Major players snap up specialist suppliers
close
Christophe Roulet
Editor-in-chief, HH Journal
CLOSE
After the takeover of La Joux-Perret by the Japanese Citizen group, Hermès enters the fray. The Parisian firm, which recently took a 32.5% stake in case manufacturer Joseph Erard, is in negotiations to buy dialmaker Natéber.
Just as chaos theory has its butterfly effect, representing the sensitive dependence on initial conditions, it seems the watch industry has its Swatch effect. It’s already been ten years since the Biel-based giant warned the sector of its intention to phase out deliveries first of finished movements then blanks, and even parts. Put simply, companies are seeing their main source of supplies dry up, leaving them with little option than to seek alternatives, and fast. Alternatives, however, are few and far between which is why acquisitions of suppliers are now rife.
Recent announcements by the big names in the branch confirm the trend. This month we learned that La Joux-Perret had changed hands and, against all expectations, the new owner is none other than the Japanese Citizen. It cleaned up when it bought Prothor, based in La Chaux-de-Fonds, whose portfolio includes not only La Joux-Perret, “a specialist in the conception, development and manufacture of mechanical movements for high-end watches employing 170 people,” but also Prototec, a parts manufacturer, and Arnold & Son, an English firm specialising in complications, named after the eighteenth-century British watchmaker. Citizen, which already masters virtually every stage in movement-making including balance springs, through its subsidiary Miyota, clearly moves up a level with this acquisition.
Growth of 23% in 2011
LVMH is also in the frontline of buy-outs, unsurprisingly given that the French multinational is in the process of vertically integrating its brands. In 2011, dialmaker ArteCad was acquired by Tag Heuer; La Fabrique du Temps, which makes grande complication movements, went to Louis Vuitton, and Profusion, a specialist in carbon fibre, joined Hublot. Hot on the heels of these acquisitions, earlier this month Louis Vuitton took over the Geneva-based Léman Cadrans, a company established in 2006 and a specialist dialmaker for fine watches.
The day after Citizen made its announcement, La Montre Hermès stepped up to the plate. The company, established in Biel since 1978 and which concentrates Hermès’ watchmaking activity, owns 25% of Vaucher Manufacture Fleurier. After taking a 32.5% stake in the capital of the Jura-based case manufacturer Joseph Erard in September 2011, La Montre Hermès revealed it was in exclusive talks to take over 100% of the capital of Natéber, a high-end dial manufacturer based in La Chaux-de-Fonds. Guillaume de Seynes, Chairman of the Board of Directors, made this comment: “In a context of strong growth for La Montre Hermès, like our acquisition a few months previously of a stake in Joseph Erard Holding, this new project illustrates our strategy to master the professions of watchmaking.” Sales of Hermès watches grew by 23% in 2011 to EUR 138.7 million (USD 183 million / CHF 167 million), to account for 4.9% of the group’s annual revenue, which increased 18.3% to EUR 2.841 billion (USD 3.748 billion / CHF 3.425 billion).
