Written by Kidist Amanuel
Jeweler Harry Winston has sold its watch and jewelry division with its 535 employees to Swatch Group for US $750 million, plus up to US $250 million of net debt. As Robert Gannicott, chairman of the board and chief executive of Harry Winston Diamond stated,
“The Harry Winston brand now has a new home that can provide the skills and support that it deserves to realize its true potential.”
The transaction did not include the Toronto-based mining segment, Harry Winston Diamond, which will now be renamed The Dominion Diamond Corporation. This puts the company as one of the few diamond companies out there at a time when diamonds are becoming scarce. Swatch Group and Dominion Diamond Corporation are expected to continue to work together in the future through a diamond sourcing deal under the purchase, including a joint diamond polishing venture. Harry Winston is a great addition to Bienne, a Switzerland-based company, which owns brands such as Omega and Breguet.
Harry Winston started as a small jeweler in New York in 1932. Its popularity skyrocketed as it became a favorite with movie stars- most especially after referenced by Marilyn Monroe in the film, Gentlemen Prefer Blondes and the song “Diamonds Are a Girl’s Best Friend”. The brand’s popularity in the US and Asia markets was an undeniable draw for Swatch Group. Chairwoman of the Swatch Group Nayla Hayek says that “Harry Winston does brilliantly complement the prestige segment of the Group.” This transaction not only allows Swatch to have a major foothold in jewelry but also allows the Harry Winston brand access to various resources that are at Swatch Group’s disposal. This has the making of a great venture for both parties.
Swatch Group, which is already the world’s biggest watchmaker in terms of sales, is only going to get bigger from here. Its acquisition of Harry Winston should add to its multi-billion dollar yearly sales, made possible by its other luxury brands like Omega. The addition of high-end jewelry should attract more people and diversify clientele, most especially in Asian markets. This is the Swatch Group’s first big takeover in many years, to be finalized upon regulatory approval.