The Swiss watch industry wrapped its arms around the burgeoning global market for pre-owned watches today as it announced the acquisition of Watchfinder, a UK-based specialist with turnover of around £120 million.
The company’s most recent accounts show turnover in the financial year ending March 2017 of £85 million, up from just over £60 million the previous year, but managing director Stuart Hennell has stated that the business is now trading at an annualised turnover of £120m.
Operating profit in 2017 was £5 million, a figure that surprised industry experts who thought there was little margin in the cut-throat market for luxury pre-owned watches, particularly those properly serviced and given a warranty like those from Watchfinder.
The company employs around 200 people, many of which are skilled watchmakers in its service centre.
Richemont has not disclosed the price paid for Watchfinder, saying only that it is a private transaction with its shareholders, which include Mr Hennell, Matthew Bowling, the company’s chief operating officer, and Adoreum, a London-based brand-building consultancy for luxury businesses that acquired 5% of the company last year for just £150,000 following a protracted legal dispute.
In a statement from Richemont today, Watchfinder is described as the leading platform to research, buy and sell premium pre-owned watches, both online and through its seven boutiques.
Commenting on the transaction, Johann Rupert, chairman of Richemont, said: “Sixteen years ago, Watchfinder’s founders foresaw the need for an online marketplace for premium pre-owned timepieces. Watch enthusiasts themselves, they established Watchfinder to provide excellence in customer experience. We believe there are substantial opportunities to help grow the Company further. Today, Watchfinder operates both as an ‘online’ and ‘offline’ business in a complementary, growing, and still relatively unstructured segment of the industry.
“Together with YOOX NET-A-PORTER and our stake in Dufry, the acquisition of Watchfinder is another step in Richemont’s strategy. It will enable us to better serve the sophisticated needs of a discerning clientele.
“We welcome Stuart Hennell and his team, and look forward to ensuring Watchfinder remains the compelling destination for premium pre-owned timepieces.”
The transaction is expected to close in the summer of 2018 and will have no material impact on Richemont’s consolidated net assets or operating result for the year ending 31 March 2019, the company says.
Swallowed up buy an international conglomerate? Good or bad, we will wait and see?