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Competition in the Watch Market Grows as Citizen Acquires Bulova

Focus on more affordable -- and casual -- watches will help Citizen Watch Co. gain market share in the luxury timepiece market

Stevens, PA January 14, 2008 -- Citizen Watch Co. just announced the acquisition of Bulova Corp. from Loews Corp. for $250 million. With this acquisition, which includes the luxury Wittnauer brand along with mid-priced brands Bulova, Accutron, and Caravelle, Citizen is likely to move up from its current ranking as the fifth most popular luxury watch brand, behind Rolex, Cartier, Omega, and TAG Heuer, according the Unity Marketing's quarterly Luxury Tracking Study which surveys 1,000+ luxury consumers on their luxury purchases and spending.

"The luxury segment of the watch market is likely to get even more competitive in 2008," says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience. "With the mass affluent consumers (incomes between $75,000-$149,999) starting to cut back on their luxury spending, a more affordable luxury watch brand like Citizen is likely to appeal to these consumers who lack the confidence in the current economic environment to 'trade up' to one of the super-premium brands, like Rolex."

But a more cautious approach from mass affluent consumers is not the only trend that is likely to impact the watch market in 2008 and beyond. Unity Marketing, in its latest study of the jewelry and watch market, found that younger consumers are not as interested in watches as their older peers, meaning that the future of the watch market is up for grabs for the watch brands that can best speak the language of youth.

Fine Watches Were Growing Category, but the Future Looks Less Certain

The watch market overall, and the fine/formal watch market in particular, boomed from 2004 to 2006, with the market for all watches up 25 percent to $9.6 billion and the fine/formal watch segment growing 39 percent in the same period. But the fine/formal watch category may start to slide as many younger consumers, particularly men under 35 years old, reject watches as a 'status symbol' and turn to cell phones as their essential time keeping accessory.

In the most recent survey of 750 jewelry and watch consumers reported in Unity Marketing's Jewelry & Watch Report, 2007, half of consumers aged 18-to-34 years agreed with the statement: "I generally don't wear a watch much any more, since I use my cell phone to keep time."

"If I were a watch marketer, this attitude, which is so prominent among young consumers, would keep me awake at night," Danziger says. "It is essential for watch marketers to position their products and brands as fun and functional, rather than push the status-button too strongly. Young consumers embrace a much more casual lifestyle, so the idea of a watch as a 'status symbol' just doesn't connect."

The Citizen brand, in particular its Eco-Drive models which are environmentally-conscious by being powered by light, not batteries, are well positioned to appeal to younger, value-conscious consumers.

Special Features in Jewelry & Watch Report, 2007

Unity Marketing has just published a new study of the jewelry consumer market, entitled Jewelry & Watch Report, 2007. It combines the results of in-depth qualitative focus group research and a quantitative research study of 750 recent jewelry buyers' shopping preferences, behaviors and attitudes.

Included in this report are:

Trends in sales and growth in the jewelry and watch market, by product form (e.g. necklaces, rings, earrings, watches, etc.), material of composition (e.g. gold, platinum, sterling silver, etc.) and gemstone (e.g. diamond, precious colored stones, semi-precious gemstones, pearls, etc.).
Brand preferences in both jewelry brands and watch brands.
Profile of the affluent, luxury consumer market for jewelry and watches, including the luxury jewelry and watch brands that luxury consumers favor.
Powerful guidance on pricing for retailers and marketers, including the popular price points for different jewelry items based upon research findings of what the majority of consumers paid when they made their latest purchases.
13 research-based Business Building Tactics to help jewelry marketers and retailers grow a more vibrant business.
Seven Major Marketing Opportunities that will mean greater success for jewelry companies and retailers that develop strategies to take advantage of these emerging opportunities.
Profiles of the nation's top ten jewelry retailers.

For Media: Charts, tables and graphs are available upon request.

Coming Soon

These new research results will be released shortly (early exclusives available to media) Call 717-336-1600 or email pam@unitymarketingonline.com for more information:

Year end 2007 Luxury Consumption Index & trends in luxury consumer spending in 4Q2007
Countries that produce the best luxury goods -- How luxury consumers feel about the country of origin of luxury goods
Latest consumer survey results on giftware and home decorative accent markets

About Pam Danziger and Unity Marketing
Pamela N. Danziger is an internationally recognized expert specializing in consumer insights, especially for marketers and retailers that sell luxury goods and experiences to the masses or the 'classes.' She is president of Unity Marketing, a marketing consulting firm she founded in 1992.

Advising such clients as PPR, Diageo, Stearns & Foster, Waterford/Wedgwood, Lenox, Prudential Fine Homes, Ritz Carlton, Orient-Express Hotels, The World Gold Council, The Conference Board and American Express, Danziger taps consumer psychology to help clients navigate and master the changing luxury consumer marketplace.

In recognition of her ground-breaking work in the luxury consumer market, Pam received the Global Luxury Award presented by Harper�s Bazaar for top luxury industry achievers in 2007.

Her latest book is Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006. Her other books include Let Them Eat Cake: Marketing Luxury to the Masses�as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).

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