Breaking News: Breitling Acquires Universal Genève

A storied brand on the cusp of a comeback?

Breitling has just announced the acquisition of Universal Genève, a once-storied brand famous for its Polerouter and Compax chronographs but that was dormant for years. Breitling will pay CHF60 million for the brand, but in tranches with CHF20 million upfront and the balance over the next five years.

The acquisition marks the first step in chief executive Georges Kern’s ambitions of building a watchmaking group, which will presumably go public. According to Mr Kern, Universal will be revived by a new team and run independently of Breitling, though it is almost a certainty Breitling will bestow upon its sister company some of its in-house movement know-how.

A sleeping beauty

Since 1989, Universal Genève has been owned Stelux, a Hong Kong watchmaking group focused on the affordable end of the market. The company’s primary business is the lucrative distribution of Seiko in Hong Kong and Southeast Asia, while its City Chain stores specialised in low-priced watches. Stelux owns a handful of other Swiss brands, including Solvil et Titus and Catena, none of which are premium brands as Universal might possibly be.

Although Universal attempted several halfhearted comebacks, particularly in the 1990s, the brand has gone nowhere for some time, making it a relatively easy turnaround given the starting point.

Commenting in the takeover announcement, Breitling chief executive Georges Kern says, “Rebuilding a brand with such a rich narrative is not a quick endeavor—it is a meticulous labor of love that we anticipate will unfold over the coming years.”

The oversized Universal split-seconds made for the Italian air force in the 1950s, one of the watches from the brand’s heyday

One step closer to the market

More notably, Universal marks the first step in Mr Kern’s long-held ambition of building a watchmaking group, which is likely the only route for his private equity backers to exit their investment. Originally bought out in 2017 by American firm CVC Capital Partners with Mr Kern at the helm, Breitling is now majority owned by Partners Group, a Swiss private equity outfit that acquired its stake in December 2022. CVC remains a minority shareholder, as does Mr Kern, along with key members of Breitling’s management.

With a presumed five-year timeline, Mr Kern will have until 2028 to bulk up his compact group of watchmakers in order to take it public. Selling the Breitling group to one of the big luxury conglomerates is less likely scenario, given that Breitling and Universal don’t fit into any gaps in the portfolios of the conglomerates, though that may change as Mr Kern continues his hunt for more brands.

Update December 28, 2023: Purchase price and terms added.

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