Rolex Offshoot Tudor Comes of Age in Threat to Midpriced RivalsCorinne Gretler
Rolex’s younger sibling is coming of age.
Tudor, a sportier brand that Rolex founder Hans Wilsdorf trademarked in 1926, plans to enter Japan after returning to the U.K. and the U.S. in the past two years, Philippe Peverelli, who has led the brand since 2010, said in an interview.
The label may pose a threat to the makers of Longines, TAG Heuer and Baume & Mercier as it sheds decades of dormancy and benefits from the support of the foundation that owns Rolex, Switzerland’s top-selling watch brand. Priced at about $2,000 to $5,000, Tudor is a gateway to a generation of consumers that might not purchase a Rolex, which start at about 4,600 francs ($4,800).
“We’ve never been so young,” Peverelli said at the Baselworld watch and jewelry fair, which ends Thursday. “Today, we try to make our own watches with our own designs. We need to have our own personality. Before we were an underbrand. We are starting to have a real life.”
The label has introduced its first watches with mechanisms that were made in-house. That’s a first step in reducing dependence on components bought from Swatch Group AG’s ETA unit, which makes components for most Swiss watches.
Rolex founder Wilsdorf began putting the Tudor name on watch dials in the 1930s, intending to create a less expensive but reliable alternative to his main brand. Production expanded after World War II, when Tudor was founded as a separate company.
However, Tudor exited the U.S. and U.K. after testing those markets. The watchmaker then focused on China in the 1960s.
The offshoot’s pricing in comparison to its older sibling has led some watch collectors to call it “the poor man’s Rolex.” A 1952 ad featured a workman operating a pneumatic drill wearing the watch, and a slogan once said the timepiece might fit you if your “aspirations are higher than your bank balance.”
The label probably had sales of about 250 million francs in 2013, Rene Weber, an analyst at Bank Vontobel AG in Zurich, said. That would be about 5 percent of Geneva-based Rolex’s total revenue of 4.6 billion francs, he estimates. The closely held company doesn’t publish financial information.
Tudor’s expansion adds to three major challenges Swiss watchmakers face this year. The surge in the franc has made it harder to export, Apple Inc. is set to introduce its smartwatch next month and a slump in Chinese demand is lingering due to a campaign against extravagance among government officials.
“The positioning is more mid-range, which is exactly the exposure you want to have right now, given how China is performing,” Bassel Choughari, an analyst at Berenberg in London, said. “It’s an attractive offering in that segment, as a lot of brands have left it by elevating prices. There’s certainly room to grow.”
While China still makes up a big part of its business, the reentry in the U.S. and the U.K. is providing Tudor with a more balanced mix.
“Tudor is a threat to brands below the mega-brands Rolex, Omega and Cartier,” Luca Solca, an analyst at Exane BNP Paribas, wrote via e-mail. “The brand that has most benefited from Tudor being asleep at the wheel so far, has probably been Longines.”
Longines, owned by Swatch, has expanded in the segment of timepieces costing 800 francs to 3,000 francs and achieved sales of 1.5 billion francs last year, Walter von Kaenel, the watchmaker’s president, said in an interview with AWP March 18.
TAG Heuer belongs to LVMH Moet Hennessy Louis Vuitton SE while Baume & Mercier is a brand of Cie. Financiere Richemont SA.
Tudor is far from achieving the same notoriety as Rolex, which has made several rare watches that have fetched prices of more than $1 million at Christie’s. The top auction prices for Tudor pieces include 31,250 francs, about $32,700, for a 1950s model in a sale last year.
Peverelli said the entry into Japan won’t be this year. In the long term, Tudor aims to keep growing in comparison to Rolex.
“In 2025, I wish for Tudor to be where Mini Cooper is today facing BMW, which for us would be Rolex,” the executive said. “The Mini is sexy, a great performer, a solid German car, attracting all ages. I want to be able to drive alone on my own four wheels.”