Swatch to Buy Harry Winston Watch and Jewelry

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Swatch to Buy Harry Winston Watch and Jewelry
Wed 16-01-2013

The Swatch Group agreed Monday to make its largest acquisition to date, taking over the watch and jewelry business of Harry Winston, which plans to shift its focus to its diamond mining activities.

Swatch, the world’s largest maker of watches, said it would pay $750 million in cash for Harry Winston and assume $250 million of debt. The publicly traded Harry Winston Diamond Corporation, based in Toronto, will be renamed Dominion Diamond after completing the sale to Swatch.

For Swatch, the purchase of Harry Winston’s jewelry and watch business, based in New York, expands its vast portfolio by adding a prominent jewelry brand immortalized decades ago by Carol Channing on Broadway and Marilyn Monroe in Hollywood. Harry Winston jewels still regularly adorn actresses on the red carpet at awards shows.

Swatch owns not only the brand that makes colorful plastic watches but also upscale names that include Omega, Breguet and Blancpain. Swatch also controls the bulk of the sector’s production of watch movements after buying several makers of components.

The purchase of Harry Winston also comes after the four-year partnership by Swatch and Tiffany, another luxury jeweler, ended acrimoniously in 2011. The other two luxury groups that dominate the watch sector Richemont and LVMH Moët Hennessy Louis Vuitton already have a strong presence in jewelry. Richemont owns Cartier and  LVMH acquired Bulgari, the Italian jeweler, nearly two years ago.

Nicolas Hayek, who founded the company and helped revive the whole Swiss watch industry in the 1980s, in the face of stiff Japanese competition, by introducing the inexpensive and highly successful Swatch plastic watches died in 2010.

Nayla Hayek, his daughter and chairwoman of the company, said in a statement on Monday that the takeover of Harry Winston, which has 535 employees, "brilliantly complements the prestige segment" of her company.

"Diamonds are still a girl’s best friend,"she added.