The Watches of Switzerland Group has bought the American distributor for Roberto Coin in a cash deal valued at $130 million.
The North American operation, Roberto Coin Inc., has exclusive perpetual rights to import and distribute Roberto Coin jewellery throughout the US, Canada, Caribbean and Central America.
Roberto Coin’s UK operation is not affected.
According to WoSG research, Roberto Coin is the sixth largest jewellery brand in the United States by retail value and has over 400 points of sale, including 16 Watches of Switzerland or Mayors locations, across retail jewellers and department stores.
It is in illustrious company with other top ten jewellery brands, which include Cartier, Tiffany, Van Cleef & Arpels, Bulgari and David Yurman.
Roberto Coin Inc. generated sales of $146.2 million and profit before taxation of $30.1 million in 2022.
Turnover dipped to $138.7 million in 2023 with profit flat at $30.2 million.
“We believe there is significant opportunity to leverage our proven retail expertise in luxury branded jewellery. The luxury branded jewellery category has consistently outperformed the wider jewellery sector, and we see further strategic and operational opportunities for the business within the broader Group. We are committed to our new wholesale partners and excited to work with them and help them grow with Roberto Coin,” says Brian Duffy, CEO of WoSG.
“Today’s strategically and financially attractive acquisition is indicative of our ambition and the momentum we are building in this exciting category. It will allow us to take one of the fastest growing jewellery brands in the US and use our retail and operational expertise to accelerate growth and further elevate the Roberto Coin proposition in North and Central America,” he adds.
WoSG has flagged its plans to expand its luxury branded jewellery offer in recent years, in part as a way of reducing its dependence on what it calls supply-constrained brands, code for Rolex, Audemars Piguet and Patek Philippe.
This acquisition also takes the group into the wholesale business for the first time, and will have a sales force focused on selling to its competitors across North America.
It is confident that this apparent conflict of interest will not stand in the way of returning to growth for Roberto Coin.
Peter Webster will remain President of Roberto Coin Inc., reporting to David Hurley, president North America and deputy CEO of the Watches of Switzerland Group.
He is committed to leveraging WoSG’s operational and retailing expertise to drive incremental growth in the Roberto Coin Inc. business across wholesale distribution and direct to consumer through the group’s Mayors and Watches of Switzerland showrooms.
Prior to this acquisition, Watches of Switzerland Group had a long journey to travel to make branded luxury jewellery a significant contributor to its operation.
Its most recent financial update, for Q3 FY24 (13 weeks to 28 Jan 2024) showed luxury watch sales of £336 million still represented 85% of group revenue for the quarter and grew at 1% year-on-year.
Jewellery sales totalled just £34 million, down 16% on the prior year.
The company did clarify that luxury branded jewellery sales grew in the quarter but non-branded jewellery dragged down the category.
WoSG research reveals that there is a global shift away from unbranded jewellery towards branded items. In 2019 branded luxury jewellery, by WoSG’s definition, accounted for 17% of the global luxury jewellery market. This year, it is up to 27% of the market.
WoSG clearly believes that Roberto Coin is sufficiently important and irreplaceable to American retailers that stock the brand that it will continue to expand its wholesale business while ramping up its own direct to consumer sales.
In a statement released to the London Stock Exchange this morning, the group says it will:
- Expand the wholesale network with independent retailers
- Develop joint business plans with wholesale partners
- Grow the export market outside of the US
- Expand DTC through the Group’s showroom portfolio and online
- Make vertical margin gains through securing product direct from Roberto Coin S.p.A.
- Increase the number of points of sale within the showroom portfolio
- Elevate the showroom presentation of the brand through the development of market leading shop-in-shop display formats
- Opening mono-brand boutiques and franchise stores
- Investing in brand marketing, including digital, to drive brand awareness
- Developing the online proposition
The Acquisition was financed via a new $115 million term loan facility but says it will be a net positive for margins moving forward.
Roberto Coin, founder and CEO of Roberto Coin, says today’s announcement marks a significant step change in the development of Roberto Coin Inc.
“Roberto Coin is synonymous with design creativity, diversity, innovation and imagination. We are delighted to have partnered with the Watches of Switzerland Group, who have a real understanding and appreciation of our unique, world-class brand and products, and can accelerate our retail strategy in North and Central America. We look forward to benefitting from their wealth of luxury retail and digital experience to unleash the growth potential of the Roberto Coin brand across our chosen markets,” he suggests.
Watches of Switzerland Group will announce its end of year financials next week, on May 16, with investors looking for a catalyst to restore confidence in the business.
Its share price has more than halved since a revision for its full-year forecast was shared in January and stands today at a four-year low.
There is no evidence this morning that the Roberto Coin Inc. acquisition is a game-changer for investors. Its share price ticked up by less than 1% in this morning’s trading and remains 57% below its price a year ago.
