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BREAKING NEWS: CHRONEXT reveals it is going public this year

Philipp Man.

CHRONEXT is going public.

The Swiss-based secondary market watch specialist has announced today that it will list on the SIX Swiss Exchange before the end of the year.

It wants the IPO to be completed in the fourth quarter of 2021, subject to market conditions.

The company intends to issue new shares worth around CHF 250 million and also place existing shares from investors in an initial public offering (IPO).

The company says it is creating “the next-generation luxury watch ecosystem in a multi-billion largely untapped market with significant growth potential”.

CHRONEXT’s workshop services, refurbishes and authenticates watches it is selling.

A report published earlier this year by Business of Fashion and including research by McKinsey & Company forecasts that the total value of pre-owned watch sales will grow at 8-10% per annum over the next five years, increasing the total value of sales from an estimated $18 billion in 2019 to between $29 billion and $32 billion in 2025. By then, second hand will account for more than one third of the total watch market.

A Reuters report earlier this year suggested that CHRONEXT and Chrono24 were racing to go public this year, a story that neither company would confirm.

Chrono24 revealed it had secured €100 million of investment, but would not say the money made an IPO any more likely.

In a statement accompanying news of its listing, CHRONEXT reports that revenue rose above €100 million for the first time in 2020 and has served 100,000 customers in 62 countries since 2013.

Sales have risen by an average of 47% per year since 2018, including growth of 18% in the pandemic-affected 2020.

CEO Philipp Man says the company is targeting profitability on EBITDA level in the mid term.

“Today is a very exciting day for the CHRONEXT team. Having grown very fast since we founded the Company in 2013, our goal is to now list CHRONEXT to give ourselves the financial flexibility to capitalise on unprecedented change in the luxury watch sector, and to conquer further growth in the structurally underpenetrated online market. We are pleased that our story has already generated strong interest among many top-tier institutional investors,” Mr Man suggests.

CHRONEXT chairman Jacob Fonnesbech Aqraou.

Jacob Fonnesbech Aqraou, who joined the CHRONEXT board as chairman this year believes that the IPO will give the company the financial muscle to accelerate growth. “The stock listing represents a natural next step in CHRONEXT’s development. Apart from the funding of the growth strategy by increasing the company’s brand visibility, credibility and profile, we think the IPO will allow CHRONEXT to take further share of the rapidly growing and highly profitable hard luxury online market,” he says.

CHRONEXT says it intends to use a portion of the net proceeds from the IPO to drive organic growth, grow the product offering and expand into new geographies. Net proceeds are also expected to be used to expand the group’s lounge network, currently there are 11 in Europe, and to invest further in its technology, in particular in respect of increasing integration with retailers and brands, development of a mobile application,and building the technology required to introduce additional products and services.

The Company also intends to invest in expansion in the United States and Asia.

CHRONEXT states that the IPO is expected to include a primary component of up to approximately CHF 250 million and an unspecified secondary component.

Additionally, the selling shareholders will make existing shares available for a possible over-allotment comprising up to 15% of the shares sold in the IPO.

The company and members of the executive committee including the founders are expected to agree to a lock-up period of 540 days, the board of directors to a lock-up period of 360 days, the selling shareholders (excluding any members of the Executive Committee or Board of Directors) are expected to agree to a lock-up of 180 days, and all other existing shareholders to a 60-day lock-up.



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