In 2023, executive chairman Danny Govberg led the merger of the pre-owned online watch platform he founded, Watchbox, with traditional jewelers Govberg Jewelers and Hyde Park Jewelers to form The 1916 Company.
Now, 1916 Company is plotting a new course for growth. John Shmerler, who has worked with Govberg since the early 1990s, was announced on March 28 as the company’s CEO. His plan to unify 1916’s various businesses hinges on retail expansion. The company already has 20 stores, with two more planned this year: A store in Baltimore will open this month and another, in Philadelphia, is set to open later this year. In addition, a Manhattan Beach, California location will debut in 2025.
Shmerler told Glossy that the brand’s retail strategy will heavily focus on clienteling and person-to-person communication, continuing the shared tradition of Watchbox and Govberg Jewelers.
“E-commerce has made up a small percentage of our sales,” Shmerler said. “Everything is whiteglove and focuses on face-to-face communication.”
Shmerler said several 1916 clients call an in-house watch advisor to talk about watches weekly, even with no immediate purchase plans. He attributed this to the tendencies of collectors, the number of which is on the rise, who often walk into a jewelry store armed with knowledge and expertise rivaling store employees.
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To better cater to these experts, 1916 aims to make the product of its new stores more focused. For example, while 1916 Company is one of the few authorized dealers of Rolex’s certified pre-owned program, the Baltimore store will only carry around 100 pre-owned Rolex watches. Inventory of other brands like Omega will also be limited in order to give each brand enough room to breathe, Shmerler said.
Carrying a small number of watches in-store is an increasingly common strategy among watch retailers. In a new store opened at the Harry Reid International Airport in Las Vegas, Bob’s Watches only carries 20 watches at a time.
Low inventory has the added benefit of giving each brand in a multi-brand environment room to breathe. Adding new brands to a store where associates are expected to be experts on the product is a challenge, Shmerler said.
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“The major brands are demanding a higher level of training and even more specialization from the in-store teams,” he said.
Rolex, despite facing competition from up-and-coming watch brands, still dominates the market at more than 30% market share. As such, the 1916 Company will always favor Rolex when merchandising a multi-brand store, Shmerler said.
“All of our multi-brand stores are official Rolex jewelers,” Shmerler said. “But we are trying to diversify our inventory by introducing more independent brands this year, including F.P. Journe and H. Moser & Cie.”
The 1916 Company is in a good position to take advantage of the growing demand for watches. It’s projecting 2024 revenue of over $600 million, plus it has a hand in both new and pre-owned sales and close relationships with the largest horological brands on the market. Watches will be a nearly $50 billion global industry this year, after growing at a rate of around 3% annually over the last five years. Around half of sales come from pre-owned watches.
But Shmerler said there are still major issues in the industry, namely in terms of supply and demand. Currently, it’s at the tail end of a cycle where demand far exceeds supply. That will likely shift soon, Shmerler said, and then inevitably shift back. And it’s during those lopsided times that brands and retailers can do better by each other, he said.
“Watch brands and retailers are not always properly aligned,” he said. “Right now, in a scarce time, the retailer is clamoring for watches. … Brands don’t need the retailers as much as we need them. Then when production is high and demand is low, our inventories build up and efficiency is not so great. The industry, unfortunately, has not found the right [solve] for that yet.”
