LONDON: The Watches of Switzerland Group has entered into an agreement with Fraser Hart Limited to purchase four luxury watch and jewellery showrooms trading under the brand name Fraser Hart for £31.7 million.
The showrooms in Stratford, Brent Cross, Kingston and York will expand the Group’s UK store portfolio in strategic locations that align with the Group’s brand offerings.
The showrooms will be rebranded as Watches of Switzerland (Stratford and Brent Cross) and Mappin & Webb (Kingston and York) on completion. The Group will invest in the stores to create a highly luxurious and contemporary experience for consumers that reflects the Group’s wider store network.
The four showrooms had a combined annual revenue of £25.7 million and 4-Wall EBITDA of £5.0 million for the financial year ended 24 June 2019. Gross tangible assets subject to the transaction are expected to be in the region of £5.5 million.
The transaction is expected to complete in January 2020 for a total purchase price of £31.7 million, subject to working capital adjustments on completion and represents a valuation of 6.3x EBITDA. The acquisition will be paid in cash from existing borrowing facilities.
The transaction is expected to contribute revenue of £6 million and EBITDA of £1 million in FY20 and will be immediately earnings accretive.
Brian Duffy, Chief Executive Officer of the Watches of Switzerland Group, said, “We have been admirers of the Fraser Hart operations for some years and see this acquisition as a good opportunity to complement our UK showroom network, and apply our best in class practices in merchandising, marketing, systems and retail operations. We look forward to welcoming the Fraser Hart colleagues of these showrooms into our Group and working with them into the future.”
The Watches of Switzerland Group is the UK’s leading luxury watch specialist, operating in both the UK and US, with a complementary luxury jewellery offer.
The Group is comprised of four prestigious retail brands; Watches of Switzerland, Mappin & Webb, Goldsmiths and Mayors and has been transformed over the last five years into a modern, technologically advanced, omni-channel retailer with a foundation of success based on strong watch brand partnerships, impactful marketing and unrivalled customer experience.