CVC to take controlling stake in replica watchmaker Breitling

Swiss group specialises in chronometer timepieces typically selling for between £200 and £1900

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CVC Capital Partners is to take control of luxury Swiss replica watchmaker Breitling, which has been owned by just two families in its 133-year old history.

Europe’s biggest private equity group will take an 80 per cent stake in the company for an undisclosed amount it said on Thursday.

Théodore Schneider, Breitling’s chief executive and the son of Ernest Schneider, who bought the company from the Breitling family in 1979, will hold the remaining 20 per cent of the group. The deal values Breitling at between SFr800m ($801m) and SFr900m $901m) including debt, a person with knowledge of the transaction said.

Founded in 1884, Breitling specialises in producing chronometer replica watches, meaning they are judged to be highly accurate. Models typically sell for between £200 and £1900, although the most expensive watch it ever made, the Bentley Mulliner Tourbillon, costs about £2500.

The Grenchen-headquartered company has about 900 employees and two manufacturing sites in Switzerland.

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Swiss watchmakers have come under pressure in recent years as slowing economic growth and a crackdown on graft and ostentatious gift-giving in China hurt sales across the luxury sector.

However, there have been signs of a tentative recovery in recent months. In its latest report the Federation of the Swiss Watch Industry said exports rose for the first time in 20 consecutive months in March and that they had a value of SFr1.6bn, 7.5 per cent higher than a year earlier.

Jean-Paul Girardin, Breitling’s vice-president, told the Financial Times last month that “while we must be confident, we also remain cautious”. He highlighted the fact that replica Breitling is less reliant on the Chinese market than some of its peers, protecting it somewhat from the slowdown in that region.

CVC plans to focus on selling more Breitling replica watches in Asia, according to the person with knowledge of the deal, who said the watchmaker had not marketed itself as much as rivals in the region had.

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“I am convinced CVC is the right partner to elevate Breitling to the next level,” said Mr Schneider. “CVC’s expertise, track record and international network will help unlock Breitling’s full potential.”

Previous buyouts of Switzerland’s fragmented independent watchmaking sector have usually been led by large luxury groups or foreign rivals. LVMH bought Tag Heuer in 1999 and Hublot in 2008, while luxury group Richemont bought Roger Dubuis in 2008.

More recently, Corum was bought in 2013 by China Haidian Holdings, a group based in Hong Kong, while Japan’s Citizen Watch bought Frédérique Constant in 2016.

“The days of the independents are numbered,” said Jon Cox, analyst at Kepler Cheuvreux, who estimates that about half of the 200 or so remaining independent watchmakers in Switzerland would be open to being sold.

The deal is expected to close by the end of June, subject to regulatory approval.