The world’s biggest watchmaker, Swatch Group, has announced the takeover of American watch and jewellery brand Harry Winston and its 535 employees for $750 million (SFr686 million) in a move to boost its high-end watch portfolio.
„Harry Winston does brilliantly complement the prestige segment of the Group. We are proud and happy to welcome Harry Winston to the Swatch Group family – diamonds are still a girl’s best friend,“ Chairwoman Nayla Hayek said in a statement.
The move comes as watchmakers compete to snap up watchmaking know-how and production facilities, and is Swatch Group’s first big takeover in years.
Watch and jewellery sales, Swatch’s largest business, increased 16 per cent to SFr7.3 billion in 2012, boosting the group’s total sales to a record SFr8.1 billion. It benefited largely from demand in Asia and from tourists who bought timepieces from Swatch brands like Omega, Longines and Tissot in Europe.
Traders said on Monday that Swatch had enough money to push through with the deal, adding that it would help boost the group’s activities in the luxury watch and jewellery segments.
Kepler analyst Jon Cox said that the deal was a major move into the jewellery business for Swatch and could also ensure its access to the diamond market in the longer term.
Swatch, which already owns high-end brands Breguet, Blancpain and Jaquet Droz, acquired several component makers over the last years, but its last purchase of a watch brand was more than a decade ago.
The acquisition includes production facilities in Geneva, plus up to $250 million of net debt. Swatch Group said the transaction did not include the mining activities of Harry Winston Diamond Corp, which will change its name to change its name to Dominion Diamond Corporation.
„The Harry Winston brand now has a new home that can provide the skills and support that it deserves to realize its true potential,“ said Robert A. Gannicott, chairman of the board and chief executive of Harry Winston Diamond Corp.
The transaction is subject to the approval of regulatory authorities.
Harry Winston’s luxury division’s sales were worth $411.9 million in 2011. It has a worldwide network of stores, and clients include Queen Elizabeth II and Hollywood stars.
Created in 1932, Harry Winston describes itself as the inventor of modern couture jewelry. The company’s founder notably donated the famous Hope Diamond to the Smithsonian Institution in Washington in 1958.