The Breitling Watch Source Forums

An announcement a little while ago got me thinking, and having just read an article in WatchTime it really cemented my thoughts a little more. This is purely speculation on my part, but what do you think of this scenario........

LVMH announced a couple of weeks before Basel that they were acquiring Bulgari - a major deal, but not one that would necessarily generate huge waves in the industry. LVMH already owns Tag and Zenith and acquired Hublot back in 2008 so Bulgari isn't a major addition - it's good revenue, but not a big name.

However, they then announced that Bulgari's CEO would be heading up LVMH's watch and jewellery division - the first time that they have put a 'watch guy' in charge. The former head is being moved elsewhere in the group. To me that suggests that LVMH may be looking to make some more additions in the watch space, and that was the gist of the WatchTime article too.

So the natural question becomes who. Well many of the big players are already owned by Swatch (major names are Breguet, Blancpain, GO, Jacquet Droz, Omega, Longine, Rado, Tissot, Certina, Rado, Hamilton) or Richemont (VC, B&M, JLC, IWC, Lange & Sohne, Cartier, Panerai, Piaget, Van Cleef & Arpels, Montblanc, Roger Dubuis). There are also the untouchables - Rolex and PP.

That leaves a lot of the independents and of course Breitling. Breitling lost revenue big time in the recession - 2009 production was down 55%, doubtless because sales were down that much as well, and we won't know how much they have bounced back until the COSC announces 2010 numbers in about 3 months. Breitling also invested a huge amount in their in house development over the last few years and a large part of that must have been based on future revenue growth.

Breitling's recent product moves have been well discussed here, but they do seem (at least to me) as though they are being made by a company that is looking to increase revenues by any way possible, so it may well be that Breitling are ripe for the picking.

LVMH paid $5.2 billion (3.7 billion Euros) for Bulgari and would doubtless be prepared to pay a lot more for Breitling. As I said at the beginning, it's speculation on my part, but if I were running LVMH's watches and jewellery division with a mandate to expand the watch business I know where I would be looking!

thats interesting.... you may be on to something there.... the weed may be making you paranoid (j/k buddy) but its a real possibility i think. you get real credit if it happens!

Absoolutely credible speculation Roff... One does hope this means the end of lollypop-colored bezels!

Come on LVMH, let's see a bronzo SA!!

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a few Pams...

I had no clue Bulgari was worth that kind of money.

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-RJ

Possible but that would be a bad move in my opinion. They're doing a good job of turning Zenith around but Breitling is a disaster IMO. Would Ulysse Nardin would be a possibility? that's where I'd be looking, not Breitling.

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"I don't own any watches, I just lease them"

If we assume that LVMH are looking for acquisitions, then it depends on what they're after. IMO if they want a sudden increase in market share, then Breitling would be an ideal potential acquisition as they're one of the largest still independent watchmakers out there. While we may not like many of their latest offerings, Breitling have a huge customer base like Omega, so any parent company would increase their market share considerably by buying them out.

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Driver8

Site Moderator

watches are a small part, you have the jewelry, fragrance, fashion lines with them, its big $$ they are one of those companies that ware way bigger out of the us than in the us.

edit stupid question removed.

if anyone were to purchase breitling it would be LVMH.

Well Bernard Arnault certainly does have the cash to knock anyone's lights out so it would not be impossible...

how about an el primero powered navitimer? how's that for thought?

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"I don't got the bright watch I got the right watch" -Jay Z

I like the sound of that!!!!!!

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"I don't own any watches, I just lease them"

I think that UN is in a much stronger position than Breitling. They have invested heavily into diversification with their stakes in producers of silicon / silicium and DiamonSil as well as their enamelling team. Even where they have not directly invested but have partnered it has still given them a more diverse portfolio of SKUs - things like the phone for example.

UN would be a quicker integration than Breitling, and has appeal for what it can bring to other brands, but the cost would be huge - the fact that Breitling does appear to be struggling as a corporate entity is exactly why they are likely to be a target for someone looking to expand - the price is likely to be right. The fact that it's family owned complicates things, but if the price is right, the time might also be right.

why do you think it appears to be struggling, i deal with busa on a daily basis, and i dont get that impression. it seems to be a common opinion here, and im not saying its not, but i dont see why people think it is.
because production was down? thats industy wide, the economy hit lots of companies hard, and i dont think breitling is down more than other brands.

No, production was down because sales were down - it will be interesting to see the 2010 figures though.

There doesn't seem to be an overall strategy from Breitling SA - certainly no stated strategy, and the models over the last couple of years don't seem to show that the brand is on a journey that has a clear direction (contrast with Zenith). It's very reminiscent of the actions that the original Breitling took in the 1970s when they were suffering with the quartz revolution.

Because Breitling is private we don't know whether they are highly leveraged or have wonderful cash reserves, but we do know that they have made significant capital investments in recent years in CNC and related machinery for in house production (both of the new movements and of ETA designs) as well as R&D costs for the new in house movements. The market downturn came at a bad time for a company that has invested so heavily - we have to assume that revenue was down hugely in 2009 (production numbers were down 55%, revenue was probably down more as people who did buy (as a group) likely looked at lower cost pieces) and that's a very big hit - especially if the company does have a sizeable debt load as a result of the capital investments.

we were dealers of Tag, breitling, cartier, bell and ross, bulgari, tag, baum, cfb, corum.
we dropped tag, they were going backwards, looking at the 09 numbers you are using, tag was up bug in cosc production, but sales were dropping, product whored out online, and the company was not going in a good direction, so we dropped them.
bulgari was the worst, huge dollar investment, all over the board product, but no where near profitable, dropped them after they all were stolen.

cartier, BIG dollar investment, and a rolex like control of product, but profitable, amd brings in people.
b and r, in the first 3 months, turned the line, thats great. slowed some, but still good.
corum is getting ready for a huge year, every time i look i see a new mag feature on them, their 2011 basel stuff is awesome,they are doing gooood things.
breitling in 2011 is up for us, 300% in year to date, and we were closed for almost a month in peak season. thats huge, unfortunately the guys here hate 90% of the new stuff, but the public seems to like it. i got a special order for a red skyracer raven today. i took a breitling display to the barrett jackson show in last month and sold 30 new lings at the show. they sold almost 20 the week before at ameila isle car show. people love em and have been buying. so we'll see.
and apparently the asian market is ON FIRE!!
again, i can only comment on what i see in my world, but the 2010 cosc numbers will tell, but i dont think they are out for a while.

wow that is interesting FEAR. Im curious to know were the buyers at the show older or younger deomgraph. youre right alot of people on here hate the new breitlings me being one of them. so im just curious