• Switzerland's news in English

Swatch acquires US jeweller and watchmaker

AFP/The Local · 14 Jan 2013, 10:27

Published: 14 Jan 2013 10:27 GMT+01:00

Facebook Twitter Google+ reddit

The Swiss group said it will pay $750 million to acquire the company and add a maximum of $250 million to take over its net debt.
The transaction, which still needs the go-ahead from regulatory authorities, does not include the mining activities of the Harry Winston Diamond Corporation, the company said.
Swatch said it would take over the Harry Winston brand and all the activities related to its jewellery and watches business, employing a total of  535 people worldwide.

In a statement, Swatch chairwoman Nayla Hayek said the deal made sense since "Harry Winston does brilliantly complement the prestige segment of the (Swatch) Group."
"Diamonds are still a girl's best friend," she said.

Harry Winston's chief executive Robert Gannicott also hailed the deal.
"The Harry Winston brand now has a new home that can provide the skills and support that it deserves to realize its true potential," he said in a statement.

Headquartered in New York, Harry Winston is named after its founder, an American jeweller who donated the famous Hope Diamond to the Smithsonian Institution in 1958 after owning it for a decade.

The company, which makes watches in Switzerland, was sold to Canadian owners some time after Winston's death in 1978.

Following the news, Swatch saw its share price jump 3.09 percent to 507.50 francs in midday trading on a Swiss market up 0.31 percent.
 Analysts too were enthusiastic about the purchase, although they said the price was steep.
"The deal makes strategic sense but looks pricey," Kepler analyst Jon Cox told AFP, pointing out that the purchase price represented 33 times Harry Winston's expected annual result for 2013.
"However, I suspect Swatch Group will be able to bring profitability up toward 20 percent margin, while the joint venture in terms of sourcing diamonds looks interesting," he said.

"Overall I think it is positive."

While they seemed to agree Swatch was paying a pretty penny for the jeweller, several analysts stressed that the company based in Biel — the heart of the Swiss watchmaking industry — could afford the operation since it has more than two billion francs in cash reserves.

"They can clearly afford it," Vontobel analyst René Weber told AFP.

"We like the deal very much despite the high price," she said.

Story continues below…

"It fills Swatch's gap in high-end jewellery... and as Harry Winston wants to expand more into watches, Swatch Group is the best solution for this," he said.

While Swatch's low-end plastic watches are perhaps its most recognizable, the Swiss company operates in every price range, from the Flik Flak kid's watches to prestigious timepieces under for instance the Breguet brand which can cost more than one million francs apiece.

Swatch's new deal with Harry Winston — one of the world's most prestigious diamond dealers — comes after it ended a partnership with luxury jeweller Tiffany & Co in September 2011.

AFP/The Local (news@thelocal.ch)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Montreux throws hat in Olympic rings
Could Montreux host the 2026 Games? Photo: Ivo Scholz/Swiss Tourism

Montreux is to put itself forward as the host city for the 2026 winter Olympics as part of a potential bid by the cantons of Valais and Vaud.

Geneva car share scheme could help reduce city traffic
Catch a Car is aimed at short hops within a city. Photo: Catch a Car

Catch a Car, already in Basel, launches in Geneva next month.

Swiss women will ‘work for free’ for the rest of year
Female employees in Switzerland earn 19.3 percent less than their male colleagues. File photo: Randy Kashka

Switzerland's gender pay gap means from today, Friday October 21st, women in the country will effectively be working for free for the rest of 2016.

Swiss luxury watches stolen in Paris raid
Police outside the Girard-Perregaux watch store on Thursday. Photo: Bertrand Guay/AFP

The 10 Girard-Perregaux watches are worth half a million euros in total.

Brother-in-law arrested over murder of Swiss teacher
The victim worked in a school in Stabio, near the town of Mendrisio. Photo: Oliver Graf

The primary school teacher was found dead in Ticino earlier this week.

Inside Switzerland’s largest nuclear bunker – 40 years on
Designed to house 20,000 people, the bunker was built in and over two motorway tunnels. Photo: Unterirdisch Ueberleben

The Local takes a tour of the Sonnenberg bunker in Lucerne, opened 40 years ago at the height of the Cold War.

Ten Swiss ski resorts named most expensive in Europe
File photo: Renato Bagattini/Swiss Tourism

Skiers in Switzerland pay the highest prices for their ski passes of anywhere in Europe, according to research.

Eco group fights Bern over wind farm plans
There are currently more than 30 wind farms in Switzerland. Photo: Alpiq

Wind turbines are “gigantic and destructive” machines, says Paysage Libre Suisse.

Vegan wins battle to be accepted by Swiss army
Antoni Da Campo will now carry out his military service. Photo: Antoni Da Campo

A Swiss man who was told he would not be accepted for military service because of his strict veganism has finally succeeded in making the army change its mind.

Geneva terror suspects to receive compensation
File photo: Emran Kassim

The Swiss public prosecutor has dropped the case against them.

Sponsored Article
How to vote absentee from abroad in the US elections
Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Sponsored Article
Last chance to vote absentee in the US elections
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Sponsored Article
How to vote absentee from abroad in the US elections
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
Photo: file
Some deodorants could cause breast cancer: Swiss study
Photo: Royal Savoy
In pictures: Inside the latest Swiss luxury hotel
Photo: AFP
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
Photo: File
Bern argues over passports for 3rd generation foreigners
Photo: Broad Bean Media
Muslim pupils must shake hands – ‘no ifs and buts’
jobs available