Breitling Valuation Slashed as Private Equity Firms Review Strategy

Breitling, the Swiss watchmaker, is facing a significant downturn in valuation as its private equity owners, CVC Capital Partners and Partners Group, reassess the company’s strategy. The valuation has fallen to as little as half its 2023 level, reflecting faltering performance amid a challenging luxury watch market and increased costs.

Valuation Decline and Ownership Shifts

CVC initially acquired Breitling from the Schneider family in 2017 for approximately €800 million. In December 2022, Amsterdam-listed CVC handed over majority ownership to Partners Group in a $4.5 billion deal, while retaining a roughly 20% stake through a novel fund [CVC]. Partners Group now holds over 50% of the shares, with its co-founder, Alfred Gantner, serving as Chairman of Breitling’s board [CVC].

Strategic Concerns and Performance Issues

The recent valuation slash indicates concerns about Breitling’s performance under the joint ownership. Pressure from CVC has led to a review of the company’s strategy [FT]. A key area of concern is the expensive rollout of Breitling boutiques, which occurred during a period of subdued demand for luxury watches and was further complicated by US tariffs on Swiss goods [FT].

Industry data suggests that Breitling’s revenue growth has plateaued since 2022. Morgan Stanley and LuxeConsult estimate a 3% sales decline in 2023, underperforming the broader Swiss watch market and other strong private brands [FT]. Sales in the UK, accounting for 8% of revenues, were particularly weak, down 25% year-on-year to March 2025 [FT]. In the US, Breitling faces stiff competition from brands like TAG Heuer and Tudor [FT].

Debt and Cost Cutting Measures

Moody’s downgraded Breitling’s debt in August, citing a “sharp” decline in earnings and increased fixed costs related to the store expansion [FT]. The company borrowed over €1 billion under CVC’s ownership to pay dividends [FT]. Breitling’s owners are now considering cost-cutting measures, and the expansion of its boutique network, currently around 300 stores, is coming to an end [FT].

Future Outlook

Despite the current challenges, some remain optimistic about Breitling’s long-term prospects. One person close to Partners Group believes Breitling could be a strong candidate for an initial public offering (IPO) between 2027 and 2029, citing significant investments in growth initiatives, including acquisitions of other watch brands and sponsorships with NFL and Aston Martin [FT]. However, Moody’s highlights the company’s “high sales concentration in a single brand” and “highly leveraged financial structure” as ongoing risks [FT].