- Luxury watch enthusiast site acquired
- Deal to drive online and US growth
- ‘Undisputed destination’ for luxury watch enthusiasts
Watches of Switzerland’s (WOSG) shares ticked up 2% to 466p on news it has acquired publishing firm-to-luxury watch platform Hodinkee as the Patek Philippe-to-Audemars Piguet seller seeks to accelerate online growth and grab a greater share of America’s expanding high-end timepiece market.
Described by Watches of Switzerland as a ‘go-to, global destination for luxury watch enthusiasts’, New York City-headquartered Hodinkee offers digital print and video content, not to mention limited edition watch collaborations alongside watch and jewellery insurance services.
As such, it looks well-placed to help its new parent to capture market share across the pond.
INTRIGUING TIE-UP BUT TIME WILL TELL
Sold to the UK’s largest Rolex retailer for an undisclosed sum, Hodinkee was founded as a watch blog in 2008, but has morphed into an influential editorial and e-commerce site for wristwatches with an engaged audience of 22.2 million annual unique visitors to its website and over one million social media followers.
Once the deal completes, Watches of Switzerland will integrate Hodinkee’s existing commercial activities with its in-house US e-commerce site, giving the FTSE 250 firm access to a captive and engaged luxury watch audience.
It will also tie-in Hodinkee’s insurance activities with Chubb (CB:NYSE).
Watches of Switzerland was at pains to point out Hodinkee will retain its editorial independence and the platform’s founder Ben Clymer will return to lead its operations after stepping down as CEO in December 2020.
WHAT DID THE CEO SAY?
CEO Brian Duffy said he is ‘thrilled to have Hodinkee join the Watches of Switzerland family. We have been avid followers of Hodinkee for many years and have long-respected Ben and his team’s success in creating the undisputed destination for luxury watch enthusiasts.’
He added: ‘With the support of the wider group, we will enable Ben and his best-in-class editorial team to keep doing what Hodinkee does best: further expanding its passionate and loyal community by being the most authentic and authoritative voice on the industry.’
In a reassuring trading update on 3 September, Watches of Switzerland said it believed the market for high-end timepieces and jewellery has bottomed out in the UK and confirmed it is on track to deliver its full year 2025 guidance.
EXPERT VIEWS
Shore Capital sees the Hodinkee deal as ‘a sensible bolt-on move adding to the group’s capabilities as it focuses down on the UK and USA markets. Watches of Switzerland had a quite torrid 2023/2024 and central to a recovery in its rating is meeting forecasts on an ongoing basis, noting continued investment in the portfolio of stores and the Coin and now Hodinkee acquisitions.’
Russ Mould, investment director at AJ Bell, observed that retailers can no longer rely on simply stocking products on a shelf or selling them through a website. They need to find additional ways to attract, engage and persuade the shopper to part with their cash.
‘That’s why Watches of Switzerland has bought a media company which acts as a gateway for luxury watch fans,’ said Mould.
‘The more people read about a topic, the greater the likelihood they will want to spend money on a relevant product or service – or so the theory goes. This technique is used in a wide range of industries, from computing to betting, and people’s addiction to smartphones means there is growing desire to consume digital content.
‘Watches of Switzerland buying Hodinkee makes perfect sense. It obtains another channel by which to capture interest from people who like posh watches, and that becomes a platform to get them to transact and buy insurance as well.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Steven Frazer) own shares in AJ Bell.
