You are here

BT_20161126_WATCH26-H_2614545.jpg

BT_20161126_WATCH26-H_2614545.jpg
The Heuer 01 chronograph.

Man Of The Heuer

The legendary Jean-Claude Biver explains why TAG Heuer continues to grow in spite of the soft market.
Nov 26, 2016 5:50 AM

"You can't ask how bad it is. For us, it's how good," Jean-Claude Biver says in a booming voice. "TAG Heuer is doing double-digit growth."

Most others in the luxury watch industry are, however, having a hard time with sales falling last year for the first time since the 2009 financial crisis. Sales fell further in the first nine months of this year.

Yet TAG Heuer, which belongs to the luxury LVMH group, has continued to sell more watches, posting a double-digit growth in January-October. "Imagine how much growth we would have if the market is positive," says Mr Biver, who is CEO of TAG Heuer and also President of the LVMH Watch Division.

Not everyone agrees with him, but Mr Biver says the worst is over for the industry, predicting that the market will improve next year. "The Chinese market (the biggest) is recovering," he says. "The US is stabilising now that the election is gone. Europe is still suffering but Russia and Latin America are getting better."

sentifi.com

Market voices on:

The 68-year-old entered the luxury watch business in 1974 and is credited for the revival of Blancpain, the growth of Omega, and for turning Hublot into a big success.

TAG Heuer is currently the best performer of the three watch brands under his watch at LVMH. Sales of Hublot, the brand Mr Biver is most closely linked with so far, are still growing but at a single-digit pace. Only Zenith, the third watch brand, is seeing sales go down.

One of the first things Mr Biver did at TAG Heuer was to slash the prices of its watches and reposition the brand for younger customers after a decade spent pursuing the super-rich with low-volume six-figure complications. He also signed up model and actress Cara Delevingne, football star Cristiano Ronaldo and Formula 1 upstarts Red Bull Racing to help sell the TAG Heuer name.

"(Cutting) prices is very important if we want to be the leader of accessible luxury," he says. And this also boosts the 'perceived values' of TAG Heuer's watches - another key reason why the watches do well despite a soft market.

These are best exemplified in the Carrera Heuer timepiece unveiled in early 2016. This takes accessible luxury to a new high. The watch is an automatic chronograph which boasts a titanium and carbon flying tourbillon priced at only S$21,800 - a third of the cheapest Swiss tourbillon in the market.

But Mr Biver prefers to use his current favourite as the example - the Heuer 01, a chronograph in a black ceramic case due to be launched this month. The watch, which he wore during his Singapore visit, will be retailed at an attractive S$6,900.

"I was seduced by it when I saw it," he says. It's also the watch that gives him the most satisfaction because he says making it - and in the large quantity it will be produced - will give jobs to more people than in, say, making the chronograph-tourbillon.

"I'm proud of it especially now when there's plenty of joblessness in Europe. It shows we are also making a social contribution and not just making profits."

Mr Biver says lowering the prices of watches and increasing their perceived values are key in reaching out to the young, the customers of tomorrow who will be "the driving force in consumption".

"We're focusing enormously on social media to talk to the new generation," he adds. Yet the two factors may not be enough to make TAG Heuer a success without a third, the "wow" factor.

"If a customer doesn't want to buy (your watch), how can you make him buy? You wow him with creativity and innovation." In other words, you present the customer with an 'avant garde' creation. "It's the best way to fight a crisis if you are in one."

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal