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26 Sep, 2017

Who Owns What: A Guide to the Watch Groups (Part 1)

Who Owns What: A Guide to the Watch Groups (Part 1)

Every so often the landscape of the watch industry shifts: a key brand gets sold to a major watch group and the balance of power changes ever so slightly. In the last few years, some important changes in the big groups' holdings have occurred: Harry Winston joined the Swatch Group, Kering acquired Ulysse Nardin, and both Citizen Group and Citychamp have made inroads into the Swiss watch world. Here are the group rosters of brands:

Swatch group (Switzerland): Breguet, Blancpain, Glashütte Original, Harry Winston, Jaquet Droz, Omega, Léon Hatot, Longines, Rado, Union Glashütte, Tissot, Calvin Klein, Balmain, Certina, Mido, Hamilton, Swatch, Flik Flak

Based in Bienne, Switzerland, the Swatch Group is the largest watch company in the world. Of the 8.46 billion Swiss francs ($9.04 billion) in net sales that it reported for 2013, SF8.17 billion ($8.74 billion) came from watches and jewelry. The publicly traded company owns 18 watch brands spanning the entire price spectrum. Breguet is the most expensive among them, while Omega generates the most revenue and is the third-largest Swiss watch brand.

The Swatch Group is the most powerful company in the Swiss watch industry due to the many components makers it owns. Thanks above all to ETA, its movement-production company, the Swatch Group is far and away the top supplier of watch movements to the Swiss industry. It also owns Nivarox-FAR, the top supplier of hairsprings. In keeping with a 2013 ruling by COMCO (the Swiss Competition Commission), the Swatch Group will gradually slow its sales of mechanical movements to outside companies between now and 2020, though it will continue to supply escapements to third parties.

The Swatch Group made a notable acquisition in 2013 when it bought Harry Winston. Not only does the purchase give the Swatch Group added strength in the jewelry category, which has been a minor part of the group’s business, it also gives the company greater access to the world diamond market. In 2014, the group won a lawsuit with Tiffany & Co. over production of Tiffany brand watches; consequently the Swatch Group no longer manufactures watches under this marque.

According to the 2013 annual report, the Swatch Group has 184 subsidiary companies. At the end of 2013, the group had 33,590 employees.

Richemont Group (Switzerland): Vacheron Constantin, A. Lange & Söhne, Jaeger-LeCoultre, Roger Dubuis, Piaget, IWC Schaffhausen, Officine Panerai, Ralph Lauren**, Baume & Mercier, Cartier, Van Cleef & Arpels, Montblanc, Dunhill

Compagnie Financière Richemont SA is a leading player across a range of luxury products. It markets 20 brands, 13 of which produce watches; but by sales, it is predominantly a luxury watch group. Net sales for fiscal 2014 (which ended March 31, 2014) totaled 10.65 billion euros ($13.77 billion).

Richemont’s brands are grouped into divisions. The Specialist Watchmakers division is comprised of A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Officine Panerai, Piaget, Ralph Lauren, Roger Dubuis and Vacheron Constantin. The Jewelry Maisons are Cartier and Van Cleef & Arpels. Cartier is the largest brand in Richemont’s portfolio and the number-two watch brand in the world after Rolex. Until recently, Montblanc was its own division; it has since been folded into the Other Businesses division, which also includes the menswear company Dunhill.

In fiscal 2014, the Specialist Watchmakers division made up 28 percent of all sales, with €2.99 billion ($3.86 billion). Thanks principally to Cartier, 51 percent of Richemont’s revenue came from the Jewelry division. A further 7 percent came from Montblanc, and Other Businesses made up 14 percent. Richemont is a publicly traded company and is based in Geneva. In fiscal 2014, it averaged 29,101 employees.

LVMH Group (France): TAG Heuer, Bulgari, Hublot, Zenith, Dior, Fred, Chaumet, Louis Vuitton

LVMH Moët Hennessy Louis Vuitton SA is the largest luxury-goods group in the world. The conglomerate owns dozens of brands in the liquor, cosmetics, fashion, and watches and jewelry businesses. It also has an extensive retail division, with more than 3,000 stores worldwide. Based in Paris, the publicly traded company had total sales of €29.15 billion ($37.69 billion) in 2013. Its watches and jewelry division made up €2.78 billion ($3.59 billion) of that. LVMH has been building its watch division for the past 15 years; its most recent watch-brand acquisition was Bulgari, in 2012. Its biggest watch brand is TAG Heuer, one of the top-selling Swiss brands.

Kering Group (France): Ulysse Nardin, Girard-Perregaux, JeanRichard, Gucci, Boucheron, Qeelin, Bottega Veneta

Kering is a large Paris-based group with a focus on fashion and retail. Formerly known as PPR, the publicly traded company changed its name in 2013. Last year, total revenues were €9.75 billion ($12.6 billion). Of that total, €6.47 billion ($8.37 billion) came from the luxury division, more than half of which was from Gucci.

Kering has been building its watch business steadily over the last few years. In 2012 it purchased the Sowind Group, consisting of Girard-Perregaux and JeanRichard. Sowind makes Swiss mechanical movements, which appeared in Gucci watches for the first time in 2013. Another significant acquisition came when Kering bought the Swiss watch brand Ulysse Nardin. At the end of 2013, Kering had 35,000 employees.

Read also: Who Owns What: A Guide to the Watch Groups (Part 2), Luxury Goods Worldwide Market Trends,

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