Kering Acquires Ulysse Nardin, Pays 13 Times Earnings For High Watch Brand

Ulysse Nardin Marine Diver

Kering makes another jewelry and watch acquisition. This time the French multinational company said Wednesday it will acquire a 100 percent stake in the Swiss luxury watch brand Ulysse Nardin. The watchmaker will join Kering’s recently formed “Luxury – Watches and Jewellery” division headed by Albert Bensoussan. Kering added that the Ulysse Nardin management team, led by Chai Schnyder, president of the Board of Directors, and CEO Patrik P. Hoffmann, will remain in place.

Kering (formerly known as PPR) hasn’t been shy about upping its stakes in the “hard luxuries” category (jewelry and watches). François-Henri Pinault, Kering’s chairman and CEO, said that in a statement that Ulysse Nardin, as one of the last remaining independent haute horlogerie brands, will reinforce its growing jewelry watch division, which consists of Boucheron, Dodo, Girard-Perregaux, JeanRichard, Pomellato and Qeelin. Three brands (Italian jewelers Pomellato and Dodo; and Hong Kong jeweler Qeelin) were acquired by Kering within the past two years. Those acquisitions along with Ulysse Nardin are evidence of the company’s pursuit of luxury jewelry and watch companies. Kering also owns brands in the high fashion, lifestyle and sports merchandising categories.

In addition, both companies say the acquisition will allow Ulysse Nardin to expand more rapidly in Asia. Expansion in Asia is something else Kering has been open about in recent years. 

“Ulysse Nardin benefits from a rich heritage, high profitability and solid growth prospects,” Pinault said. “Independent high-end watchmaking manufactures are rare. This is an opportunity that we had to seize, particularly because this structural acquisition will enable us to take advantage of numerous synergies with our existing brands. We have great ambitions for this company and we will help it continue its international expansion whilst staying faithful to its roots and its identity.” 

The company declined to give an acquisition price but during a conference call Wednesday, Jean-Marc Duplaix, Kering CFO and Jean-Francois Palus, Kering managing director, said the company paid 13 times Ulysse Nardin’s 2013 earnings before interest, taxes, depreciation and amortization. Palus said it is a “fair (price) for a brand with such a rich heritage high visibility and growth prospects.”

As a private company, Ulysse Nardin doesn’t disclose much of its finances or manufacturing volume and Kering wouldn’t release those details. An analyst at the conference call asked if media estimates of annual sales of 250 million Swiss francs and annual turnover of 27,000 pieces per year were accurate. Duplaix responded by saying the “assumption you mentioned is quite sensible and so is the volume of watches the brand is selling per year.” He added that Ulysse Nardin “will become the backbone of our watch business.”

Ulysse Nardin, based in Le Locle, Switzerland, specializes in creating ultra-complicated timepieces, many of them considered groundbreaking achievements, using cutting-edge technologies and state-of-the-art materials. For example, it was one of the first companies to use silicon in its timepiece movements and is one of the few Swiss watchmakers to have its own production capacity for critical watch components, particularly regulating systems.

The independent company was founded in 1846 by Ulysse Nardin with its roots in the nautical world for navigational purposes. It was taken over and re-launched in 1983 by Rolf W. Schnyder who transformed it into a highly profitable business. After his unexpected and sudden death in 2011, Chai Schnyder, Rolf Schnyder's wife, and Hoffmann took over the lead of the company. 

The company still benefits from a very strong brand identity based on its historical expertise in marine chronometers.

“Joining Kering is an opportunity for Ulysse Nardin,” Chai Schnyder said. “It will allow the brand to carry on with its international expansion and continue to innovate, while assuring the long-term future of its knowledge and expertise and communiqué.”

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A French Company Acquires Another Prestigious Italian Jewelry Brand

Tilda Swinton, a spokesperson for Pomellato.

Less than two years after French conglomerate LVMH acquired luxury Italian jewelry brand Bulgari; its French competitor, holding company Kering, finalized its acquisition of Italian jewelry brand Pomellato.

The agreement for Kering to purchase a majority stake in Pomellato was announced in April. On Thursday, Kering, formerly known as PPR, announced in a brief statement that the agreement received clearance from the antitrust authorities and has been finalized.

Pomellato was one of the few truly prestigious independent Italian jewelry brands left to acquire. The brand was founded by Pino Rabolini in Milan in 1967, pioneering the concept of ready-to-wear jewelry. The idea was that jewelry is not just a status symbol but an accessory to be worn and replaced at any time of the day. The current CEO, Andrea Morante, will remain in this position with the company.

Pomellato ranks among the top five European jewelers by sales, with 2012 revenues of €146 million ($190 million). It has a distinct style, an international following and an aura of exclusivity. The brand is known for its colorful rounded cabochon gems and its tactile forms. For example, pavé patterns are created with gemstones of various sizes and irregular forms. In recent years, the company was also known for its advertising partnership with actress Tilda Swinton, who appeared in company photographs and videos.

In 1995, Pomellato launched a second brand, Dodo, an accessible line of 18k gold charms in the shapes of animals. The name, after an extinct bird, was chosen as a way to exemplify the need to protect nature. The brand supports the Italian World Wildlife Fund, working to prevent the extinction of other animal species.

Pomellato’s distribution network includes 86 mono-brand stores (45 Pomellato, 41 Dodo) as well as approximately 600 independent points of sale around the world. More importantly for Pomellato and Kering is that there is plenty of room for growth. Pomellato has expressed an interest to extend its international distribution. Kering, with its immense size as an international player in the apparel and accessories markets, can fuel that growth.

Kering is present in more than 120 countries and generated revenues of €9.7 billion ($12.4 billion) in 2012. With the acquisition Pomellato finalized, the company now has a majority stake in 19 brands that include international luxury fashion brands Gucci, Bottega Veneta and Saint Laurent; French luxury jewelry brand, Boucheron; Chinese luxury jewelry brand, Qeelin; luxury Swiss watch brands, Girard-Perregaux and Jewn-Richard; and sports brand, Puma.

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Kering Strengthens its Focus On Luxury Jewelry and Watches

Tilda Swinton wearing colorful Pomellato rings. The Italian jeweler is owned by Kering.

French multinational holding company Kering (previously known as PPR) continues its transformation (at least three years in the making) into a luxury and lifestyle conglomerate with the recent announcement that it has reorganized most of its luxury brands into two divisions and appointed executives to lead those groups.

Albert Bensoussan, 55, a former LVMH executive, was named CEO of the “Luxury – Watches and Jewelry” division, which will house the brands Boucheron, Girard-Perregaux, JeanRichard, Pomellato, Dodo and Qeelin.

The last three brands (Italian jewelers Pomellato and Dodo; and Hong Kong based jeweler Qeelin) were purchased by Kering within the past two years and is evidence of its pursuit of luxury jewelry companies.

Meanwhile, Marco Bizzarri, 51, a Kering employee who most recently served as president and CEO of Bottega Veneta, was named CEO of the “Luxury – Couture & Leather Goods” division, which will be made up of Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, McQ, Stella McCartney, Tomas Maier and Sergio Rossi.

Bizzarri remains president of Bottega Veneta until a new CEO is appointed.

Gucci will remain under the responsibility of Patrizio di Marco, chairman and CEO, who will remain under Pinault’s supervision.

Both appointments take effect in May. They will both report to François-Henri Pinault, Kering chairman and CEO.

“The new structure reflects the specific character of the businesses of the Group’s different brands, and will provide better responses to their particular needs, adapted to each brand’s stage of development,” Pinault said in the April 24 announcement. “The introduction of this structure is a logical stage in the formation of a more integrated group, to further accelerate the development of our brands while respecting the autonomy and individual identity of each of them.”

Bensoussan, Bizzarri and di Marco are all members of Kering’s executive committee.

Along with the new appointments there will be resignation. Alexis Babeau, managing director of Kering’s luxury division since 2011, said he had successfully fulfilled his mission and wanted to take his career in a new direction. Pinault credited him for the development of luxury brands first at Gucci Group and then at Kering.

“Alexis played a key role in identifying and implementing operational synergies between our brands, while maintaining the creative independence that makes each of them unique,” Pinault said.

In addition, Pinault said he will remain the chairman of the board at Saint Laurent. “Saint Laurent is at a pivotal moment in its history and reform as undisputed reference for Parisian elegance,” Pinault said. “Retaining its chairmanship ensures the preservation of the unique individuality and positioning of this historical French Couture House.”

Kering also has a “Sport & Lifestyle” division with the brands Puma, Volcom, Cobra, Electric and Tretorn.

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Kering Acquires Pomellato

Tilda Swinton, brand ambassador for Pomellato.

The rumors have been swirling for some time but now they are verified.  PPR, which will soon officially change its name to Kering, has acquired Pomellato, the Italianjewelry company that has both broad and growing appeal.

Kering will hold a majority stake in the Pomellato group and its CEO, Andrea Morante, will remain in this position with the company.

Pomellato, whose 2012 revenues reached €146 million ($190 million), is one of Europe’s major jewelry groups, with a strong international position. The company’s success is based on the personality and style of its creations with a blend of colors, stones and shapes as well as their fine Italian craftsmanship. The Pomellato group is a profitable and growing Italian business with two brands, Pomellato and Dodo. The first positioned within the fine jewelry segment and the latter within the accessiblejewelry segment. Its distribution network includes 86 mono-brand stores (45 Pomellato, 41 Dodo) as well as approximately 600 independent points of sale around the world. There is plenty of room for growth for this company and Kering said its expertise and resources in real estate, distribution, media and brand management will help in that area.

With this acquisition, Kering is extending and reinforcing its portfolio of luxury brands in the high growth jewelry market.

“Synonymous with Italian style, Pomellato and Dodo rank among the most beautiful and innovative jewelry brands in the world,” said François-Henri Pinault, chairman and CEO of Kering . “We have great ambitions for the Pomellato group, which, with access to our expertise and know-how, will be able to step up the pace of its growth and expand its geographic footprint while preserving the values that underpin its Italian identity.”

Andrea Morante, CEO of Pomellato, added: “Becoming global brands is no longer an option for Pomellato and Dodo; it is a necessity. With this consideration in mind, we have undertaken a lengthy review of our best strategic alternatives and reached the conclusion that joining Kering was far and away the most favorable course of action. First, we will instantly join one of the most prestigious groups in the world; second, we will have a unique opportunity to preserve and enhance the Pomellato and Dodo success stories on a global scale.”

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PPR To Become Kering

François-Henri Pinault, PPR chairman and CEO, poses with the company's new name and logo, which is expected to become official on June 18.

French holding group, PPR, said Friday that it will change its name and brand messaging to reflect its new identity as an international luxury, sports and lifestyle organization.

On June 18, subject to board approval, the new name for the company will be Kering (pronounced Caring). The Paris-based company said the new name reflects its culture of “taking care of our brands, people, stakeholders and the environment.” The suffix “ing” expresses the idea of movement, reflecting the diverse history of the 50-year-old company, which began as a trader of timber and construction materials. The stem “ker,” meaning home in Breton, refers to its origins in the Brittany region of France.

Since 2005, PPR has been undergoing a transformation from a conglomerate focused on primarily European distribution activities, to an international group focused on the apparel and accessories business across two fast growing segments that it defines as “Luxury” and “Sport & Lifestyle.” In a few months, the new group expects to leave the distribution sector completely, after disposing of Fnac and the remainder of online fashion retailer Redcats.

The company’s collection of brands include Gucci, Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, Stella McCartney, Boucheron, Girard-Perregaux, Qeelin, Puma, Volcom, Cobra, Electric and Tretorn.

Laurent Claquin, head of PPR Americas, said the change in the company’s identity is a natural step in the group’s transformation.

“We are marking a transition from a conglomerate to an integrated group,” he said. “We are in the business of fashion. We are also part of the same group (as) a way to signify how we do our business with our brands and customers.”

Claquin refused to comment on published reports that the company is in the final stages of acquiring luxury Italian jewelry brand, Pomellato. “It is not the subject of the day,” he said.

Accompanying the new name are new symbols for the company and an international branding strategy over multiple platforms that it emphasis the creativity of its brands. A new video, website and advertising campaign and supporting items are among the ways the company intends to promote its new image. Digital media will be a centerpiece of the campaign. Follow this link to view the company's new video.

As part of the strategy, the company adopted a new symbol, the “untamed” owl, and even a company signature that reads: “empowering imagination.”

The owl is drawn from a single line, like a quick sketch, a doodle even, with outstretched wings and its face framed in a heart. This simple drawing expresses far reaching values, according to the company, from foresight, wisdom and intelligence to caring and respect.

Claquin emphasized that the new campaign is geared toward the B-2-B community and not the general public. “We don’t communicate through a general public,” he said. “We don’t want to be stronger than our brands but we do communicate to our target populations.”

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