Fossil Group Stock

Fossil Group, Inc. operates as a design, innovation and distribution company specializing in consumer fashion accessories.

The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts and sunglasses. The company designs, develops, markets and distributes products under its owned brands FOSSIL, SKAGEN, MICHELE, RELIC and ZODIAC and licensed brands ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, and TORY BURCH.

Segments

The company manages its business primarily on a geographic basis. The company's reportable operating segments include Americas, Europe and Asia. Each reportable operating segment includes sales to wholesale and distributor customers, and sales through the company-owned retail stores and e-commerce activities based on the location of the selling entity.

The Americas segment includes sales to customers based in Canada, Latin America and the United States.

The Europe segment primarily includes sales to customers based in European countries, the Middle East and Africa.

The Asia segment primarily includes sales to customers based in Australia, Greater China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea and Thailand. Each reportable operating segment provides similar products and services.

Brands

The company makes distinctive watches and lifestyle accessories, bringing each brand to life through an extensive global channel and distribution network.

Proprietary Brands

The company’s owned brands include FOSSIL, SKAGEN, MICHELE, RELIC and ZODIAC.

FOSSIL

FOSSIL is a leading global lifestyle accessories brand inspired by creativity and ingenuity. The company creates timeless, well-crafted bags, jewelry and watches to accessorize a joyful, inspired life.

SKAGEN

From the coastlines of Skagen, Denmark to the city life of Copenhagen, intentional Danish design has influenced Skagen's distinctive point of view. Since 1989, the company’s watches and jewelry have been defined by timeless design that never goes out of style.

MICHELE

MICHELE luxury timepieces are an extension of the women who wear them - women who are bold, feminine and unforgettable. The company’s exceptional watches feature the finest materials; hand-set diamonds, 18K gold, mother-of-pearl dials and signature MICHELE details that women celebrate as a reflection of their distinct personal style.

RELIC

RELIC by Fossil is an American watch and lifestyle brand creatively delivering accessible, updated casual designs. With each of the company’s signature watches and accessories, it creates styles that fit the everyday lifestyle.

ZODIAC

ZODIAC was founded by Ariste Calame in Le Locle, Switzerland. The company has dedicated itself to the precision and craftsmanship associated with Swiss mechanical timekeeping. Zodiac consistently pushes the limits of design innovation, driving new variations of the company’s iconic models forward with purposeful uses of color and premium materials, all powered by proprietary Swiss mechanical movements and leading technologies.

Licensed Brands

The company’s main licensed brands include ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, and TORY BURCH. As a result of the company’s vertical integration, it is uniquely positioned to launch an accessory category, such as watches, in partnership with a licensor in a timely and consistent manner. All of the company’s major licensing relationships are exclusive for the brands it licenses and includes traditional watches, and for certain other brands, smartwatches and/or jewelry.

Products

The company designs, develops, markets and distributes accessories across a variety of product categories: traditional watches, smartwatches, jewelry, handbags, small leather goods, belts and sunglasses. Additionally, the company manufactures and/or distributes private label brands, as well as branded products purchased for resale in certain of its other branded retail stores.

Traditional Watches and Smartwatches

Watches are the company’s core global business. The company’s full display smartwatches use Google’s WEAR OS operating system. The company has a license for WEAR OS that expires on August 30, 2024. Certain of the company’s hybrid and other smartwatches use operating systems developed by it or as otherwise licensed to it by Google.

Licensed Brands

The company has entered into multi-year, worldwide exclusive license agreements for the manufacture, distribution and sale of watches bearing the brand names of certain globally recognized fashion brands.

The company also licenses certain internationally known brand names, such as Skechers, for limited distribution in select markets. The company mutually agreed with PUMA to an early termination of the PUMA license agreement effective at the end of 2023. The company is negotiating a new long-term agreement for its license for the Tory Burch brand and negotiating an extension of its licenses for the Armani Exchange and Emporio Armani brands. The company’s license agreement with DKNY provides the licensor the right to terminate the license if it fails to meet the minimum net sales specified in the license agreement for two consecutive years, which the company does not meet. If it does receive a termination notice from DKNY, the license agreement will terminate, but it will be allowed to sell through the collection of articles in production when the termination occurs.

Fashion Accessories

In addition to the company’s core watch business, it designs and creates handbags, small leather goods, and belts across certain of its owned brands and jewelry under its owned brands and certain licensed brands. In the U.S. and certain international markets, the company markets its fashion accessory lines through the same distribution channels as its watches using similar marketing approaches. The company’s fashion accessories are typically sold in locations adjacent to watch departments, in store or online, which may lead to purchases by persons who are familiar with its watch brands.

Licensed Eyewear

The company has a license agreement with the Safilo Group for both FOSSIL branded sunglasses and optical frames worldwide, which expires on December 31, 2028.

Stores

The company’s products are sold across approximately 140 countries worldwide through 23 company-owned sales subsidiaries and through a network of 65 independent distributors. The company’s products are offered on airlines and cruise ships and in international company-owned retail stores. Its network of company-owned stores includes retail stores and outlet stores. In certain international markets, the company’s products are also sold through licensed and franchised FOSSIL retail stores, retail concessions operated by it and kiosks.

The company also operates stores under the WATCH STATION and WSI brands, in which it partners with some of the world's most iconic brands to curate a unique collection of designer watches and jewelry for women and men. The company offers a robust online and in-store experience in the United States, Europe and Asia that connects its customers to the stories, trends and latest innovations in the world of watches.

Strategy

The key elements of the company’s strategy are to revitalize the Fossil brand; grow watches and jewelry in its core portfolio brands; and focus on premium watches.

Marketing

The company has an in-house marketing center of excellence, serving both its owned and licensed brands, to better connect with consumers and drive sustained engagement and awareness. This capability works across channels, including digital marketing, social media/social commerce, email marketing, Customer Relationship Management, partner marketing and brand media. The company expanded this model in 2022 to include brand development, PR, content and integrated marketing, in addition to a dynamic global creative studio.

Distribution

The company distributes its products globally through regional warehouses with its warehouse in Dallas, Texas serving the Americas, its warehouse in Eggstätt, Germany serving Europe and its warehouse in Hong Kong serving Asia. For those countries in which the company’s products are distributed, but where it does not have a physical presence, the company uses third-party distributors. From the company’s regional warehouses, its products are shipped to subsidiary warehouses, distributors, wholesale accounts or directly to customers in selected markets. The company’s extensive distribution network allows it to reach a diverse global customer base. The company sells its products through a range of channels, including e-commerce, company-owned retail stores, department and specialty retail stores, airlines, mass markets and concessions.

Digital: The company’s holistic e-commerce efforts include three forms of digital channels. First, the company’s owned global e-commerce websites for its brands deliver mobile-friendly experiences, personalized content, and seamless omni-channel integration with retail stores, including buy online pick up in store, curbside pickup and ship from store. Second, the company sells its products to leading third-party online retailers and its wholesalers’ e-commerce websites. Third, the company directly sells to consumers on major third-party platforms.

Intellectual Property

The company uses its FOSSIL, MICHELE, RELIC, SKAGEN and ZODIAC trademarks, as well as other trademarks, on watches, its FOSSIL and SKAGEN trademarks on smartwatches and jewelry, and its FOSSIL trademark on leather goods and other fashion accessories in the U.S. and in a significant number of foreign countries.

The company also uses FOSSIL, SKAGEN, WATCH STATION INTERNATIONAL, and WSI as trademarks on retail stores and FOSSIL, SKAGEN, WATCH STATION INTERNATIONAL, WSI, MISFIT, ZODIAC, KATCHIN and MICHELE as trademarks on online e-commerce sites. The company also has rights in certain copyrights and designs both in the United States and in other countries where are products are principally sold.

Seasonality

The company’s business has a seasonal pattern, with a significant portion of its sales occurring during the end-of-year (year ended December 2022) holiday period.

Competition

The company’s traditional watch business generally competes in these tiers with a number of established manufacturers, importers and distributors, including Armitron, Citizen, Gucci, Guess?, Kenneth Cole, LVMH Group, Movado, Raymond Weil, Seiko, Swatch, Swiss Army, TAG Heuer and Timex.

Manufacturing and Sourcing

The majority of the company’s products are sourced internationally. Most watch product sourcing is coordinated through its Hong Kong subsidiary, Fossil (East) Limited (Fossil East). The operations of the Hong Kong and Chinese factories that produce the company’s products are monitored on a periodic basis by Fossil East, and the operations of its Swiss factories are monitored on a periodic basis by Montres Antima SA, one of its foreign operating subsidiaries.

Research and Development

The company's research and development expenses were $29.1 million for the year ended December 31, 2022.

History

Fossil Group, Inc., a Delaware corporation, was founded in 1984. The company was incorporated in 1991.