Look closely and you’ll find that many of Lamborghini’s parts are made by Audi and many of Audi’s parts come from Volkswagen. This is because all three car brands are owned by the VW Group. It’s a model that we see replicated in the watch industry with the biggest watch groups being LVMH, Swatch and Richemont who collectively own some of the largest watch brands.
A group owning multiple brands not only provides revenue and financial benefits but as we see with cars, operationally it can provide economies of scale. Savings on manufacturing, sharing supply chains and even sharing technologies and innovations. If every car brand had to create its own electric vehicle battery it would be chaos. Instead brands within a group can share battery technology.
Swatch x Omega MoonSwatch Mission to Earthphase
If you need further evidence of the benefits of a group structure the MoonSwatch only became a reality because both Omega and Swatch are owned by Swatch Group. That said, there are some drawbacks. Many argue that once a brand is swallowed by a large group they lose their autonomy and independence (the term independent watch brand generally refers to one that falls outside these major groups). Ideally, groups don’t want two of their own brands competing with each other so, what each brand is allowed and not allowed to do can be restrictive.
Richemont Group
Vacheron Constantin Overseas Chronograph Pink Gold
Richemont, although smaller than LVMH, is a powerhouse in the watch industry. Based on the share price at the time of writing the group is valued at over CHF 73 billion. If we run down their list of brands they tend to be dominated by higher end maisons. The hero of which is Cartier, who in value sales are the second largest watch brand in the world behind Rolex. Richemont are also the only watch group to boast one of the holy trinity in Vacheron Constantin.
Elsewhere across the portfolio you’ll find Piaget and Van Cleef & Arpels. Both brands have a big name in jewellery as well as watches. Add Cartier into the mix and Richemont corner this section of the market. However, balancing three of the largest jewellery houses can’t be easy. Additional high end brands include A. Lange & Sohne, Jaeger-LeCoultre and Roger Dubois. Three brands with very different offerings but all definitely positioned at the upper end of the price point scale.
IWC Portugieser Eternal Calendar
Richemont’s more mainstream or affordable offerings come from IWC, Panerai and Baume & Mercier. IWC represents the biggest watch brand of the three and has enjoyed a rising profile in recent years. Being able to have these three brands in the stable helps to balance out Richemont’s profile so it’s not only luxury jewellery and haute horology.
Richemont, rather cleverly, has a presence in the retail side of the market. They own Net a Porter which conveniently sells many of the Richemont brands among others. In 2018, Richemont took a step further into the retailer space with the acquisition of Watchfinder. Owning both a retailer and a pre-owned dealer gives Richemont a finger on the pulse of the market. More than that, it lets them have an influence on the market by providing a direct link to customers.
LVMH Group
Tag Heuer Formula 1 Kith
For a brief point in time Bernard Arnault, the owner of LVMH, was the richest man in the world when his net worth hit $218 billion. Whilst this total value isn’t all down to the watch brands in the LVMH portfolio, they certainly play an important part in what has become the most influential luxury empire. The hero brand of the group is Tag Heuer one of the most recognisable in the industry.
In volume terms Tag Heuer are the largest of the 4 dedicated watch brands within LVMH. They are also the most affordable within the group. The other brands share more of a focus on value over volume with Hublot being the most valuable. Their annual sales are estimated around CHF 670 million despite selling significantly fewer watches than Tag. The third brand is Zenith. Compared to Hublot and Tag Heuer, Zenith have a long history in the industry and are perhaps most famous for their El Primero chronograph movements.
Zenith El Primero Revival
Finally, the LVMH watch section is completed by Bulgari, a brand whose heritage is across jewellery and fashion. However, in recent years Bulgari have been hitting watch headlines with their Octo Finissimo range. With an eye on creating the world’s thinnest watch they reclaimed their world record from Richard Mille in April 2024. A record which is now under threat from Konstantin Chaykin.
On reflection the LVMH portfolio of watch brands is well balanced. Across their 4 brands they have an affordable household name, a modern innovation leader, a historic icon and a high jewellery brand. If LVMH were to expand you could argue that a non-Swiss brand might be called for. Perhaps something from Japan, Germany or the US.
Swatch Group
The MoonSwatch Misson on Earth Lava, Polar Lights and Desert
Unlike LVMH and Richemont, the Swatch Group portfolio is diversified beyond just some of the world’s largest watch brands. In parallel the group has a hand in the end-to-end value chain of the watch industry through ownership of movement manufacturers like ETA and battery production from Renata. The businesses that grab the headlines are the consumer facing brands, the hero, as you no doubt have guessed, is Swatch. The other favorite child of the group is Omega. Having both of these hero brands under one group is perhaps the only reason the MoonSwatch became more than an idea.
Swatch X Blancpain Scuba Fifty Fathoms
Post the MoonSwatch, the Swatch group decided to double down on brand collabs with the Blancpain x Swatch Scuba range (recent expanded with a new blue colourway). Blancpain along with Breguet and Harry Winston represent the high end luxury section of the portfolio. Keeping Omega company in the middle of the range is Glashütte Original and Union Glashütte. Both brands represent some of the best in German watchmaking. However, they are small volume brands with GO producing less than 20,000 units each year.
In comparison Longines produce over 1.5million watches a year making them one of the top 10 largest watch brands. Within a similar price bracket to Longines, the Swatch Group also has the Rado and Mido brands. Finally, rounding off the portfolio with the most affordable brands, Tissot and Hamilton provide a more serious option to the often colourful and playful Swatch brand.
Tissot PRX Powermatic 80 35mm Ice Blue
Within watches you can make a strong case for Swatch Group being the most well rounded of the large groups. They seem to have every price point covered from the historically significant watch brand in Blancpain to arguably the most affordable in Swatch. Not forgetting their ownership of parts manufacturers and retailers there isn’t a part of the industry their tentacles don’t reach.
What is interesting is how important the more affordable brands are to the group. Putting Omega to one side the Swatch Groups’ success is very much driven by the likes of Swatch, Tissot and Longines. Would Swatch ever consider adding another luxury brand to the stable?
