Fossil CEO Franco Fogliato Leads Turnaround With Fresh Focus

Franco Fogliato is finally ready to have some fun at Fossil Inc.

The chief executive officer — who joined the watchmaker from sports equipment brand Salomon in September 2024 — has spent much of the last year wrestling with its finances. 

A debt deal this month cleared much of that up. The company added $32 million in additional borrowings, bringing its bond debt to about $18 million and pushing back the payment date to 2029. 

That is breathing room Fogliato said Fossil needed. 

“It is bringing the company out of the storm,” Fogliato told WWD. “It was an important step to strengthen our balance sheet because even though we’re doing a lot better, our cash flow is still negative this year and it would’ve not allowed us to really get into paying down the debt in November next year. 

“It’s been a little painful taking a long time because of instability in the market, particularly with tariffs, which obviously makes it difficult to make a decision. But ultimately we got there.” 

Fogliato said there are three phases to the Fossil turnaround — strengthening the balance sheet, returning to profit and then growing.

That first part done, the CEO is getting to the good stuff. 

“Right now is what I call the fun part,” he said. “Literally 100 percent of what we do is about executing the plan we built.”

There should be plenty of fun to be had as Fogliato is looking to bring the company out of a decade-long slump when it struggled to keep up with the consumer and a wave of new wrist technology. 

It’s not a coincidence that 2014 is both the year the Apple Watch was introduced to the world and a high-water mark for Fossil.

The watchmaker was not just big then, peaking at $3.5 billion in sales, but broad, selling through its namesake brand as well as licenses with Diesel, Michael Kors and many others. 

Despite its entrenched position in the market, Fossil never really came up with an effective answer to the smartwatch and even its if-you-can’t-beat-‘em, join-‘em deal with Google fizzled. 

The company finally got out of the smartwatch business early last year. Soon after, Kosta Kartsotis, who started at the firm in 1988 and had been CEO since 2000, was out and Fogliato was in. 

“What went wrong is a combination of different things — market complexity, pressure,” Fogliato said of the Fossil he first joined. “The group had 14 different brands, two business models [including the licensed and the owned brands], 140 countries globally and three channels.

“It was far too complex,” he said. 

Breaking the company up by segments — looking at how each brand performed by country and channel — he said there were 79 segments with less than $500,000 in sales. 

“The goal was really to focus on what makes a difference,” Fogliato said. “When things are good, you generate operating cash flow, you can invest in smaller assets. When things are tough, you go back to what you are good on. 

“We’re going to simplify,”  he said. “We’ll constantly try to find that way to refocus.”

That means amplifying the Fossil brand, now repped by Nick Jonas, and building the licensed Michael Kors and Diesel businesses. 

Some of the other businesses have already been jettisoned and others will be stopped in the future. Already, Fossil was contracting quickly, with sales down 18.9 percent to $1.1 billion last year given store closures and the smartwatch exit. 

Fogliato said the company is now moving to a much healthier place as it sharpens its focus. 

The Fossil brand, he said, had started to rely too much on price promotions. 

“We were chasing sales and our wholesale channel was irritated with us,” he said. “We were becoming a competitor, an unfair competitor. Also, we were not servicing them well.”

So the CEO’s tenure started with a charm offensive. 

“I met with all our largest partners in the world and they clearly said, ‘Look, we love the Fossil Group, but you guys needed to change stuff.’

“Ultimately, we cut our DTC penetration down dramatically … and are refocusing into the wholesale channel, rebuilding relationships,” he said.

Given the size difference between Fossil, which has a market capitalization of $136 million, and Apple, with a market cap of $4 trillion, none of that would really matter if it were a head-to-head competition. 

But the consumer is a moving target for everyone, including Apple. 

Fogliato was reminded of this when his 18-year-old son heard he would be working at Fossil and asked for a watch.

“Why wouldn’t you wear an Apple watch?” Fogliato said he asked. “And he says, ‘Mom wears an Apple Watch. There’s no way I’m going to wear an Apple Watch.’ And he looks at me and says, ‘You guys are old. You think about measuring steps, heartbeat. I just want to look cool.’

“There’s a new generation that is coming into the space,” Fogliato said. “They don’t want to wear a smartwatch. When you think about a watch as an accessory, the price point is generally pretty achievable. And that’s really what has been driving some of the improvement together with brand strength.”

Fossil’s third-quarter sales declined by 6.1 percent, showing a big improvement from the 15.2 percent drop in the second quarter.  

“It is hard work,” Fogliato said of the turnaround. “You’ve got to be lucky. There are a few things that need to happen, but I think what is very encouraging today is that the younger generation are appreciating the watches. They create emotional connection. It’s a way to express themselves more than any other thing. They don’t want to look all the same.”

To grab that opportunity, Fogliato and Fossil have a lot of work, um, fun, ahead of them. 

“I can be a pretty intensive guy,” he said. “My days are 24 hours a day, seven days a week. I’ve sat down with every team in every office we have around the world. I went to see our vendors, I went to see our customer. People are like, ‘Oh, we haven’t seen management for years.’ I think I’ve done four, five tours around the world in a year.”

Fogliato, a self-professed brand guy, believes in the Fossil brand, but is very clear that he is rebuilding a watch company.

“We’re going to double down on our innovation center in Switzerland,” he said. “We’re building watch assembly in the U.S. for next year. We have a great innovation center in Asia as well. If consumers get excited about our brand, we love it. But ultimately we’re a watch company first.”