LVMH supremo Bernard Arnault has overtaken Elon Musk in the Forbes 2023 billionaires rich list with a fortune estimated at $211 billion.
Soaring revenue and profits at LVMH, home to watchmakers TAG Heuer, Bulgari, Hublot, Zenith and Louis Vuitton, helped add $53 billion to Mr Arnault’s fortune over the past 12 months, the biggest gain of any billionaire this year, according to Forbes.
He beat Elon Musk by $31 billion after a difficult year for the Tesla founder and Twitter CEO.
Watches make up only a small fraction of LVMH’s revenue.
Morgan Stanley estimates combined sales from its watchmakers at €2.1 billion from group turnover of €79.2 billion in 2022.
The likes of Louis Vuitton, Christian Dior, Givenchy, Tiffany’s, Marc Jacobs, Sephora, Moët Hennessy and Fenty Beauty are the giants of the business.
The world’s richest man, 74-year-old Bernard Arnault, shows no sign of slowing down, but has been handing down responsibility for parts of the LVMH empire to the next generation.
Last summer he proposed a reorganisation of his holding company, Agache, which holds the bulk of his LVMH stock, to give equal stakes to his five children, who all hold senior positions within the group.
And this is where the luxury watch business, not just the brand owned by LVMH, but across the sector, may benefit.
La Fabrique du Temps
In 2011, Louis Vuitton bought Swiss watch manufacturer La Fabrique du Temps and turned it into the hot house that now makes prestige timepieces under the Louis Vuitton name.
Ten years after that acquisition, Jean Arnault, the youngest of the five Arnault offspring, joined the business as director of marketing and development at La Fabrique du Temp.
Today, master watchmakers Michael Navas and Enrico Barbasini still run operations, but Jean Arnault is director of watches for Louis Vuitton, and effectively setting a new path for La Fabrique du Temps.
That path now includes producing a new generation of Daniel Roth watches.
The first, a Daniel Roth Tourbillon Souscription, launched last month with an in-house manufacture calibre DR001 conceived and manufactured entirely by La Fabrique du Temps.
Not content with reviving one legendary name from the annals of Swiss watchmaking, Jean Arnault followed up the Daniel Roth coup with the announcement that Louis Vuitton and La Fabrique du Temps had acquired rights to designs by the legendary Gérald Genta.
Louis Vuitton says it will make small quantities of high end complications based on designs by Mr Genta, and with the blessing of his widow, Evelyne Genta.
Could an executive unattached to the LVMH dynastic owner have made such bold moves, and found the money for the transformation of the La Fabrique du Temps?
We will never know, but it cannot hurt to have an Arnault at the table when these decisions are being made.
Frédéric Arnault at TAG Heuer
TAG Heuer is also benefiting from the sort of investment and focus that a member of the Arnault family can bring.
Frédéric Arnault took over as CEO in 2020 and, despite the challenges of steering the business through the pandemic in his first year, began reshaping the brand.
In an interview with WatchPro in March to mark the 60th anniversary of the Carrera chronograph, he said his mission is to draw new, younger, customers to the brand while maintaining the integrity of such a historic marque.
“It is important to appeal to a younger audience, which you hear a lot about in the watch industry. We believe that it is not incompatible to be mainstream while at the same time appealing to connoisseurs and collectors. We want to appeal to a wide audience. TAG Heuer might be a first watch or once in a lifetime watch, so a lot of our customers are not fanatics or enthusiasts. But at the same time we have the rigour and legitimacy to appeal more and more to the enthusiasts,” Mr Arnault said.
Big budgets were found to create a blockbuster launch for the 60th anniversary range of Carreras in the form of a movie with Hollywood production values — complete with a global red carpet premier in London in April — starring TAG Heuer brand ambassador Ryan Gosling and comedian Vanessa Bayer.
Arguably the biggest job given to one of Bernard Arnault’s sons is over at Tiffany & Co., which LVMH acquired in 2021, and is now run by Alexandre Arnault.
And, again, the investment taps are open with Beyoncé, one of the world’s biggest superstars, appearing in Tiffany’s “Lose Yourself in Love” campaign ahead of Christmas last year.
That campaign notched up 4.6 billion social media impressions and 690 million video views, the sort of cut-through that will help Tiffany’s evolve from a jeweller whose greatest days were behind it to the one of the greatest retailers of hard luxury on the planet; complete with Patek Philippe’s blessing.
The reopening of Tiffany’s flagship store in New York in April after a three year refurbishment is likely to be one of the most spectacular events in the jewellery calendar of 2023.
So, with three son’s of the world’s richest man at top jobs in fascinating parts of the watch and jewellery world, we should be looking forward to their influence spreading far and wide across the industry.
Who knows, perhaps the rumours earlier this year about LVMH wanting to buy Richemont, home to the mighty Cartier, might one day turn out to be true.
