ABU DHABI // Swatch Group, the world's largest watch manufacturer, announced yesterday that it has acquired a stake in Rivoli Group, the high-end retailer from Dubai. Rivoli and Swatch have worked together informally for some 20 years, but officials said this strategic partnership would fuel Rivoli's efforts for regional and international expansion, particularly into Saudi Arabia and India. "We have long been associated with Swatch Group, but this agreement will really allow for great expansion," said RRamanathan, the group general manager of corporate affairs for Rivoli Group.
The value of the agreement remains undisclosed, but officials said it made Swatch Group the second-largest shareholder in Rivoli, after Dubai International Capital (DIC), which acquired a stake last September. Operating more than 245 retail outlets in the UAE, Bahrain, Oman and Qatar, Rivoli has a diverse portfolio of international brands such as Dunhill, Omega, Cartier and Montblanc. "We believe that we can help in the existing market and in new markets like India and Saudi Arabia," said Béatrice Howald, a spokesman for Swatch Group. "Rivoli is very experienced in retailing and we have a lot of experience in selling watches and producing luxury goods, so this makes sense."
With a turnover of six billion Swiss Francs (Dh20bn) last year, Swatch Group is the largest manufacturer and distributor of watches and jewellery in the world, operating from its headquarters in Switzerland. Its brands include Omega, Tiffany & Co and Calvin Klein, as well as Swatch. "We, as a shareholder of Rivoli, want it to do as well as possible," said Mark Lunn, a spokesman for DIC. "Swatch coming in will increase the value of the company."
Mr Lunn added that the presence of a retailer in DIC's portfolio had enabled his company to take advantage of the success of the GCC luxury goods market. "The GCC has always been a growth market and has always had a lot of affluent people. We are seeing the GCC emerging as a place for investment opportunities and [as a] consumer market as well," Mr Lunn said. As well as its stake in Rivoli, DIC's investment portfolio includes Mauser, an industrial packaging leader, Almatis, an alumina maker, and Alliance Medical, the leading provider of diagnostic imaging services to the European health care sector.
The Dubai Gold and Jewellery Group, a body that represents the Emirates' jewellery industry, estimates that the regional luxury goods sector will reach a value of Dh367bn by 2010. Emerging markets currently account for about 30 per cent of all luxury goods sales worldwide, with analysts predicting double-digit increases in the coming years. They say that the growth is linked to the emergence of a new middle class in countries such as India, China and Russia, with more money to splurge on pricier items. However, many expect the rate of growth in worldwide demand to weaken by as much as one per cent next year.
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