LVMH luxurious watches at Watch Week in Miami

Luxurious big LVMH is making a push to achieve share of the worldwide luxurious watch enterprise, with a newly shaped watch division and an array of recent, higher-priced fashions.

Gross sales of luxurious watches worldwide are estimated at about $30 billion this 12 months, in response to market analysis agency IMARC Group. They’re anticipated to develop to greater than $37 billion by 2032, as international wealth will increase and Technology Z and millennials change into extra curious about high-end mechanical watches.

LVMH’s jewellery and watch division posted gross sales of $11.8 billion in 2023, representing a 7% enhance in natural progress. The posh big now has 10 watch manufacturers, together with TAG Heuer, Hublot and Zenith, together with trend and jewellery manufacturers similar to Louis Vuitton, Bulgari and Dior that additionally make watches.

Final month, the corporate named Frederic Arnault, the 29-year-old son of LVMH Chairman and CEO Bernard Arnault, CEO of LVMH Watches, which incorporates the TAG Heuer, Hublot and Zenith manufacturers.

Analysts estimate gross sales of these three manufacturers reached about $2 billion final 12 months.

Frederic Arnault, who launched an array of extremely common new fashions at TAG Heuer, is anticipated to carry his give attention to innovation, cutting-edge supplies and inventive designs to the bigger model group. Analysts say LVMH might also proceed to amass engaging manufacturers in the event that they change into accessible.

In interviews with CNBC throughout LVMH’s Watch Week in Miami, the manufacturers’ chief executives mentioned 2024 is already shaping as much as be stronger than 2023, when rising rates of interest and fears of recession tempered demand. Executives say they’re particularly inspired by the resilience of the American luxurious shopper.

“It’s all about cycles, and the beauty of America is that the cycles are very short,” mentioned Benoit de Clerck, CEO of Zenith. “We go through ups and downs and all that, but I can reassure you today Zenith is definitely on an upswing with good traction within the U.S. markets.”

Watch gross sales are following the same sample to the broader luxurious market, the place the wealthiest shoppers stay strongest. Executives say the rich are much less affected by rising charges and financial uncertainty, so increasingly manufacturers are catering to the “super-spenders” and VIP collectors who proceed to spend on the best high quality and craftsmanship.

“The high end has been really one of the main drivers of our growth,” mentioned Jean-Christophe Babin, CEO of Bulgari. “I think the wealthy more than ever are eager to invest in authentic, reputable and timeless brands.”

Babin mentioned he is seeing rising power on the excessive finish all through Bulgari’s companies, which now embody lodges, trend and fragrances.

“We sold more high-end jewelry, more high-end watches, more high-end bags,” Babin mentioned, displaying off certainly one of Bulgari’s coveted yellow-gold Serpenti Secret watches that retails for $350,000.

LVMH can be concentrating on the fastest-growing phase of luxurious watches: ladies’s watches. Whereas ladies’s watches account for under a couple of third of whole gross sales, ladies’s curiosity in luxurious mechanical watches has soared from extra publicity on social media and a rising variety of fashions designed for ladies. The rising international inhabitants of rich ladies — each self-made and inherited — can be fueling gross sales progress.

“The trend is toward more and more feminine and more unisex watches,” mentioned Babin. “Women have increasing power, in terms of independence, autonomy and purchasing power. We think that will continue.”