VLG North America was keeping mum on its plans for the Piaget brand following the announcement last week that it was acquiring Movado Group’s Piaget business for an estimated $30 million.
Movado is the exclusive distributor of Piaget watches and jewelry in the U.S., Canada and Caribbean. Following the sale, expected to take place in February, VLG, a subsidiary of Geneva-based Vendome Luxury Group, will take over the distributorship and will also operate the Piaget boutique on Fifth Avenue in New York.
The Piaget brand is owned by Vendome, but has distributor deals in some countries.
“We know there is great potential for future development of the Piaget business in the North American marketplace,” said Simon J. Critchell, president and chief executive officer of VLG as well as Cartier Inc., also owned by Vendome.
However, he declined to offer any specifics about the future of the brand, adding, “It is premature to make any comments about what will happen. We will be more in a position to talk about it in January.”
The acquisition will add a third luxury brand to VLG’s stable of high-end watch brands, which now includes Swiss watchmakers Vacheron Constantin and Baume & Mercier. VLG was organized in September 1997 as an umbrella entity over the North American operations of the two brands, although each brand retains control of day-to-day activities, including sales, distribution, credit, customer service, after-sales service, public relations and advertising.
Piaget was the founding business for Lyndhurst, N.J.-based Movado, which began distributing the brand in 1961. The luxury watches now carry an average price point of between $12,000 and $20,000, and Piaget products are now sold in about 75 stores, mainly independent jewelry shops, in addition to its own boutique, according to Movado Group President Efraim Grinberg.
Grinberg told WWD that the sale allows Movado to focus on its own brands that it manages worldwide, including Movado, Concord, ESQ and the licensed Coach brand. The company does not break out individual sales figures for Piaget, but combines them with Corum, its other Swiss-made brand Movado distributes. In the most recent fiscal year ending in January 1998, Corum and Piaget had sales of $17 million, against $22.4 million in the prior year; Movado attributed the decline primarily to planned reductions in Piaget’s distribution.
“Given the scope of our own broad activities, we felt that we would be better off selling the North American Piaget business to VLG North America,” Grinberg said in a statement. “This transaction allows us to give greater focus to the rest of our business and frees capital that can be reinvested.”
Joe Gladue, an analyst at the Chapman Co., said the sale was likely a combination of Vendome wanting the distributorship for its brand, and a desire on the part of Movado to concentrate on its higher margin brands.
“Piaget watches are very expensive, and with watches that are that expensive, inventory turns are much slower and it ends up being less efficient,” Gladue commented. “Also, there wasn’t a tremendous amount of synergy between Piaget and the other Movado brands.”
In addition to the watches and Cartier, businesses owned by Vendome include Montblanc, Chloe and Sulka. Vendome is wholly owned by the Switzerland-based Compagnie Financiere Richemont AG conglomerate, which took Vendome private earlier this year to allow the luxury firm to escape the pressures of the stock market.
Movado, in addition to the brands it manufactures, distributes Swiss-made Corum watches in the U.S., Canada, Central America and the Caribbean. Grinberg said there are no plans to sell or change its Corum business.