Swatch is dripping in cash and can afford to lash out a bit on a smattering of trophy brands. But why spend so much cash on a jewellery maker?
Much of is down to a rash of luxury goods companies rushing to consolidate their offerings in order to flog more high end aspirational goods to a rapidly expanding Asian middle class. Witness Richemont bagging Net-a-Porter in 2010 and Bernard Arnault, chief exec of LVMH, snapping up Bulgari for €4.3 billion.
Key for companies like Swatch is economies of scale. And synergies, namely manufacturing and diamond industry expertise, in this case. "The Swatch Group," said Harry Winston in a press statement, "with its unparalleled combination of expertise in both engineering and brand management, is the perfect home for such a prestigious brand."
Not everyone is thrilled at such unions. LVMH boss Bernard Arnault, for example, covets the House of Hermès. LVMH, which controls such brands as Gucci, Krug, Louis Vuitton and Givenchy, has been busy buying up shares in the company, even if Hermès didn't grasp the extent of Arnault's stealth stock purchases until 2010.
No soul?The Hermès family have been scrabbling to shoo Arnault away ever since fearing financial and artistic loss of control, more pressure on mass production vulgarity - and a certain loss of soul or chic. But with mixed success.
However, the Swatch-Harry Winston Diamond jewellery and watch division looks a more comfortable fit: Swatch also owns other luxury brands like Blacpain, bought in 1992 and Breguet, bought in 1999. The deal isn't cheap at the best part of $1bn in total, including debt obligations.
Reuters reports that the Swatch Group has snapped up "more than a dozen component makers over the last 10 years, its most recent buys being watch case maker Simon & Membrez and a 60 percent stake in case polisher Termiboites last year."