History of Fossil

Owner of one of the most popular brand names in the United States, Fossil, Inc., designs, markets, and distributes fashion watches, leather goods, sunglasses, and other merchandise for retail sale on an international basis. Fossil grew quickly during the 1980s, propelled by the retrospective designs of its watches, which were inspired by magazine advertisements from the 1930s, 1940s, and 1950s. After recording phenomenal success with the sale of its watches in the United States, the company entered international markets and diversified its product line to include leather goods and sunglasses during the 1990s. In addition to marketing merchandise under the Fossil brand name, the company also marketed a line of less expensive fashion watches under the Relic label.

Founded in 1984, Fossil represented the second entrepreneurial effort launched by Tom Kartsotis, a Texas A&M dropout living in Dallas. When he was in his early twenties, Kartsotis and a partner operated a ticket brokerage business in Dallas, where the two entrepreneurs enjoyed moderate success by hawking tickets to Dallas Cowboy football games and other events. But "I didn't want to be a 30-year-old ticket scalper," Kartsotis confided to Forbes a decade after founding the business that would launch him toward fame and wealth. The inspiration that led Kartsotis into his second business venture came from a suggestion by his older brother, Kosta Kartsotis, a merchandising executive at Sanger Harris, a large, Dallas-based department store chain. Kosta told Tom about the large profits that could be made from importing retail goods made in the Far East, particularly the money that could be made in importing moderately-priced fashion watches. At the time of Kosta Kartsotis' suggestion, Swiss-based Swatch watches were the rage of the day, enjoying international popularity as trendy fashionable timepieces. Tom Kartsotis was intrigued enough by his brother's comments to withdraw his savings and sell his half of the ticket brokerage business, which gave the young entrepreneur $200,000 to start his new business.

Tom Kartsotis flew to Hong Kong without any concrete plans about his business future except to investigate the possibilities of starting an import/export business. During his travels around Hong Kong, Kartsotis explored various import/export possibilities, including dealing in stuffed animals and toys, but finally settled on the suggestion made by his brother. Kartsotis hired a Hong Kong manufacturer to produce 1,500 watches and brought the products back to the United States where he sold the watches to Dallas department stores and boutiques. These sales marked the fledgling moments of his new company, Overseas Products International.

Shortly after embarking on his new enterprise, the 24-year-old Kartsotis hired a friend, Lynne Stafford, as Overseas Products' designer and created the "retro" design style that predicated the company's existence and fueled its growth throughout the 1980s and into the 1990s. With Kartsotis at the helm, the company grew exponentially during the 1980s by attracting consumers with designs reminiscent of an era only their parents or grandparents had live through. Targeting middle- and upper-income consumers in their teens, twenties, and thirties, Kartsotis and Stafford designed watches that imitated the styles of the 1930s, 1940s, and 1950s. For inspiration, Kartsotis and Stafford (who were later married) pored over old issues of Look, Life, and Time magazines, taking careful note of the fashion styles illustrated in advertisements and devising a design concept that was embraced by a new generation of consumers.

Before consumers could flock to their local stores and snatch up Fossil watches, Kartsotis needed to broaden and deepen his distribution network. The watch designs touched a nostalgic chord in the hearts of the company's early customers, but the company itself was little more than a startup venture just emerging on the retail scene, unable to attract legions of consumers. With financing from Asian manufacturers and after several years of peddling his products to an increasingly greater number of retailers, however, Kartsotis' company stood on the brink of explosive growth. By 1987, Fossil, Inc., as the company was now called, was collecting $2 million in sales a year after having established a solid reputation among Texas retailers. Kosta Kartsotis joined the company in 1988, midway through the most prolific period of growth in Fossil's short history. Kosta Kartsotis' job was to help the company sells its watches to department stores--the area of his expertise--and ensure that as many retailers as possible stocked Fossil watches.

Fossil is the biggest company nobody knows much about. Many people, especially people in the watch industry, tend to overlook Fossil. After all, the product is primarily quartz, overwhelmingly fashion, with a very reasonable price point. How big could this company actually beı Last year, Fossil did an astounding $850 million in sales!

The Future

Fossil has been phenomenally successful since its inception and all signs point to the growth and success continuing. "We continue to have incredible growth and increased opportunities, with all of our brands worldwide," Gundy says. "We foresee huge growth. We forecast 10-15% every quarter. It's the process we have. It is the speed of execution, from idea to product in the store, and it is the execution in the store. It's a constant attention to detail."Fossil is the dominant story in our company, because it is so large in watches and other categories," Gundy adds. "We bring professionalism; we bring excitement at the store level so the ultimate consumer gets a feel for the brand in packaging, execution, and styling. I think we are much quicker to market products than any other company. We have a great commitment to have the right products in the stores at the right time."