AAA  Sep. 13, 2014
Watch out!
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Smartwatches are buzzworthy, but the volume of the conversation turned up a notch this week with the unveiling of the Apple Watch.

Analysts at Citi Research estimate the smartwatch market could grow to $10 billion in sales by 2018, up from an estimated $1.8 billion this year. So what might that mean for Fossil Group, a leader in fashion watches? Its licensed brands represent nearly half of its sales and include names like Armani Exchange, Burberry, DKNY and Michael Kors.

Apple is targeting fashion conscious customers with the inclusion of an 18-karat gold option in its new line. The implications for Fossil won’t become clear until the Apple Watch is made available next year, but Fossil is taking proactive steps. It’s collaborating with Google and Intel to develop fashionable wearable technology.

This week analyst Randal Konik of Jefferies reiterated his “buy” rating on Fossil, noting that the stock’s price-earnings ratio of 13, based on projected earnings, is below its historical average. “We believe Fossil watches and the Apple Watch serve different purposes for consumers,” he wrote in a note to clients.

Associated Press
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