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Taking stock

Taking stock

Friday, 10 July 2015
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Christophe Roulet
Editor-in-chief, HH Journal

“The desire to learn is the key to understanding.”

“Thirty years in journalism are a powerful stimulant for curiosity”.

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3 min read

The current slowdown in watch sales is behind a dangerous build-up of inventory at retailers. “Dr” Goldberger is offering a tripartite solution by selling this unwanted stock at pre-owned prices in the United States. A credit note from the brands makes up the shortfall.

Retailers abhor inventory; that accumulation of unsold goods that tie up capital, depreciate in value, and ultimately prejudice balance sheet assets, which is precisely where their banker looks first. Rarely a problem when the economy is riding high, overstock plagues markets in these less certain times, prompting some retailers, in Hong Kong for example, to sound the alarm. The subprime crisis already brought about a similar situation in 2008. Now history repeats itself as the watch industry struggles to grow: the 8.9% drop in Swiss watch exports in May sent figures for the first five months of the year into the red, at -0.3%.

To sudden bouts of amnesia .

While certainly not a cause for celebration, some have succeeded in turning the situation to their advantage. For a number of years now, one man in particular has specialised in finding solutions for retailers who want to rid themselves of unwanted stock. This man is Maurice Goldberger, and his solutions must certainly be viable given that just about everyone in the watch industry knows his name. However, his is a business that does best out of the spotlight, and because of this no-one – and that really is no-one – would actually own up to working with him. As for Mr Goldberger himself, he is prone to sudden bouts of amnesia when asked who his clients are.

Everyone's a winner

This Canadian national and Chief Executive of Chiron Inc – named after the centaur who educated Achilles – was in Geneva to talk about his latest idea. “Collaborative restocking” is a solution specifically aimed at retailers which he spent the last three years developing. “I was hearing from more and more retailers who were low on cash and, at the same time, had old inventory on their hands. At the same time, I sensed the potential which the North American market could have for this type of product. There is a clientele of people in the US who are very much interested in pre-owned goods, and in particular pre-owned watches. They are the smart guys with an eye for a bargain. This is a typical characteristic of the United States. Other markets prefer to buy new.”

More than one retailer will be signing up for "Dr" Goldberger's remedy!

This is how it works: Maurice Goldberger buys inventory, regardless of quantity or condition. These watches, for which he provides a warranty and servicing, are then sold as pre-owned in vintage accessories stores, at private sales, or at antique watch and jewellery fairs in the United States, though never online. “I have no problem selling these products,” Maurice Goldberger affirms, “In fact demand is so high I could easily sell more.” Needless to say, Goldberger pays retailers less than the amount they originally paid. And this is the clever part. The shortfall for the retailer is made up by the brand, which issues a credit note which the retailer will use to buy in the year’s new models, usually at a one-to-three ratio. Thanks to this tripartite agreement, the retailer refreshes its inventory, the brand gets its new designs in stores, and Maurice Goldberger maintains his business volume. Granted, brand and retailer must sacrifice part of their margin but they are relieved of a sizeable thorn in their side. Chances are that in the next few months, more than one retailer will be signing up for “Dr” Goldberger’s remedy!

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