Breitling Sold To CVC Capital Partners For Over $870 Million

Breitling Sold To CVC Capital Partners For Over $870 Million

Breitling Sold To CVC Capital Partners For Over $870 Million Watch Industry News

Even in the exceedingly turbulent times that the watch industry has been enduring for nearly two years, it is rare news to see major brands exchange hands – and that is why today is a notable day, as it has just been announced that Breitling has been sold to CVC Capital Partners for more than 800 million euros – that is about 873 million US dollars or 866 million Swiss francs.

Breitling Sold To CVC Capital Partners For Over $870 Million Watch Industry News

Until this moment, Breitling had been one of only a handful of properly independent major brands out there – Chopard and Patek Philippe remain two other family-owned big players in the industry, with every other mammoth brand either owned by one of the big four groups (Swatch Group, LVMH, Richemont, and Kering) or some other major entity, like Rolex and Tudor with the Hans Wilsdorf Foundation. The last big news of this nature was when family-owned Frederique Constant, Alpina, and Atelier de Monaco were purchased by Citizen Watch Co. last year

Breitling Sold To CVC Capital Partners For Over $870 Million Watch Industry News

Nevertheless, previous majority owner Theodore Schneider will remain with Breitling because, as part of the CVC Capital Partners deal, he agreed to re-invest for a 20% stake in Breitling. Ironically, it was as recently as May last year that Breitling vice-president Jean-Paul Girardin told Reuters he was confident in Breitling retaining its independence despite speculation about its future following the 2015 passing of Ernest Schneider who bought the brand in 1979.

Still, soon after that interview, Bloomberg (the breaker of today's news) had reported in late November last year that Breitling was "on the block" for sale, after having been in the hands of the Schneider family since 1979. Breitling has very much been a family-run company in the sense that Ernest Schneider had been running it from the late '70s until the early '90s when his son, Théodore Schneider took over. While Théodore is the (exceedingly rarer) type of the quiet watch CEO who stays out of the limelight, he's said to be very much taking part in running the business.

Breitling Sold To CVC Capital Partners For Over $870 Million Watch Industry News

Late last year, when the speculation regarding Breitling's sale sprung, analysts expected the manufacture that employs some 900 people and produces around 150,000 watches annually to fetch between 600 and 900 million Swiss francs (CHF). As of today, we know that Breitling has been acquired for over CHF866 million – with Breitling's annual sales of about CHF420 million, this might give the company the financial stability it needed to make it through these troubling times and, hopefully, come out stronger once it's over.

As for CVC's official plans with Breitling, Daniel Pindur, Senior Managing Director at CVC says: "Using our network and expertise, CVC will work to make this global, iconic brand even more renowned and help shape the future of one of Switzerland's last independent watch manufacturers. Specifically, we see significant growth potential for Breitling in both existing and new geographies by driving the digitization of the marketing and distribution channels in the company, helping to enrich the product and customer experience."

Breitling Sold To CVC Capital Partners For Over $870 Million Watch Industry News

Breitling, who produces some of the quality movements, dials, cases, and bracelets for its watches has tremendous potential and, on a personal note, I am a bit worried to see them become part of a large financial group. Times do change from better to worse and back in the watch industry, there's nothing new about that, but I do hope that Breitling will stay away from cheapening its brand and its products in chasing higher temporary profits. If you've handled a Chronomat or Navitimer lately, you'll know that Breitling has a long way down the quality food chain, as its movements, cases, bracelets, and dials remain some of the truly solidly built ones at a time when we already see a lot of high-end brands go for cheaper designs and quality of execution.

Breitling Sold To CVC Capital Partners For Over $870 Million Watch Industry News

Challenges ahead of Breitling include fixing the strong discounting and vast grey market as well as gaining more traction in established and new markets through streamlined and more powerful branding and marketing. They produce a huge variety of timepieces from the $2,000 Colt Skyracer with a COSC-certified quartz movement and carbon composite case (hands-on here) through the Bluetooth-connected Bentley Supersports B55 (explained here) and true Breitling classics like the Navitimer 01 (reviewed here), to the bonkers-expensive, $40,000 Superocean Heritage Chronoworks (hands-on here). All this is to say that Breitling stands on a solid foundation of versatile collections, but their awareness and global presence has to be improved – something both parties expect "the network and expertise of CVC" to assist with.

Breitling Sold To CVC Capital Partners For Over $870 Million Watch Industry News

More recent news from Breitling included their producing of chronograph movements for the Tudor Heritage Black Bay Chrono (hands-on here) and them sourcing a base three-hand movement from Tudor in return. This, though not confirmed, implied unused manufacturing capacities at Breitling and a break from industry-wide principle in that they chose not to invest in developing their own base manufacture caliber but rather source one with similar credentials.

The transaction between Breitling and CVC Capital Partners is expected to complete by around June 2017, subject to approval by competition authorities. How long and in what role Théodore Schneider will stay around at Breitling, we are yet to learn. breitling.com Source: Bloomberg, via WatchesBySJX.

  • Yojimbo

    Oh joy, a fund convicted of price fixing takes over at a luxury watch maker.

  • Mark1884

    Well…. I will say that I am not pleased by this sale. Part of the Breitling “charm” to me, was the fact that it was one of the few remaining family owned companies.
    Breitling has such a rich history, I just hope the new conglomerate owner appreciates that and protects it. Really, what other company has it’s own private air force??
    Sure, the new influx of funds and marketing avenues will help the brand. As long as they don’t go too far off script, and change the direction or tone of the company.
    I hope Breitling does not become just “another horse in the stable”
    Thanks Ernest…….. It was great while it lasted.

  • Gokart Mozart

    David, you may have been having a drink when you wrote the paragraph or staring at the Vertu Breiting phone in the picture next to the paragraph, but your grammar is out.

    “If you’ve handled a Chronomat or Navitimer lately, you’ll know that Breitling has a long way down the quality food chain, as its movements, cases, bracelets, and dials remain some of the truly solidly built ones at a time when we already see a lot of high-end brands go for cheaper designs and quality of execution.”

    Are you implying that the quality has gone down, or that the quality is so good that the quality could fall along way down? i am not a Breitling fan so have not handled one in a while and was curious of the true meaning of your cryptic paragraph.

    Thanks

    • Mark1884

      I have to admit, that I had to re-read that paragraph. My interpretation was, that Breitling was high up on the food chain and had a long way to fall.
      Falling down the chain, if the new owners went with cheaper designs and quality.

      • David Bredan

        Mark’s interpretation is correct – apologies if that bit necessitated a re-reading. I did mean that Breitling has a long way do go down in quality. In other words, if some accountants find out that a lot could be shaved off from the manufacturing costs of movements/cases/dials/bracelets, I hope someone will be around to guide their hand…

        • Gokart Mozart

          That is what I thought.

          It would be worrying and probably likely, but perhaps it may work out to be good not to be part of the big 4, and Breitling for better or worse will keeps its identity. Less chance they will become Swatched or Richemonted if you know what i mean.

          But saying that if you look at CVC and Formula 1 and the history and relationship, its possibly not that Breitling is out of the woods yet.

          https://www.motorsportweek.com/news/id/14459

          • David Bredan

            Oh boy, Breitling joining any of the big 4… I do very much agree it’s a good thing that it was not to be.
            From their perspective, the big 4 – especially the first 3 – have such a complete portfolio that Breitling could not have possibly fitted in anyhow, since it would’ve stepped on so many toes at once – especially in the highly sensitive segments between $2k to $10k. It would have had its wings cut off for it to fit in somehow.
            The big groups have done a more or less thorough job at re-allocating watch categories and price segments between their brands so as to saturate the whole market as much as possible without having overlapping products (which is the smart thing to do).
            Look at LVMH: the layering of TAG/Zenith/Hublot is genius, or for something much more complex, see how Richemont has not brands but specific collections to cover as wide a range of watch types and price segments as possible. The Swatch Group is smart with layering Hamilton/Omega/Breguet and fill in the gaps with the rest. Those who don’t fit in (Piaget, Blancpain and a few others) are destined to struggle as they cannot enter fields already “owned” by another brand/collection within the group. This actually is clever and sensible stuff. I’ve been working on a “family tree” sort of thing to illustrate and better explain all this.
            Breitling, I feel safe in saying, was definitely taken into consideration by every major player for their acquisition, but (largely for the aforementioned reasons), they all have opted out – for the better of all parties, I think.
            Again, I just hope Breitling will do what it needs to fix its current issues as opposed to start messing with other departments that have helped keep it together for this long.

        • Lord Dunsany

          Your writing is solid, if a bit overwrought at times.

          • David Bredan

            I appreciate your feedback, will definitely work towards enhanced readability. The real challenge lies in delivering the same complex sentiments and messages but in the simplest, yet sophisticated forms possible. Been working on this for years but was not planning to stop putting thought into it anytime soon. Thanks again, appreciate it.

  • SuperStrapper

    Shitty that it happened, but we all knew it would. Hopefully the brand is left alone to its own devices for the most part.

  • The company was family-owned and will soon be owned by a private equity company. It is not like it was still owned by the Breitling family anyways. It will probably be a positive change.

  • Yanko

    CHF 866 Million this year. Next year that number will be half.

    • ??????

      Or double? 🙂

    • Skip

      You have not seen the 50mm Colt Chronograph diver pilot watch in quartz, also made in carbon fiber OR bronze.

  • imageWIS

    ” Breitling had been one of only a handful of properly independent major brands out there – Chopard and Patek Philippe remain two other family-owned big players in the industry, ”

    Rolex…!

    • JosephWelke

      The article stated Rolex and Tudor were owned by the Hans Wilsdorf Foundation.

    • ??????

      Nope

  • Mark1884

    Will the Breitlings manufactured prior to the sale have any premium value??
    Kind of a “1st Gen” type of premium?

    • Skip

      Do the watches made before the bankruptcy (the real Breitling) command a premium? The firm did go under in the 1970’s and was bought out of bankruptcy by Herr Schneider.

  • “Chopard and Patek Philippe remain two other family-owned big players in the industry”

    Audemars Piguet?????

    • DanW94

      Good to see your name pop up again. It’s been a while. Whirlwind book tour through Europe I assume 🙂

      • Hey Dan! Long time no comment 🙂

        Book whirlwind plus I just relocated to the UK! Hope you are well sir.

        • IG

          Brenter?

  • JosephWelke

    Who owns Oris, again?

    • Skip

      They are independent. They did spend a decade in the Swatch Group, but were taken private by managers who could not stand to see the brand raped any further (Swatch had them making quartz McWatches and other crimes against horology). Note, they are all mechanical now. They are a fine brand making solid watches for reasonable prices.

      • JosephWelke

        Indeed so. I love my Divers Sixty-Five.

  • Berndt Norten

    Who owns Gentlemen Warfare?

    • DanW94

      A nameless, faceless offshore-based shell corporation with ties to the Chinese mob.

      • The Deplorable Boogur T. Wang

        you say that like its’ a bad thing.

      • Skip

        The Chinese mob prefers to be referred to by its proper name, the Communist Party.

    • BILL

      So wait…are Triarrows and Audaz owned by the same people? 🙂

    • ??????

      And what about Donkylne?

  • TrevorXM

    Job number one for the new owners: kill the Colt quartz plastic ruler wristband watch. Job number two: fire everybody responsible for it.

    I find it very reassuring that Breitling was bought for a very substantial sum by an investment firm. It would be worrying if it were scooped up by one of the watch conglomerates as part of a group portfolio of brands, or by a mass market junk watch giant looking to increase their prestige with a “halo brand” that they then cheapen. Those two scenarios would be terrible. This one could actually end up being a good thing.

  • ??????

    Please, take good care of Breitling. We need more things like B01, new Navitimers, AOPA, and less plastic junk.

    • Skip

      Sinn makes a mean Navitimer. actually prefer theirs.

  • Der0

    Poor Breitling. CVC Capital Partners will rip the utter heart out of this organisation and make it a shell of whatever it formerly was.

    Look at what it did with Formula 1 in the decade or so that it owned it. It transformed the sport from the pinnacle of motor sport to a “racing” series that has to require driver aids in order for drivers to race and pass each other.

  • proudAmerican702

    I’m ambivalent about the sale. Breitling watches are just too busy for my tastes.

  • WMWM

    Best of luck to Breitling, one of my favorite brands. another(Panerai) is also not doing very well these days, I guess.

    • Skip

      Panerai is part or Richemont, so they should be fine.

  • The alternative would have been worse, so…

    And I never figured out which teenage girls did that actual voice over for these dudes.

    The Breit Gees live?
    https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiGj7SumcnTAhVB72MKHXxYDhQQyCkILDAA&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DoQwNN-0AgWc&usg=AFQjCNHO6hkXF1-grPCDB_g-hnWa37f0_Q

    • IG

      They sound more like grannies not teenage girls.

      • The Brothers Granny?

        • IG

          The Bearded Grannies

        • Larry Holmack

          Disco sucked back in the 1970’s and still does today!!! They always sounded like they had been sucking on Helium when they sang!

          • Skip

            Take that back. I was not alive back then, but the Bee Gees have some great music. It is creative and very well-produced. Even cheesy hair bands from the 1980’s are actually pretty good if you really listen to them (I am fond of Guns and Roses). Yes, the Stooges and PIL were cooler than disco, but disco had some genuinely solid characteristics.

          • Larry Holmack

            Naw…I’ve had a long and very pleasant hatred of Disco Music!! I was listening to Boston, Aerosmith, and anything else but Disco! In the 80’s I listened to MTV’s Head Banger’s Ball on Saturday nights, Dakken, Scorpions, Judas Priest…etc. Now days, I still listen to all my old favorites and some new bands….Disturbed….Daughtry….Evanescence ( okay, maybe I just listen to them because Amy Lee is smoking hot!! ) and others. Just give me rock and roll and I’m one happy 59 year old geezer!!!

  • TheChuphta

    As per usual, the biggest question on the true enthusiasts’ minds is left unanswered…. WHAT WILL HAPPEN TO TRAVOLTA?!?!

    • Sheez Gagoo

      Isn’t there a junk yard for wrecked planes somewhere in Arizona? Or he can wait for another chance from Tarantino.

      • Skip

        Those are actually fully-functional long-distance bombers. They are out in the open so the Russians can see that they are not in use. It was part of START I, if I recall.

  • Bozzor

    A bit of an inside perspective: I have worked with (ad)venture capital for over 20 years (though not directly with CVC Capital Partners) and can give you a bit of insight as to what has happened and the direction they will go. Firstly, the entire top VC sector operates at the same level of intellectual capability as the top management consultants (MBB), the most prestigious banks and the top IT firms: the people in them are the ~top 5% of their years in the best schools in the world – often much better. Next, as this type of individual is very much in the top 1% of income earners in the world (actually more like top 0.01%), they would be very familiar with Breitling as a brand – many as owners – and likely the people involved in the transaction may well be longstanding enthusiasts of the brand or at least very well aware of it.

    They are in this to make as much money as possible of course, but I would think that they are well aware of what adopting the Pierre Cardin, YSL, Gucci et al mindset of chucking the label on rubbish products would do the brand. Pindur’s words indicate a focus on better supply and logistics and more innovation in appealing to wealthy, tech savvy Gen Y & Z individuals who may not currently fully comprehend the Breitling proposition, history and emotion.

    • David Bredan

      First, thank you for the insight – what you say makes sense, though in fairness I think there are some examples in the back of everyone’s minds when things have taken a similar start and went quite bad quite soon (and stayed that way for long). Nevertheless, in line with I wrote above, I wish that you are correct and that they’ll treat Breitling sensibly. I do genuinely like some of what Breitling does – even if I don’t own one of their watches at the moment.

      • Bozzor

        We just need to hope these guys learn from the mistakes of others and understand that Breitling has a hardcore of knowledgeable buyers who can see through the mirages of marketing (well…mostly) and won’t tolerate the kind of badge engineering and worse that had occurred over the past few years.

    • Skip

      I am not so sure. I worked for one of those top management consultancies and later in finance, and no matter how much they care about watches, they care about their compensation more. A quick increase in sales and a public listing or a sale to some Chinese SOE would be just fine. I do not think it is an accident that luxury conglomerates are so very different than typical international businesses. I do not know of many examples of luxury companies being transformed by financial sponsors of any stripe.

      • Bozzor

        Definitely a risk, but this tactic of fast returns is pretty transparent and has not had good outcomes. I suspect these guys know it now and will have to try for a more respectful, longer term approach. And let’s be realistic…Breitling has been in its own worst enemy with many product decisions over the recent past…