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TAG Heuer interview

Bernard Arnault, Chairman & CEO of LVMH with Jean-Claude Biver, President of LVMH Group's Watches Division & CEO of TAG Heuer

INTERVIEWS

Connection and Synergy

By Michel Jeannot

TAG Heuer

03.10.17

Leading the company with clear positioning, Jean-Claude Biver applies his vision to guide not only TAG Heuer but also Zenith, Hublot and the entire watch division at LVMH.

In 2016, TAG Heuer posted double-digit growth—the best in its history!—despite the struggling sales of the watchmaking industry as a whole. The brand’s CEO, Jean-Claude Biver, notably leads the company via clear positioning: innovation and high subjective value, contrasting with reasonable prices that its products firmly in the affordable luxury category. Since the beginning of 2017, Biver has also been applying his vision to guiding the destiny of Zenith, in addition to being President of Hublot and heading the entire watch division at French luxury group LVMH.

Are you planning on creating new synergies within the watch division at LVMH?
My new functions at the helm of Zenith will allow me to familiarize myself with its strategy and industrial capacities. Each of the brands in the group has mastered certain aspects, and of course it is more advantageous to be supplied internally than externally. Hublot produces 20,000 movements per year, manufactures its own cases and creates its own alloys, driven by a particularly dynamic R&D department. This year, TAG Heuer will roll out 120,000 mechanical movements, 300,000 cases and 500,000 dials. Clearly, such large-scale production facilities afford significant potential for mutual cooperation. In addition, TAG Heuer and Hublot are very well situated in terms of distribution, which will also support Zenith’s development.

What positioning is TAG Heuer adopting?
Avant-garde and a leader in the market for accessible, luxury Swiss watches, TAG Heuer offers watches whose perceived value is twice their price! Our three main collections—Aquaracer, Carrera and Formula One—respond to these imperatives perfectly: their perceived value is two to three times their actual price.

What is the secret of TAG Heuer’s growth, in an environment that is otherwise so gloomy?
We are investing more, even as our competitors are investing less. At the product strategy level, we are drawing a younger clientele with a strong entry-level range, priced between $1,000 and $3,000. The highest end of our product line (over $50,000) has been whittled down to a few conversation pieces. We have a muscular midrange offering ($3,000 to $6,000)—with a lot of in-house movements and innovations. Finally, you’ll see a limited haute horology line, between $10,000 and $20,000.

How would you analyze the current public attitude towards luxury watches?
In the beginning, a watch was just a timekeeping instrument! Today, it represents status, style, design, even eternity. One of our major challenges continues to be the education of our clients. We want them to comprehend all these different dimensions. That’s how we will continue to sell watches! The wearable technology trend is also opening up new perspectives for historic brands.

TAG Heuer interview

TAG Heuer Connected Watch

Why did you bet on the connected watch?
To build the future, we have to innovate! TAG stands for Technologie d’Avant-Garde—added to Heuer, a name that dates to 1860. We do better than simply replicate tradition. We continue the avant-garde legacy. By definition, youth is disruptive—and so are we in looking firmly towards the future! Thanks to the connected watch, our image has enjoyed an incredible rejuvenating effect.

How is the connected watch evolving this year?
From a single model at its launch, we now offer it as a complete collection, with different combinations of functions colors, materials, finishes, sizes and prices.

What about production?
In 2016, we delivered 60,000 smart watches. We committed the error of underestimating the product’s potential, which forced us to stagger the delivery process. This year, we won’t make the same mistake. Deliveries will be made on a global scale, thanks to an available stock of 30,000 to 40,000 units. Over the year, we will produce about 100,000 units. What’s more, starting this year, the assembly of the microprocessors will be done in-house—the first telecom assembly line in Switzerland!

How is 2017 shaping up for TAG Heuer in the mechanical watch market?
We are going to write a new chapter in horological history, thanks to a breakthrough in the field of metallurgy! This represents a very important new milestone for watchmaking.

How is TAG Heuer faring with collectors?
Vintage models benefit from our dynamism, such as the Autavia, which has been rereleased. Collectors also love the performance of the Mikrograph, powered by the first mechanical caliber with an integrated column wheel, which displays 1/100ths of a second using a central hand.

TAG Heuer interview

Aquaracer Calibre 5 - Premier League Special Edition

As far as sponsorship goes, Hublot and TAG Heuer seem to have the world of soccer all sewn up!
Yes, these two brands can rest assured of being the only ones in the sport. Hublot covers the more prestigious events, like the World Cup, the Euro and the Champions League. TAG Heuer partners with all the events, leagues and national teams, as well as the star players. This corresponds perfectly with the brand’s image of accessible luxury. Soccer enables us to reach a wide audience: the clients of today and tomorrow! The sport is also gaining unprecedented popularity in China, since the government has encouraged the top entrepreneurs to invest in the sport. Player transfers in China are now the most expensive in the world!

What are the other fields in which TAG Heuer has sponsorships?
We are partnering with the China Space Agency, notably for the exploration of Mars. We provide the clocks in the control rooms and ensure the countdowns. We will have access to the models of lunar and Martian vehicles, for example, for display in our boutiques. A dedicated TAG Heuer model will also be developed. Aside from that, TAG Heuer is visible wherever our clients are! In the great automobile races, but also in skiing, with the Patrouille des Glaciers, as well as in marathons, surfing, and even cycling, with the BMC Racing Team.

Which markets do you consider to be your top priorities?
The United States, China and Japan. In terms of distribution, the number of boutiques has remained stable over the last five years. In addition to the boutiques, TAG Heuer can be found at many retailers. A luxury brand must plan for the long term, according to the particularities of each market.