Story Highlight
– Retail model shifted towards direct consumer engagement.
– Hing Wa Lee emphasizes experience over product alone.
– New stores designed for social interaction and hospitality.
– Investment-focused buyers challenge traditional customer relationships.
– Company prepares for third-generation leadership transition.
Full Story
The modern luxury watch sector has historically thrived on brand reputation, sales figures, retail space, and inventory management. Retailers have poured resources into enhancing store aesthetics, expanding their physical presence, and improving customer service, while vying for the industry’s most sought-after brands. However, in the last ten years, this paradigm has evolved. There has been an increasing inclination towards direct-to-consumer sales, a rising focus on watches as investment pieces, and independent jewellers are feeling the pressure to provide more than just products.
In California, Hing Wa Lee has responded to these changes with a thoughtful re-evaluation of its luxury retail model. While maintaining the core elements of product, service, and brand collaborations, the retailer is now prioritising experience, hospitality, and personal connections to set itself apart from larger, more uniform luxury chains.
This shift is rooted in decades of evolution. Hing Wa Lee, founded by David Lee’s father in Hong Kong in 1965, originally specialised in gemstone carving and wholesaling primarily to the US. “Initially, he had a gemstone carving factory producing jade and other gemstone figurines, scenery and decorative objects. We wholesaled primarily to the US market,” explains David Lee, the chairman and CEO, who represents the second generation of this family-run enterprise.
The family’s journey to the United States was marked by pivotal milestones, including an invitation from the Smithsonian Institute in the mid-1970s for Lee’s father to restore damaged Chinese antiques, which facilitated their eventual permanent residency. By the early 1980s, the family had relocated to Los Angeles, expanding their offerings to fine jewellery, jade, and coloured stones while predominantly functioning as a wholesaler, supplying major retailers like Van Cleef and Gumps.
The transition into retail was primarily driven by economic necessity. After graduating from the University of Southern California in 1990, David Lee saw the need for a strategic pivot as the US faced an economic downturn. “I realized we needed to change our business model and suggested moving into retail with watches,” he recalls. His father, while managing real estate ventures, entrusted David to spearhead this new direction, leading to the opening of their first retail outlet in San Gabriel in 1993.
Significant growth followed, with Hing Wa Lee forging partnerships with over 25 watch brands, establishing itself as a leading independent luxury retailer in the US. Yet, Lee candidly acknowledges that independent retailers face significant challenges as brand strategies shift. “One challenge is that traditionally, if you sold well for a brand, invested in them and presented them properly, you were considered a good retailer,” he notes. However, many brands have since opted to establish their own boutique outlets, leaving multi-brand retailers in a precarious position.
This shift has resulted in an unpredictability that can abruptly sever long-standing partnerships, often leading to vacant retail space and lost revenue, despite years of investment. “Suddenly, despite doing nothing wrong, they’d leave,” Lee reflects. “Over the last decade there’s been a lot of that. It created instability and frustration.”
Lee differentiates these internal disruptions from more traditional economic or geopolitical challenges that luxury retailers are accustomed to managing. “That kind of disruption isn’t caused by economic or geopolitical issues – those are things we can’t control. This came from within the industry itself. But we navigated through it and came out stronger on the other side.”
The pandemic has also transformed consumer behaviour, with watches now viewed differently in cultural and economic contexts, particularly within the high-end market impacted by scarcity and secondary pricing. “Customers are increasingly viewing watches not just as status symbols or toys, but as investment vehicles,” Lee says, noting a significant rise in investment-minded consumers.
This evolution poses a challenge for retailers striving to cultivate lasting customer relationships, as investment buyers often prioritize transactions over loyalty. In response, Hing Wa Lee has intensified its focus on client experience, particularly in its newer store designs where hospitality and social interaction form a core component.
The design philosophy adopted in newer projects, such as the Larchmont location and the forthcoming Laguna Beach development, prioritises client experience at the conceptual level. “We’re designing stores with client experience built into the architecture from the beginning,” Lee asserts.
The Larchmont location is a prime example, deliberately deviating from the conventional luxury retail aesthetic. “Larchmont is almost like a three-storey townhouse,” Lee describes, creating an atmosphere reminiscent of a private home rather than a standard showroom. The design invites clients into various lounge spaces, dining areas, and entertainment zones featuring collections reflective of Lee’s personal interests, such as a Ducati room and a space for vinyl records.
Rather than concentrating solely on product displays, the environment is curated to encourage longer visits and informal exchanges. “You’re not surrounded by watches,” Lee explains. “Instead, you’re experiencing my lifestyle.” This personal touch, he believes, is one of the few genuine advantages that independent retailers can still leverage in a consolidating luxury market.
The flexibility afforded by Hing Wa Lee’s ownership of much of its real estate enables prioritisation of hospitality and experiential elements over conventional retail metrics. “We can create environments designed around experience rather than just return per square foot,” he states.
Looking ahead, the company’s most ambitious venture is the upcoming Laguna Beach project, expected to open in 2028. Positioned near Main Beach, it aims to evoke a South of France ambiance reminiscent of Saint-Tropez. “I’m creating a South of France Riviera-style environment – something inspired by Saint-Tropez,” Lee describes. “Customers will experience not only the store itself but the entire atmosphere around it.”
While the term “experiential retail” has gained traction in the luxury segment, Lee’s philosophy focuses less on grandeur and more on forging familiarity and ongoing relationships with clients. “People today want memories and experiences,” he states. “That’s what creates loyalty. Client experience is absolutely at the forefront of luxury retail.”
The business is also preparing for a significant generational transition, as Lee’s son is set to join the firm post-MBA, which he views positively amidst growing succession concerns in the jewellery industry. “That will bring in the third generation, which brands appreciate,” he notes.
Future growth is expected to remain deliberate and mostly organic. Besides the Laguna Beach initiative, Hing Wa Lee plans to remodel its Walnut location and continue refining the Larchmont concept. Lee also entertains the idea of selective acquisitions while emphasizing the importance of maintaining independence. “We’re independent – we don’t have private equity and we’re not public,” he affirms. “We grow through our own capabilities.”
In a landscape increasingly influenced by major luxury conglomerates and vertically integrated strategies, this independence is proving invaluable. Hing Wa Lee does not aspire to completely overhaul luxury retail but is instead enriching it with a personal touch—a quality that larger operators often struggle to emulate. Ultimately, Lee’s vision is clear: while products may draw customers initially, fostering a welcoming and enjoyable environment is vital for nurturing long-term loyalty in a field that can often feel increasingly homogeneous.
