Yahoo Finance LVMH Leads Watch Week Presentations
PARIS — LVMH Moët Hennessy Louis Vuitton set the pace for the luxury watch industry on Monday, kicking off the year’s events with a week of presentations from its watch labels Bulgari, Hublot and Zenith.
This is the second time LVMH labels are holding a watch week together. At the same time last year, the luxury group took to the Bulgari Resort in Dubai to test out the new presentation format after other traditional watch fairs had been pushed until later in the year.
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The group prefers setting the agenda at the start of the year, and before 2020 had been known to hold events in Geneva in January, tapping into the traffic flows to the former SIHH fair, which was dominated by rival brands belonging to Compagnie Financière Richemont.
But everything has been changed by the coronavirus crisis, which upended traditional watch fairs — finishing off struggling Baselworld altogether and sending labels on the search for new, effective ways of reaching their clients.
“Due to the sanitary situation we all have to stay a bit far one from the other so we are trying from our manufacturer to your place to bring you all the fantastic novelties made by every maison,” said Stéphane Bianchi, chief executive officer of LVMH’s watches and jewelry division, welcoming viewers to the online presentation.
“This year it’s not physical any longer, it’s phygital, meaning a combination of digital and physical for those residing in Switzerland,” said Jean-Christophe Babin, Bulgari’s CEO.
A series of presentations ensued, with Hublot CEO Ricardo Guadalupe presenting new models like the orange sapphire Big Bang Tourbillon watch, from the factory floor, with high-tech machines serving as a backdrop. Zenith CEO Julien Tornare introduced the brand’s new ambassador, National Football League quarterback Aaron Rodgers, who also spoke briefly in a prerecorded address, as well as the brand’s new Chronomaster Sport, which measures one-tenth of a second.
New models from Bulgari included the tightly wound Serpenti Spiga and the flashy Octo Finissimo.
Under the direction of Bianchi, who oversees Tag Heuer, Hublot and Zenith as well as jewelry labels Chaumet and Fred, the brands have been increasingly pooling resources in areas like real estate — gaining leverage when negotiating leases in a mall, for example — as well as bulking up an innovation center in Chaux-de-Fonds that serves the various houses.
“So this is a kind of division we wanted to create and then try to make all the brands work together, more together,” said Bianchi, speaking in an interview with WWD ahead of the presentation.
Last February, he recruited Edouard Mignon to head the innovation center, bringing on an executive who had managed product development at Cartier, before taking over Richemont’s research and innovation activity.
Bianchi noted that pooling resources does not extend to products — front office operations remain very separated.
“It’s more on the, ‘how do we do things?’ Do we want to see journalists separate or together? Do we want to launch our own fair? Do we work on sustainability together? All these kinds of things where the more you are the better you are,” noted Bianchi.
“It’s a real network which is building up, step-by-step,” he said, noting executives at the different labels call each other without his involvement.
Bianchi started out in the division heading Tag Heuer operations himself, while overseeing Hublot and Zenith, each run by their current CEOs. When he passed the reins of Tag Heuer to Frédéric Arnault last year, Chaumet and Fred were added to the division, because the innovation center can serve jewelry houses as well.
“We’re working on gold, we’re working on materials, and even our factories can make some watches of course, but they can make jewelry as well,” he explained.
Other brands can use the innovation center as well, he added, even if they’re not in his division — the one restraint is that each area of innovation must be brand-specific.
“if you want to take the same innovation, we’ll have to twist it to make it for another brand,” he explained.
“The carbon hairspring, for example, is something which could be used by different watchmakers, but then maybe some hairsprings will be big, some small, some with a different shape — the materials could be the same carbon, but then the use and the shape and all this would be specific to each brand,” he said.
The center has been particularly useful for Tag Heuer recently but other brands are increasingly making use of it, he noted.
Asked about the challenges facing the industry, he stressed the importance of innovation.
Exports of Swiss watches, a key industry indicator, declined 23.5 percent over the first 11 months of last year, with growth in demand from mainland China helping improve the performance in recent months.
“I think innovation is key, you have to innovate,” said Bianchi.
“On the product side, it’s innovation, on the brand side it’s desirability, and the one is linked to the other, and you’ve got to work on both of them and this is key,” he said.
When it comes to navigating the current crisis, LVMH watch executives noted they had postponed a number of launches, and worked to be agile — curtailing marketing investments when a country shuts down, and then ramping them back up again when places reopen.
Babin said he is “reasonably optimistic” about the coming year, even if the first half will likely continue to be complicated. Bulgari is better prepared, now, for the ongoing disruptions. “We’re more agile, we’re faster, there’s a lot of delegating things locally — practically we can’t go and see other countries,” he noted.
Tornare was similarly optimistic.
“COVID took a bit of steam out of our momentum, but it is only a postponement,” he said, noting three big launches that had planned for last year that will take place this year.
Guadalupe also sounded a positive note.
“If we remain open, more or less everywhere, even if there’s not tourism, we should be able to mark an important rebound in sales this year compared to last year,” he said.
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