I'm sure you talk to many CEOs and collectors at every level. I talk to collectors at every level too and at all different levels of income. But when you talk to CEOs, you're not asking the same kinds of questions that we journalists are asking. And also, CEOs aren't give you the same answers they'd give someone like me.
For instance, I go into a meeting with a CEO knowing the margins of the industry. In USA, in a mall location, what kind of rent are they expecting to pay for a store. Do you have an idea? Probably not. As an individual with an economics background and with knowledge about this industry, I can tell you that retail shops are extremely expensive to operate. As someone who is familiar in the industry on a macro-level, I can paint a rough cost structure for a mono-brand luxury watch store. And in moderately bad economic times, a Lange (or insert your favorite) mono-brand store will potentially lose money, or sometimes that specific brand is just going through a cool down period. Do you think all Breguet and Blancpain mono-brand stores make money? They don't, because right now certain brands aren't hot. So, no, these brands don't always profit more from opening these stores. Whereas in those same moderately bad economic times a multi-brand store can still make money because there are other products to support the store.
Furthermore, when you talk to CEOs, a CEO is going to answer the same question from a journalist and from a collector very differently. Perhaps you forgot to consider this important aspect.
And lastly, perhaps it's my fault, perhaps you didn't understand my posting and that's possibly my fault because I didn't write it well, but considering you didn't understand 3a, again, possibly because I didn't write it in a clear way, that's basically stating a multi-brand store can be more efficient costs-wise than a mono-brand store. A mono-brand store is likely going to have higher costs. Much more overhead for one thing, than a multi-brand store.
You are basing your statement from an assumption. That assumption being, nobody goes into business to lose money. Which is true. BUT! Right now, watches are hot. And these CEOs forecast growth even in bad economies, and they need to achieve that growth somehow. Also, CEOs are not always judged by profit growth! Sometimes they're only judged by revenue growth! This is something that is very strange. So you may even be a CEO of a big company. Let's say you're CEO of Felicetti Pasta (one of my favorite pasta brands), of course you understand business, you probably come from a big business school even. But sometimes these CEOs have very different targets than you probably initially assumed. We can't assume that our logic applies in every case. To assume is to make an assumption, and assumptions aren't always right.
Thank you again! You made very logical assumptions, but until we can confirm these assumptions, they remain assumptions. Oh, in English, the word "assumption" is a negative word, because it implies that nobody can confirm if it's a fact. So Assumptions in American business is looked at as "worthless" since it's not "confirmed." "Assumption" is equivalent to a "best guess." "Presumption" is an "educated guess, but still not confirmed." So understanding that not everyone knows the subtle nuance of the word assumption, this is why I mention this.
So far you seem to have stated multiple times that opening boutiques is always a move for more profits - I would disagree. As the costs of operating a boutique can be tremendous. The cost of goods sold is likely around 55% of revenue for a watch store. The rent alone will be another 10% of revenue or more (depending on the city, but not necessarily entirely dependent on the size of the space rented oddly). Personnel costs vary tremendously, but can be anywhere from 6-10% (depending on the country). Then there's still marketing costs of around 2% per revenue spent (the brand will do some matching for the store). And a bunch of other administrative costs such as insurance, utilities, etc. which vary widely). In the end, most stores come out with relatively low (8-13%) profit margins. And sometimes losses in slower years when they can't sell much and overhead costs really start to become a bigger percentage of the smaller revenue.
Thank you again for your participation in this topic! I really appreciate your response even though we don't agree on every aspect of the conversation! And as always I really appreciate your posts!