American watchmaking group Movado, which owns struggling luxury brands Ebel and Concord as well as better performing licensed brands like Hugo Boss and Coach, has just inked a deal to buy MVMT.

MVMT sells very affordable watches to young people, typically buyers looking for an accessory rather than a timepiece per se. The deal sees Movado paying US$100m upfront, with an additional US$100m in future payments depending on MVMT’s future performance.

MVMT founders Jake Kassan and Kramer Laplante

Founded in 2013 by a pair of college dropouts, MVMT’s success is largely social media driven. The brand has a million followers on Instagram and sells most of its wares direct to the consumer, as well as in a handful of large department stores like Nordstrom.

With its watches priced around US$100, with nothing past US$200, MVMT relies on suppliers in Hong Kong and China for its products, the standard business model in the category.

The company sold US$71m of watches and accessories in 2017, making it approximately the same size as Roger Dubuis, which had 2017 revenue of about US$68m according to Swiss bank Vontobel.

The millennial-friendly MVMT site

Despite the size of the deal, MVMT is not the biggest player in its segment. The title goes to the company that arguably pioneered the concept, Daniel Wellington.

The Swedish company was founded in 2011 and grew revenue to over US$200m last year, with its youthful owner, Filip Tysander, still owning all of the equity and no doubt feeling very pleased right now.

Source: Bloomberg