The luxury giant LVMH is attempting to increase its market position in the world of luxury watches by launching a new watch subsidiary and introducing a number of more expensive models.
The global market research firm IMARC Group projects that sales of luxury timepieces will reach approximately $30 billion this year. By 2032, it’s anticipated that they will have grown to over $37 billion due to rising global affluence and growing demand for upscale mechanical watches among millennials and GZ.
LVMH’s jewelry and watch segment reported $11.8 billion in sales in 2023, a 7% increase in organic growth. This luxury giant now owns 10 watch brands, which include TAG Heuer, Hublot, and Zenith. It also includes fashion and jewelry brands such as Louis Vuitton, Bulgari, and Dior, which design watches.
Estimated Market Size of LVMH
The previous month, Frederic Arnault was appointed as the CEO of LVMH Watches, which is home to the TAG Heuer, Hublot, and Zenith brands. He is the son of Bernard Arnault, the LVMH Chairman and CEO. According to analysts, these three brands were reported to reach about $2 billion last year.
It is anticipated that Frederic Arnault, who just introduced a plethora of hugely successful new models at TAG Heuer, will apply his emphasis on innovation, state-of-the-art materials, and imaginative designs to the broader brand group. Analysts predict that LVMH might potentially keep acquiring appealing brands as they become available.
During one of their interviews at LVMH’s Watch Week event in Miami, the luxury giant’s chief executive stated that 2024 is already looking to be a better year than 2023 when rising interest rates and recessionary fears dampened demand. Executives express particular encouragement from the American luxury consumer’s tenacity.
High-End Sales Soar Despite Economic Headwinds
Watch sales are following the trend of the luxury market overall, with the wealthiest clients continuing to represent the largest market share. According to executives, rising rates and economic instability have less of an impact on the wealthy, which is why an increasing number of firms are targeting “super-spenders” and VIP collectors who are willing to spend on the finest products and craftsmanship.
Moreover, the executives believe that wealthy people are willing to invest more in authentic, reputable and timeless brands. There has been a rise in the demand for high-end products. They have managed to sell more high-end jewellery, more high-end watches, and more high-end bags.
LVMH also aims to capture the fastest-growing market for premium timepieces: women’s watches. Only around one-third of watches sold are for women. Still, because of increased visibility on social media and an increasing number of models specifically made for them, women’s interest in high-end mechanical timepieces has skyrocketed. Sales growth is also being driven by the growing number of rich women worldwide, both inherited and self-made.
Watches that are more and more unisex and feminine are in style. In terms of independence, autonomy, and purchasing power, women are becoming more powerful. This pattern will continue to persist.
Luxe on the Rise: LVMH Brands Go Ultra-Premium
With more costly, limited edition products, several LVMH brands are simultaneously climbing the price ladder. The $250,000 limited-edition MP-10 Tourbillon Weight Energy System watch from Hublot, which is well-known for its oversized, bold timepieces, was just released. The futuristic watches—of which there will only be 50 made—are anticipated to sell out fast.
CEO of Hublot Ricardo Guadalupe described it as “the art of fusion in watchmaking.” We are fusing innovation with a watchmaking history that is more than 400 years old. We achieve that by using new mechanics, materials, designs, and methods of motion production.
