TAG Heuer head Frédéric Arnault on being the youngest chief executive in watches
TAG Heuer chief executive Frédéric Arnault has a bold ambition to reach a billion in sales.
Frédéric Arnault, chief executive of TAG Heuer, outlines his twofold ambitions for the brand as tangible and intangible. There’s the cold, hard business of it all, and then something you know when you see, touch and feel it.
“One ambition we can talk about from a numbers perspective is reaching a billion in sales. That’s close. We’re close, it’s an ambition we set when I joined … we have one North Star, which is always desirability,” he tells WISH at LVMH Watch Week, held in Singapore this year.
So what makes a brand desirable?
“It’s a mix of elements. I think the core and most important is the product. You know, how much people want the product, love it, like to wear it. But it’s not enough. Then it’s about the brand’s spirit, values, the image they’re associated with, the clarity of the image, the consistency. I think all this builds the desirability.”
Arnault, the second youngest son of Bernard Arnault, chief executive and chairman of luxury conglomerate LVMH, was the fourth of Arnault senior’s five children to take on an executive position within LVMH.
TAG Heuer is part of the LVMH stable, alongside the likes of Tiffany & Co., Louis Vuitton and Christian Dior.He became chief executive in July 2020 following a stint in the brand’s smart-watch team, and before joining TAG Heuer interned in the Artificial Intelligence (AI) department at Facebook and at management consultancy firm McKinsey. Arnault also started and sold a mobile payment startup with a friend and studied mathematics and computer science at the prestigious École Polytechnique.
The tech world MO of moving fast and breaking things, of agility suits him. Even, or perhaps especially, in the watch world, a finicky and precise place not especially associated with pace. He also believes moving quickly suits a brand such as TAG Heuer, long associated with cars that zoom.
“We’ve had that in our DNA, we’re a brand that goes fast but is very dynamic and tries to stay close to what’s happening in the world,” Arnault says. Arnault speaks fondly of TAG Heuer’s Connected team, which oversees the brand’s smart watches and is structured, he says, almost like a “tech startup” in Paris.
He is also interested in the topic of the capabilities of AI. “I’m a strong believer in AI, it’s going to be more and more present, everywhere. We invest in AI, I mean the [Calibre E4] connected watch golf [uses] AI technology. We have an AI team working at TAG Heuer,” he says. As for what AI could mean for watchmaking though, Arnault says it’s too early to say.
Key to his mission on desirability is introducing striking and technically impressive new watches, including the Carrera Plasma Diamant d’Avant-Garde in 2022, which is studded with lab-grown white and pink diamonds – introduced this year – and priced from $740,000. There are also new tweaks and materials used for the Monza (carbon) and the TAG Heuer Aquaracer Solargraph in light titanium (20 hours of sunlight will charge the watch for six months).
As chief executive he’s also overhauled the brand’s retail strategies, hired some watch-world heavyweights such as movement director Carole Forestier-Kasapi and in April launched a short film, The Chase for Carrera, starring Ryan Gosling (TAG Heuer is the Barbie and The Gray Man actor’s very first ambassadorship), which was filmed in Australia and directed by Nash Edgerton.
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“The founder was 19 and then the founding family who ran the company for 100 years were all very young when they took helm at the business. So it’s something that’s been in the brand for a long time”
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Arnault, whose first watch was a TAG Heuer Aquaracer, given to him by his father when he was 12, sees moving the brand into a more elevated space as fitting with key shifts in the watch industry.
“One big trend that we’ve seen in the past 10 years is that volumes are decreasing and watches are becoming more and more of a luxury product, when 20 years ago it was also a utility product … [So] volumes are decreasing, but the value in the market overall is growing because people have a lot of interest in pieces that have a meaning, a special design, accompanied by great brands … and so this is a trend on which we’re building [by] positioning as a high watchmaker, investing in quality, perceived value,” he says.
Nicholas Biebuyck, heritage director at TAG Heuer, who joined Arnault on stage to present the brand’s keynote at Watches and Wonders in Geneva in April, said the move into more high-end watchmaking also reflects the brand’s history.
“A lot of people see watches like [Plasma] as slightly against the grain for the brand, but it’s important to remember that for more than 160 years, the company’s been about innovation and historically that was technical,” says Biebuyck during our interview at the annual watch fair.
Arnault’s agility is in part related to his youth: at 28 he is the youngest chief executive in the watch world. It is something he shares with TAG Heuer founder, Edouard Heuer, and also Jack Heuer, great-grandson of Edouard and the brand’s former leader, now its honorary chairman.
“We are a brand that was always very innovative, young; we talked to young customers well and that was run by young leaders historically. The founder was 19 and then the founding family who ran the company for 100 years were all very young when they took helm ... So it’s something that’s been in the brand for a long time,” says Arnault.
Biebuyck agrees that Arnault, who in his spare time is an accomplished pianist (he once played with the Moscow Philharmonic Orchestra), is unlike other watch company leaders. “Obviously he’s significantly younger than most of the chief executives, but beyond that, he’s clearly more culturally engaged. He’s more connected. [Even] just his use of social media, his engagement in that space, his understanding of these kind of topics … that obviously has big benefits for us as a brand,” says Biebuyk, who notes that watch culture has shifted in ways that benefit someone who is plugged into what’s happening.
“There’s been a huge evolution in who’s collecting and what that now looks like. Historically, it was old guys collecting pocket watches with their magnifying glass and writing letters to the horological journals to share the news with their friends. Beyond that, we evolved into the internet era where we had the forums and the guys talking about in-house and independents and finishing and complications. Today, we have a much younger consumer coming through, particularly via social media, who’s far more interested in what I always call the anthropological nature of collecting. They want to know the human stories, who’s behind the brand, who are the watchmakers, what’s going on in these different areas. And that for me is super powerful,” he says.
A key focus for TAG Heuer this year is the 60th anniversary of the Carrera, a watch with a direct line-through to the brand’s heritage with chronographs and car racing. The launch of a sapphire case Glassbox Carrera during Watches and Wonders, with a new in-house movement and integrated tachometer scales (used to measure speed based on time travelled for a set distance) on the outer bezel, was one of the most buzzed-about of the fair.In pushing forward ideas for such a beloved watch (Biebuyck says TAG Heuer watch collectors are famously some of the world’s nicest), both Arnault and Biebuyck saw the importance in connecting the past with the present.
“We always take inspiration from heritage because of so many great designs, great stories and it’s always stronger when we can say where it comes from,” says Arnault. “It makes it much more authentic, legitimate. Our approach is unique in the sense that we don’t do repetition of the past. We take strong inspiration, but we always try to modernise as much as possible.”
This story appears in the July issue of WISH, out on Friday July 7 with The Australian.
