Group Portraits

April 2004

It is an undisputed fact: watchmaking has undergone major transformations over the last five years. The phenomenon of mergers and takeovers that has profoundly modified the structure of the watch industry has not been an exception to the general economic rule over the last few years.


verywhere you turn, it is the same scenario, whether in banking, pharmaceuticals, raw materials, transportation, telecommunications, media, or insurance. All sectors have been affected and are suffering the same upheavals. Capitalism, by promoting fierce competition, has made it obligatory for everyone to attain the necessary critical mass in order to simply survive. Through acquisitions, mergers and various verticalization efforts, each player has sought the dominant position, even though strategies may have varied locally. Transversal or vertical, on a large scale, diversified or concentrated, these strategies have resulted in a drastic reduction in the number of players in the marketplace.
Currently, the watch landscape is greatly dominated by the large groups that have erected their own fortresses, with the Swatch Group, Richemont, LVMH, Gucci - PPR and Rolex (a case apart) on the Swiss Made side of the equation, while Seiko and Citizen balance the scale on the Japanese side. The heavyweight independent manufacturers number only a handful: Patek Philippe, Audemars Piguet, Chopard, Girard-Perregaux and a few others. These enterprises occupy niches, although major niches, but remain confined to very specific sectors.
The deaf war of the charging elephants, as in all wars, has left a number of casualties. We have quit counting the number of brands that have disappeared (it’s sufficient to thumb through issues of Europa Star from ten years ago to get an idea). Yet, this ongoing battle has paradoxically favoured the birth of new players in the field. The reasonı Despite the relative ‘glaciation’ of the forces now in power, life goes on as new sprouts develop in the frozen landscape like weeds peeking up through cracks in the concrete.
The ‘group’ mentality is also spreading throughout the industry, as new groups are beginning to form in all sectors of watchmaking, from fashion to high luxury, without forgetting the ‘middle of the road’ segment. As examples, we think of the Fossil group, which has slowly but surely woven its web in the world of the licensing agreement, or of Movado - Concord that has just purchased Ebel and is now enlarging its stable of brands.
Other ‘mini-groups’ are emerging such as the new Perficio group that is concentrating in the luxury timepiece arena and whose portrait we paint on the following pages. In light of the increasing number of groups, the editorial team of Europa Star decided to examine this phenomenon in detail, with a specific look at their industrial, commercial, social, media-oriented and stylistic consequences. Therefore, over the year, we will present interviews, portraits and analyses of these groups, whether well-established or in the formative stages. To kick off the series, in addition to the article on Perficio, we give the floor to Philippe Pascal, CEO of the watch and jewellery division of LVMH, a group recently created ex nihilo with plenty of capital behind it, yet still fragile, but already a player in the big leagues.

LVMH: “a sportive year” An interview with Philippe Pascal, CEO LVMH of Watch & Jewellery