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The equity firm proprietors of Breitling have drastically reduced the Swiss watchmaker’s appraisal to potentially half its 2023 worth, as its results have deteriorated under the shared stewardship of CVC and Partners Group.
According to three individuals cognizant of the situation, the pair of acquisition companies are re-evaluating Breitling’s strategic direction, following insistence from CVC. This comes as the brand has contended with a costly shop expansion amidst muted interest for premium timepieces and American duties imposed on Switzerland.
Amsterdam-listed CVC transferred primary control of the company to Partners in a $4.5bn transaction three years prior, having divested a minor share to the Swiss acquisition firm in 2021. CVC had originally acquired the century-and-a-half-old timepiece label for approximately €800mn in 2017, yet retained an approximate 20 percent holding in 2023 via a fresh investment vehicle.
The 2023 transaction sparked debate within Partners Group, according to two individuals conversant with the situation, owing to uncertainties regarding how much further Breitling could broaden its reach following its swift expansion during CVC’s tenure.
The two acquisition firms still maintain joint authority, but Partners Group wields considerable influence, possessing over half of the equity and with Partners co-founder Fredy Gantner presiding over the timepiece conglomerate’s governing body.
CVC has devalued its holding to approximately 0.5 times its deployed funds, based on the level at which it reinvested in 2023, according to an individual knowledgeable about the issue. Partners Group appraises its ownership at approximately 0.7-fold, which an individual connected to the entity stated was due to having committed capital at a reduced appraisal in 2021 compared to 2023.
Partners Group, CVC, and Breitling asserted that there had been “no disagreements between [the equity investment companies] concerning Breitling’s strategy.”
The Swiss watchmaking sector is famously non-transparent, rendering it challenging to gauge accomplishments accurately. Most prominent labels are privately owned and reveal scant monetary details.
However, Breitling’s impetus has diminished since 2022, with sector statistics indicating that the brand’s ascent in the Swiss timepiece revenue standings has leveled off.
Morgan Stanley and Swiss consultancy LuxeConsult project that Breitling’s turnover decreased by approximately 3 percent last year, falling behind both the wider Swiss timepiece sector and the industry’s most robust privately-held labels.
Results in the United Kingdom — which comprises eight percent of its income — have been especially concerning, one individual remarked, with country-wide transactions declining by twenty-five percent in the year leading up to March 2025. In the US, its biggest segment, Breitling is encountering intense rivalry from labels such as TAG Heuer and Tudor.
Last August, Moody’s lowered Breitling’s debt rating, observing a “steep” reduction in profits in the year concluding March 2025, compounded by elevated fixed expenditures resulting from the inauguration of additional Breitling boutiques.
CVC initiated the retail outlet expansion scheme in 2017, but the latest enlargement of Breitling’s specialty store chain to approximately 300 outlets had been contentious, one market observer noted. An individual cognizant of the plan stated, “That deployment is nearing its conclusion.”
Breitling’s proprietors are now evaluating expenditure reductions, that individual further mentioned.
Recognized for its time-recording devices and aeronautical legacy, Gantner considered Breitling a prized possession for his Swiss firm, an ex-Partners staff member informed the FT last year; a simulated Breitling boutique is located in Partners’ worldwide principal office near Zurich. The employee remarked, “The common perception was that it represents his personal project.”
One individual affiliated with Partners Group stated that Breitling’s impetus compared to immediate rivals endured, and that they were “optimistic Breitling would be a robust initial public offering prospect in 2028, perhaps 2027, or possibly 2029”.
Another individual connected to the entity added that the company had made “substantial capital deployments into expansion efforts” such as the acquisitions of two timepiece labels and endorsements with the NFL and Aston Martin.
Moody’s indicated its reduction in rating originated from Breitling’s “significant sales focus on one brand” in contrast to bigger and more varied horology conglomerates.
The rating agency also referenced the brand’s “heavily indebted fiscal framework” and its past practice of securing loans to distribute funds to equity holders. The company obtained more than €1bn in loans to issue dividends during CVC’s proprietorship, according to PitchBook.
Nevertheless, Moody’s appended that Breitling maintained “sufficient cash flow” and “favorable enduring expansion potential”.