What's Happening?
Richemont, a Swiss luxury goods company, has agreed to sell its watchmaker Baume & Mercier to Italy's Damiani Group. This decision comes in response to a slowdown in the luxury watch market, influenced
by factors such as tariffs imposed by President Trump, high gold prices, and reduced demand in China. Baume & Mercier, a nearly 200-year-old brand, will join Damiani's portfolio, which includes other luxury brands like Salvini and Bliss. The financial details of the transaction have not been disclosed. The deal is expected to close in the summer of 2026, with Richemont providing operational support for at least 12 months post-closing.
Why It's Important?
This sale highlights the challenges facing the luxury watch industry, which has been impacted by geopolitical and economic factors. For Richemont, divesting Baume & Mercier allows it to focus on its other high-performing brands. For Damiani, acquiring Baume & Mercier represents an opportunity to expand its offerings in the watch segment and attract a broader customer base. The transaction underscores the strategic shifts companies are making to adapt to changing market conditions and consumer preferences.
What's Next?
The completion of the sale is contingent on certain conditions, and the transition period will involve Richemont's continued operational support. Stakeholders will be watching how Damiani integrates Baume & Mercier into its brand lineup and whether this move will help stabilize or grow its market share in the luxury watch sector. The broader industry will also be monitoring how other luxury brands respond to similar market pressures.
