Luxury watch retailer Chronext AG plans to list on the Swiss stock exchange as it continuously enjoys the high demand for high-class watches, specifically from younger generations.
Chronext AG plans to raise around $250 million francs ($273 million) and existing shareholders plan to sell an unspecified amount to additional shares.
The company also said that selling holders will also make existing stock available for a possible over-allotment comprising as much as 15% of the shares sold.
Chronext AG was established in 2013 and aims to be one of the best companies for new and second-hand watches, which comes mostly from third-party distributors.
Proceeds from its IPO will be used for tech investments to be able to grow its product offering and expand its presence into new markets. It is currently eyeing the United States and Asia because of its vibrant markets, especially on luxury watches.
One of the routes that the watch retailer might consider when it expands on these markets is through merger and acquisition deals. Currently, Chronext AG's business is mainly focused on Switzerland, Germany, and Austria.
With ideal market conditions already in place, various European companies are highly interested in launching their own IPOs.
Chronext's much-awaited sale is expected to be completed in the fourth quarter, which is still subject to market conditions, the company clarified.
Even with the ubiquity of online shopping, the luxury watch market hasn't fully dived in online stores, with only 5% of its total sales having gone through online. A report from McKinsey predicts that online sales might increase to 15% by 2025.
"There's a fundamental paradigm shift with online becoming a very important channel. The best is yet to come since Generation Y and Z have an appetite for such products," Philipp Man, Chronext chief executive officer, said.
The luxury retailer had sales of 101 million euros last year and it had a compound annual growth rate of about 104% since its full year of operation and 47% since 2018.
Chronext's top three best-selling luxury watches in the first half of the year were Rolex Datejust, Omega's Seamaster, and Rolex's Submariner.
It can also provide rare timepieces to its customers faster than any other retailer because of its multiple sources.