The decision, which took the local market by surprise, will sever a five-year relationship with Bangalore-based Titan Industries, which like Timex, owned 28.5% in Timex Watches. Negotiations are also on to acquire the shares held by Titan, the local market leader in quartz watches, and other investors, all of which are part of the Bombay-based Tata Group.
A sluggish economy and poor demand in rural India are cited as the main reasons for U.S.-based Timex's decision to go solo. Titan's 60 exclusive stores and 4,500 dealers failed to offer Timex what it needed: a foot in the low-income, rural hinterland for watches priced at less than $30.
Sales of Timex watches in fiscal 1997, ended last March, dropped 13% to $23.7 million, while post-tax profits were down 78% to $377,000. During the year, Timex's local alliance produced 1.83 million watches but sold only 1.78 million.
The marketer still commands a 23% share of the organized quartz watch segment in India and ranks No. 2 after Titan, with which it will retain ties while the restructuring exercise is on.
Efforts to crack new markets in India continue, however. Timex watches are now sold in the Ministry of Defense-run Canteen Stores Department, which caters to the Indian armed forces and claims to be Asia's largest chain of stores. By 1998, the marketer plans to open 14 stores Indiawide that will stock only Timex products.
SSC&B Lintas, Bangalore, handles Timex.
Copyright December 1997, Crain Communications Inc.