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LVMH’swatchbrandsareflexingtheirmuscles.Bulgari,TAG
Heuer,Hublot,andZenith—thefourwatchmakersownedby
FrenchconglomerateLouisVuittonMoëtHennessySA—
gatheredinDubaionJan.13-15forthefirstLVMHWatchWeek,
a poshjunketputontoshowcaseeachbrand’snewwaresfor
2020.TheDubaishindigwasa throwbacktothedevil-may-
careluxuryofthe1980sand’90s,whenthesebrandsbased
muchoftheiraspirationalimageonover-the-topexperiences
thatmadeit intothegossippagesofglossymagazines.
About 200 journalistsand 150 customerswerewinedand
dinedintheshadowoftheglitteringBurjKhalifaandinvited
to trektothedesertatnighttowatchfiredancers.Inbetween
theylookedattimepiecesincludingthediamond-studded
$100,000HublotBigBangIntegralandBulgari’s$220,000
Divas’DreamFinissimaMinuteRepeater.
TheeventalsoservedtodemonstratethatLVMH’swatch
companiescanoperateandcompeteasa group,rivaling
the powerhousesquadsfromRichemont(whichincludes
Cartier,Piaget,IWCSchaffhausen,andPanerai)andSwatch
(Omega, Breguet,Longines, andTissot). “We want to
showthattheLVMHwatchdivisioncanbestrong,”said
RicardoGuadalupe,thechiefexecutiveofficerofHublot.
BankVontobelAGestimatesthe40-year-oldbrandreached
€550million($610million)inrevenuein2018,puttingit
slightlyaheadofRichemont’sJaeger-LeCoultre(€535million)
andwithinrangeofSwatch’sHarryWinston(€614million). PHOTOGRAPHCOURTESYLVMHLVMHWatchWeekis oneofa coupleofeventsthathave
brokenofffromtheBaselworldwatchexpo,whichnormally
takesplaceinMarchandwhichformanyyearsservedasthe
primaryvenuetointroduceelitetimepiecesinSwitzerland.
Butlikeautomotivetradeshowsworldwide,thecountry’s
fairshaveenduredanexodusofbig-nameparticipantsas
mobileappssuchasInstagramandWeChatoffera more
directwaytoconnectwithconsumersata fractionofthecost.
Mostnotably,SwatchGroupAGstartedhostingretailers
ata moreprivateeventforitsbrandsinZurichlastyear.In
response,Baselworld’sorganizersteamedupwithGeneva’s
exclusiveSalonInternationaldelaHauteHorlogerie,which
primarilyhostsRichemontbrandsandis usuallyinJanuary.
SIHHwasrenamedWatches& Wonders,andbothfairsmoved
toadjoiningweeksstartinginlateApril.Forcompaniesplan-
ning their 2020 shipments, April was too late to start introduc-
ing products to the market, said Stephane Bianchi, the CEO
of TAG Heuer, who oversees LVMH’s watchmaking group.
LVMH hasn’t decided whether it will participate in
Baselworld after 2020, but the appeal of a roving LVMH Watch
Week is strong. Baselworld is “outrageously expensive,” said
Jean-Christophe Babin, CEO of Bulgari, as he looked across a
sunny lawn in Dubai at the crowd sipping Champagne. (The
brand saw an estimated €2.37 billion in revenue in 2018.)
Flying hundreds of retailers and journalists (as always,
Bloomberg Businessweek paid its own way) to the gleaming
Bulgari Resort Dubai in the United Arab Emirates turned out
to be much cheaper for LVMH than building an elaborate
booth at Baselworld. “With six hotels—and soon 10 in the
world—Bulgari can host in the U.S. to Russia to China to Bali
for the next decade,” Babin said.
Although certain markets are stronger than others for the
various brands ( Japan, China, and the U.S. are going gang-
busters for most, and Southeast Asia for others), “differ-
ences between one market and the other are getting thinner
and thinner,” said Zenith CEO Julien Tornare. “I think we all
became kind of global clients, global customers.”
One dark spot on that luxurious globe is the environment
of unrest in Hong Kong. Like Tokyo, the city had been a hub of
shopping for travelers from mainland China and other Asian
countries, making it a key market for the Swiss watch indus-
try. It also typically offered higher margins because of lower
taxes. “Hong Kong clearly is affecting the whole watch indus-
try and luxury industry,” Tornare said. “For watches, the
average is around 15% to 18% of the business for some brands.
So we need to work on how we compensate.” Companies are
optimistic, he said, because “some cities in China became
unbelievable shopping destinations.”
As much as they talked about their corporate unity, the
CEOs in Dubai didn’t want to discuss the LVMH acquisition
of Tiffany & Co. for $16 billion, which was announced in
November and is expected to go through in June. “There is
no competition among us” in the LVMH family, TAG Heuer’s
Bianchi said. “Of course, there is major competition with the
others.” —With Corinne GretlerA new trade show for watches
illustrates a changing luxury
strategy. By Chris RovzarAll in
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