Bernard Arnault's Son Sets Sights On $30B Watch Market With High-End, Reinvented Pieces After LVMH Restructuring

LVMH Moet Hennessy Louis Vuitton SE LVMHF, the French multinational luxury goods conglomerate, is making a significant move in the global luxury watch market. The company has launched a new watch division and introduced a range of high-end models.

What Happened: LVMH is aiming to capture a larger share of the global luxury watch market, which is projected to reach $37 billion by 2032, according to a CNBC report. Market research firm IMARC Group estimates global luxury watch sales to reach approximately $30 billion this year. The company’s jewelry and watch division recorded sales of $11.8 billion in 2023, representing a 7% organic growth.

The luxury giant has 10 watch brands, including TAG Heuer, Hublot, and Zenith, along with fashion and jewelry brands such as Louis Vuitton, Bulgari, and Dior, which also produce watches.

Last month, the company appointed Frederic Arnault, the 29-year-old son of LVMH Chairman and CEO Bernard Arnault, as the CEO of LVMH Watches, which includes the TAG Heuer, Hublot, and Zenith brands.

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Analysts estimate that the sales of these three brands reached about $2 billion last year.

"We call it the art of fusion in watchmaking," said Hublot CEO Ricardo Guadalupe. "We are connecting the tradition of watchmaking of over 400 years, with innovation. We do that through design, through materials, new mechanics and new ways of making movements."

Why It Matters: This development comes after a significant restructuring at LVMH. In October 2023, Bernard Arnault, the world’s second-richest man, according to Bloomberg’s Billionaire’s Index, created a limited partnership called Financière Agache to allow his family to manage his LVMH empire for the next 30 years.

However, the luxury retail industry has faced challenges. In January 2024, LVMH’s stock experienced a significant decline, dropping by almost 30% from its 2023 highs, following concerns about the Chinese luxury market and the subsequent normalization of growth after the pandemic surge.

Despite these challenges, LVMH’s new focus on luxury watches, especially the women’s segment, and the appointment of Frederic Arnault as the CEO of LVMH Watches, suggest a strategic shift in the company’s direction.

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Photo by Christian Wiediger for Unsplash