CEO Talks: Daniel Wellington’s Tianhao Liu Has Big Jewelry Ambitions
PARIS — Following a major strategic overhaul, Daniel Wellington is pivoting its offer to become a bigger player in the jewelry segment.
The Swedish brand, known for its minimalist watches at accessible prices, in May launched a line of charms that retail for 25 euros to 35 euros, placing it in direct competition with Pandora. In tandem with that, it introduced the Quadro Mini, its smallest watch to date, also aimed at a female clientele.
More from WWD
Alexandra Daddario Shines in Sheer Oscar de la Renta Dress at Tag Heuer's Fifth Avenue Grand Opening
Tag Heuer Bullish on Retail Expansion With Fifth Avenue Flagship: CEO Frédéric Arnault
Philipp Plein's Foray Into the Luxury Swiss Watch Market Takes Flight
Tianhao Liu, who took over as chief executive officer last January, believes jewelry could eventually account for half of Daniel Wellington’s sales.
“In the future, we will launch more jewelry [stock keeping units] than watches,” he said. “We are now developing what I would say is the most exciting product roadmap that I’ve seen in the past 10 years that I’ve been in the company.”
The Charms collection launched with 86 references, including letters, numbers and hearts, and he expects to add between 50 and 100 charms a season. With prices averaging $59 to $69, jewelry already accounts for 30 percent of the brand’s sales, and the next target is 40 percent, Liu said.
“I think it can go even more to around 50-50 because when we look at the market, jewelry is a product that I think is very interesting in the sense that it has broader distribution. You can do more repurchases,” he predicted.
“Not a lot of brands in our price range are strong in both watches and jewelry; it’s usually either/or, but Daniel Wellington is quite strong in both. We have for example created a concept that we call The Perfect Match where you match jewelry with the watch. That’s working really, really well for us,” he said.
In addition, Daniel Wellington is preparing to launch its first handbag collection at retail in August, having already added eyewear to its assortment.
According to the financial statements of JFT Holding — Daniel Wellington’s parent company — the brand posted revenues of 1.7 billion Swedish kronor, or $166 million at current exchange rates, in 2022.
Liu expects the company to return to profitability this year after a period of upheaval that saw it switch from a wholesale model to a direct-to-consumer system in 2018, before reversing course in the wake of the coronavirus pandemic.
He said the brand turned a profit in 2018 and broke even in 2019, before embarking on a loss-making streak.
“We opened up around 300 monobrand stores in China in about two years and it worked really, really well, but it was a hard business model to do all at once,” Liu explained.
“We started scaling up in 2019. It went well at the start, but then COVID[-19] came, so we were then stuck with a lot of offices around the world, our teams, a lot of retail stores and retail staff. And we took the entire hit on ourselves, because we had no partners,” he added.
“We have now since last year done the restructuring back to a wholesale model. We’re quite fortunate that the brand and the products are still quite in high demand and that our partners all across the world were happy to take us back and continue working with us,” Liu said. “We are back on track.”
Daniel Wellington has around 5,000 points of sale worldwide. “We’re aiming to have around 8,000 at the end of the year and at our peak, we had around 10,000 in 2018,” he said.
The brand last year inked a strategic partnership with American watch manufacturing company Timex, which distributes its products in the U.S., Canada, Mexico, Great Britain, Poland and India. In turn, Daniel Wellington handles distribution for Timex’s various brands in China.
Online sales account for around half of revenues, Liu said, reflecting its history as a digital-native brand. Daniel Wellington says it has sold more than 18 million watches since it was founded by Filip Tysander in 2011.
“We are and have been the fastest-growing watch company the past decade in the industry,” said Liu. “It was a very rapid ramp-up because of several factors: products, of course, but there was also how we engaged the community through social media. We were essentially the pioneers in that.”
The brand has 4.6 million followers on Instagram, compared with 1.7 million for Swatch, for example. China remains the top market, accounting for roughly a third of revenues, and the company is intensifying its sales push in the U.S. and Europe, with a particular emphasis on France, Italy and Scandinavia.
In addition to diversifying its product categories, it plans to bring more newness into its core watch category. “What I’m most excited about is that we are now on the track of actually focusing again on reaching consumers with great products,” Liu said. “Personally, I think that we have been a bit too slow here before.”
Contrary to reports, Daniel Wellington is not looking for a buyer, Liu said. “The goal is for us to be self-sufficient and to turn this into profit,” he said. “But then we also know that we will need strong partners in order to do so. We have learned from our mistakes that we cannot do everything ourselves.”
Best of WWD
