The Chinese have arrived in the world of Swiss luxury watches.
This story first appeared in the April 25, 2013 issue of WWD. Subscribe Today.
China Haidian Holdings Ltd. inked a deal to buy the La Chaux-de-Fonds-based Montres Corum, which sells watches for more than 25,000 Swiss Francs, or $26,628 at current exchange.
High-end Western companies have been keenly focused on tapping into the growing Chinese luxury market, but so far there have been few instances of Chinese producers snatching up brands for themselves. Corum has sales of about 80 million Swiss francs, or $85.2 million, and is one of the last freestanding Swiss luxury watch names.
The cash-and-stock deal values Corum and its debts at 86 million Swiss francs, or $91.6 million at current exchange, with some additional performance payments possible depending on how the business develops. Once the deal is closed, the Michael Wunderman Trust, which controlled 90 percent of Corum’s stock, will own 10 percent of China Haidian, which trades on the Hong Kong Stock Exchange.
“This strategic agreement fulfills the long-term vision of both partners for the continued development and growth of the Corum brand,” Corum said. “It will allow China Haidian to anchor its position in the Swiss Haute Horlogerie by reinforcing its other activities and open for Corum new prospects for development and strengthen the positioning of its brand worldwide.”
Corum chief executive officer Antonio Calce will stay with the business.
Hon Kwok Lung, chairman of China Haidian’s executive committee said, “The brand has done a remarkable job under the leadership of Mr. Calce and was able to reposition itself as one of the major players in Haute Horlogerie.”
The deal is a significant step for a Chinese producer.
“For many years, the Chinese were not big acquirers of brands,” said Elsa Berry, cofounder and managing director of Vendôme, which advised Corum on the deal.
But now that the market is heating up, many Western brands that previously licensed their businesses overseas are choosing to go it alone and reap the rewards.
“Americans and Europeans interested in Chinese development took back their brands, so many companies are losing their bread and butter and little by little I think are going to become brand acquirers, primarily to drive sales in China,” Berry said.
China Haidian owns the Ebohr and Rossini watch brands, which it noted are two of the top-four domestic watch brands in China. It also owns the Swiss brand Eterna, which has a license to manufacturer and distribute Porsche Design watches.