The luxury-group consolidation

On the eve of these sales, several of the houses belonged to owners from outside watchmaking. Breguet had been owned since 1987 by the investment firm Investcorp and a group of international investors. IWC Schaffhausen, Jaeger-LeCoultre and A. Lange & Söhne sat in Les Manufactures Horlogères, a holding formed in 1991 and owned from 1993 by the German group Mannesmann. In Saxony, Glashütter Uhrenbetrieb, maker of Glashütte Original, had been registered as a company in 1990 after German reunification and belonged to a pool of shareholders that included a private equity firm.^{1, 2, 5, 7}

Zenith of Le Locle, one of the few houses still making its own movements, had passed in 1972 to the American Zenith Radio Corporation and in 1978 to the Le Locle machine-tool maker Dixi.^8, 9

Two of the holding’s brands were tied by one manager: Günter Blümlein had run IWC for VDO and in 1990 co-founded the revived A. Lange & Söhne with Walter Lange.^{10, 11, 12}

Two of the buyers had started earlier. SMH, as the Swatch Group was then called, bought Blancpain and the movement maker Frédéric Piguet in 1992; Richemont, through its luxury holding Vendôme, bought Vacheron Constantin in 1996 and Panerai in 1997. LVMH’s report for 1999 says that before that year its only house in the field was the Paris jeweller Fred.^{3, 4, 13, 14}

On September 14, 1999, the The Swatch Group agreed to take over all the shares of Groupe Horloger Breguet from Investcorp. The purchase included Nouvelle Lemania, which made Breguet’s watches and high-grade movements for other brands, and the component maker Valdar, all in the Vallée de Joux.¹

In the same months LVMH bought TAG Heuer, in the third quarter of 1999, then Ebel in October, the jeweller Chaumet, and Zenith in November. With Fred they made up a new Watches and Jewelry business group, LVMH’s fifth.^4, 15

In February 2000 Vodafone AirTouch took over Mannesmann, which then decided to sell its watch holding. On July 21, 2000 Richemont announced it would buy Les Manufactures Horlogères for CHF 2,800 million and had already bought the other 40 per cent of Jaeger-LeCoultre from the Audemars Piguet group for CHF 280 million. The sale closed on December 8, 2000.^5, 6

The Swatch Group added three more houses in 2000: Jaquet Droz, and in Glashütte Glashütte Original and Union Glashütte. It agreed on October 9 to buy all the shares of Glashütter Uhrenbetrieb, a company of more than 150 staff whose former shareholder Heinz Pfeifer stayed on as general manager.^2, 3

Smaller buyers moved too. The Federation of the Swiss Watch Industry reports, in July 2000, that the Bulgari group had agreed to buy Gérald Genta, Daniel Roth and the company that owned their workshops for 37.6 million francs, and in January 2000 it describes an industry in the throes of buy-outs, mergers and regroupings.^16, 17

Each buyer said it wanted manufacturing. Richemont named the holding’s skill in making high-value movements; the Swatch Group said Nouvelle Lemania and Valdar added capacity to its own makers of luxury movements and components; LVMH’s report calls Zenith one of the last Swiss watchmakers making its own mechanical movements, whose El Primero and Elite calibres also drove other upscale brands’ watches.^1, 4, 5

LVMH put its aim in so many words: its report for 1999 says it meant to “act as consolidator in a fragmented sector” and counts itself third in the world in luxury watchmaking after the purchases.⁴

The houses kept their names and management. The Swatch Group set up Breguet and Glashütte Original as separate profit centres, Richemont said the three LMH brands would keep their own factories, marketing and customers, and Glashütte Original says joining the group opened the way to selling internationally.^{1, 2, 5, 7}

The result was an industry of a few groups. The Historical Dictionary of Switzerland describes most Swiss brands in the early 21st century as sitting under a handful of them, the Swatch Group, the Movado Group, Richemont and LVMH among them, while the few complete manufactures kept to the top of the market.¹⁸

The groups’ customers became their rivals. Pierre-Yves Donzé argues that the Swatch Group’s hold on movements mattered little until it moved into luxury and finished watches in the early 2000s; in July 2002 its movement maker ETA told its customers it would stop delivering ébauches from 2006.^19, 20

The Competition Commission held ETA to its customers: a settlement of 2004 kept its deliveries of ébauches going to the end of 2010, and a second, of 2013, phased out its supply of mechanical movements by the end of 2019. The dispute is told under The ETA supply dispute.^21, 22

The groups went on to buy their suppliers. Richemont bought the movement maker Minerva in 2006 and the case maker Donzé-Baume in 2007.¹³

Independent houses bought suppliers too. The Federation of the Swiss Watch Industry reports, in 2001, that Patek Philippe had bought the case maker Calame and that Rolex had bought Boninchi, its maker of crowns since 1919, as part of what Rolex called a policy of industrial consolidation.^23, 24

LVMH kept buying: Hublot in 2008 and Bulgari in 2011, which brought Gérald Genta and Daniel Roth with it; in 2026 LVMH lists both among its watch and jewellery houses.^{15, 25, 26}