Move to help company expand its presence in high-growth premium segment.
Titan Industries, India’s largest organised watches retailer, said on Wednesday it would acquire heritage Swiss watch brand Favre Leuba for euro 2 million. Based in Le Locle, Favre Leuba, created in 1737, is one of the very first watch making companies in Switzerland.
Titan, which controls 65 per cent of the Rs 4,000-crore organised watches market in India, has signed a binding offer with Spain’s Valfamily S L and Switzerland’s Maison Favre Leuba S A to acquire the brand. The acquisition, being pursued on an asset purchase mode, will give Titan global rights to the trademarks of this brand.
“The strategic rationale behind the acquisition is to complement and strengthen the existing watches brand portfolio of the company with a Swiss heritage brand,” said Harish Bhat, COO, watches division.
|* Titan has signed a binding offer with Spain’s Valfamily S L and Switzerland’s Maison Favre Leuba S A to acquire the brand|
|* This acquisition will give Titan global rights to the trademarks of the Favre Leuba brand|
|* Titan controls 65 per cent of the Rs 4,000-crore organised watches market in India|
Titan is taking this step to expand presence in the high-growth premium segment. The premium and luxury segment accounts for 10-15 per cent of the market.
Favre Leuba, which was being sold through some dealers in India for more than a decade, was among the most sought Swiss watch brands during that time and Titan intends to capitalise on that brand recall. “The brand has 10-15 watches and has been dormant globally during the past couple of years and not much sales have been registered. We intend to revive the brand in India and we are yet to take a call on the pricing and positioning,” Bhat said.
According to industry estimates, Favre Leuba can be retailed at Rs 50,000 to Rs 1 lakh. The Swiss watch market in India is growing at around 25 per cent a year – to Rs 365 crore this year (January-August imports) from Rs 297 crore in the same period last year.
Titan has a growing presence in the luxury watch segment through Xylys (a Swiss-made brand) and Nebula (a 24-carat gold watch). It also has retailing rights in India for global premium brands BOSS, FCUK and Tommy Hilfiger. The segment contributed just under 10 per cent to Titan’s revenues from watches of around Rs 1,300 crore during the last financial year. Xylys sells in the premium range of Rs 10,000 to Rs 25,000 and holds the second position, with a 20 per cent market share in its category. It’s still two-and-a-half times behind the market leader, Tissot.
Titan shares on Wednesday rose just under three per cent to close at Rs 211.90 on the National Stock Exchange.