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CASE STUDY 11.4
Skagen Designs: becoming an international player in designed watches

"awards the end of 2006 Charlotte and Henrik Jorst ;an look back at 15 hectic but successful years. Their company was founded in an apartment in New York, -:-n where its first marketing efforts took place. The -.-.o entrepreneurs started selling relatively expensive •.atches bearing a logo that American companies - ght use as company presents. During the Gulf Crisis -owever it was very difficult to sell watches in that price •ange. In 1990 Charlotte and Henrik visited a watch fair - Basel in order to find a manufacturer who was able 50 produce the watches at a lower cost price. They •:^nd a Danish-owned company, Comtech Watches, •• :n headquarters in Aarhus and a clock and watch •actory in Hong Kong. In 1992 Charlotte and Henrik had an annual turnover - US$800,000, primarily through an advertisement on ~e back page of a big mail-order catalogue for Father's Za;. Since then events followed each other in quick ;.;cession. In 1995 the chain store Bloomingdale's re uded the Skagen Design watches in its assortment jrd other retail chains like Macy's, Nordstrom and •'.atch World have followed. In addition, the watches i-5 sold in big gift and design shops. In 1998 Skagen Designs had an annual turnover of .-ost US$30 million; in 2005 turnover had increased •: approximately US$70 million.

Charlotte and Henrik Jorst
Skagen Designs.

Skagen designs - the story in brief
' 986 Party at Carlsberg. Even if Henrik Jorst has :-;jght his girlfriend, he manages to make Charlotte vcibye his neighbour at dinner, and they fall head over •eels in love. Shortly after the party Carlsberg sends -enrik to New York. From New York Henrik manages I-arlsberg's USA sales. Charlotte stays on for a year I'd a half in Denmark keeping in close contact with -enrik on the phone. •986 Charlotte joins Henrik in the United States i~d reigns as Miss Carlsberg for the summer and •= months. After a Danish colleague sends them 2 few of his sample corporate watches to sell in —e United States, Charlotte and Henrik embark on —eir dream of starting their own business and begin Corking in the world of watches. They are married - May.

1990 Henrik quits his job at Carlsberg. Charlotte walks New York trying to sell the Danish Jacob Jensen watches to watchmakers. They have hardly any money. Charlotte gives birth to their daughter Christine. 1991 The Jorsts design a few sample corporate watches and exhibit them at the New York Premium and Incentive Show in the Spring. At this fair, several retailers notice the watches and wonder why the two Danes present them as corporate watches and not branded goods. The retailers state that if the watches were available without the corporate logos they would purchase them for their stores. During the summer they produce 800 copies of four different watches with the name Skagen Denmark, A few months later all watches are sold out and an additional amount was produced. 1992 Sitting at the dinner table Henrik and Charlotte design 30 different models, all labelled 'Skagen

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PART II DECIDING WHICH MARKETS TO ENTER

Denmark'. In a New York street Charlotte meets one of the managers from the mail order giant The Sharper Image'. She takes a chance, and yes, he features the Skagen watches on the back page of the Father's Day catalogue. Everything is sold out. From the apartment in New York Henrik and Charlotte have a turnover of US$800,000. 1993 There are not many states in the United States where business taxes are almost equal to zero. In Florida and Nevada this is, however, the case. One day they fly to Incline Village at Lake Tahoe - one of the world's best ski resorts. They lose their hearts and buy a house that is much too expensive, but big. The company moves into every room from kitchen cupboards to garage. They still do it all by themselves. Charlotte gives birth to their daughter Camilla. 1995 Five years after starting the...
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