Robin Swithinbank caught up with LVMH’s charismatic head of watches
I first interviewed Jean-Claude Biver five years ago, over the phone. I remember it very vividly, even so. Then boss of Hublot, his every answer, his every opinion was broadcast in fist-clenching crescendo. His bombast, his vitality and his vision were then, as they are now (he’s 68), compelling, if a little overwhelming. Later, I would interview him in person, and watch with a mixture of fascination and bemusement as he thumped the table repeatedly, quite literally banging home his point.
What is always so apparent is that he tells it like no other. He has a grasp on what the market is calling for in a way few, if any of his contemporaries do. And in his own inimitable style, he communicates what he’s selling the market in a way no one else seems able to.
During our most recent conversation at the launch of TAG Heuer’s Muhammad Ali watch (above) in New York last month, he claimed the company – he’s been TAG Heuer’s CEO and LVMH’s watch division head for almost two years now – is up 18 per cent. Given the Swiss watch industry is bombing at the moment (down 10.2 per cent this year at last count), this is astonishing.
Is it believable? I don’t have the P&Ls to prove it, but retailers I’ve spoken to back it up. In any case, it’s hard not to believe the man who brought Blancpain back from the dead, put Omega on the wrists of James Bond and Cindy Crawford and made Hublot into a global superpower. It’s hard not to believe a man who has so much conviction.
I probed him on what TAG Heuer is doing in boxing and music, on who else TAG Heuer is manufacturing parts for, and on what his ‘zero separation concept’ means. As ever, he didn’t hold back.
What is TAG Heuer doing in boxing?
If you go to the boxing in Las Vegas or New York, you will see the first 10 rows will cost between $2,000 and $10,000. What has this to do with our customer? It’s just the price of our watches. Which means, there are a lot of people that are our customers who are in the first 10 rows around the ring. If you look at boxing, is the crowd old like me, or are they young? They are young. And the young people are our customers of tomorrow. So we have a good reason to be in boxing. Then we have to look at our history. Have we ever been in boxing? Yes. We developed a stopwatch called Ring-Master [in 1957].
So is this the start of a new relationship between TAG Heuer and boxing?
Of course. It’s the reconnection of TAG Heuer into boxing. It’s not the start – we were in boxing in the 1950s. It’s like with cycling. We just started a partnership with BMC, a Swiss racing team. TAG Heuer was in cycling in the 1980s and 1990s. Very often we reconnect the brand to what it was and to its own DNA. People who don’t know the past think we invent – but we have always been there.
But you’ve invented a relationship with music, surely?
Yes, where we are innovating is in music. TAG Heuer has never been in music. Why are we in music and associated with David Guetta and OneRepublic? Because young people have only two languages. One language is soccer, and the second language is music. That’s the language all the young people understand. Wherever you go, people speak football and they speak music. Music and football are two universal languages that young people speak and understand. This is why we have entered music, and yes, that’s new. Music has to do with research we did into being close to our customer. If you are not in music and only in sport, you don’t have zero separation, because when they are going to Coachella [TAG Heuer was the official timekeeper of the Californian music festival in 2016], you miss your customer.
You’re reporting that TAG Heuer is up 18 per cent – is that true?
Yes, to the end of September. But only in watch sales. We produce movements, watch cases and dials for us, but also for other brands. The turnover of what we sell to other watch companies is not in that calculation.
What do you put that down to?
The secret is the anticipation of the slowdown. How did we do that? When a slowdown arrives, what should you do? Reduce power? Reduce speed? We said no. We have to increase. We have to increase power. How do you increase power? More creativity. Because when there is a crisis, people get worried, people stop buying. How do you make people buy? Eventually politically they announce a new president, a new policy, a new economic push, peace with Russia – all these can be positive. But they are not in our power. What is in our power? Only one element – innovation. If you innovate that’s the best way to make people buy, because they will be seduced. Innovation is the best answer to the crisis.
Every Swiss watch brand claims to be innovative – there must be more to it than that?
Well, we said, when the crisis comes, where will it start? It started in China. Are we strong in China? No we are not. How good are we in China? Only 3.8 percent of our turnover. So if China goes down, we won’t feel it. So what we will do? We will now increase our investment in China as the competition reduces their investment. Then our voice is louder.
You’ve also reduced prices. What impact has that had?
We said the crisis will change the mentality of the people and people will be more conscious about prices. People become price-conscious when there is a crisis. So you must work on what we call ‘accessible luxury’, or ‘affordable luxury’. That’s the only thing that keeps moving when there is a crisis because it’s accessible. Somehow people say, ‘this I can afford’. And when there is a crisis, people want perceived value that is higher than the price. Because when the perceived value is double, then it makes you move. So we are working on perceived value. So working on perceived value, working on affordable luxury and investing in innovation, those three elements have brought us up.
Can you keep growing at this rate?
No, because the crisis will not last. We will be ahead eventually, but not by so much. I do not believe we will be able to do plus 18 next year, because business will be better, but that doesn’t mean that we won’t outperform the industry. Those are the only numbers I look at. I don’t look at how much we do, I look at how much I do better than the others.
TAG Heuer made a large number of redundancies a couple of years ago – are you producing more with a smaller workforce?
We have employed 100 people in production this year, having laid off 49 in 2014. We changed the way we produce watches. So the people we asked to leave are not the ones we replaced.
Are you going to expand your manufacturing facilities?
Yes. We are now building a factory of 15,000m2 in La Chaux-de-Fonds. Now we are renting a factory, which is absurd. We should never rent a factory. The factory should be bought. Because a factory is something that is not fixed. A factory must be modular. And when you are not in your own house, you can’t rebuild it or change it. We will open it in 2019.
How many watches can you make at the moment, and how many will you be able to make come 2019 when the factory opens?
In dials, we make nearly 800,000. Watch cases, we produce 330,000. Including for the others. In movements, we are now at 85,000. Next year will be 150,000. In five years, I want to produce 200,000 movements, 500,000 cases and 1 million dials.
Who will you make them for?
They will be mad at me if I tell you.
How many of the watches you make a year are TAG Heuer’s?
The majority. I prefer not to say. We don’t sell watches to anybody. We sell parts and movements.
How is the Connected watch performing?
We’ve done 60,000. It’s a good success. Next year we expect 150,000 – that will be a huge success. The Connected watch is something in which we believe very strongly.
You talk about a ‘zero separation concept’ in marketing, taking your brand wherever your customer is. Where next?
We are done. I think so. We’re not in tennis or golf and we won’t be – because it’s Rolex. You should never go where you have a guy who has 80 per cent of the market.
But you’re in Formula 1 and Rolex is dominating there, too.
We’ve been in Formula 1 since the 1960s. It’s different. It’s in the DNA. And you should never give up DNA. Even if because of wrong management you gave it up and others went in. Whoever is in Formula 1, don’t give it up, because it’s your DNA. But I would never go into a sport where you have a leader like Rolex. In tennis, Rolex has the tournaments and the best players, so what are you going to do? You are going to be number two. And is it worth starting a new sport when you know you will be number two?
Do you think the industry needs to adopt this zero separation concept?
They don’t know what it means! I never told them.
Aside from the global problems facing the watch industry, do you think there are other internal factors pulling it back at the moment?
A lot of people [in the industry] are a bit depressed and that’s the worst thing that can happen. When they enter a store and they talk with people and they are half depressed… We changed the rules. I pay first class tickets. People ask me why – they say there’s a crisis on. I say I pay first class tickets so that you can tell everybody you’re travelling first class. Because if there’s a crisis, you must be closer to the market and you must travel more. How can I ask you to travel more? By paying first class so you arrive in good shape. You can tell the story to the sales people.
And then the sales people say: ‘Wow, this brand must be doing well – this guy comes every month to visit us, he looks great, he’s travelling first class and eating caviar. What a great brand!’ If on the contrary other brands say, no, it’s finished, only economy. The guy has to travel economy, he doesn’t want to travel, but he has to travel, so when he arrives and goes to the retailer, he’s already in a bad mood. The business goes down, while our business goes up, just for the price of a first class ticket. And how much is a first class ticket for a big company? Nothing! The effect is great. These are little psychological things that you should do in a crisis. And I swear, the Swiss brands – I don’t want to name names – have given instructions to finish business class, everybody in economy. People don’t want to travel. You must be contrarian. That’s the best way to make money in business.
You said earlier this year that Zenith was down 8 percent. Where is it now?
Zenith is down more. Zenith is down as much as the watch industry. And you know why? Because Zenith was very strong in China. And whoever was strong in China is punished.
Do you think your Zenith marketing strategy will help it turn a corner?
Yes. I have a lot of good feeling. I have a positive feeling for Zenith.
You’re 68 now, how long can you keep doing this?
Seven years. And when I’m 75, I will check how long I still have to go.