Tim_M
1276
Suitors Outside the Watch Space
Nov 30, 2016,04:38 AM
Kering may be the best fit among existing watch portfolio holders, but I suspect that the most likely buyer would be a company flush with cash and currently operating outside either the luxury industry or outside of the luxury watch space. Rolex, Richemont, and Swatch have plenty of steel sports watches in the $3,000-$15,000 US market where Breitling makes most of its money. IWC, Baume et Mercier, Montblanc at Richemont, Longines and Omega at Swatch, and TAG Heuer at LVMH already serve this market.
I would not be shocked to see a marauding private equity company or cash-rich Chinese firm looking to add a luxe watch brand if they see these lean times as an opportunity to "buy low."
Best,
Tim
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Breitling seems to be for sale
By: KMII : November 29th, 2016-18:13
According to Bloomberg ( https://www.bloomberg.com/news/articles/2016-11-29/swiss-watchmaker-breitling-said-to-be-considering-a-sale ) Breitling has kicked off the process of looking for suitors as a result of the current industry crisis. With sales at ar...
I think Richemont would be a good fit
By: logan2z : November 29th, 2016-19:55
Hard to say who will snap them up, though. To be honest, I didn't even realize they were still independent until I read the news about the possible sale. I guess I hadn't thought about the brand much as I've never really had a desire to own one of their w...
I like the idea of Richemont buying them
By: AnthonyTsai : November 29th, 2016-20:12
Gives Richemont a mass market brand at the lower level which I dont think they seem to have. It does make a better fit for LVMH imo but they already have TAG Heuer. AT
How about MB?
By: KMII : November 29th, 2016-22:09
The lower level MB lines would be positioned below, while the IWC Pilot line would be spot on price wise? Still does not need to be a bad fit... The brands they have are adequately differentiated, so could work, if the overlap with IWC is managed
Baume & Mercier is Richemont's mass-market brand..
By: rdenney : November 30th, 2016-14:27
..but they don\'t make Breitling-style tool watches, and Breitling would complement them. But Breitling isn\'t quite as downmarket as B&M, at least not looking at their retail prices. --Rick
Forgot about B&M
By: KMII : November 30th, 2016-21:57
So even more competition The pilot segment would be covered by IWC in their portfolio.
I'll be....
By: InHavenPro : November 29th, 2016-20:26
third in a row to say that Richemont may very well be the right suitor to take the company over. Shall be followed with interest on my end.... Cheers, Filip
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By: Nono01 : November 29th, 2016-21:32
Richemont has brands like IWC and Panerai for their Pilot & Diver market, so i don't see the fit of Breitling brand in their portfolio. The same is with LVMH. Swatch on the other hand....
Agreed on the IWC overlap
By: KMII : November 29th, 2016-22:05
May be hard to properly pursue both. LVMH could work in the sense that TAG does not do pilot watches and Zenith only does one line (OK, maybe two), which would not overlap that much. Swatch has very many brands already but I grant you that Breitling would...
+++1. [nt]
By: amanico : November 29th, 2016-22:30
You want to place a bet on a specific other group?
By: KMII : November 30th, 2016-00:36
Maybe us Purists save up a bit and get ourselves an own brand? Comes with plenty of aircraft, too - how cool is that? Technically it could have been VW some years back but do not think it would fly nowadays... Red Bull?
Agreed - better saved than gone
By: KMII : November 30th, 2016-00:37
The question of course remains what will change with them... If it means economies of scale and these passed on to consumers to an extent, I'm all for it
Not sure of that my friend ;-)
By: Alkiro1 : November 30th, 2016-00:47
But a huge fight could happen between main competitors as Breitling is a very well known brand all over the world and so their goodwill is important. Interesting to follow this new story. Best wishes Alkiro
Fully agree!
By: KMII : November 30th, 2016-02:35
And I hope a good suitor is found - would be a shame for the brand to disappear, or languish with little attention...
Absolutely
By: Alkiro1 : November 30th, 2016-02:44
My Navitimer and I would be very sad. Best wishes Alkiro ...
+1 [nt]
By: KMII : November 30th, 2016-04:51
that is a shame
By: COUNT DE MONET : November 29th, 2016-23:55
They have just invested in new in-house movements and now they are in financial difficulties. Maybe the in-house movements came too late? Thank you for the news.
Read an article somewhere...
By: KMII : November 30th, 2016-00:39
That in-house movements are one of the culprits of the current watch industry doldrums. They are generally expensive to develop and the brands then tried to recoup the investment through higher prices, bringing them ever closer to competitors that were in...
Among the 4 potential suitors....
By: rnaden : November 30th, 2016-01:04
I think Kering is the one that has the space for a brand like Breitling. Sporty and affordable, something which I think as a group they still lack. Will be a good complement to GP and UN, I feel.
Good point!
By: KMII : November 30th, 2016-02:36
Too early to say how successful they will be with the brands they have I guess but there is the least amount of overlap I guess. And they should understand luxury from non-watch related points of view, too.
Maybe too expensive for Kering?
By: Marcus Hanke : November 30th, 2016-03:46
(Normally well-informed) sources indicated that Kering paid 850 millions Swiss Franks for Ulysse Nardin two years ago. With the current crisis of the luxury watch market, expecially in Russia and Asia (two markets especially emphasized by UN), it my be do...
Suitors Outside the Watch Space
By: Tim_M : November 30th, 2016-04:38
Kering may be the best fit among existing watch portfolio holders, but I suspect that the most likely buyer would be a company flush with cash and currently operating outside either the luxury industry or outside of the luxury watch space. Rolex, Richemon...
Depending on the price, a Chinese investor may be difficult these days...
By: KMII : November 30th, 2016-04:56
Given that new capital controls / FDI controls have just been instituted in China. So it could either be someone already in the watch business or Chinese investors could be out - again depending on the purchase price and the centrality of the acquisition ...
Fair point...
By: KMII : November 30th, 2016-04:54
Since I assume that the non-watch sectors of Kering's portfolio are not overperforming in those countries, either. Thanks for your update / thoughts!
that's a shame
By: 41northpole : November 30th, 2016-04:34
I think it would be nicer to remain independent rather than having to fit into a group philosophy. Quite understand financially though if they feel the need to shore up the business. I know Breitling doesn’t get a lot of mentions on here maybe because a l...
I think Rolex should consider
By: gcTIME : November 30th, 2016-05:21
Buying them. Both brands have somewhat similar take on sticking to one core segment and both have similarly large production numbers with similar marketing approaches. Rolex most likely also have the financial strength to buy them as well.
I hear you...
By: KMII : November 30th, 2016-12:55
Swatch can definitely gobble them up - but with so many of their brands competing in that price range, the question is should they...
As I said - cannot see the rationale
By: KMII : November 30th, 2016-21:47
Just that they would have the muscle to do it. And I do not think that they have the pilot watch sector covered. Still, it would be a step too far IMHO.
Would Swatch need it?
By: KMII : November 30th, 2016-21:49
The B01 is fine but Swatch possesses in-house movements aplenty, not sure if there are areas in case construction or elsewhere, where Breitling has significant in-house capability that Swatch lacks...
Hear you
By: KMII : December 4th, 2016-22:05
I guess we will see in a couple of months...
Let's see... :)
By: KMII : December 3rd, 2016-13:12
May be quite some months before we have clarity on the final suitor...