"The watch industry is a $65 billion industry, and if you look at the tech industry, it's trillions of dollars in consumer spending a year," Fossil CEO Kosta Kartsotis said on Tuesday at Piper Jaffray's consumer conference. "If just a small percentage of that would come into our category, it will change the industry."
Kartsotis said the company will begin to release watches with some added technology features as early as the fourth quarter, with more set for release in 2016. A release late in the year might be just what the company needs to boost its end-of-the-year sales of watches; its net sales of watches decreased 1% in the fourth quarter of 2014 compared with the fourth quarter of 2013.
Executives said they hope the technology will attract more millennials to the 31-year-old company, whose performance has been hurt lately by currency fluctuations and weak watch sales at Michael Kors (KORS), for which Fossil is the exclusive watch maker. Net sales for Fossil's first quarter fell 7% to $725.1 million from the same quarter the previous year.
Meanwhile, the company's stock is down 36% year to date, perhaps on fears that the Apple Watch will hurt Fossil's sales.
Fossil Chief Financial Officer Dennis Sector said one way the company is increasing its use of technology is by boosting its digital presence and focusing less on adding physical stores.