9
May 2024
FOR
IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS
INSIDE INFORMATION
The Watches of Switzerland
Group PLC
Acquisition of Roberto Coin
Inc. for a total consideration of $130 million
Transaction represents
significant milestone in the Watches of Switzerland Group's luxury
branded jewellery strategy
On 8 May 2024, the Watches of
Switzerland Group ('WOSG' or the 'Group') signed and completed the
acquisition of the entire share capital of Roberto Coin Inc., an
associate company of Roberto Coin S.p.A. from Roberto Coin S.p.A.,
Pilar Coin and Peter Webster, Co-Founder and President of Roberto
Coin Inc., for a total consideration of $130 million (the
'Acquisition').
Background on Roberto Coin and Roberto Coin
Inc.
· Roberto Coin S.p.A., founded in the Italian city of Vicenza,
designs and manufactures delicately handcrafted jewellery with a
unique ruby signature under the world-renowned Roberto Coin
brand
· Roberto Coin is the sixth largest jewellery brand in the US by
sales at retail value1
· Roberto Coin Inc. has exclusive perpetual rights to import and
distribute Roberto Coin jewellery throughout the US, Canada,
Caribbean and Central America
· The US
precious jewellery market is by far the world's largest jewellery
market, and the Roberto Coin brand has developed a strong position
in it, competing successfully with other top 10 industry leading
brands such as Cartier, Tiffany, Van Cleef & Arpels, Bvlgari
and David Yurman1
· Roberto Coin Inc. sells to major department stores, jewellery
chains, and independent jewellers in more than 400 points of
sale
· The
Acquisition builds on the Group's successful partnership with
Roberto Coin, which spans over a decade; Roberto Coin is currently
available in 16 WOSG showrooms in the US
Strategic rationale
· Luxury
branded jewellery is a core pillar of the Group's growth strategy;
the trend within the global luxury jewellery market is towards
branded jewellery which made up 27% of the market in 2024, up from
17% in 20192
· The
Acquisition builds on the Group's proven capabilities in showcasing
luxury brands across both watches and jewellery and will
significantly enhance our strategic positioning in the luxury
branded jewellery category in the US, the world's largest luxury
jewellery market on a per capita basis3
· The
Group will leverage its operational and retailing expertise to
drive incremental growth in the Roberto Coin Inc. business, both
across Robert Coin Inc.'s wholesale distribution and well as direct
to consumer ('DTC') in the Group's retail boutiques and
online:
· Expansion opportunities in wholesale
o Grow
the wholesale business under the leadership of Peter Webster, who
will remain President of Roberto Coin Inc., reporting to David
Hurley, President North America and Deputy CEO of the Watches of
Switzerland Group
o Expand the wholesale network with independent
retailers
o Develop joint business plans with wholesale
partners
o Grow
the export market outside of the US
· DTC
through the Group's showroom portfolio and online
o Vertical margin gains through securing product direct from
Roberto Coin S.p.A.
o Increasing the number of points-of-sale within the showroom
portfolio
o Using the Group's CRM and clienteling capabilities to drive
sales
o Growing the high-end Roberto Coin Collection
· Opportunities for both DTC and wholesale
o Elevating the showroom presentation of the brand through the
development of market leading shop-in-shop display
formats
o Opening mono-brand boutiques and franchise stores
o Investing in brand marketing, including digital, to drive
brand awareness
o Developing the online proposition
Value enhancing financial effects
The Acquisition completed for a
total cash consideration of $130 million (of which $10 million is
deferred for one year and contingent on the future profitability of
the acquired business), subject to working capital
adjustments.
Roberto Coin Inc. achieved annual
revenue of $146.2 million and profit before taxation of $30.1
million for the audited financial year ended 31 December 2022.
Gross assets at that date were $87.9 million. 2023 preliminary and
unaudited revenue was $138.7 million and profit before taxation
$30.2 million.
The Acquisition was financed via a
new $115 million term loan facility. At the date of the
Acquisition, the transaction increased the Group's leverage to
c.0.8x Net Debt4/Adjusted EBITDA5 (pre-IFRS
16 at mid-point of FY24 guidance). Covenants are identical to
the Group's existing multicurrency revolving loan
facility.
The Acquisition will be margin
enhancing and EPS accretive from the date of
acquisition.
In line with the Group's track
record of successful previous acquisitions, we expect to deliver a
smooth integration of Roberto Coin Inc. into the Group.
Roberto Coin Inc. will continue to
operate as an independent, standalone company within the Watches of
Switzerland Group. The Coin family will retain a seat on the
Board of Directors of Roberto Coin Inc. and Peter Webster will
remain as President of Roberto Coin Inc., supported by the
exceptional, experienced and dedicated team he has built over
nearly 30 years.
Brian Duffy, Chief Executive Officer of the Watches of
Switzerland Group, said:
"We have partnered with Roberto Coin
for over a decade in the US, retailing its elegant jewellery in a
number of our Mayors' showrooms. It is a hugely popular, growing
brand, occupying a strong position in the market, underpinned by
product quality, design creativity and imagination.
"We believe there is significant
opportunity to leverage our proven retail expertise in luxury
branded jewellery. The luxury branded jewellery category has
consistently outperformed the wider jewellery sector, and we see
further strategic and operational opportunities for the business
within the broader Group. We are committed to our new
wholesale partners and excited to work with them and help them grow
with Roberto Coin.
"Today's strategically and
financially attractive acquisition is indicative of our ambition
and the momentum we are building in this exciting category. It will
allow us to take one of the fastest growing jewellery brands in the
US and use our retail and operational expertise to accelerate
growth and further elevate the Roberto Coin proposition in North
and Central America.
"It has been a great pleasure
getting to know Roberto and Peter over the last 18 months while we
have been discussing this exciting opportunity. We are enormously
appreciative of the trust Roberto, his family and Peter Webster
have placed in us for this important next stage of the brand's
development. We are delighted to welcome Roberto Coin Inc.
colleagues into the Group and look forward to working closely with
Roberto and Peter going forwards."
Roberto Coin, Founder and CEO of Roberto Coin,
said:
"Today's announcement marks a
significant step change in the development of Roberto Coin
Inc.
"Roberto Coin is synonymous with
design creativity, diversity, innovation and imagination. We are
delighted to have partnered with the Watches of Switzerland Group,
who have a real understanding and appreciation of our unique,
world-class brand and products, and can accelerate our retail
strategy in North and Central America.
"We look forward to benefitting from
their wealth of luxury retail and digital experience to unleash the
growth potential of the Roberto Coin brand across our chosen
markets."
Conference call
A conference call and presentation
for analysts and investors will be held at 10.30am (UK time) today.
To participate in the conference call, register using the link or
dial in details below:
Registration
Link: https://www.netroadshow.com/events/login?show=429f4187&confId=64861
Dial in: +44 20 3936 2999
Conference access code:
179311
Notes:
1Source: WOSG research
2Source: McKinsey, Euromonitor
3Source: Euromonitor, WOSG research
4Net Debt is defined as total borrowings (excluding capitalised
transaction costs) less cash and cash equivalents and excludes IFRS
16 lease liabilities
5Adjusted EBITDA is defined as operating profit before
exceptional items and IFRS 16 impact
This announcement contains
information which is deemed by the Company to constitute inside
information stipulated under the Market Abuse Regulation (EU)
No.596/2014 as it forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018. Upon the publication of this
announcement via the Regulatory Information Service, the inside
information is now considered to be in the public
domain.
The person responsible for arranging
the release of this information on behalf of the Company is Laura
Battley, Company Secretary and General Counsel.
Contacts
The
Watches of Switzerland Group
Anders Romberg, CFO
+44
(0) 207 317 4600
Caroline Browne, Group Finance &
Investor Relations Director
+44 (0) 1162 817 420
investor.relations@thewosgroup.com
Headland
Lucy Legh / Rob Walker / Joanna
Clark
+44 (0) 20 3805 4822
wos@headlandconsultancy.com
The Group plans to announce Q4 FY24
results on 16 May 2024.
About the Watches of Switzerland
Group
The Watches of Switzerland Group is
the UK's largest luxury watch retailer, operating in the UK, US and
Europe comprising six prestigious brands; Watches of Switzerland
(UK and US), Mappin & Webb (UK), Goldsmiths (UK), Mayors (US),
Betteridge (US), and Analog:Shift (US), with a complementary
jewellery offering.
As at 28 January 2024, the Watches
of Switzerland Group had 222 showrooms across the UK, US and Europe
including 98 dedicated mono-brand boutiques in partnership with
Rolex, OMEGA, TAG Heuer, Breitling, TUDOR, Audemars Piguet, Grand
Seiko, BVLGARI and FOPE and has a leading presence in Heathrow
Airport with representation in Terminals 2, 3, 4 and 5 as well as
seven retail websites.
The Watches of Switzerland Group is
proud to be the UK's largest retailer for Rolex, OMEGA, Cartier,
TAG Heuer and Breitling watches.
www.thewosgroupplc.com
About Roberto Coin
Roberto Coin is a brand of fine
jewellery whose operational and production headquarters are located
in Vicenza, the jewellery capital of Italy. The brand has become
famous throughout the world for its collections' design and
technological innovation, which pay homage to, and revolutionise
ancient Italian manufacturing techniques, as well as for its
particular "art of creating new authenticity".
Roberto Coin, the brand's founder,
designer and eclectic businessman, defines his desire to make
collections that are always distinct and to guarantee that each
piece of jewellery is perceived as unique. Far from
standardised, the brand avoids aesthetic traits that would make it
easily recognisable.
Roberto Coin prefers that the details
of artisanship tell the story of his mission to create beauty -
mixing the past with the present and the codes of elegance with the
forms of art and architecture that inspire him, particularly as
he's walking through the alleyways of Venice, the city where he was
born.
Another fundamental element that ties
the collections together and has made the brand an icon of
refinement throughout the world is a small signature ruby found
inside every piece. It's positioned so that it's in contact
with the wearer's skin, respecting the ancient legend that rubies
could confer a long and happy life. This precious signature has
always been the message that the brand dedicates to each of its
clients. Loved by movie and fashion stars, Roberto Coin's jewellery
takes centre stage on international red carpets and countless
editorial pages. In part, this is a result of the brand's tireless
ethical commitment, a beacon that has illuminated Roberto Coin
since its foundation; a commitment that includes the activities of
the Kimberley Process, World Diamond Council, Dodd Frank Act, RJC,
CIBJO and carbon offsetting.
Today Roberto Coin is universally
recognised as a pioneering talent in conceiving new trends and as a
man capable of balancing creativity and commerce in the name of a
success that is as brilliant as it is responsible.
His creations have conquered more
than 60 countries around the world, the United States being the
largest market, where the brand is a leader in the jewellery
industry along with the most important brands.
Disclaimer
This announcement has been prepared
by Watches of Switzerland Group PLC (the 'Company'). It includes
statements that are, or may be deemed to be, "forward-looking
statements". These forward-looking statements can be identified by
the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends",
"plans", "goal", "target", "aim", "may", "will", "would", "could"
or "should" or, in each case, their negative or other variations or
comparable terminology. They appear in a number of places
throughout this announcement and the information incorporated by
reference into this announcement and may include statements
regarding the intentions, beliefs or current expectations of the
Company Directors or the Group concerning, amongst other things:
(i) future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy and future prospects; (ii) business and management
strategies, the expansion and growth of the Group's business
operations; and (iii) the effects of government regulation and
industry changes on the business of the Company or the
Group.
By their nature, forward-looking
statements involve risks and uncertainties because they relate to
events and depend on circumstances that may or may not occur in the
future and may be beyond the Company's ability to control or
predict. Forward-looking statements are not guarantees of future
performance. The Group's actual results of operations, financial
condition, liquidity, and the development of the industry in which
it operates may differ materially from the impression created by
the forward-looking statements contained in this announcement
and/or the information incorporated by reference into this
presentation.
Any forward-looking statements made
by or on behalf of the Company or the Group speak only as of the
date they are made and are based upon the knowledge and information
available to the Directors on the date of this announcement, and
are subject to risks relating to future events, other risks,
uncertainties and assumptions relating to the Company's operations
and growth strategy, and a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by the forward-looking statements. Undue
reliance should not be placed on any forward-looking
statements.
Before making any investment decision
in relation to the Company you should specifically consider the
factors identified in this document, in addition to the risk
factors that may affect the Company or the Group's operations as
detailed above.