In our roundup of watch-industry insider predictions for 2022, William Massena of Massena Labs surmised that some big luxury conglomerates would begin unloading their watch brands this year. And on Monday, the prophecy came true: Kering, the parent company of Gucci, Balenciaga and Saint Laurent, among others, announced that it had sold its entire stake in both Girard-Perregaux and Ulysse Nardin to Sowind Group SA, which manages the two watchmakers.
Both companies are storied houses: Girard-Perregaux dates as far back as 1771 and Ulysse Nardin traces its roots to 1846. Girard-Perregaux is renowned for its Three Golden Bridges, first seen in the Esmerlda pocket watch in 1884, which won the gold medal at the Universal Exhibition in Paris in 1889 and has since been reinvented in everything from sapphire crystal to titanium for the 21st century. And Ulysse Nardin has a long history of making marine chronometers for naval fleets, as well as modern accomplishments like the groundbreaking Freak watch, which tells time without hands, and the implementation of Silicium in watch movements.
Both companies are currently being helmed by Patrick Pruniaux, a charismatic CEO with a long history in the watch industry, who also worked on the Apple Watch. He took over at Ulysse Nardin in August of 2017 and a year later was appointed to also run Girard-Perregaux. Both manufactures have plenty to work with in terms of innovations, history and savoir faire, but have failed to gain the kind of traction that Kering’s ultra-successful revamps of Balenciaga and Gucci have seen.
“The Group has supported the two Houses in their development, strengthened their positioning and ensured they have adequate resources to finance their growth,” said Kering in a press statement. “It has confidence in the management in place to successfully pursue the work undertaken.”
Jean-François Palus, Kering’s group managing director, added, “The extensive work carried out by the Group in recent years at Girard-Perregaux and Ulysse Nardin has laid the foundations for sustainable growth. Kering has demonstrated its ability to secure the conditions for the long-term development of entities leaving the Group, in the interest of their employees, partners, customers and local communities.”
It may be that these brands will thrive outside of a conglomerate like Kering, which is used to the fast-paced world of fashion where trends, capsules, collaborations and numerous collections must be churned out within a year’s time. It will allow both Girard-Perregaux and Ulysse Nardin to operate at a pace more in-line with the intricacies and slower craftsmanship of the watch industry where employees spend lifetimes working at one manufacture as opposed to the musical chairs of the fashion industry (not so coincidentally, many designers have experienced burn out, meltdowns and worse as a result of the pressure).
As a reminder, Massena predicted this to Robb Report two weeks ago: “We’ll see brands separating from the four big groups: LVMH, Kering, Richemont and Swatch. There will be pressure from the shareholders to reduce costs and to maximize returns and a lot of those brands will be much better off as independents. It will take years, if not a decade, for this to happen, but in 2022, we will see the beginning of the de-consolidation.”
So, we’ve already seen the beginning, which has us wondering…who’s next?