LVMH’s Watches Unit Is Under a Cloud of Uncertainty. What Happens Next?

Watches expert Robin Swithinbank weighs in twice a month with intelligence and insight on the age-old industry as it navigates tensions between reinvention and tradition.

MILAN — LVMH may finally have cleared the air with Friday evening’s confirmation that TAG Heuer CEO Antoine Pin has exited the company, but big questions loom about the future of the group’s largest watch brand and its watchmaking division as a whole.

The timing of Pin’s departure was awkward, just before LVMH Watch Week kicked off in Milan, the first major industry event of the year.

Speculation around the veteran LVMH executive had been rife since his departure was reported by the Swiss site Business Montres on Jan. 3. Behind the scenes, employees hadn’t seen Pin at the office for weeks and frustrated journalists were told TAG Heuer executives would not grant interviews. For now, a successor has not been named, leaving TAG Heuer in limbo at a crucial time. More on this below.

The situation adds to pressure on LVMH’s stalling watch business, which also spans specialist watchmakers Hublot and Zenith, clockmaker L’Epée, the watchmaking divisions of Bulgari, Louis Vuitton, Dior, Tiffany and Chaumet and niche high-end brands Gérald Genta and Daniel Roth. (All barring Dior and Chaumet are at this week’s event.)

Profit has slumped at LVMH’s watches and jewellery division, down 13 percent year on year in the first half of 2025, while revenues have been largely flat, up just 1 percent over 9 months with watch brands mired in an industry-wide slump, dragging down better-performing jewellery.

This isn’t just an LVMH issue. Swiss watchmakers are under the cosh, with headwinds from all directions including tariffs, soaring gold prices and a slump in Chinese demand.

Yet rival Richemont, owner of Cartier and Jaeger-LeCoultre among others, has been growing steadily, with sales from specialist watchmakers up 7 percent over the holiday quarter, reported last week. LVMH’s update comes later this month, forecast to report a 1 percent decline in sales from watches and jewellery over the same period.

TAG Heuer Enters Year Two of F1 Under Pressure

The heat on TAG Heuer’s management comes as it enters year two of its high-tariff Formula 1 sponsorship, part of a blockbuster deal between LVMH and F1’s owners Liberty Media, said to be worth $1 billion over 10 years.

Activating the sponsorship was a huge part of Pin’s brief when he was appointed in September 2024, as was rolling out a colourful new collection of $1,950 Formula 1 watches designed to draw in aspirational Gen Z-ers brought up on a diet of Instagram and Netflix’s “Drive to Survive” series.

So why the dramatic split? Talk of strategy tensions has centred on the future of the Connected, TAG Heuer’s luxury smartwatch (also priced $1,950). According to some estimates, LVMH has invested as much as 250 million Swiss francs in the project over the past decade. Some analysts think the category is a dead end, and that LVMH won’t have made a return to match, even if the most recent launch is said to have performed better than previous editions.

At the same time, TAG Heuer is now pushing haute horlogerie watches at hypercar prices, upwards of $150,000. Meanwhile, its bread-and-butter mid-range mechanical chronographs continue to sustain it. Can it be all things to all men? Or just motorsport fans aged 18–30? There’s the rub.

Pin’s departure continues a long season of “football manager syndrome” for one of LVMH’s crown jewels: He was the brand’s sixth permanent CEO in just over a decade. Until LVMH names a successor, speculation will swirl, adding uncertainty.

Meanwhile, Pin’s “Designed to Win” campaign, launched in April, continues with a big focus this week on the brand’s chronographs. New releases include the CHF110,000 ($139,000) Carrera Split-Seconds Chronograph.

Hublot Moves Beyond Football

Over the road at Hublot, led by CEO Julien Tornare — who vacated the TAG Heuer CEO seat for Pin — the waters seem calmer. After his first year seeing through the 20th anniversary of the Big Bang watch, Tornare is now repositioning the brand so it’s no longer skewed so heavily towards that totemic design and football. The two pillars that have defined Hublot over the past two decades have lost some of their edge says Tornare, explaining his decision to surrender sponsorship of this summer’s FIFA World Cup and the UK’s Premier League.

It will save a lot of money. Analysts expect FIFA will be pitching the World Cup timekeeping licence to brands for as much as $50 million, with activation likely to cost the same again. Hublot can little afford such sums. Morgan Stanley estimates the brand’s revenues plunged from 744 million Swiss francs in 2022 to 495 million Swiss francs in 2024. LVMH does not break out watch sales by brand.

Otherwise, handing the keys to prime marketing real estate to a competitor sounds risky.

If Hublot gets lucky a tech brand will take the slot, rather than a rival. Omega and Breitling, who both invest heavily in sport told me they’re out. The profile is a bad fit for Rolex, which prefers golf and tennis, but could make sense for its second brand Tudor, already involved in football. Swatch Group brands Longines and Tissot have form here, too. With the World Cup being co-hosted by the US, by far the industry’s largest market, opportunity knocks.

Tornare’s official line is naturally more circumspect. He says Hublot has become too football focused (particularly given “soccer” has less marketing power in the US) and while once that was disruptive (in 2006 when it made its first move into the sport, it was), it’s now, well, just a bit mainstream. He now intends to reassign budget to music and art, two areas where he says human emotional responses are on a par to those seen in sport.

Football and Hublot have not completely consciously uncoupled — sponsorship of UEFA’s Champions League and four-yearly EURO international tournament will continue, as will its relationships with footballing superstars Kylian Mbappé et al., Tornare says.

Tornare is banking on the retreat from football to free up energy for Hublot’s new manufacturing facility. In April, he takes the keys to “H3,” a 13,650 square-metre facility in Nyon that should be up and running early next year. As well as an area devoted to bespoke commissions — expect this to be a theme for luxury watchmakers in the coming years — it will also be home to a flexible 400 square-metre client entertainment space.

“Experiential manufactures” are not a novel concept, but Tornare says the label is setting a new standard, offering concerts and sporting events designed to give “money can’t buy” moments to his customers. Not only VICs. The idea, he says, is as much about bringing in younger buyers who might just have swung their first steel Classic Fusion. Long-term loyalty is the goal.

This has the air of a good idea (plenty would jump at the opportunity to train with Usain Bolt or tinkle the ivories with Lang Lang), but it’s the gloss on a project that was commissioned five years ago and broke ground two years later, when the industry was in the middle of the post-pandemic boom. Hublot’s volumes have since stagnated at around 40,000 pieces a year. Tornare says there’s no group-level expectation those numbers will soar once H3 is up and running, but the danger will be it becomes a white elephant.

Zenith Is ‘Not for Sale’

And what of LVMH’s third specialist watch brand Zenith? It’s not been 18 months since the division’s then head Frédéric Arnault declared Zenith would become the group’s watch movement-making engine room, unintentionally giving the impression Zenith’s days as a brand might be numbered. Earlier this month, LVMH denied the company was for sale after rumours in the Swiss press. Industry insiders remain skeptical.

In Milan on Monday, the company’s chief executive doubled down on the group’s message. “It was refuted by the group as being a rumour, as being unfounded, as being defamatory and as being a lie,” Benoit de Clerck told reporters. “The brand is not for sale.”

De Clerck declined to comment on further rumours the brand is making losses. LVMH does not permit its chief executives to discuss figures. But de Clerck said that in 2024 the brand sold every watch it made and he expects 2025’s numbers to show similar levels.

“We’re not big and we’re not small,” he said. “We’re growing, but very slowly. I don’t want to have spikes that go up and down because it’s not good for the brand.”

If it’s curtains for Zenith, that would be a crying shame in the eyes of many watch enthusiasts, and I count myself among those. Founded in 1865, it has a sparkling history, but its current profile and popularity with contemporary buyers seems stuck in neutral. It’s never had the marketing investment granted to its stablemates, while its name is arguably more generic, which may prove a hurdle it can never jump. Being bottom of the alphabet doesn’t help either.

The new collection focuses around its best-selling Defy line. New pieces included a new entry-level for the brand, the $7,800 Defy Revival A3643. It brings the barrier to entry slightly higher than before, but in line with inflationary rises, said de Clerck, who has not raised prices following US tariffs last year and doesn’t plan to do so for gold, either. “People are buying more gold watches,” he said.

Is Richemont Grabbing Market Share?

It’s results season and Richemont has already set the bar high. The group doesn’t report brand-by-brand performance, but the 7 percent sales from specialist watches over the holiday quarter suggests Vacheron Constantin, IWC and Jaeger-LeCoultre enjoyed a successful gifting season, likely gaining market share.

Forecasts for LVMH and Swatch Group (Omega, Longines, Breguet, among others), which report later this month, are much less positive.

Richemont’s competitors could be in real trouble, as suggested by its performance as well as data from the Federation of the Swiss Watch Industry (FHS). The FHS’s most recent tally shows exports of Swiss watches down 2.2 percent through November, across all brands and territories, with a 7.7 percent decline year on year for the month of November alone. This follows two years of volume and value contraction after record years in 2022 and 2023. Richemont’s strength suggests others are taking a hit. All indications are Rolex, Audemars Piguet and Patek Philippe are doing just fine.

Bird’s eye, the industry’s challenges are clear. Almost entirely based in Switzerland, luxury watchmaking is defenceless against the apparently bullet-proof Swiss franc, which continues to gain on major currencies, with a proportional knock-on effect on costs and margins.

Then there’s President Trump’s punishing tariffs on the non-EU country, which spiked at 39 percent last summer, sending the industry into a spin and wildly skewing export figures as brands front-loaded US inventories before the taxes kicked in. A new rate of 15 percent is expected to be mandated at the end of this quarter, but CEOs remain nervous increasing prices could impact their leading market.

Where Are the Bright Patches?

But if those are the negatives, CEOs are calling the positives. FHS export data for for 2025, due Thursday, are expected to show the decline in values will top out at around 2.5 percent. Not too shabby.

Where can brands look to for growth in 2026? Some territories provide a glimmer. The Middle East, swelled by population growth and low taxes, is on the up, as are South Korea, Spain (home of a cash-generating new F1 Grand Prix later this year) and Saudi Arabia, where brands are now beginning to invest heavily. Japan has stalled, but its currency remains weak. The Winter Olympics next month should give European retailers a lift, with Omega due its biennial bump as official timekeeper.

Some are shifting manufacturing focus to innovative materials, with brands looking to find substitutes for gold. At Watches and Wonders Geneva in April, we expect a raft of alternatives, and no doubt some pumped-up storytelling around the luxury value of titanium, carbon and who knows what else besides.

Another option is to keep spending. Some brands are going big on marketing, signing blockbuster deals in a bid to gain market share in a declining market. Breitling is leading the way, with an NFL deal signed in the autumn. Expect fireworks when it announces plans for its first Super Bowl on Feb. 8. Short term, risks behind the deal are high, but CEO Georges Kern is betting on his expectations the industry will concentrate around 10 top brands in the next decade. Awareness, image and relevance could well be the keys.

Sector resilience may come from elsewhere. Beyond the finely-honed-on-paper strategies (and guesswork), luxury watch brand executives are talking about something more fundamental they believe will secure their future: luxury watches as the antidote to AI.

As tools like Grok become household names overnight, there’s ever-increasing value (emotion) in a hand-crafted mechanical object, they will begin telling us, not least if it’s decorated with one of the so-called métiers d’art — engraving, gem-setting, enamelling, miniature painting and so on.

Is that desperation? I don’t think so. There’s no data set for such things, but for centuries, buyers and collectors have been ready to pay a premium for luxury, craftsmanship and scarcity. If anything, as we become hungrier for the real, the tangible and the human, desire will likely increase. Watchmakers have some first-mover advantage here. It’s what they do. It’s what they’ve always done.

Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.