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Watch for These Winners in the Smartwatch Battle

A growing market makes room for more winners

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Fossil Group (FOSL)

Fossil NASDAQ:FOSLFossil announced recently that it is in early R&D stages of a new Android Wear line of clothes and other products and investors voiced their approval big-time. The shares have risen nearly 7% to $120 after the announcement.  Since then they have since settled back to the $116 range.

While Texas-based Fossil owns about 45% of the U.S. fashion watch market, the company has been in a slump lately as demand waned in the larger upscale jewelry segment. However, a survey by Cowen Consumer Tracking showed that 38% of people bought at least one watch last year, so the watch industry is experiencing an uptick.

Fossil’s foray into smartwatches could help retain momentum, although a saleable product won’t be ready until at least the summer. Fossil is already riding the tailwind of an 11.4% jump in revenue over last year.

Interestingly, Fossil has attempted to make its own smartwatch before, but it flopped and never made any money. The hope is that Android Wear will make the watches attractive for both brains and beauty. Fossil caters to mostly women with an eye for fashion, so the “coolness” of the device will be very relevant.

Fossil, with $3.3 billion in annual sales, also licenses brands including Michael Kors and Tory Burch.

Article printed from InvestorPlace Media,

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