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Boldness runs in the Arnault family and Jean Arnault, the youngest son of LVMH chairman and CEO Bernard Arnault, is no exception. The 24-year-old, who took on the role of watch director at Louis Vuitton in October 2022, made the drastic decision to clear out 80 per cent of its current offer “to start with a blank page”.
The new chapter involves dramatic price hikes: the new version of the Tambour, the house’s iconic watch, is priced between €19,500 for the steel version, €28,000 for the steel and gold and €55,000 for the gold, up from approximately €5,000 for the old quartz version. It will make the average price of Louis Vuitton watches the highest of all LVMH watch brands, including Tag Heuer, Hublot and Zenith. Customers can pre-order the new Tambour before it goes on sale in September.
“It was a carefully considered decision. It was necessary, bold, but we wouldn’t have done it if we weren’t ready,” says Arnault. “We have become more professional in the last year and a half, allowing us to integrate some métiers like dial, casing, movement – allowing us to take this bet,” he says.
A primary focus has been on phasing out quartz in favour of higher-end craftsmanship. Arnault recalls an early discussion with Michel Navas and Enrico Barbasini, the two master watchmakers of La Fabrique du Temps – Louis Vuitton’s state-of-the-art watch workshop in Switzerland. “It was my second day and they’re telling me: Jean, we need to stop [using] quartz. I said, ‘Wait a minute, it’s a significant part of the business. We’re not going to change it overnight.’ But they planted the seed and as time went by, I said this is what I want to do. We can do it, we just need the right product.”
The release of the new Tambour marks the beginning of a transition phase that will last about two years, Arnault predicts. Only a few other models remain, such as the Street Diver (approximately €4,000), which won the Grand Prix d’Horlogerie in Geneva in 2021, and the smart watches (priced at around €3,800).
“We’ll reintroduce new collections. But the idea was to create a shock: if we want a real renewal we have to clear everything out,” says Arnault. “The smart watches make more sense with our new strategy than before.” He says that at around the average price point of €4,000, smart watches began to take over entry-level purchases. “Now, we focus on high-end mechanical watches only and smart watches will live separately. In stores, they are not displayed with traditional watches but alongside Louis Vuitton speakers and the rest of our connected offer.”
In a presentation on 5 July at Musée d’Orsay, Arnault described the new version of the Tambour as “the most important watch launch of Louis Vuitton in the last 20 years. It will be the icon of the next 20 years.” It is more refined, much slimmer (8 mm versus 13 mm), with a fully integrated bracelet, a 40 mm diameter to fit both men and women, and it is equipped with a new mechanical movement designed by La Fabrique du Temps. It comes in a small Louis Vuitton trunk.
The presentation was followed by a gala dinner hosted by the youngest Arnault, attended by house ambassadors Bradley Cooper and Alicia Vikander, actor Michael Fassbender, architect Peter Marino and conductor Vladimir Spivakov, as well as members of the Arnault family.
Watches are a small part of the house’s total sales (less than 3 per cent, say sources) but given the scale of Louis Vuitton (€21.5 billion in 2022, according to Morgan Stanley analyst Édouard Aubin’s estimates) even a small portion means sizable business.
The move upmarket taps into demand for ultra-luxury watches. The post-Covid boom led to long waiting lists for the likes of Rolex and Patek Philippe watches and record prices at auctions. Demand for high-end watches seen as investment assets has remained strong. A new generation of consumers is ready to spend lavishly on Swiss craftsmanship.
It is also in line with Louis Vuitton’s wider elevation strategy, allowing the world’s largest luxury house to avoid ubiquity. In bags for example, Aubin notes the increased share of leather, rather than canvas. “Raising average selling price via mix is one of the most difficult things for a luxury brand to do and is a testament of the Vuitton brand s desirability,” he wrote in a note.
Bernstein analyst Luca Solca says: “This seems a big vote of confidence on the ability of Louis Vuitton to move to higher prices in non-core product categories. Developing the watch assortment at a higher price point can only benefit the brand, even if the business may be small.”
Mario Ortelli, managing director of Ortelli Co, believes it’s a positive move: “It’s a value play, rather than a volume play. In a brand as big as Louis Vuitton, you want the product categories that are still of relatively small size to contribute to enhancing the overall positioning.”
“I never learned to like the Tambour. I found it clumsy,” says luxury historian and watch expert Nick Foulkes, but he praises the new version: “The tapering on the casewall is much more subdued as is the branding. The first thing you notice is the super smooth winding system and the abundance of quality finishing that makes it very appealing to the trained eye.” Foulkes also notes that the watch bears the words “Fab. en Suisse”, which is “a nod to collector culture” as the abbreviation of “Fabriqué en Suisse” (made in Switzerland) appeared on watches of the 1950s and 1960s.
Foulkes adds: “Jean is a watch lover and collector and he gives the Louis Vuitton customer a Tambour he or she deserves. He would like to see Louis Vuitton watchmaking reach a wider, horologically articulate, audience but distribution might be a barrier: Louis Vuitton’s watches are sold in Louis Vuitton’s own stores and not in the wider retail network.”
Arnault, who was watch marketing and development director for Louis Vuitton before moving into the watch director role, has been busy since last year: he is also spending a part of his time on reviving high-end independent watch brands Daniel Roth and Gerald Genta, which have been withdrawn from sitting under Bulgari and moved to La Fabrique du Temps Louis Vuitton. He also created the equivalent of the LVMH Prize for Young Fashion Designers, for watchmakers: the Louis Vuitton Watch Prize for Independent Creatives, whose first recipients will be announced in January 2024.
Louis Vuitton is riding high after the success of Pharrell Williams’s debut as creative director of men’s. Asked if there are bridges between Louis Vuitton watches and the house’s other categories, Arnault says: “In horology, the [slower] times of development are such that we can’t work in tight close collaboration. It takes at least two years to develop a product. [But] Pharrell’s collection is inspiring for all of us. We are very fortunate to be part of this brand. ”
The young executive has a collector’s mindset; whether it’s for Loro Piana loafers or watches. His first watch was a Tag Heuer Professional Golf style designed by Tiger Woods, given to him by his father 10 years ago. “I still have it. I just need to change the battery.”
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