Undervalued Independence: What Jaeger-LeCoultre Is Really Worth

Authors: Margaux Brun, Raphael Kratiroff, Marco Similea, Oscar Lancetti

Jaeger-LeCoultre occupies a unique position in the luxury watch industry. Founded in 1833 by Antoine LeCoultre in the Vallée de Joux, the maison has spent almost two centuries building one of the strongest manufacturing traditions in Swiss watchmaking. It has been associated with over 400 patented inventions and more than 1,400 calibers, earning the reputation of the “watchmaker’s watchmaker”. It has historically supplied movements to Cartier, Patek Philippe, and others long before those names became household words. Since its 1937 merger with Edmond Jaeger and its eventual acquisition by Richemont^[1], JLC has been the technical crown jewel of one of the world’s largest luxury conglomerates. 

This position makes the rumoured management buyout led by CEO Jérôme Lambert particularly interesting. Miss Tweed^[2], the luxury industry publication that first reported the story, claimed a transaction value of more than CHF 1 billion. 

The key question is whether the price is justified. To answer it, we proceed with a corporate finance analysis, reviewing the size, dynamics, and pressures of the global luxury market between 2024 and 2025. We then examine JLC’s operating independence from Richemont’s own financial trajectory, evaluating it through trading comparables and a precedent transactions analysis. Together, these produce a valuation range through which the reported price can be assessed. 

Sector Analysis  

1. Market Size and Long-Term Growth 

Luxury watches occupy a strange position within the consumer economy. They are not a necessary purchase, yet prices range from a few thousand to several million, with demand remaining strong even when prices increase. This behaviour is only possible because the value is largely intangible: brand heritage, horological complexity, and the status associated with owning a particular brand.

The size of the global luxury watch market varies considerably depending on the methodology used, as each measures different parts of the market. The Bain & Company/Fondazione Altagamma Luxury Goods Worldwide Market Study draws on actual financial filings from over 280 luxury companies and measures the market at retail value. Its 2024 edition estimated global luxury watch sales at €51 billion, down roughly 5–7% from 2023 at current exchange rates. Swiss export data provides a useful complementary measure. The Federation of the Swiss Watch Industry (FH) recorded CHF 26.0 billion of Swiss watch exports in 2024^[3]. These figures are based on export prices rather than retail prices and cover Swiss-made watches only. They therefore represent a smaller part of the final retail market. 

Figure 1 — Global luxury watch market, retail value (€bn). Source: Bain & Company / Fondazione Altagamma, Luxury Goods Worldwide Market Study. 

The Bain series illustrates the unusual path the market took during the pandemic years. The market stood at approximately €44 billion in 2019, fell to around €32 billion in 2020, and then recovered sharply, reaching approximately €57 billion in 2022. By 2024, it had settled back at €51 billion. Therefore, the current market should be viewed with caution. It is not in structural decline but has experienced an exceptional boom during the pandemic, with reduced travel spending, pandemic savings, and speculative activity that pushed demand higher.

Looking ahead, the Bain-Altagamma projection for personal luxury goods (of which watches represent roughly 14%) implies a recovery trajectory toward €530– 570 billion by 2030 for the broader category, subject to different macroeconomic scenarios across China, the Americas, and emerging markets. For watches, the Altagamma Consensus for 2025 forecasts a modest 1% revenue recovery, consistent with the FH's H1 2025 export data, with broadly flat year-on-year value despite continued volume erosion. 

2. Industry Structure 

Entry into luxury watchmaking is effectively impossible for a new player, as the barriers are not primarily regulatory or capital-related, but heritage-based. A brand that did not exist before, say, 1950 cannot claim the centuries of provenance that allow it to price^[4] at the top of the market. The 'Swiss Made' label carries legal minimum-value requirements that further restrict access for outsiders. And, beyond heritage, it requires decades-old proprietary movement expertise, vertically integrated manufacturing, and distribution relationships built over generations. 

The corporate structure of the industry reflects this. At the conglomerate level, Richemont, LVMH, and Swatch Group control a disproportionate share of recognised brands. At the brand level, Rolex alone is estimated to command roughly 25–30% of total market value. According to the Bain 2024 study, just a third of luxury brands grew revenue in 2024, down from 95% in 2022. This reversal shows how the pandemic boom has given way to a much more selective market. 

Buyer sophistication has risen materially through secondary market platforms (Chrono24, WatchBox, WatchFinder), which give customers real-time resale data before a primary purchase. This shift in information asymmetry has real consequences: resale value has become a purchase criterion in a way it had not been a decade ago, rewarding brands with strong secondary premiums and penalising those without. 

3. Key Structural Trends 

3.1 The Export Hangover and China’s Correction 

Swiss watchmaking had an extraordinary run from 2020 to 2023. Pandemic-related market activity drove Swiss export values to a record CHF 26.7 billion in 2023. That run has since ended.   

In 2024, Swiss watch exports declined 2.8% in value to CHF 26.0 billion, the first annual contraction since 2020, while volume fell a steeper 9.4% to 15.3 million units, a historically low level. The industry is exporting fewer watches at higher average prices, which supports revenue but raises questions about underlying demand breadth. First-half 2025 data from the FH showed value broadly stable (–0.1%) against H1 2024, but volumes contracting a further 5.7%, reaching what the FH described as an 'unprecedented' level. 

China accounts for most of the decline. Swiss exports to China collapsed 25.8% in 2024, the FH noted, which was worse than the pandemic contraction, driven by a persistent property sector crisis, elevated youth unemployment, and deteriorating consumer confidence. Hong Kong fell 18.7%. The geographic rebalancing toward the United States (+5%), Japan (+7.8%), and India (35% growth over two years) is real, but insufficient to replace China in depth or scale, with the FH stating: 'Any recovery in the market will depend largely on the outlook in China, where uncertainty remains high.'

3.2 The Polarisation Dynamic 

The Bain 2024 study documents what it calls an 'increasing polarisation' in the watch category. A small number of leading brands, the so-called Holy Trinity (Patek Philippe, Audemars Piguet, Vacheron Constantin) and Rolex, continue to operate in a fundamentally different market from their peers. They deliberately constrain supply, generating waiting lists for key references and a secondary-market premium that reinforces primary demand. The FH data also illustrates another bifurcation: watches priced below CHF 3,000 at export (a proxy for accessible luxury) saw a 15.6% decline in value in 2024, while the above-CHF-3,000 tier (representing over 80% of total export value) grew just 1%, highlighting that growth exists only at the very top. 

Additionally, brands operating in the mid-to-high tier, particularly those within large conglomerate portfolios where capital allocation and strategic focus is shared across many maisons, are disproportionately exposed to this polarisation. 

3.3 The Second-hand Market as a Structural Force 

The pre-owned luxury watch market has grown into a structurally material segment. Grand View Research estimates the global pre-owned luxury watch market at USD 24.4 billion in 2023, growing at a CAGR of 9.2%, nearly double that of the primary market. Richemont's own WatchFinder platform reported double-digit volume growth in FY2025, one of the few genuine bright spots across the group's watch-related activities. A 2024 Deloitte^[5] survey found that 18% of consumers intended to buy a pre-owned watch within the next twelve months, twice the proportion in 2020. 

Resale data has also become a purchase criterion. Buyers researching a CHF 20,000 watch routinely check what comparable items trade for on resale platforms. Brands with strong secondary market premiums benefit from a reinforcing loop. Whereas those without face the opposite: weakened primary demand as buyers price in the expected resale discount. Notably, brands that participate proactively in the secondary market, rather than merely benefiting from it passively, gain a further edge: Rolex's Certified Pre-Owned program lets it capture resale economics directly and exert influence over the pricing that anchors its resale values, reinforcing the primary-market premium it already commands. As a result, the secondary market has sorted the industry into two camps, and the distance between them continues to widen. 

Secondary market prices had fallen for 3 consecutive years from the 2022 speculative peak (per Morgan Stanley / WatchCharts) but finally showed tentative stabilisation in Q1 2025, down just 0.4% in that quarter. 

3.4 Jewellery Has Won Inside Richemont 

Within Richemont, the divergence between jewellery and watches has become impossible to ignore. In FY2025, Cartier and Van Cleef & Arpels generated EUR 15.3 billion in revenues at a 31.9% operating margin, up 8% YoY. In contrast, specialist watchmakers generated EUR 3.3 billion at materially lower margins, down 13%. Jewellery now represents 71% of group activity, and is not a temporary phenomenon: it benefits from lower cost of goods, higher brand concentration, and greater resilience to the China correction. In regard to this, the Group has already acted: the sale of Baume & Mercier to Damiani in early 2026 signals willingness to divest watch assets and concentrate on higher-returning categories. 

4. Synthesis 

The luxury watch sector generated €51 billion in retail sales in 2024, down from a post-pandemic peak of €57 billion in 2022, and is currently stabilising rather than recovering further in 2025. Swiss exports confirm the value at CHF 26.0 billion in 2024 at wholesale prices, with volume at its lowest level in recent history. The total numbers are less interesting than the distribution within them: growth is concentrated in a narrow band of dominant brands, China's structural correction has reset the geographic centre of gravity, and the secondary market is now large enough to influence primary market behaviour. 

For mid-to-high tier brands within large conglomerates whose strategic priorities have moved elsewhere, pressures converge in a specific way: reduced capital, decreased management attention, and a parent group redeploying resources toward higher-returning categories. That is the market context in which the transaction examined in this paper becomes worth analysing. 

The Case for JLC’s Independence 

The management buyout rumour reflects a confluence of strategic, financial, and personal factors that make independence an increasingly logical conclusion for Jaeger-LeCoultre. 

The starting point is Richemont's own trajectory. In FY2025, the group's Specialist

Watchmakers division posted a 13% revenue decline to €3.28 billion, with operating margins of just 5.3%, a fraction of the 31.9% generated by Cartier and Van Cleef & Arpels watch brands risk becoming strategic orphans. The January 2026 sale of Baume & Mercier to Damiani Group confirms this. 

Jérôme Lambert returned to lead JLC in January 2025, stepping down from his role as Richemont Group COO to do so. The timing was conspicuous: Lambert had previously run the maison from 2002 to 2013, and his return was widely read as more than a routine appointment. Under group ownership, JLC has operated with limited autonomy, with its investment cycles, pricing strategy, and product roadmap all subject to group-level priorities. An MBO would give Lambert the freedom to pursue his stated vision of "watchmaker's watchmaker" positioning without compromise, aligning his personal financial stake directly with the brand's long-term success. 

Other industry examples offer a compelling reference point for what that independence could be worth. Patek Philippe, Rolex, and Richard Mille consistently command the highest brand desirability scores, pricing power, and secondary market premiums precisely because independence signals authenticity, long-termism, and undivided craft focus. For a brand whose identity rests on 190 years of uninterrupted manufacture heritage, regained independence carries genuine commercial value, not just symbolic weight. 

The timing, finally, is not incidental. The MBO reports surfaced at a moment when JLC's internal momentum was arguably at its strongest in years: two new in-house calibers, a reinvigorated Reverso^[7] franchise, grand complications pushing into six-figure territory, and a possible integrated-bracelet collection on the horizon. Buying the brand now, before a potential re-rating of its strategic value, would reflect a calculated bet that JLC's current positioning still undervalues what it could become as a fully autonomous entity. 

That said, independence alone does not guarantee a re-rating: the pricing power and secondary market strength seen at brands such as Patek Philippe or Rolex are ultimately driven by sustained excess demand, something Jaeger-LeCoultre would still need to build over time. 

Valuation  

Before turning to valuation, it is worth noting that a transition to independence would introduce execution risks. Under Richemont, Jaeger-LeCoultre benefits from a global distribution network, shared infrastructure, and landlord leverage that would be costly and time-consuming to reproduce. Any valuation must therefore be analysed considering both the strategic upside of independence and the operational challenges it entails. 

Valuation of Jaeger-LeCoultre: Trading Comparables and Precedent Transactions 

Two classic methodologies were used to estimate Jaeger-LeCoultre's enterprise value: a Trading Comparables analysis and a Precedent Transactions analysis. 

The Trading Comparables method benchmarks JLC against listed luxury peers, while the Precedent Transactions method grounds the valuation in what strategic acquirers have actually paid for comparable assets. Together, the two approaches produce a valuation corridor: one anchored in current market sentiment, the other in the objective deal history. 

The Comparable Trading approach utilises two tiers and seven comparables to generate 

EV/Revenue and EV/EBITDA valuation multiples^[8]. Tier 1, the Conglomerate floor, consists of Swatch Group, Richemont, and LVMH Watches & Jewellery, representing diversified groups for which JLC is one asset among many, and whose multiples scale back under the weight of size and portfolio diversification. Tier 2, consisting of Hermès, Brunello Cucinelli, Moncler, and Ferrari, captures the standalone luxury premium that reflects Jaeger-LeCoultre's heritage and prestige as discussed in earlier sections. The two tiers are specifically chosen since Jaeger-LeCoultre does not fit neatly into either category: it carries the heritage and manufacture depth of a standalone luxury brand yet would exit a conglomerate structure without the distribution infrastructure that underpins those premiums. The corridor between the two tiers is a deliberate analytical choice: the floor denotes what a diversified buyer would pay, the ceiling what the market rewards when brand equity stands alone. The companies representing each tier have been selected on the following basis:

The analysis draws on four multiples (Tier 1 and Tier 2 EV/Revenue and EV/EBITDA) applied to Jaeger-LeCoultre's estimated 2024 financials. Revenue of €550m is based on a CHF 524m estimate sourced from WatchPro^[9], converted using the 2024 average CHF/EUR exchange rate of 1.0499. EBITDA of €79m is derived by applying a 14.3% margin to that revenue base, taken from Richemont's Specialist Watchmakers segment in its FY2025 financial report, a dedicated segment encompassing Jaeger-LeCoultre, IWC, Panerai, and Vacheron Constantin, distinct from the Jewellery Maisons division. This margin reflects a cyclically depressed year marked by a 13% revenue decline, Swiss franc appreciation, and weak Chinese demand, and should therefore be treated as a conservative floor rather than a normalised estimate.

Each multiple is given by the enterprise value – market capitalisation plus net debt – of each peer divided by its most recent annual revenue or EBITDA (2025). The Tier 1 median EV/Revenue of 3.00x applied to €550m implies an enterprise value of €1,649m, while the Tier 2 median of 6.66x implies €3,662m. On an EV/EBITDA basis, the Tier 1 median of 14.05x implies €1,105m, and the Tier 2 median of 18.31x implies €1,440m. Miss Tweed placed the MBO price at more than CHF 1 billion. As shown in the chart below, that figure falls below all four implied values in the corridor, including the Tier 1, suggesting the reported price does not yet reflect the full value of JLC's heritage and manufacture credentials even under the most conservative assumptions. 

The Precedent Transactions method captures the premiums strategic acquirers have historically paid for comparable luxury assets. Four transactions were selected based on the target profile: a heritage brand with strong pricing power acquired by a large strategic buyer, rather than distressed sales or private equity roll-ups.

The same JLC financial base used here: €550m revenue, €79m EBITDA at a 14.3% margin, and €29m EBIT derived by applying an EBIT margin of 5.3% from FY2025 Richemont's Specialist Watchmakers segment. As with the EBITDA margin, this EBIT figure reflects trough operating conditions and should be treated as a floor estimate rather than a normalised one. 

Three implied valuations are produced, one per multiple. Where data was unavailable at the time of the transaction, the corresponding multiple is excluded from the average rather than estimated. Hublot lacked publicly disclosed EBITDA figures, and Tiffany's EBITDA was not available in a usable measure; the EV/EBITDA average therefore draws on Bulgari and Harry Winston only. Similarly, Bulgari's EBIT was not disclosed, leaving the EV/EBIT average across the remaining three transactions. These gaps are a feature of working with real deal data rather than clean public filings: the averages are narrower but more reliable for it. 

Average transaction multiples of 3.1× EV/Revenue, 21.4× EV/EBITDA, and 29.0× EV/EBIT produce three implied enterprise values, reported below. 

Taken together, these analyses establish a valuation range against which the reported MBO price of over €1 billion can now be assessed. It sits below all four implied values produced by the comparable company analysis, including the Tier 1 conglomerate floor, and below two of the three implied values from the precedent transactions approach. 

The sector analysis provides the context for this result: a luxury watch market correcting from a post-pandemic peak, with growth concentrated at the very top and conglomerates like Richemont increasingly prioritising their jewellery divisions over watchmaking. 

That structural backdrop makes the transaction strategically coherent. Richemont is divesting into a segment where returns have lagged, while Lambert is acquiring a brand whose manufacturing heritage and potential independence premium remain only partially reflected under group ownership. 

Several caveats apply: JLC’s financials are not publicly reported, the margins used reflect a cyclically depressed year, and the comparable set involves peers that are not perfect substitutes. In addition, independence introduces execution challenges, particularly around distribution and infrastructure, which may temper the pace at which any re-rating is realised. Within those limitations, if the deal closes at the reported figure, Lambert may be acquiring one of Switzerland’s most storied manufactures at a price that reflects Richemont’s capital allocation priorities more than Jaeger-LeCoultre’s standalone potential.