Movado Group’s purchase of Ebel, a top Swiss luxury watch brand, provides “a compelling strategic opportunity” for the Group to expand in both the luxury watch and global markets, said Ephraim Grinberg, Group president and chief executive officer, in published comments and a January 2004 JCK interview. “We’ve always thought Ebel is a great brand, with great image, distribution, products, and history, and have been interested for years in acquiring it.”
The $47.3 million all-cash deal with French luxury goods group LVMH (Moët Hennessy Louis Vuitton), announced Dec. 22, will close in the first quarter of2004. The 93-year-old Ebel firm—renowned for its distinctive, innovative lines including Beluga, Classic Wave, and 1911—did $65 million in net sales in 2003. It will remain in La Chaux-des-Fonds, Switzerland, says Grinberg.
The Movado Group, based in Lyndhurst, N.J., is Ebel’s third owner in a decade, but, as Grinberg pointed out to JCK, Movado is “the first watch company [to own Ebel]. That’s to Ebel’s benefit. We understand the watch business and will nurture this luxury watch company with tender loving care.” Ebel is the Movado Group’s first acquisition since 1983.
The Swiss watch firm is “an excellent complement” to the Group’s portfolio, Grinberg noted. That portfolio includes Movado, Concord, and the licensed lines ESQ, Coach, and Tommy Hilfiger watch lines (covering moderate to luxury price categories), which Movado Group Inc. designs, manufactures, and distributes to department stores, jewelry store chains, and independent jewelers worldwide.
Grinberg said the addition of Ebel will “significantly expand our presence in the high end of the luxury watch category.” Ebel watches retail mainly for $1,500 to $10,000, with some in the $100,000 bracket. It will be the Group’s most expensive brand, topping Concord, which retails $1,000 to $9,999.
Just as important is the fact that Ebel, which does 70% of its business outside North America, provides “a solid platform” on which to expand Movado Group’s global presence, especially in Germany, the United Kingdom, France, and Japan. The acquisition immediately increases Movado’s percentage of international sales from the low double digits to about 20%.
“When we look at the U.S. market, we think the [Ebel USA] management team has done a great job,” he says, “and there are opportunities to continue growing. We intend to provide resources to build upon its heritage and maximize its potential, while generating long-term value for our shareholders.”
According to Grinberg, “We’ll continue to focus on, evolve, and develop product that’s purely ‘Ebel’—some based on its archives and heritage—and will focus powerful advertising on the brand.” Last year, Ebel added a new line called Tarawa.
Founded in 1911, Ebel came to the U.S. market in 1979. In 1994, it was bought by Investcorp, a Bahrain investment firm, which sold it in 1999 to LVMH, whose upscale watches include TAG Heuer, Christian Dior, Zenith, and Fred Joailler. Between 2000 and 2003, Ebel revamped its operations and marketing, streamlined worldwide distribution to about 1,800 outlets, and upgraded its brands. In 2002, it launched its high-end haute joaillerie watches. Last year, Ebel unveiled Tarawa, new looks for Beluga and 1911, a new ad campaign, and new in-store displays and packaging.