MILAN — Italian jewelry and watchband maker Morellato SpA bought 100 percent of watch manufacturer Sector Group in a bid to find business synergies and expand beyond Europe.
“In the market for fashion jewelry, we’ve seen how the correlation with watches has become stronger in the minds of consumers,” Morellato president Massimo Carraro said in an interview.
Morellato makes jewelry under its own brand name and holds licenses for Miss Sixty and Just Cavalli baubles. The 75-year-old company got its start as a watchband manufacturer and diversified into jewelry six years ago. Convinced of untapped potential in the watch market, it launched its own line of timepieces at last spring’s edition of the trade show Baselworld.
The company expects to post sales of 200 million euros, or $250.8 million at current exchange, this year, and increase them 25 percent, to 250 million euros, or $313.5 million, in 2007. Those projections include revenue from the Sector business. Morellato does about 85 percent of its business in Europe.
Morellato completed a deal this week to buy Sector from Bulgari SpA-managed investment fund Opera for 45 million euros, or $56.4 million, including the assumption of debts at the watch company.
Sector’s revenues have been choppy in recent years. Morellato said the watchmaker would do 70 million euros, or $87.8 million, in sales this year.
Carraro said the watchmaker’s varied brand portfolio made it a desirable acquisition target. Sector’s namesake brand boasts a sporty, masculine line of watches. The company also owns the more exclusive Philip Watch and Lucien Rochat brands and makes, through licensing agreements, watches for Roberto Cavalli, Moschino and Pirelli Pzero. Sector also has a licensevvvv for Valentino watches, although it’s not clear whether that pact will be renewed.
At retail, Sector watches run from about 150 euros (about $188) for a simple model to as much as 10,000 euros ($12,539) for a gold and diamond piece. Morellato’s jewelry prices range from 22 euros ($28) for a pearl charm to 188 euros ($236) for a chunky steel chain necklace. Sector’s watches are carried in the U.S. by Macy’s, Watch Station, Saks Fifth Avenue, Tourneau, Fears and Zale.
Related Articles
You May Also Like
Carraro said Morellato would dedicate next year to “relaunching” Sector, improving the technological content of the timepieces, and boosting communications and public relations for the various watch brands. Morellato has always emphasized marquee advertising, and used Ben Affleck in a previous jewelry campaign, but Carraro said it’s too early to outline specific plans for Sector.
He did say Morellato and Sector would be able to exploit geographic synergies. Morellato can use Sector’s U.S. headquarters in New York as a base to expand its jewelry presence there, while Sector can build off Morellato’s distribution infrastructure in Asia to penetrate new areas.
The Opera fund bought Sector in 2001 as it embarked on a buying spree, snapping up stakes in boat, furniture and food companies and control of shoemaker Bruno Magli, which has struggled in recent years. An Opera spokeswoman declined to comment on recurring speculation that the fund is shopping around the footwear company.