Peace Mark grew to 10,000 employees selling watches — then debt killed it in weeks

Peace Mark (Holdings) Ltd was a Hong Kong-based international watch maker, distributor, and retailer with about 10,000 employees and annual earnings of approximately US$900 million. It owned brands like Milus and Sergio Valente, licensed timepieces including Bill Blass and Fiorucci, and distributed Givenchy and Technomarine in China. It also held exclusive rights to operate De Beers retail stores in China and develop the market for Boucheron.

In late 2007, Peace Mark made two large acquisitions: STM Holding, a Swiss watch movement maker, and Sincere Watch, a chain of about 150 stores. The company secured a US$500 million bridge loan from international banks to fund these acquisitions. By summer 2008, the stock was falling on rumors that the company was overextended. Trading was suspended in August 2008, and an English private equity firm withdrew a buyout offer.

In early September 2008, Peace Mark announced it could not meet sudden demands from some banks to repay US$156 million. The lenders responded by cancelling the entire US$500 million bridge loan, which made it impossible to repay existing loans and triggered demands from other creditors. On September 11, 2008, two provisional liquidators from Ferrier Hodgson were appointed with the agreement of Peace Mark and its major creditors.

The company's assets were sold off piecemeal. Two weeks before October 13, 2008, Peace Mark sold its Swiss watchmaking facilities (STM Holding) to the Festina group. On October 3, 2008, the Hong Kong jewelry giant Chow Tai Fook signed an agreement to acquire Peace Mark's watch retail network — about 120 multi-brand stores and over 1,000 mid-price stores in mainland China, Hong Kong, Macau, and Taiwan — plus two watch movement factories in China, for over US$90 million (HK$700 million). The Hong Kong High Court approved the deal on October 6.