Fossil, Inc. is one of the most popular watch brands in North America, and yet not many consider it as a luxury brand. The reason for this misconception could be that Fossil operates under the brand name Relic, which sells inexpensive watches in lower-end stores. What many may not know is that Fossil sells watches under the names of several other subsidiaries, including Michelle Watch, Zodiac, Skagen, and Abacus, all of which are quite high-end.
From its humble beginning in 1984, the company also began forming partnerships with some of the world's most well-known brands, such as DKNY, Burberry, Adidas, Michael Kors, Marc Jacobs, Diesel, Emporio Armani, and several others. In addition, Fossil not only produces watches but also sunglasses, belts, leather goods, and other accessories. However, its main focus is, and always will be, watches.
5 Company's Past
Fossil was founded in 1984 by Tom Kartsotis, who originally named the company Overseas Products International. Tom was in the ticket brokerage business, but it quickly began to lose its appeal. His brother Kosta suggested importing watches from the Far East and selling them in the United States. Finally, Tom sold his business, giving him an entrepreneurial budget of $200,000 and hired a watch manufacturer in Hong Kong to produce 1,500 watches, which were then sold at Kosta’s department store chain called Sanger Harris which was based in Dallas, Texas.
Soon afterwards, Tom Kartsotis hired his future wife Lynne Stafford as the designer, and together they created the “retro” style of watches increasingly popular in the 1980’s and 90’s. These designs were inspired by older styles of watches from the 1930's, 1940's, and 1950's, which the Kartsotises and Stafford found in Look, Life, and Time magazine.
In 1987, the company officially changed its name to Fossil, Inc., inspired by the nickname the brother had for their father.
Fossil was founded at a time when most would have chosen function over fashion, and yet the Kartsotis brothers have overcome this obstacle as well. In 1998, the company developed Big Tic™, which is a part analog, part digital watch that today is one of Fossil’s signature designs. This design includes a calendar setting, a daily alarm, a countdown timer, a chronograph, and/or several other settings in an externally stylish watch.
At a later date, the company developed its own watch movement under the name of Twist. This patent-pending design has often been described as having “the look of an automatic movement watch with the accuracy of the quartz movement.”
In 1999, Fossil also began developing Wrist PDA’s, more commonly known today as “smartwatches.” Engineer Donald Brewer began working with the Palm OS operating system, and in the early stages of development the watch looked like “a cell phone glued on one’s wrist.” After overcoming various issues with the size of the watch and its screen, a new design was created called the Fossil Abacus, featuring several different models. Following 2005, however, Fossil discontinued the technology with its Palm OS system in favor of the more modern Abacus WristNet watches.
After experiencing the initial success with the company, Fossil has decided to take its designs to the next level by creating its signature watch tins. In 2006, Fossil had a contest called Tinspiration, in which many American designers had participated. The goal was to develop artwork for the packaging in which the watches would be sold.
According to several reviewers and retailers, the tins have quickly become almost as popular as the watches themselves, with millions of designs that appeal to a wide range of customers. The designs include celebrities, superheroes, sports teams, iconic cities, and numerous other categories. Some of these designs have no representation but are equally unique and pleasing to look at. The tins are collected and traded at flea markets, antique shops, on eBay, as well as in several other places throughout the world. As a result, Fossil, Inc. is proud to set the highest standard for creative excellence in the production of watches.
Shannon Washburn, Vice President of Watch Product Development, has revealed the following in 2005, “What makes Fossil unique is the way we approach the business. We are a creative marketing company with a very commercial base. Fossil designs the product that is directional in the market and offers a great fashion look and value to our customer. Being first to market and setting a fashion direction is what sets us apart [from competitors]."
In 1993, Fossil watches were already considered a luxury product, yet, with retail prices ranging between $45 and $110. When the company acquired its first subsidiary, Relic, those watches were sold at a significantly lower price range: between $40 and $50, with the average price being $42. Today, Fossil watches range between the prices of $80 and $300, which the less expensive Relic watches range between $30 and $120.
Fossil’s other subsidiaries, however, have much more impressive prices, definitely helping maintain the overall company’s qualification as a luxury brand. The Michelle Watch ranges from $300 to just over $3,000. Zodiac watches range from approximately $50 to $1,250. Skagen watches range from $120 to $300. Finally, the Abacus had the retail price of $200 in 2005, while today they cost approximately $500.
1 Company's Future
It is highly likely that the already successful company will continue to grow and further develop its products and overall image. Richard Gundy, President of Fashion Watch Brands, says, "We continue to have incredible growth and increased opportunities, with all of our brands worldwide. We foresee huge growth. We forecast 10-15% every quarter. It's the process we have. It is the speed of execution, from idea to product in the store, and it is the execution in the store. It's a constant attention to detail.”
Such a forecast may seem ambitious, but it is very likely to be true. In 1987, Fossil’s annual revenues were at approximately $2 million. In 1993, the gross revenue was at $70 million, and by 2003 the number has increased to $850 million. In 2013 alone, the company has earned a revenue of $92.8 million in sales.
Fossil boasts an impressive number of stores in the United States as well as worldwide. In 2005, American stores were at 105 while international stores were at 124. By December 2012, these numbers have gone up to 226 and 247, respectively. The company sells its products to department stores, specialty retail stores, as well as watch and jewelry stores in the United States and in 130 countries around the world. This is done through 25 company-owned foreign sales subsidiaries and more than 60 independent distributors. In addition, sales are made through their website, and several international versions of the Fossil online store.
With its spectacular statistics, Fossil, Inc. is bound to be a company that will remain successful for decades to come.