Swiss watch brands Girard Perregaux and Ulysse Nardin will soon return to profitability after posting significant sales increases following a management-led buyout of the brands from luxury group Kering SA, according to the boss of both marques.
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The brands are enjoying a boost in popularity that has seen sales rise more than 40% by value, said Patrick Pruniaux, the chairman and chief executive officer of the Sowind Group, which owns them both.
“Sowind Group is on a path to sustained, strong profit within the next few quarters,” he said in an interview.
The Girard Perregaux and Ulysse Nardin marques had been losing money while Kering owned them. The French luxury-goods conglomerate, which controls the Gucci label, agreed to sell them in January in a management buyout group led by Pruniaux, who had helmed the brands for five years.
Combined, Girard Perregaux and Ulysse Nardin share about 400 years of watchmaking history. The average selling price for both brands have increased from about 15,000 francs ($15,300) two years ago to 18,000 today.
Pruniaux said the brands’ new independent ownership structure, which includes both company managers and family-office investors, has given them the financial stability for investment and growth.
“We are quite ahead of our plan,” he said.
Driving the sales increase are models including the Girard Perregaux Laureato, a geometric-case-shaped sports watch that collectors have turned to as an alternative to the wildly popular and pricey Patek Philippe Nautilus, Audemars Piguet Royal Oak and Vacheron Constantin Overseas models.
Sales of Ulysse Nardin’s nautical-inspired timepieces are also rising faster than most competitors, Pruniaux said. The brand’s “Freak” models, first introduced in 2001 and featuring modern designs that expose complicated watch mechanisms, remain a cornerstone of the brand and a key driver of sales, he said.
Through the management buyout, Sowind and its brands have joined a small club of independent Swiss watch makers including Rolex, Patek and Audemars Piguet. One advantage they have is that they’re unburdened by short-term corporate pressures, while brands under the Richemont, Swatch Group or LVMH stables have to continually prove their growth potential to stock-market investors.
Pruniaux, a 50-year-old Frenchman who returned to the Swiss watchmaking world five years ago after a stint as an Apple Inc. executive, said he expects production of Girard Perregaux timepieces to remain below 25,000 per year and Ulysse Nardin between 10,000 and 15,000.
With its newfound independence, the brands will focus on capturing better margins through rising prices and streamlined distribution, said Pruniaux, while underscoring his commitment to guiding Sowind over the long term.
“I expect this to be my last job,” he said.
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