Cape Town - Richemont Securities, the Swiss-based luxury group and overseas arm of the Rembrandt group, had acquired Stern Creations of Geneva from Orior Holdings for an undisclosed sum, Richemont said yesterday.
Stern would continue to create and supply dials to the luxury Swiss watch industry, and Stern would regain a high level of autonomy within the Richemont group, Richemont said.
Stern Creations, together with subsidiaries Stern Manufacturing and Stern Appliques in La Chaux-de-Finds in the Jura region of Switzerland and a small French subsidiary, is a leader in the manufacture of luxury watch dials. Its products include lacquered, precious metal and jewellery dials which are supplied to some of the most prestigious watch brands.
Richemont lifted earnings 19,3 percent to E60,05 (R385,89) from E50,33 a unit, in the six months to September 30 last year, after 20,2 percent sales growth in all its products to E1,26 billion, and after particularly strong sales growth of 30 percent in watch sales.
Richemont`s interests in the luxury goods market are held through its wholly owned subsidiary Vendome Luxury Group, which owns the Cartier and specialist watch brands Piaget, Baume & Mercier, Vacheron Constantin and Panerai. Gold and jewellery watch sales grew 15,9 percent to E291 million over the interim period, while sales of other watches were up a hefty 46,6 percent to E309,1 million.
Analysts said the Stern Creations acquisition was unlikely to have a substantial impact on Richemont`s earnings. The company`s turnover only amounted to between E40 million and E75 million a year.
``The acquisition is part of Richemont`s vertical integration plans. Stern was already a big customer; they simply brought the customer in-house,`` said one analyst.
Another said the biggest supplier of watch movement components in the world, also of the luxury watch market, was Swatch. The big advantage of the acquisition of Stern Creations was that it would reinforce Richemont`s position in the market.