Fossil INC: Evolution of the Branded Fashion Watch
FOSSIL , INC.: EVOLUTION OF THE BRANDED FASHION WATCH
On an April morning, 1993, Tom Kartsotis woke up worth over $42 million on paper and owner of a considerably stronger company. The previous day’s initial public offering of 2.4 million shares had returned $18.7 million to Fossil. Starting from modest beginnings, Fossil had emerged as a major competitor in the highly-competitive branded fashion watch industry. Tom’s months of hard work had resulted in a successful initial public stock offering (IPO). He faced the welcome challenge of making effective use of these new funds.
FOSSIL’S CREATION AND GROWTH
After he dropped out of Texas A&M, Tom set up business outside Texas Stadium in suburban Dallas. He worked as a ticket-broker, or as some would say, scalper, and sold enough hard-to-get tickets to sporting events and concerts to build his savings to over $200,000. In 1984, at the age of 24 and not looking forward to a future as a ticket scalper, he sold out to his partner and began a search for new opportunities.
Tom’s older brother, Kosta, 31 at the time, was a merchandise executive at a large Dallas department store chain, Sanger Harris. Kosta had noted the recent success of Swatch fashion watches and was aware that watches and other goods could be imported from the Far East at very low cost. On a visit to Hong Kong, Tom studied a number of potential products for import including toys and stuffed animals before following Kosta’s advice and returned to the U.S. to develop a watch import business.
Enlisting the aid of two friends, Lynne Stafford for her sense of design and Alan Moore who had a master’s degree in accounting, he invested his savings of $200,000 to found Fossil as a Texas corporation in 1984. Fossil’s initial purchase of watches from a Hong Kong manufacturer included some retro and jumbo designs that Macy’s thought were “hot,” and significant orders followed.
A design staff was developed that included watch buyers from retail
On an April morning, 1993, Tom Kartsotis woke up worth over $42 million on paper and owner of a considerably stronger company. The previous day’s initial public offering of 2.4 million shares had returned $18.7 million to Fossil. Starting from modest beginnings, Fossil had emerged as a major competitor in the highly-competitive branded fashion watch industry. Tom’s months of hard work had resulted in a successful initial public stock offering (IPO). He faced the welcome challenge of making effective use of these new funds.
FOSSIL’S CREATION AND GROWTH
After he dropped out of Texas A&M, Tom set up business outside Texas Stadium in suburban Dallas. He worked as a ticket-broker, or as some would say, scalper, and sold enough hard-to-get tickets to sporting events and concerts to build his savings to over $200,000. In 1984, at the age of 24 and not looking forward to a future as a ticket scalper, he sold out to his partner and began a search for new opportunities.
Tom’s older brother, Kosta, 31 at the time, was a merchandise executive at a large Dallas department store chain, Sanger Harris. Kosta had noted the recent success of Swatch fashion watches and was aware that watches and other goods could be imported from the Far East at very low cost. On a visit to Hong Kong, Tom studied a number of potential products for import including toys and stuffed animals before following Kosta’s advice and returned to the U.S. to develop a watch import business.
Enlisting the aid of two friends, Lynne Stafford for her sense of design and Alan Moore who had a master’s degree in accounting, he invested his savings of $200,000 to found Fossil as a Texas corporation in 1984. Fossil’s initial purchase of watches from a Hong Kong manufacturer included some retro and jumbo designs that Macy’s thought were “hot,” and significant orders followed.
A design staff was developed that included watch buyers from retail
References: Fossil (1993) Prospectus for IPO. Bumbacher, Urs (1992) “The Swiss Watch Industry,” Harvard Business School, Case 9-792-046. Federation of the Swiss Watch Industry (1993) Swiss Watch Exports: 7,588.8 Million Francs in 1993. Press Release - February 9, 1994. Modern Jeweler (1991) 1991 World Watch Almanac. Joe Thompson, Editor-in-Chief. -------------------------------------------- [ 1 ]. Copyright 1995 Steven Isberg and Ronald Stiff, University of Baltimore, 1420 North Charles Street, Baltimore, MD 21201. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means - electronic, mechanical, photocopying, recording, or otherwise without permission of the authors. Revised 26 March 1999.