Louis Vuitton is repositioning their watch business

Intro

A year ago Jean Arnault assumed the role of Watch Director at Louis Vuitton and it is clear to us now that the company is poised to make a move in the elite world of luxury watchmaking by re imagining watches as more than just fashion accessories.

Within the expansive LVMH empire, watches and jewelry together contribute approximately 6% to sales and 4% to EBIT. In comparison, Louis Vuitton Horlogerie represents less than 1% of the brand’s sales. This indicates untapped potential and the brand is well positioned to potentially become a major player in this industry.

Firm, young and ambitious vision

It has only been a year since Jean Arnault assumed the role of Watch Director at Louis Vuitton, and he has already had some remarkable achievements. He has revitalised two highly esteemed independent watch brands: Gerald Genta and Daniel Roth.

Jean Arnault, in a blue blazer, posing for a portrait with his finger touching his chin. He is wearing a watch with a multicolored face.

He has significantly transformed the timepiece collection at Louis Vuitton, with plans to discontinue 80 per cent of its existing product lineup. When asked what is your vision for Louis Vuitton horology's universe? "To make the finest watches possible in the industry today throughout the [different] complication segments — from a three-hand movement with an integrated steel bracelet, to high complications and unique pieces."

Growth, history, and acquisitions

LVMH’s journey in high-end watchmaking began with acquisitions of several brands starting with Fred Joaillier in 1995, followed by Chaumet, Ebel, TAG Heuer, and Zenith in 1999. As of 2022, the five watch-selling brands under LVMH held a combined market share of approximately 6.3% in the Swiss watch industry, ranking fourth behind Richemont. Moreover, the acquisition of Hublot in 2004 was a significant step, but growth through acquisitions is limited due to the scarcity of major brands available for purchase.

Despite this, LVMH is actively building the foundation to become a formidable player in the industry, with Bernard Arnault’s sons, Frédéric and Jean Arnault, taking active roles in the watch business. Jean Arnault, with just 25 years old, has made substantial positive impacts in the industry, showing business acumen and genuine passion for watches.

One of his initiatives includes the creation of the Louis Vuitton Watch Prize, which not only awards winners but also provides mentorship to help watchmakers build successful brands. The eclectic jury for this prize, which includes the director of the Grand Prix d’Horlogerie de Genève, lends it institutional legitimacy.

More recently, in 2011, Louis Vuitton acquired La Fabrique du Temps, an R&D and prototyping workshop, marking a significant step towards establishing itself in the luxury watch market. Since then, La Fabrique du Temps has evolved into almost a fully integrated manufacture, producing high-grade components and aiming to master the entire value chain of high-end watch production.

The importance of the Tambour collection

The 2002 launch of the Tambour collection marked Louis Vuitton’s entry into the watch market, blending the brand’s DNA with bold colors and a mix of mechanical and quartz-powered watches. While there have been other collections since, such as the Emprise collection in 2008, the Tambour collection remains a distinctive reference in the watch world. In july 2023, the new Louis Vuitton Tambour was the result of the new brand strategy.

Boasting a design that's simultaneously sleek, contemporary, refined, and relaxed, this watch stood out as authentically horological, distinctly distancing itself from mere fashion codes. The latest evolution of the Tambour series manifests as a timepiece that embraces the principles of classical watchmaking, intentionally positioning itself as a contender in the densely populated arena of sporty-chic integrated watches.

LMVH decided to mirror Hermès success and now Louis Vuitton is shifting towards using in-house movements. The new Tambour, launched in July, is a testament to this vision, though its high price point (roughly €20k) makes it a direct competitor with more established players. The new Tambour’s potential for success is attributed to its distinctive design and high-quality caliber.

Enthusiasts at this price range find direct competitors to the Tambour in established leading manufacturers.

Bright future

From our perspective, the future of Louis Vuitton in luxury watchmaking could not look more promising after the most recent strategic collaboration (i.e. with Akrivia for the LVRR-01 Chronographe à Sonnerie), past innovative initiatives, and the young leadership commitment to mastering the craft in-house.

The Louis Vuitton x Akrivia LVRR-01 Chronographe à Sonnerie proves Louis Vuitton is a safe haven for independent watchmaking

Despite watch sales being a small portion of Louis Vuitton’s revenue, the move into haute horlogerie is significant for its potential to elevate brands like TAG Heuer, Zenith, Gérald Genta, and Daniel Roth.

As LVMH continues to navigate this competitive industry, Louis Vuitton’s strategic approach not only targets product excellence but also aims to build comprehensive mechancial expertise.

The brand is well positioned to potentially become a major player in high-end watchmaking. Time will tell but we should pay attention to Jean Arnault and his team.