial route and it has made them look 'less' exclusive. Tag is a very good brand. I know the reason most people here piss on them is because they make quartz models which is silly. Their main focus is on timing and sports. Of course they'll make quartz. But they've also made some of the biggest advancements in automatic watches. Companies like Rolex have been doing the same tired shit for the last 30 years. I think it's a great move.

Actually I do agree with a lot of what you are saying, about perceptions. They have marketed themselves to be entry level Swiss, and now trying to take that back by cutting the dealers out. Time will tell how it works, but I would say they have to do things a bit differently. The reason I don't see them as great as the next step up isn't the quartz, it is the large range of entry level type watches they sell to the masses. Really they should still do that, because what they are doing now is turning their backs on their buyers by and large. What they should be doing is pushing the better models as an upper echelon of the brand, like say Lexus does from Toyota. Because again, I do agree they have some great watches out there and in development. Look at the calibre 16 (or 17) with the seconds hand as a disc that rotates rather than a hand. Or the belt drive watch. Amazing pieces in their own right.

[graman 2]

Not just the retail stores guys. They have also made it impossible for non AD watchmakers to get parts. The supply has been totaly cut off for folk such as myself and Offshore. We can't get a circuit board, crystal, coil, crown, or even a bracelet/strap let alone mechanical MVT bits. Guess what that does to the cost of having your Tag serviced.

 

 

Col.

 

 

Agreed....costs in Australia for parts are going beyond ridiculous.

Omega started this about 12 months ago.....My watch maker was an Omega dealer and authorised repairer for 50 years...Omega pulled his franchise, along with all the others in the eastern suburbs of Melbourne.

Then opened an Omega boutique in Chadstone shopping centre.

 

Tag Heuer have made a great deal of money selling ho-hum watches with quartz movements in them to sports freaks for years...now they're trying to go to the next rung in the luxury market.

Boring.

Methinks Chinese dealers will be repping parts soon and making a great deal of moolah...

[speedzmaster 0]

Meanwhile, you can walk into a Costco and buy an IWC.

[graman 2]

good on IWC!