Girard Perregaux

PRESS RELEASE
Paris, June 9, 2008

PPR and Girard-Perregaux sign a long-term strategic partnership

 

PPR announced the signature of a long-term strategic partnership with the Sowind Group, a

Swiss holding company based in La Chaux de Fonds headed by Luigi Macaluso. The Sowind

Group includes the Haute Horlogerie brands Girard-Perregaux and JeanRichard, a Research and

Development Centre, as well as Sowind Manufacture, maker of high-end watch movements.

Under the partnership, PPR will own a 23% interest in the Sowind Group, with the possibility of

increasing its stake under the terms of a shareholders’ agreement. Mr. Macaluso will retain

control of the company.

 

This strategic partnership represents the materialisation of a shared vision between the two

partners regarding long-term growth prospects in the Haute Horlogerie segment. It will allow

PPR and Girard-Perregaux to combine their know-how and knowledge base in terms of R&D,

design, brand management, distribution networks and sourcing. Mr Macaluso will join the

Gucci Group Management Committee and the Boucheron Board of Directors. François-Henri

Pinault and Robert Polet will become Directors on the Sowind Board.

 

This long-term agreement offers Girard-Perregaux, one of the last independent, high-end Swiss

watch "Manufactures", and the JeanRichard brand the means to fully exploit their potential for

growth and innovation by teaming up with one of the major players in the luxury goods

industry. As for PPR, the agreement confirms the Gucci Group’s goal of building a strong

presence in the Haute Horlogerie segment, one of the most promising luxury goods markets.

The Gucci Group brands will thus benefit from outstanding watch-making expertise and will

extend their sourcing for timepiece components.

 

François-Henri Pinault, Chairman and CEO of PPR, declared: "I am pleased that the bonds

between our two groups are being strengthened, as we build a joint future in one of the most

prestigious sectors of the luxury goods business. The PPR and Sowind groups share the same

entrepreneurial values passed on through long family tradition. I have a great admiration for

Girard-Perregaux, a brand founded in 1791 whose identity and worldwide influence is

exceptional."

 

Luigi Macaluso, Chairman and CEO of the Sowind Group, stated: "I am extremely pleased to be

able to work with a major group like PPR and, specifically, with the Gucci Group. This will be

a truly rewarding experience. Our varied and complementary skills are based on common

values of excellence. This agreement will mean new synergies and new long-term projects."

 

Robert Polet, Gucci Group CEO, said : ""This is a tremendous opportunity for our brands to be

in contact with the greatest watch-making expertise of Sowind. We are convinced that this

agreement will create a number of important synergies for our watch brands and their further

development."

 

About PPR

PPR develops a portfolio of high-growth global brands. Through its Consumer and Luxury brands, PPR

generated sales of EUR 19.8 billion in 2007. The Group is present in 90 countries with approximately

93,000 employees. PPR shares are listed on Euronext Paris (# 121485, PRTP.PA, PPFP).

To explore the universe of PPR brands go to www.ppr .com: Fnac, Redcats Group (La Redoute,

Vertbaudet, Somewhere, Cyrillus, Daxon, Ellos, The Sportsman’s Guide, The Golf Warehouse and

brands of the plus-size division), Conforama, CFAO, Puma and the Luxury brands of Gucci Group

(Gucci, Bottega Veneta, Yves Saint Laurent, YSL Beauté, Balenciaga, Boucheron, Sergio Rossi,

Alexander McQueen and Stella McCartney).

 

Sowind Group, the pinnacle of Swiss watchmaking Art

The Sowind Group is a Swiss « Haute Horlogerie » company owned by Luigi Macaluso who has been

heading it since 1992.

Based in La Chaux-de-Fonds, the Group incorporates the Girard-Perregaux and JeanRichard brands, a

watch « Manufacture » that develops and produces a complete portfolio of high-end movements (more

than 100 variations) and collections of mechanical watches.

The Research and Development Centre is the company’s cornerstone, with more than 80 patents and a

strong percentage of the firm’s turnover being re-invested in it.

Girard-Perregaux’s roots date back to 1791 and the company history is rich in innovations bringing

together design and technology, like the renown Tourbillon with three gold bridges created by Constant

Girard in the 19th century.

Girard-Perregaux is represented globally in 550 prestigious points of sale and several exclusive boutiques,

like the one in Gstaad.

JeanRichard is a brand dedicated to Daniel JeanRichard (a pioneer of watchmaking in the Neuchatel region

during the 17th century) and presents a daring and innovative interpretation of the codes of traditional

Swiss watchmaking.

 

(source: Girard-Perregaux and PPR)

On one hand, it's sad to see an independent family-owned great watch house goes to join a large cooporate.  On the other hand, I hope this will allow GP to expand to its full potential with more money backing and hopefully, win more recognition it truly deserves.  I sincerely hope that GP is allowed to do things how they were now without sacrificing their quality and exclusivity.

that Peter shared with us, it is clear that Luigi Macaluso will retain control of the company even if the stake of PPR increases so I see only positive effect to the Sowing group.

We have even seen acquisitions from very big companys but still see the small companys management to control things.

So i wish all will go well for both companies and as vlkchang said to win more recognition that GP truly deserves.

 

Alepos

G'day,

i´m a bit torn too - it´s always been a special for Girard-Perregaux and Jeanrichard to be privately family-owned brands.
But then, the new cooperation may not lead to apparent changes in first degree.

I´m not sure we´ll see much of an impact for the product, other than GP or JR movements to be used in other lines.
Boucheron already fitted a limited number of watches with SOWIND movements lately, which i suspect to be a chance for synergies.

On the design or production side, PPR probably will not be of great influence - aside the fact Gino Macaluso keeps the vast majority and control over the group.
There may be much more impact on the distribution side, simply because "Gucci" is a fortress in the luxury field outside watches. At least that´s my impression when passing by the local (quite large) Gucci store here in Berlin
Haute Couture is not a bad environment for luxury goods and the PPR brands didn´t venture in this field too much so far; i think there´s a definite place for GP and one that may be difficult to conquer without help of the PPR luxury group.

I´m relatively confident we´ll see a less wide portfolio by GP in the future, which is not directly tied to PPR but not a bad thing too.
GP maintains one of the largest range of models and variants in relation to the brand´s annual production. That´s reflecting the brand´s creativity, but can create some difficulties in terms of marketing, production and logistics. In the past 2-3 years we´ve seen quite some models and variants to be discontinued and GP focussing on the brand´s core strength, which i´m perfectly sure to be an excellent measure.
This may leave room to create something very nice in a limited field, without placing Girard-Perregaux in the "fashion watches" field.
What i´d really like to see is a piece designed by Gino Macaluso for Gucci; this well may be a stunning watch! And well in line with what the PPR luxury groups strength.

Aside this, the capital aspect is not to be overlooked.
That´s certainly a huge benefit for the SOWIND brands.

So all in all, i´d suspect there will be less impact on GP and JR in terms of products and production but more so on the distribution side.
And maybe some nice (limited) editions, which may represent a new and interesting expression of SOWIND´s creativity!

Cheers,

Peter

 

What I really don't want to see is something like Gucci using high end GP movements like triple bridges tourbillon.  The other thing I don't want to see is GP getting exhausted to make base movements for other companies of the group and at the same time, lowers their quality and also making their movement less exclusive.

But i´d be surprised to see a "Gucci" labeled GP!

If creating a model for Gucci (or YSL), i´d suspect more of a dedicated model produced at GP/JR.
Currently Gucci seems not to supply something that holds up with their Couture offerings and that´s probably leaving room to switch from relatively affordable fashion-oriented watches. At least i´d guess there may be interest; when spending a couple of thousands for a hand bag or dress, it may be more interesting to be offered a very nice watch too!

Cheers,

Peter

I only hope that GP will keep its autonomy in the creation of some sublime watches, and that the financial people will stay away from the creation...

Time will tell.

Best.

Nicolas

Hi,

And of course for our friends over there, what is the prinicpal for me!

Out of that I'm happy to see that GP is slightly becoming a watch brand from Brittany!     OK very slightly!  

Cheers

Dje

SWATCH GROUP... RICHEMONT GROUP....Zenith... HUBLOT... now Girard Perregaux ...

I always think somebody from Wall Street should step in Swiss Horology Business to acquire PP, AP, GP through one big deal and create a 3P company ... HeHeHe.. now we could only hope someday a sport shoe company come to rescue AP if it fells into trouble..

Then we could have the iCal, the iGon, the iNaut...

Hey, maybe even an iMoon Tourbillon...

Cheers
Tony P