As the dust has now settled from the frenetic start to the year for TAG Heuer, we welcomed the chance to speak with CEO Jean-Claude Biver to get his take on the start of the year and some insight into what we can expect over the next few years. The year started with the launch of new watches in Geneva in mid-January, with only a few weeks break before the launch of the Connected Modular and then the biggest event of the year- Baselworld- in March.
While in the past buyers had to wait many months after seeing a new Basel launch until the watch arrived in stores, the new Autavia is already available to buy, as its strong presence on social media attests. And speaking of the Autavia, the obvious question is what comes next? We’ve had the Monaco, Carrera, Monza, Silverstone and Autavia brought back from the past..but is there more to come?
As always, the chat with Jean-Claude Biver presents a strong vision for the future and gives an idea of what to expect in 2019.Calibre 11: It’s been a few weeks now since Basel and I wanted to start by asking if you’re you happy with the reaction the watches got, both in terms of feedback and in terms of dealer orders for 2017?
Jean-Claude Biver: Yes, I’m very pleased. I’m pleased by the success of the new collection. I’m pleased by the order we got on the new collection. And I’m of course very pleased about the four first months of 2017, which have been the best quarter of our history. The four months of the year, so from January until April is a record quarter. I hope we can keep the pace and finish 2017 as becoming the best year of our history in turnover
Calibre 11: When we spoke back in the early days of 2015 you had four major initiatives planned- the Carrera Heuer 01, which was a totally new design and concept with the modular construction, the Heuer-02 Tourbillion, a real revolution in terms of pricing, the Connected watch and lastly the revival of the heritage collection, first with the Monza and now with the Autavia. So looking forward, what are the key themes for the next couple of years?
Jean-Claude Biver: I think we will develop the modularity, which we have introduced in the Connected watch. This modularity is absolutely genius. It’s incredible to be able to change on your watch the lugs, the bracelets, and the bezel. This has never been achieved, has never been made. Nobody has ever even approached it. This is definitely a concept that should be extended, not only for the Connected watch, but it should come on the regular collection. That will open new horizons which will open new opportunities for the customer, and of course for us.
Imagine you can constantly change your watch. You can buy gold lugs for Father’s Day. For the anniversary, you can buy another bracelet, which means your watch can constantly be kept up to date and can everyday be changed, more or less. And upgraded, you can buy diamond lugs. You can buy a diamond- everything can be done, which means for the same watch within ten years you could eventually, just by buying certain parts of it, you can have a new watch ten times!
I think this is a very interesting concept that should definitely be extended also to ladies’ watches. That’s one important development I want to introduce in the collection.
Calibre 11: The big event for collectors this year is the launch of the Autavia, which is now starting to find its way into stores. When you and I first spoke, you mentioned you saw the Heritage Collection watches as being a single model rather than a new range. Is that still the case or have you started to think about whether the Autavia could become a range of watches?
Jean-Claude Biver: I still believe Autavia should be a single product. It should not be extended to different colors or sizes. But again, depending on the request of the market, we might have to change our concept. I don’t know what is the reaction of the market yet, because we just have started to deliver it. But if the market wants the extension of the Autavia, extension in size, extension in colors, in materials, I might be seduced to do it. I want to be close to the market. It’s as simple as that. The market is always right, and you should not fight the trend. The trend must be your friend.
I don’t know, so for the moment I will answer no. There’s no reason we should extend, but maybe, in 18 months, my answer will be different because I will have had the reaction of the market.
Jean-Claude Biver: Yes. It’s going very well indeed…going extremely well. It’s going so well it could be possible that in two or three years we might produce more Heuer-02 movements than we make Heuer-01 movements. It could even be that in five years 90% of our chronographs might be Heuer-02, because the Heuer-02 construction has been much more modernised and much better adapted to today’s productivity than our Heuer-01.
We have a Heuer-02, which will be more easy in the after-sale service to handle. We have a Heuer-02 which will give us a better productivity as soon as we produce 50,000 pieces. But with the Heuer-01 if we produce 50,000, 60,000 or 70,000, the cost doesn’t move much. On the Heuer-02, we really have some savings depending on the quantities.
Calibre 11: It sounds like it might be 12-18 months before we see a Heuer-02 Carrera or Aquaracer?
Jean-Claude Biver: Yes, it will be around 18 months.
Jean-Claude Biver: Yes, it’s incredible!
Calibre 11: Have you thought about selling vintage Heuers in a small number through your own boutiques?
Jean-Claude Biver: It would make sense. It would be a great addition for our stores, yes. I have thought to do it. We haven’t done it yet, but the idea is there. Because the advantage would be we would sell it and only sell it with a guarantee. It means all the pieces we might sell in our own shop be with original parts and will have been certified, and will have a traditional guarantee from the factory, which would bring the consumer quite an advantage if he buys a classic vintage from our store or if he buys it from another merchant.
I think there is a demand now for people buying vintage watches to have the security that the watch is not a fake, that 100% of the parts are from the original, and that they have a guarantee the watch is working well. It is something we could provide. Providing this would definitely give an advantage to the customer. Because of this, we should really pursue this project and try to have it in the next two years as a reality.
We also have now a better view of this stock. We have made an inventory of all the spare parts, so there’s a real system going on for the spare parts of the classic watches.
Calibre 11: I guess the economics are interesting because as you know, you could buy a 4-5,000-dollar watch, and older, second-hand Heuer. If you had the right bezel and particularly with the bezel for the Autavia GMT for example, if you had a perfect new bezel, that watch is worth a lot more than just the cost of the bezel alone. I guess that value of those parts is multiplied when they go onto a watch, as against the value of the part by itself.
Jean-Claude Biver: Absolutely. Yes. The bezel or another dial can give you huge additional value, yes.
Jean-Claude Biver: No. I don’t want to expand too much this re-edition concept. I think we should stay with the Autavia re-edition. We should stay with the Monaco re-edition. We should stay with the Monza, and last but not least, the Carrera re-edition: that’s it. I wouldn’t like to go a Camaro re-edition, I want to really stay to these four big iconic watches. Carrera, Autavia, Monaco, Monza, that’s it.
Calibre 11: It could be be interesting to do something with the iconic dive watches from the 1980s, the TAG Heuer 1000 for example. What would that watch look like if it was designed today, if it was a mix of the original TAG Heuer 1000 but with a Carrera Heuer 01 modular style?
Jean-Claude Biver: That would make more sense.
Calibre 11: In terms of e-commerce, how do you see that going? I was interested to see that LVMH have announced plans for 24 Sèvres to cover all their luxury brands. Do you see the potential to do that in watches, to bring together TAG Heuer, Zenith and Hublot?
Jean-Claude Biver: No doubt. There is not a single doubt. The online business is the business of the future. The new generation will buy online. You cannot stop the trend. E-commerce is flying. It will be one of the biggest drivers of your sales. You cannot allow yourself not to be part of it. It doesn’t mean we have to go this next year, but we definitely have to consider e-commerce. And we have to build an e-commerce concept, an e-commerce environment, an e-commerce internet site. We will definitely not leave e-commerce out of our business model. It will become a key part of our business.
Calibre 11: I guess to get the best result from that strategy, putting a stop finally to the grey market is critical. Otherwise the grey market at the moment is teaching people that online you can get a huge discount on a watch, which is completely in contrast to the model if you were to sell through a multi-brand boutique online.
Jean-Claude Biver: Yes, absolutely.
Calibre 11: My last question was in terms of Zenith. There’s obviously been a lot of attention on Zenith, and in particular, I’ve read you talk about bringing together the best of Hublot and TAG Heuer to help support the growth of Zenith in terms of its new products. Are there any things from Zenith that could go into a TAG Heuer, for example the Elite movement?
Jean-Claude Biver: Yes, definitely. There is no doubt that we will use the synergies from the three brands. Sometimes the synergy can move from Zenith to TAG Heuer. Sometimes it can move from Hublot to Zenith. We will be careful to keep the identity of each brand for itself, of course. We will also keep certain exclusivity for each brand, like the El Primero 21 will be only reserved for Zenith, or the Magic Gold from Hublot will be only for Hublot. But there are other products that could very well be used by one or the other brand. The synergy concept is in place, and it will work. It will be implemented. But with the respect of each DNA and also with the respect of certain exclusivities which will never be able to be conferred to another brand.
Calibre 11: Obviously, for many years, the El Primero was sold to TAG Heuer, but I guess there’s no need anymore with the Heuer-01 and Heuer-02…but the Elite three-hand movement could be a quite interesting approach
Jean-Claude Biver: There’s no reason for TAG Heuer to buy the El Primero, no reason at all. But the Elite movement would make huge sense, yes.