The Watchmaker That Set Out to Lose Sales

Watchmaker Fossil Group is losing sales on purpose.

Around this time last year, new leadership looked at the company and saw some problems. Fossil sold too many watches at a discount, which was eating into profits, so executives reduced the price cuts expecting that the move would diminish sales. Walking away from discounted online sales is part of the executives’ turnaround plan, which has also included closing stores and cutting jobs.

“Our discount rate on e-commerce has been reduced more than 50% in the last year,” said Fossil Chief Financial Officer Randy Greben. This means that if items on sale were previously marked down 20%, the discount would now be 10%. “We knew it would shrink our e-commerce business and it absolutely has. And that’s been OK,” he said.