Louis Vuitton, Jean Arnault, and Big Watchmaking Ambitions

PARIS – Jean Arnault admitted he was rolling the cube. “It’s actually a sort of a chance,” the 24-year-old watch director of Louis Vuitton instructed the Enterprise of Vogue in an unique interview. “This shift may both make our enterprise drop rapidly or revive it fully.”

The shift Arnault was referring to was the relaunch of Louis Vuitton’s flagship Tambour watch with a set of 5 ultra-high-end variations on the type. Forward of the brand new watches’ introduction at Paris’ Musée d’Orsay Wednesday, Arnault stated the brand new line of mechanical sports activities timepieces was “made by watch collectors for watch collectors.”

The Tambour was initially launched twenty years in the past and is Louis Vuitton’s signature watch design. Now, below Arnault’s course, the drum-shaped watch has been upgraded with an built-in metallic bracelet, thinner case, new automated mechanical motion — and far larger worth factors.

The brand new fashions are set to switch as a lot of 80 p.c of the corporate’s common watch assortment, Arnault stated, because the model transitions to a top-end positioning within the class.

The launch additionally marked the primary time Arnault — the youngest member of luxurious’s wealthiest clan — had stepped into the highlight after quietly becoming a member of Louis Vuitton in 2021 (first as its watch division’s advertising director earlier than rising to steer the class final 12 months). The Arnault household have been among the many attendees at a gala dinner in Paris final evening to announce the brand new assortment, alongside Bradley Cooper, Natalia Vodianova, Alicia Vikander and Michael Fassbender.

Even when the stakes have been excessive — Louis Vuitton is luxurious’s largest model and the revenue driver of family-controlled dad or mum firm LVMH — Arnault stated he was assured {that a} push upmarket was the best transfer. “It might be silly for us to not enter that facet of the enterprise [and make] an built-in sports activities watch,” he stated.

Lately luxurious sports activities watches with built-in bracelets (referring to designs the place the metallic band flows into the case), corresponding to Audemars Piguet’s Royal Oak and Patek Philippe’s Nautilus, have dominated the high-end watch market. Rolex, whose assortment is nearly totally made up of built-in sports activities watches, is known to account for round 30 p.c of gross sales of Swiss timepieces.

Whereas earlier generations of Louis Vuitton watches have been obtainable for just a few thousand {dollars} — roughly consistent with rival luxurious trend manufacturers’ watch extensions — the brand new items will begin from $18,500 for metal variations and rise to $52,000 for full gold, placing the Tambour in direct competitors with watchmaking’s top-end pure gamers.

Louis Vuitton was based in 1854 however solely introduced its first watch in 1988, making it a comparative newcomer in comparison with legacy names corresponding to IWC, Girard-Perregaux and Zenith, in addition to jewellery-first maisons like Cartier and Chopard, all of whom have been making watches for greater than a century.

Can the Tambour compete? “It takes time,” stated Arnault. “I’m speaking about 20 years. Clearly, we’re hoping for a smashing success, however we’re not anticipating a smashing success to start out as a result of we’re going from one step to the subsequent so rapidly.”

Arnault insisted he had no fastened targets. “We’re not wanting on the numbers,” he stated. “We’re altering so radically that we haven’t put particular ambitions as to when or how or which targets we’re going to do.” Nonetheless, class enlargement is seen as a key alternative for Louis Vuitton because the model seeks to continue to grow after surpassing the edge of €20 billion in annual gross sales final 12 months.

The costs of the brand new assortment took some observers abruptly. “Grossly overpriced for what it’s,” stated a commenter on the watch web site Hodinkee in response to the launch. However Arnault was unrepentant. “Louis Vuitton is just not right here to place a watch on the wrist of everyone.”

Arnault stated the brand new Tambour was about making the Louis Vuitton watch story extra coherent. Thus far, its entry-level watch assortment has had little in widespread with low-volume, high-end mechanical releases, such because the playful Tambour Spin Time or the extremely ingenious Carpe Diem, created by the model’s Geneva watchmaking facility, La Fabrique du Temps.

“The model is dichotomic,” he stated. “It’s very bipolar. However from right this moment, we not have two ranges of ending, two ranges of expertise and two ranges of high quality. All the things is now on the identical aircraft.”

Louis Vuitton’s luxurious smartwatch, the $3,405 Tambour Horizon Gentle Up, accounts for round 25 p.c of the corporate’s watch volumes, however the devices are understood by customers to belong to a separate product class.

Requested who would possibly purchase the brand new watches, Arnault paused. “That’s attention-grabbing,” he stated. “I’m wanting ahead to seeing the outcomes, which is able to most likely be fully totally different in a 12 months.” He stated Louis Vuitton’s high-end items had a dedicated collector base, and that originally, he anticipated the identical collectors to be serious about his new watches.

However he added: “I hope with all my soul that sooner or later we’ll be capable to convert watch collectors and watch connoisseurs that will have gone for a pure-player model, and to listen to them say that Louis Vuitton has a compelling supply. I hope to show a few of these individuals round.”

Consumers have already proved keen to spend money on costly watches made by multi-disciplinary luxurious maisons. Bulgari, Gucci, Chanel and Montblanc have all developed profitable nice watchmaking companies, whereas Hermès’ watch division trumped all of them with a turnover of €519 million in 2022, in accordance with its final annual monetary report.

LVMH doesn’t break down the efficiency of particular person manufacturers, however in accordance with Morgan Stanley estimates, Louis Vuitton’s watch revenues reached 130 million Swiss francs ($144 million) and volumes of 35,000 watches final 12 months (round 1 / 4 of Hermès).

Arnault stated his new watches would solely be obtainable in Louis Vuitton shops, the place there would all the time stay items to strive on, even when some fashions have been prone to run ready lists.

Arnault is the fifth and youngest little one of Bernard Arnault, the chairman and chief government of the LVMH Group and the world’s richest man. Siblings Delphine, Antoine, Alexandre and Frédéric all maintain senior positions within the family-controlled luxurious empire, whose manufacturers additionally embrace Dior, Tiffany, TAG Heuer and Berluti.

After finding out engineering and finance, Jean stated he had chosen to maneuver into certainly one of his father’s luxurious watch companies as a result of he had “all the time been obsessed with mechanical issues.” He stated he had initially wished to work within the automobile enterprise earlier than being “known as by the watch rabbit gap” as an adolescent. His older brother Frédéric — chief government of TAG Heuer since 2020 — can be a watch fanatic.

Arnault stated that regardless of rising up within the age of the iPhone and the smartwatch, he and his fellow members of Gen-Z have been intrigued by mechanical timepieces. “We all know that they’re everlasting, or not less than that they will final quite a bit longer than electronics,” he stated.

Luxurious watch manufacturing volumes have declined in recent times. Swiss watch exports fell from 28.1 million in 2015 to simply 15.8 million final 12 months.

Nonetheless, a handful of ultra-luxe manufacturers like Audemars Piguet and Richard Mille have surged throughout the pandemic —providing hope for the business’s topline.

Arnault stated that was a mirrored image of adjusting tastes. “Folks purchase much less watches or larger high quality watches that can final and stand the check of time,” he stated.

And if Louis Vuitton’s Tambour solutions that transient, Arnault’s top-table gamble would possibly but repay.

Disclosure: LVMH is a part of a bunch of buyers who, collectively, maintain a minority curiosity in The Enterprise of Vogue. All buyers have signed shareholders’ documentation guaranteeing BoF’s full editorial independence.