The Moodie Report

Swatch Group division Tech-Airport plots expansion in China and Europe

Published: 25/01/12

Source: ©The Moodie Report

By Gavin Lipsith and Martin Moodie

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Tech-Airport's Hour Passion store at Venice Marco Polo: one of a series of recent openings

INTERNATIONAL. Specialist watches and jewellery retailer Tech-Airport’s recent openings at Beijing Capital International Airport are the latest steps in a remarkable growth story.

Since The Swatch Group subsidiary’s formation in 2004, when it acquired six outlets at Paris Charles de Gaulle Airport, the operation has extended across France, to key markets in Switzerland, Germany, Italy and Ireland, and to Singapore and China. By the end of the first half of 2012 it will operate close to 40 outlets at 16 international airports.

According to Tech-Airport CEO Gaël Vallade, that growth has been guided by a focus on high-quality airport locations in markets where parent company Swatch Group has a strong presence. “We are committed to qualitative growth,” says Vallade. “We will not go where the location is so-so or where there is a weak local organisation and we have actively refused to look at certain markets on that basis. We need Swatch Group and we need good partnerships locally, as well as a good retail location.”

Tech-Airport’s expansion in Asia is one example. In July 2010 it opened an Omega boutique at Singapore Changi Airport Terminal 1, the management of which has been entrusted to the Swatch Group’s local organisation. And last year Swatch Group China helped it to establish operations at Chongqing and Changsha airports, where Tech-Airport has installed its multibrand concept Hour Passion, and at Wuhan Tianhe Airport, where the company has opened its first flagship store for high-end Swatch Group brand Longines alongside an Hour Passion shop.

The Omega boutique at Geneva Airport, one of the key airport locations worldwide for the company

But Tech-Airport’s biggest development in China to date is its new business at Beijing Capital International Airport. Previously represented there under a contract with master retail concessionaire GABICO, on January 16 the company opened its own 210sq m Hour Passion store, featuring a 25sq m Longines shop-in-shop, serving domestic passengers in terminal three. The next phase will see the opening of an Omega boutique in March.

The importance of local strength is also evident from Tech-Airport’s approach to third-party, non-Swatch Group brands. In Europe, such brands make up an important part of the retailer’s offer, and Vallade is proud of the strong relationships with other brand owners. But in China, it has not yet been possible to recreate the same level of cooperation.

“We have great relationships with external brands,” he says. “They follow us when we need them, and many brands ask us to help with their implementations in other countries, including Italy, Germany and China. In China we work mainly with Swatch Group brands because some external brands are not well developed there. But in future if these brands have good expansion domestically, we will be happy to consider working together.”

Expansion on the home front
The Asian expansion is exciting, but the majority of Tech-Airport’s business remains in Europe. The retailer was dealt a blow when Galeries Lafayette won the tender to take over its locations at Paris Charles de Gaulle and Orly airports by the end of this year, but Vallade is philosophical and upbeat about prospects elsewhere.

The company is seeking quality locations to showcase brands such as Swatch (pictured above at Geneva)

He says: “It is a pity for us because we are native to Paris, but we have grown so much and seen so many qualitative airports worldwide that there is plenty for us to focus on. The tender system is fantastic because airports have the benefit of being able to adapt every five years. And for us too, no one location will always be key; it is most important to have a balanced portfolio geographically, to have a choice of locations and to help airports achieve their qualitative goals.”

One important new addition to that portfolio will be the new Berlin Brandenburg Airport Willy Brandt, where from June Tech-Airport will operate a strong offer comprising two Hour Passion stores and single brand concepts from Swatch and Omega.

Vallade says: “Berlin was a big success and it should be a 'wow' operation. Together with our two stores at Düsseldorf we now have a good network in Germany.”

Tech-Airport also has a growing presence in Italy. In May last year it secured the watches business at Venice Marco Polo Airport, where Vallade reports that sales have been ‘very satisfactory’. And following negotiations late last year it will operate at Milan Linate from May 2012.

Another development is underway at one of Tech-Airport’s flagship international locations at Geneva International. The airport is key to the retailer’s portfolio, and Vallade reveals that the Swatch monobrand concept there is among the top five Swatch outlets in the world, despite its relatively small size, at 40sq m. Following a recent tender, in June the company will extend its existing Hour Passion store to 143sq m, encompassing the current Omega boutique, which will be replaced by a bigger 50sq m outlet. The Swatch boutique, also in the central transit area, and the Hour Passion store in the airport’s railway station, will remain.

Preparing for further growth
With its dramatic expansion in China, three big new European openings in the next few months, and its existing business both at French airports, including Nice Côte d’Azur and Nantes, as well as at Dublin Airport, Tech-Airport is preparing for a busy time ahead. The company has relocated from its suburban headquarters in Roissy to central Paris in order to attract and retain the talent needed to handle such a growing concern, and it has outsourced its expanding logistics to reinforce its supply capabilities in anticipation of further growth.

“No-one wants to expand too quickly – I doubt we will have 500 locations anytime soon,” says Vallade. “But we will be looking for high quality locations wherever the Swatch Group is strong and where we know we will have good local support.”

With two stores in Duesseldorf (above and below), and one to come in Berlin, Tech-Airport is building its German presence

Given the parent group’s global coverage, it seems that nowhere is off limits for Tech-Airport. China is certainly a focus, but Swatch Group also has big networks – and has reported good 2011 performances - in multiple markets across Europe, Asia and the Americas. For Vallade, this group presence and the quality of the location provide two crucial factors in determining future growth. The third important factor is Tech-Airport’s ability to tailor the offer to each location.

“Our main goal is adaptation,” he says. “We adapt the range of brands to the airport and location, and adapt the mix to our clients. The key is the brands. We don’t want to promote our name everywhere, but to make the most of the brand names of Omega, Longines, Tissot, Swatch, and all the other great Swatch Group brands. Our concept must be adapted to the quality and requirements of the airport, and today we think only Tech-Airport is able to offer that truly global travel retail expertise in watches and jewellery.”