Leadership changes at LVMH and Richemont amid a shifting luxury watch market

Luxury conglomerates Richemont and LVMH are shaking things up with major leadership changes, setting the stage for a new chapter in the high-end watch and jewellery sectors.

These shifts come at a time when the luxury watch market is navigating choppy waters, particularly in key regions such as China and Hong Kong.

On July 17, LVMH caused a stir when it announced a shake-up in its watch division. After 20 years at Hublot, 12 of which were spent steering the brand, Mr Ricardo Guadalupe is stepping down as chief executive to become honorary chairman on Sept 1.

Stepping into his shoes is Mr Julien Tornare, who just six months ago was appointed head honcho of Tag Heuer after successfully reinvigorating Zenith between 2017 and 2023. Mr Antoine Pin, the former general manager of Bvlgari’s watchmaking division, will now lead Tag Heuer.

The reshuffles at LVMH come hot on the heels of C-suite changes at Richemont, which owns several watch brands including Cartier, IWC and Jaeger-LeCoultre.

On July 2, the group announced that Mr Louis Ferla, currently the CEO of Vacheron Constantin, will take over as CEO of Cartier from Mr Cyrille Vigneron, who will retire and become chairman of Cartier Culture & Philanthropy. 

Another big change at the group is Ms Catherine Renier, formerly the CEO of Jaeger-LeCoultre, stepping in to steer Van Cleef & Arpels (VCA). This follows Mr Nicolas Bos, VCA’s former head, being promoted to Richemont group chief executive in May.

The changes at Richemont appear to be part of a broader succession plan. With chairman Johann Rupert now in his 70s, promoting his trusted executives to key positions may be the South African billionaire’s way of setting the group’s future direction and values.

Meanwhile, LVMH, led by Mr Frederic Arnault, the 29-year-old son of chairman Bernard Arnault, is also consolidating its strength in the competitive luxury watch market. His transition from Tag Heuer CEO to overseeing the entire watch division earlier in 2024 reflects a strategic move to harness his expertise and drive the group’s growth.

LVMH’s ambition to dominate the luxury watch market is no secret. Its journey to become a key force in the industry started in 2011 when it acquired La Fabrique Du Temps, the innovative movement manufacturer founded in 2007 by renowned watchmakers Michel Navas and Enrico Barbasini.

This was followed by several other moves to boost the conglomerate’s horological credentials, including the purchase of two dial manufacturers, ArteCad and Leman Cadran, in 2012; and the setting up of La Fabrique Du Temps Louis Vuitton, a 4,000 sq m manufacturing facility in Meyrin, just outside Geneva, two years later.

The facility now focuses exclusively on producing highly complicated watches in small quantities.

Adding a layer of intrigue to LVMH’s plans is Mr Bernard Arnault’s acquisition of a small personal stake in Richemont in June. While the size of the stake is not known, it raises questions about potential future collaborations or even consolidation in the luxury sector.

These big changes come amid significant challenges for the luxury watch market. Recent reports from financial services company Morgan Stanley and market research platform WatchCharts indicate a big drop in sales for high-end Swiss watches.

Sales of Richemont watch brands fell 13 per cent in the three months through June, driven by a 27 per cent drop in Greater China.

LVMH Watches & Jewelry also saw sales dip by 5 per cent to €5.15 billion (S$7.5 billion) in the first half of 2024.

The situation is a stark contrast to the Covid-19 pandemic-era boom when the industry thrived. Back then, with travel and dining out off the table, cash-rich clients – inspired by flashy social media posts – splurged on pricey mechanical watches.

In the world of luxury, strategic manoeuvres often have far-reaching implications.

What will these new captains bring to the table? Will they implement big changes or chart new waters? We wait with bated breath.