To stay ahead, you sometimes have to change direction. Such agility, you would imagine, would be second nature to a 155-year-old watch company that also happens to be the biggest brand within French luxury group LVMH. It’s a notion that Tag Heuer’s global sales vice-president Philippe Alluard reinforces during his recent interview with The Peak.
“We have no sacred cows,” says the French-American executive, who is both friendly and disarmingly frank. He is referring not just to Tag Heuer’s industry-disrupting innovations such as its belt-driven Monaco V4 timepieces, but to the brand’s recent strategic repositioning. The new direction will see Tag Heuer – which has an estimated annual turnover of one billion euros (S$1.6 billion) – focusing on its mid-range offerings and slowing its shift towards the higher end of the market.
He says matter of factly: “We tried to shift the brand upwards too quickly and the market castigated us.”
The brand is “still growing”, notes Alluard, but “not at the rate we had been growing before”. He adds: “Traditionally and for many years, Tag Heuer has been the epitome of access to selective Swiss watchmaking. In the last five years, we strayed a little from that segment. We were heavily promoting our manufacture movements at higher price levels, and we lost part of that customer base. We want to regain this territory, and also be that sporty, nice-looking watch for the affluent person who wants to go to the beach or on a motorcycle ride on the weekend.”
Under the direction of Jean-Claude Biver, head of the LVMH Watches Division, Tag Heuer will streamline its collections, concentrating on its watches in the 1,500 Swiss francs (S$2,030) to 5,500 Swiss francs price range. Last June, the company announced that it would be putting the production of its new CH80 chronograph movement on hold, less than a year after it was presented. The personnel changes that have taken place in recent months show the extent of the brand’s recalibrations. Last September, it was reported that several management and production jobs had been cut, followed by news of the resignation of CEO Stephane Linder in December.
Accompanying this change in course is the new (and perhaps, telling) “Don’t Crack Under Pressure” campaign, which features brand ambassadors such as Maria Sharapova and Cristiano Ronaldo. The latest advertisements draw attention to – and parallels between – the physical and mental strength of these star athletes, and the sturdiness and innovative qualities of the watches.
But make no mistake: Its renewed focus on its more affordably priced pieces does not mean that one should stop expecting game-changing horological surprises from the brand, which unveiled cutting-edge watches such as the Tag Heuer Carrera Mikropendulum Tourbillon at special events in Singapore last November.
Says Alluard: “We are working on several projects, and we hope to be the first watch brand to enter in certain territories. The brand is going to be more affordable, but it is still going to be very exciting.”