Frédéric Arnault, head of the historic brand from La Chaux-de-Fonds, is trying to find the magic formula for each line in TAG Heuer’s eclectic portfolio, which ranges from high-volume watches to Haute Horlogerie. Today, this formula includes Super Mario, lab-grown diamonds and the automotive world. Interview.
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ith his keen analytical mind and articulate speech, Frédéric Arnault, 27, a graduate of the prestigious Ecole Polytechnique, is well aware of his entrepreneurial responsibilities. Like other members of his family, he is currently proving himself within a brand of the LVMH group.
The brand – TAG Heuer – is part of the luxury giant’s watchmaking portfolio. Having worked in artificial intelligence R&D at Facebook, Frédéric Arnault started by injecting his professional experience from the tech industry (the La Chaux-de- Fonds-based brand is one of the rare Swiss watchmakers to have fully embraced the smartwatch). He then moved on to revisiting in depth and detail the brand’s great historical references – Carrera, Aquaracer, Monaco – at a time when vintage, particularly vintage sports models, is valued as never before.
The work was all about fine-tuning, balancing retro inspiration, catalogue updates, digital disruptions and daring innovation (e.g. the lab-grown diamonds of the Carrera Plasma), all to find the perfect synthesis between the different avenues the brand has explored in the 21st century, in the search for the right niche. The past few years have also seen several strategic reversals. Volume or value? It’s the eternal dilemma of brands active in what is called, for lack of a better term, “affordable luxury”.
TAG Heuer’s strategic partnership with Porsche reflects its ambition: to reinforce its desirability as a brand that stands at the crossroads of heritage and innovation. Its scope of action is wide but “traditional watchmaking will always be TAG Heuer’s core business”, emphasises Frédéric Arnault, as if to reassure us of his intentions.
Volume or value? It’s the eternal dilemma of brands active in what is called, for lack of a better term, “affordable luxury”.
Europa Star: How, specifically, has TAG Heuer evolved since your arrival at the brand in 2017?
Frédéric Arnault: When I joined TAG Heuer, I initially focused on the then nascent connected watch business. I entered the watchmaking world from a tech angle. We updated the brand’s vision in this area. There was a focus on production, because it was – and still is – a major issue in the traditional watch industry. But that’s not necessarily the case in the tech world. Market leaders like Apple, one of the most verticalised companies in the world, do not handle their own production. In tech, it is quite possible to control quality without controlling production. On the other hand, you have to go and find the right know-how. What counts above all is finding the right network of suppliers.
The priority for us was not so much production as experience. We therefore had to find the means to invest in both the physical and the software experience. A team was set up in Paris to work on these elements, in close collaboration with Switzerland. That was the first major change I implemented when I arrived at TAG Heuer. Today, connected watches represent 15% of our sales, and that’s a good ratio – traditional watchmaking is doing very well, so this segment has had to really grow to increase its internal market share. Back then, I was directly involved in the transformation process under the supervision of Stéphane Bianchi, before taking over the management of the brand in 2020.
“I entered the watchmaking world from a tech angle. We updated the brand’s vision in this area.”
The first strategic axis is a gradual repositioning and move upmarket in traditional watchmaking, which will always be TAG Heuer’s core business: the demand is there and we have fantastic heritage and know-how. We have clarified the basics of the Carrera and Aquaracer collections. The next step is to integrate innovative technologies into these lines, like the Plasma or the Solargraph, which we are introducing this year. The move upmarket is about the product, but it’s also about distribution. We are rationalising our network of sales outlets; in three years, we have gone from more than 4,000 points of sale to less than 3,000. At the same time, we are strengthening our partnership with the points of sale that we have kept. The cornerstone of this whole strategy, our permanent obsession, is the desirability of the brand. TAG Heuer must appeal to new generations and strengthen its relevance in the decade to come.
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