Frédéric Arnault, the second-youngest son of LVMH CEO Bernard Arnault, took over as CEO of LVMH Watches last week as the company seeks to become a major player in the space. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, and the Glossy Beauty Podcast for interviews from the beauty industry. -Danny Parisi, sr. fashion reporter
Frédéric Arnault’s watch ambitions
Last week, Frédéric Arnault, former CEO of the LVMH-owned watch brand Tag Heuer and son of LVMH CEO Bernard Arnault, was announced as the first CEO of the newly-formed watch division LVMH Watches. That puts Arnault in charge of not just Tag Heuer but all of LVMH’s watch brands which include Zenith and Hublot.
LVMH, and Louis Vuitton in particular, has its eyes on the lucrative and growing luxury watch market. It already has a solid footing there, but its watches are considered by most enthusiasts as “fashion watches” — high quality, but not on the same level as a high-end horological brand like Rolex or Patek Philippe. But LVMH has been meaning to change that view. Last year, it announced that it would be reshaping Louis Vuitton’s watch output by reducing the number of watch models sold and significantly increasing the price to better position its watches alongside other premium brands.
Arnault helped do exactly that at Tag Heuer where, under his leadership, he pushed the brand into higher-end territory. The $500,000 Tag Heuer Carrera watch became a hot commodity during Arnault’s time, growing to have a waitlist of over two years to get one as of this past summer. Other expensive models in the five- and six-figure range popped up during the three years Arnault was CEO of Tag Heuer, pushing the average price point of the brand’s watches above $3,000.
It seems Arnault’s mandate is now to do something similar with LVMH’s entire watch catalog. LVMH Watches is already a $2 billion business and has the backing of LVMH, with a $500 billion valuation, to invest in making its watch ambitions a reality.
But the appointment comes just as watch sales and luxury in general are slowing down. Richemont ended 2023 showing a 3% decline in quarterly sales. It owns popular Swiss watch brands including Vacheron Constantin.
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A down period in watches could be the best time for LVMH to invest. When things are slow and calm, change may be better received – but it’s not a guarantee. Pushing prices higher just as sales of high-end watches are slowing and people are curbing their spending may make the transition a difficult one.
