As the wildfires raged in California, destroying thousands of homes, it became clear that LVMH Watch Week — originally pegged to be held in Bel Air, Los Angeles, on 21 to 22 January — would have to move. In record time, the company managed to pivot the event to New York; its commitment to carrying on a testament to the importance of the US market for LVMH’s watch brands.
In the end, the sixth edition of the luxury conglomerate’s watch event was held on the same dates between the Tiffany, Bvlgari and Louis Vuitton flagships, all nestled at or near the corner of 57th Street and Fifth Avenue.
“All of our thoughts go with the people of LA that went through — and are still going through — a very difficult time. We didn’t want to take a risk of doing the event there and also out of respect to the people of LA,” Frédéric Arnault, chairman and CEO of LVMH Watches, and third son of LVMH chairman and CEO Bernard Arnault, tells guests during a dinner at Casa Cruz, a restaurant situated in a townhouse on Manhattan’s Upper East Side. “We decided very quickly on New York. We have probably the best monobrand stores in the world, [including] the Tiffany Landmark [the flagship on Fifth Avenue, which reopened in 2023] that’s number one in terms of sales for the group. We are recreating our watch fair with these magnificent flagships.” A second part of the event will be held between 30 and 31 January at LVMH’s Cheval Blanc Paris hotel.
The New York event coincided with the week of President Trump’s inauguration, which was attended by Bernard, his wife Hélène Mercier Arnault and two of his children: Delphine and Alexandre Arnault (the family sat behind the row of former US presidents).
“It’s the inauguration of a new president here in the US, and the US is a very important market for us at LVMH and for us in watches,” says Frédéric. “It has been very dynamic last year and we all have high hopes and optimism for the economy and the watch business here, so we wanted to be present in the US for this Watch Week.” (Previous editions have taken place in Dubai, Singapore and Miami.)
This time around nine brands were featured, including Tag Heuer, Hublot, Zenith and Bvlgari, alongside debuts from Louis Vuitton and Tiffany. Another newcomer was L’Épée 1839, a Switzerland-based manufacturer of high-end clocks acquired by LVMH in 2024. Swiss watchmakers Daniel Roth and Gerald Genta joined the event for a second season.
Confidence in the US market
“I’ve just come back from the US and I’ve seen the wind of optimism in this country,” Bernard told analysts and journalists during the annual earnings conference on Tuesday night. LVMH reported sales up 3 per cent in the US during the fourth quarter of 2024.
This was echoed by LVMH executives during Watch Week. “Last year ended better than it started. There was a noticeable improvement in business in luxury the weekend after the election, the second weekend in November,” says Anish Melwani, chairman and CEO of LVMH North America. “I believe the reason why is that after the election, 50 per cent of the people were happy, 50 per cent were sad. Before the election, 100 per cent were nervous and tense.”
Tiffany president and CEO Anthony Ledru also notes the increased consumer confidence Stateside. “There’s recurring wealth creation in the US — what the election generates is a much bigger confidence than last year,” he says. “I think it’s going to bring clarity. We’ve had a good holiday season and I think that’s had an impact. We are much more confident than early 2024.” (Tiffany generates roughly 40 per cent of its business in North America.)
This positive economic climate coincides with a number of large-scale projects, starting with the hard-to-miss Louis Vuitton Fifth Avenue flagship, which is covered in an oversized and viral trunk-shaped scaffolding for the multi-year long renovation. In the meantime, Louis Vuitton has opened a temporary flagship with a lobby atrium that has sculptures of trunks dubbed “skyscrapers”. (Be patient if you want to taste the signature monogram burger or the espresso martini at Le Café Louis Vuitton on the fourth floor; it’s the hottest ticket in town.) Meanwhile in SoHo, there’s a Louis Vuitton x Murakami pop-up, which runs until 31 January, with the re-edition already being a sell-out. Louis Vuitton is “off to a solid start to the year, partially a function of the successful launch of the Murakami collection”, according to a Morgan Stanley note.
Dior will reopen its Madison Avenue flagship in June, following an expansion, and plans to open a new store later this year on Los Angeles’s Rodeo Drive. There’s also a new 990,000-square-metre distribution centre in the pipes for the perfumes and cosmetics branch of LVMH in New Jersey, which will allow further customisation. Last but not least, LVMH’s partnership with Formula One — involving Louis Vuitton, Tag Heuer and Moët Hennessy — will materialise this year, with races taking place in fast-growing luxury hotspots Miami, Austin and Las Vegas.
Could tariffs on luxury goods be the party pooper? LVMH appears to be in no hurry to import lots of cognac, champagne, perfume, handbags, etc, in case tariffs on luxury goods are imposed by the new administration. “Overreacting has its own cost,” says Melwani, noting it would mean diverting from other markets and paying for storage.
The positive picture in the US is only marred by the extreme weather, which, alongside the fires, has so far this year seen the southern states battered by a rare winter storm. “It’s very hard to see what’s really happening because we’ve had to close stores in Texas, Atlanta, Washington DC and New Orleans because of the snow,” Melwani adds.
As for the impact of the wildfires in Los Angeles, the executive predicts an increase in construction costs for the next two to three years in Southern California. “There will be increased demand for the artisans and builders that craft our boutiques as they will also be rebuilding homes,” he explains. Otherwise, Melwani expects a localised effect rather than a negative impact at the macro level. “Americans are resilient. We may see a shift in population as people that went shopping in one neighborhood may now go to a different one. This will take time to understand as the devastation from the fires continues.”
Melwani stresses the importance of aspirational customers in the US, a core part of the market that he says has the “biggest growth potential”. The US is unique, he continues, because it is so fragmented. “ The key to desirability, besides heritage, is cultural relevance. But unlike in other markets where it’s more homogeneous, in the US you have to figure out how to be culturally relevant to the specific subcultures that you’re trying to speak to.”
An update on Tiffany’s ‘transformation’
Tiffany is still pursuing a “complete transformation”, according to Ledru. “The potential is there, we’ve just been slowed down for a year by headwinds,” he says. From the product perspective, the brand has reduced the share of silver in the house business to 12 per cent (it made up 20+ per cent of Tiffany’s sales, per HSBC, as reported by Vogue Business at the time of the acquisition). The share of bridal jewellery is also down. Instead, it is focusing on high jewellery, which is designed by Tiffany chief artistic officer Nathalie Verdeille, who joined from Cartier in 2021, and which represents around 10 per cent of the house’s sales today. Iconic lines including Lock, HardWear and T are also a key priority. ”These categories are doing very well and I think we’re outperforming our competitors, which is normal because we’re playing catch-up. This is the new Tiffany. That’s why our average price has doubled,” Ledru says.
On the retail front, Tiffany has upped its annual investment tenfold compared with before the acquisition in late 2020, to currently reach $500 million per year. There’s still work to be done: only 25 per cent of the store network (consisting of 350 stores) has been renovated so far. The plan is to renovate around 50 stores per year. After the stores in Toronto and Bal Harbor take shape, some upcoming renovations or openings include Tokyo, Milan, Beijing and Mexico City, as well as a new flagship in Paris slated for 2027. “We see a gap of 25 percentage points between legacy stores and renovated stores in terms of sales growth,” Ledru says. “In the stores that have been renovated, clients stay longer and spend more.”
Tiffany has also more than doubled its communications spend over the last four years, including a 50 per cent increase in the first year. Following the release of a high-profile campaign starring Beyoncé and Jay-Z in 2021 that “woke up the brand” (under Alexandre, who is executive vice president of product, communications and industrial at Tiffany; he will become deputy CEO of the wine and spirits division on 1 February), the brand is shifting more towards heritage. ”Today, we’re much more focused on products in the campaigns. The icons campaign is inspired by Gene Moore, the [maison’s] head of visual merchandising in the ’60s. We had an enchanting holiday campaign focused on the Tiffany Landmark. The recipes have changed a little,” he says.
The first products designed by Verdeille launched in 2023. A big focus starting in the autumn will be Bird on a Rock, the iconic brooch created by French jewellery designer Jean Schlumberger for Tiffany in 1965. “Not long ago, it was a brooch only; now, we have rings, pendants, earrings at the price point [starting at $10,000] that will allow us to have hundreds of thousands of clients, instead of thousands of clients.” Tiffany introduced two new Bird on a Rock watches at the LVMH Watch Week. The Sixteen Stone design by Schlumberger in 1959 inspired another watch presented in New York. “We’re no longer talking to the same customers and it’s no longer the same business model as four years ago,” Ledru says.
Inside LVMH’s watch strategy
The watch market was severely impacted by the decreased consumer confidence in China last year. From January to November 2024, Swiss watch exports were down 2.7 per cent, including a 26.3 drop per cent in China and a 5.6 per cent increase in the US, according to the Federation of the Swiss Watch Industry. The US is the bright spot, and another crypto market boom in the Trump era could further boost the watch market, according to industry experts.
LVMH’s watches and jewellery were down 2 per cent in 2024 to €10.58 billion, including a 3 per cent increase in the fourth quarter.
Frédéric, who became CEO of LVMH Watches in early 2024, continues to build the watchmaking credibility among watch collectors and move the category upmarket. He also initiated a strategy where Zenith will manufacture some movements for other LVMH watch brands, in addition to its own watches.
Louis Vuitton’s steep upmarket repositioning, which since 2023 has been led by Jean Arnault, the house’s watch director and fourth son of Bernard, continues. “Our strategy is much less focused on volume, more towards highly creative pieces for our clientele of collections collectors. It’s a strategy that feels much more relevant today than it did five, 10 years ago, when the industry in general was looking to find volumes,” Jean says. “It s a great help because almost all our pieces are on the waiting list.” Today, Louis Vuitton makes 85 per cent of its components internally at La Fabrique du Temps, an atelier integrated by Louis Vuitton that employs 200 in Switzerland, up from 25 per cent in 2021. “You re never better served than by yourself,” Jean said. “Our way of working is different from almost the entire industry: a watchmaker makes the watch from A to Z.”
Louis Vuitton makes between 1,000 and 2,000 pieces per year. The executive predicts a “low growth for the foreseeable future.” “We’re much more interested in being desirable and making quality pieces than in trying to transform our artisanal manufacturing methods, which would then bring less romance to our pieces.” Louis Vuitton presented in New York the Tambour Taiko Spin Time, six high watchmaking models in limited edition whose movements were developed by La Fabrique du Temps.
Among other novelties, Bvlgari presented the Serpenti Seduttori collection, very timely considering the Year of the Snake. Morgan Stanley noted more recently that “industry contacts in China have flagged that Bvlgari should be able to capitalise on the fact that its most iconic line [Serpenti] should benefit from China celebrating the Year of the Snake from 29 January onwards [last time was in 2013].”
Frédéric is also behind LVMH’s decade-long partnership with Formula One through Tag Heuer’s role as the official timekeeper, kicking off with the Australian Grand Prix in March. The Swiss brand presented products that aligned with the partnership at Watch Week, such as its Formula 1 Chronograph.
LVMH opened the earnings conference with a video clip of the Formula One partnership. “I think this will have a great future and impact,” Bernard Arnault said.
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