Breitling Valuation Slashed As Private Equity Owners Reassess Strategy

Valuation Declines Amid Sales and Profit Drop

Breitling's private equity owners, CVC Capital and Partners Group, have significantly cut the luxury watchmaker's valuation, reflecting a decline in sales and profits since a peak in 2023. Sources close to the investment firms, cited by the Financial Times, indicate that CVC has halved the value of its remaining stake compared to its 2023 investment level. Partners Group, which holds a majority stake of over 50%, is valuing its holding at approximately 70% of its previous valuation. This marks a dramatic shift since 2022 when Breitling was valued at $4.5 billion during Partners Group's acquisition of a majority stake from CVC Capital.

Industry estimates from Morgan Stanley and LuxeConsult suggest Breitling's sales reached CHF 870 million (CHF 1.2 billion at retail) in 2023. However, these figures reportedly fell to CHF 820 million (CHF 1.1 billion at retail) in 2025. Data from the UK, believed to be Breitling's second-largest market, shows a steeper decline, with turnover dropping from nearly £90 million in FY2023 to under £60 million in the most recent report.

Aggressive Expansion and Market Pressures

The revaluation comes amidst challenges including an aggressive store expansion strategy, subdued demand for high-end watches, and potential impacts from US tariffs on Swiss exports. Breitling has rapidly opened 300 boutiques worldwide, adopting a consistent aesthetic. These boutiques are either directly managed or operated through franchise agreements with retail partners.

Despite investment in product development, marketing, and high-profile brand ambassadors such as Brad Pitt and Charlize Theron, alongside partnerships with Aston Martin and the NFL, sales momentum has cooled since 2022. Average watch prices have increased significantly, from €4,300 to €7,200 over seven years, partly due to the increased use of in-house movements like the B01 and B31.

Financial Downgrade and Future Outlook

The financial pressures have led to a credit rating downgrade. Moody's assigned Breitling a B3 score, indicating high credit risk, citing a sharp decline in earnings for the year ending March 2025. This decline was exacerbated by increased fixed costs associated with the expanded retail network and high leverage.

CVC initially acquired Breitling in 2017 for approximately €800 million. The subsequent sale of a majority stake to Partners Group in 2023 was valued at $4.5 billion, with CVC retaining a significant stake. Partners Group, which now has a controlling position, noted that its investment valuation in 2021 was lower than its 2023 investment.

Despite these headwinds, insiders at Partners Group reportedly remain optimistic about Breitling's long-term prospects. They view the brand as a potential IPO candidate between 2027 and 2029, underpinned by its strong heritage in chronographs and aviation branding. Breitling is also set to anchor a new group of brands for its owners, with plans to relaunch historic marques Gallet and Universal Genève.