Americans Adore Fine Jewelry, and Watches of Switzerland Wants In

LONDON — Signaling the dynamism in the branded fine jewelry market, Watches of Switzerland Group has acquired 100 percent of Roberto Coin Inc. for $130 million.

The group said the acquisition represents “a significant milestone” in its stated aim of accelerating growth in the sizzling hot branded fine jewelry category in the U.S., and “step change” in Roberto Coin’s retail and distribution strategy.

The deal gives Watches of Switzerland, which already stocks Roberto Coin jewelry in some of its U.S. stores, exclusive and perpetual distribution rights for Roberto Coin jewelry in North and Central America and the Caribbean.

Brian Duffy, chief executive officer of Watches of Switzerland, said there was a big opportunity for the group to leverage its retail expertise and move into luxury branded jewelry in North and Central America.

“We have partnered with Roberto Coin for over a decade in the U.S., retailing its elegant jewelry 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 were talking for over a year with Roberto Coin and Peter Webster, and we got to know each other. They are really great people and, culturally, we’re very, very compatible,” Duffy said.

He added that the luxury branded jewelry category has consistently outperformed the wider jewelry sector in the U.S., “and we see further strategic and operational opportunities for the business within the broader group.”

He described the acquisition as “strategically and financially attractive” and indicative of the group’s stated ambition to grow through M&A and to build momentum in the jewelry category.

The markets agreed, sending the shares up nearly 4 percent to 3.37 pounds in afternoon trading on the London Stock Exchange on Thursday. The shares closed up 1.8 percent at 3.31 pounds.  

Roberto Coin is the sixth-largest jewelry brand in the U.S., the world’s largest branded jewelry market.

Roberto Coin Inc. will continue to operate as an independent, stand-alone company within the Watches of Switzerland Group, and the Coin family will retain a seat on the Roberto Coin Inc. board of directors. Peter Webster will remain as company president, supported by the team he has built over the past 30 years.

Roberto Coin, founder and CEO of the jeweler, will remain with the brand, which will continue to operate independently in regions outside North and Central America.

In an interview following the announcement, Duffy said the group plans to leverage its operational and retailing expertise to drive incremental growth at Roberto Coin Inc., across the jeweler’s existing wholesale distribution network, its retail boutiques and online.

“The big step up for Roberto Coin is distribution enhancement, particularly for monobrand stores and store presentation. It’s overdue, and it’s where we can really bring our complementary resources, retailing skills and contacts. We’re looking for store opportunities, and the plan is to work with our existing partners on franchises, and in some cases, we’ll operate the Roberto Coin stores directly,” said Duffy.

Coin described the acquisition as a “significant step change” in the development of the brand, which also has thriving businesses in Europe and the Middle East.

He said Watches of Switzerland has “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 benefiting from their wealth of luxury retail and digital experience to unleash the growth potential of the Roberto Coin brand across our chosen markets,” Coin added.

Watches of Switzerland said the acquisition of the North American business was 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.

Roberto Coin Inc. achieved annual revenue of $146.2 million and profit before taxation of $30.1 million for the financial year ended Dec. 31, 2022. Gross assets at that date were $87.9 million. The company’s 2023 preliminary and unaudited revenue was $138.7 million, and profit before taxation was $30.2 million in the region.

Roberto Coin Inc. sells through major department stores, jewelry chains and independent jewelers in more than 400 points of sale in North America.

Watches of Switzerland has been carrying the brand for more than a decade, and it is currently available in 16 of its stores in the U.S.

Founded in 1996, Roberto Coin SpA is headquartered in Vicenza, Italy, a thriving hub of gold manufacturing and design. Each handcrafted piece features a hidden ruby, 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,” according to the brand.

Analysts were enthusiastic about the deal, and couldn’t resist a pun.

“Roberto Coin? Don’t flip, it’s a good deal,” wrote HSBC, adding the purchase “ties in well” with Watches of Switzerland’s long-range plan to spend $350 million to $500 million on M&A over the next five years.

HSBC added the acquisition also increases Watches of Switzerland’s “exposure to the fast-growing branded jewelry segment, and should provide a welcome margin boost.” Roberto Coin’s profit margins, it noted, have been more than 20 percent over the last two fiscal years — far higher than those at the group.

In a report titled “Ruby Thursday,” Jefferies said Watches of Switzerland’s sales mix will now “skew towards the attractive branded jewelry market, in line with the stated strategy.” The bank added that Roberto Coin was ripe for further development in the region.

Royal Bank of Canada viewed the deal as “modestly positive for Watches of Switzerland Group, as it offers a further stepping stone into the jewelry category, and the U.S. market. It is clearly not material in terms of financial contribution, however is margin and earnings accretive.”

The deal comes within days of Richemont’s acquisition of the Italian jeweler Vhernier for an undisclosed price.

Like Roberto Coin, Vhernier was founded as an artisan goldsmith in northern Italy in the last century. Both companies eventually began making branded jewelry, and over the past decades have expanded internationally and opened stand-alone stores.

Richemont chairman Johann Rupert said earlier this week that his company would be working closely with the Vhernier team to realize the full potential of the brand within “the thriving branded jewelry market.”

Now that Watches of Switzerland has a slice of the hot fine jewelry market, Duffy said future acquisitions will most likely focus on other watch and jewelry retailers rather than single brands. “For example, when we bought Betteridge [jewelers in 2021] that gave us access to the marketplace and intelligence and understanding of the high-end jewelry market,” he said.

Over the past five years, Watches of Switzerland has grown revenue to more than $800 million in the U.S., and the group is set to expand further with a new central hub in Fort Lauderdale, Fla.

“It will lead us back to our work in areas such as learning and development,” said Duffy. “There is a new state of the art training facility, and we’re also expanding the service area for watchmakers and for warehousing and distribution.”

Duffy added: “We’re connected to landlords and property consultants, and we have this great structure which means we can really help and partner with Roberto Coin’s team.”   

The Watches of Switzerland Group is the U.K.’s largest luxury watch retailer, and operates in the U.K., U.S. and Europe with five retail brands: Watches of Switzerland, Mappin & Webb, Goldsmiths, Mayors and Betteridge.

The group currently has 222 showrooms across the U.K., the U.S. and Europe including 98 dedicated monobrand boutiques in partnership with Rolex, Omega, Tag Heuer, Breitling, Tudor, Audemars Piguet, Grand Seiko, Bulgari and Fope, and has a presence at Heathrow Airport and seven retail websites.