A journey across Switzerland, mapping out LVMH’s watches strategy
today Aug 3, 2018
Though the blinds are down, the summer sun filters through into the spacious workshop. Leaning over the workbench, with a magnifying loupe pressed to one eye, two young women in white lab coats are busy checking a watch movement, under the benevolent gaze of their instructor, Ronan Gregoire. Two offices further on, a colleague is tidying away tweezers, movement holders, dust blowers, and pin removers. The atmosphere is focused but relaxed. It is the beginning of July, the summer break is about to start for the Swiss watch-making industry, and the branch of the LVMH’s Institut des métiers d’excellence (IME, the luxury group’s vocational training institute) based at the headquarters of TAG Heuer, in La Chaux-de-Fonds, Switzerland, is about to close down for the period too.
The French luxury goods giant set up its watch-making vocational training institute in 2016, basing it at TAG Heuer, a Swiss watch manufacturer founded in 1860. “For the last three years, watch-making training for TAG and Zenith has been taking place here, with other courses run in partnership with the CIFOM professional training school. This enables us to host about twelve students at different course levels,” said Ronan Gregoire, who for 20% of his time still continues to work as a watch-maker.
There is no promise for employment at LVMH for those who train at IME. However, the watch-making industry is growing again and the competition for hiring qualified professionals is keenly felt. And by training the watch-makers of tomorrow, LVMH is also creating a talent pool it can draw from to develop its brands, in the watch-making workshops and also in after-sale service worldwide. “LVMH’s corporate environment broadens the students’ professional minds, for example when they work on projects with ready-to-wear or champagne brands. In the course of their training, they have access to the workshops of TAG Heuer, Zenith and Hublot. We also take them to visit Louis Vuitton’s Time Factory, recently opened in Meyrin, close to Geneva.”
Though the basic know-how is the same for each brand, the students are able to experience and assimilate different corporate cultures. And in the world of Swiss watch-making, profoundly steeped in tradition, these differences mark each brand’s unique character. Visiting these watch factories, whose windows overlook Alpine pastures, means discovering different philosophies. This is what the LVMH group will offer to the general public from October 12 to 14 2018, when it will open the doors of some of its manufacturing facilities for the fourth edition of its ‘Private Days’ initiative.
As for future watch-makers, taking a peek behind the scenes is fascinating for the general public too. And it enables people to understand why these workshops, the cradles of Swiss watch-making expertise, are classified among UNESCO’S World Heritage sites.
This sector is usually associated with a master watch-maker leaning on his workbench. To enter into the workshop allows one to discover this trade where calm, precision, and dexterity are they key words. There are several important stages in the creation of watches. Firstly, putting the plate and the bridge in place, then the assembly, and finally the casing, which makes it possible to fix the movement of the watch to the dial and to the case. By witnessing these steps, this hierarchical profession can be discovered in an egalitarian way, with both the helpers and the experts.
In Building B of Tag Huer’s headquarters, which produces 800,000 watches a year, the majority of casing operations take place in a large hall reminiscent of a laboratory. Around 30 people are spread across different workshops and silence is the norm as everyone is focused on a very precise step, placing miniscule parts and following the patterns. “We rotate positions,” explains an operator, who also mentions that it takes several weeks of practice before the operators' hands stop trembling enough to perform these precise tasks.
On another floor, the atmosphere is more intimate. Eight men wearing black overalls are bent over their raised workbench and focused on complex pieces. Here there is no task rotation. We are in the space dedicated to Haute Horlogerie. These are assembly experts who are responsible for facilitating all of the most complex movements of the watches they work on, watches which cost tens of thousands of euros. Around 20 watches are produced here each week.
“Here, everyone is responsible for their watch from start to finish,” explains Catherine Eberlé-Devaux, Tag Heuer’s brand heritage director. “These are people with a ‘craft degree’ which requires five years of studies. It has been two years since we realised our strategic goal to have an Haute Horlogerie offer, all while having the parallel objective of shaking up the norms and pricing in the segment.”
Other experts (again, only men), who are also part of the elite, are tasked with after-sales service. Every year, the team of six people repair around 800 vintage watches. In order to meet the needs of this booming market, the brand used its prototyping workshop to individually reproduce parts from its historical models.
“This is a special task because it demands knowledge of how the watch was originally produced, which requires scouring the brand’s archives to see its design and the type of alloy used at the time, as well as understanding how the watch has been repaired over time,” explain the team, which is led by Denis Chardon. This team of professionals has many years of experience, but also one younger member under 30, who grew up in the workshop of his father, a watchmaker. This epitomises Swiss watchmaking: heritage and family lines.
The brand new museum in Locle, Le monde étoilé de Zenith, is at the heart of the area’s watch manufacturing in the Vallée de Joux and showcases the importance of its local history. The Zénith brand was founded in 1865 by Georges Favre-Jacot, who had the idea of bringing together different trades to produce a mechanical watch and subsequently its industrial manufacture. Next year, the brand will celebrate the fiftieth birthday of one of its classic models, El Primero.
Looking around one of the brand’s 18 hillside buildings can gives a flavour of its heritage. When visiting the lofts where old stamps and materials are stored on wooden shelves, the brand’s global human resources director, Pierre-Olivier Aguinalin, notes: “These are parts worth 40,000 Swiss Francs apiece. If these had been lost, it would have been the end of manufacturing.”
The expertise of Zénith was nearly lost in the 1970s when the brand’s former owners decided to bet its future on quartz. The brand’s treasure was preserved by the engineer Charles Vermault who defied his orders. Vermault decided to hide the watch specifications documents, machines, and stamps in the eaves of one of the buildings and then to condemn the place to time. His secret was preserved until a change of strategy saw mechanical watches come to the fore.
Today, Zénith produces around 30,000 luxury watches. Witnessing their manufacture makes it possible to understand the diversity of professions involved in the creation of an object that measures 4cm in diameter, from the design team and research and development to the aesthetic finish, through prototyping, machine parts, the production of the dial, the assembly and so on.
Beyond the heritage of Zénith, the sophisticated touch of Tag Huer, and the occasionally iconoclastic approach of Hublot, is an organisation that reaches far beyond watchmaking expertise. The LVMH group has opted for a verticalisation of its strategy and has an impressive industrial structure. Much of the activity is mechanised, robotic, and digitised. The use of machines when producing the pieces that make up the miniscule movements of watches and dials benefit from these numerous industrial techniques. At Zénith, machines facilitate the production of pieces that compose the watches’ movements. At Tag Heuer, a test laboratory can perform some 160 tests to check the resistance of models and the chemical composition of materials used. At Hublot, a machine runs 24 hours a day to perform chronometric tests on 500 watches. The brands of the group therefore make just as substantial investments in basic tools as they do in specialised machinery.
At the heart of the Hublot brand, founded 30 years ago and acquired by LVMH in 2008, is its own unique image, “the art of fusion, and of a positioning of uninhibited luxury,” says Philippe Tardivel, the brand’s marketing director. The brand assembles around 65,000 watches a year in its two buildings that look out over Lake Geneva, one for fabrication and the other for assembly, and is growing at an annual rate of 10-15%.
The brand’s watches are worn on the wrists of football players and even by Karl Lagerfeld, who sported the brand’s new model, a bright red ceramic watch, at his latest Chanel show. “It is exceptional to be able to offer watches with bright ceramics,” says Philippe Tardivel. “We have been mastering this over nine months and it is the result of many years of development. Our goal is to bring our heritage watchmaking art up to date.” Research and development is clearly a strong focus point for these watchmaking brands which form a team to find new alloys and develop the appeal of their respective brands.
In the ultra-modern buildings at Hublot, it is immediately apparent that materials development involves a range of other technological advances. Inside the brand’s laboratory, its engineers are pleased to present what has become the star of Hublot in recent years, the Magic Gold. It is an 18-carat alloy that is scratch resistant. However, in order to be able to use this material to create dials, specialised machines had to first be developed in Hublot’s machine workshop. State-of-the-art machinery is essential for the brand and annual investments in machines sometimes reach a six-figure sum. This investment pays off and the brand’s innovation that created brightly coloured ceramic opened the door for Hublot to a number of new partnerships, including a collaboration with Ferrari on its red watch. This has also won Hublot new customers.
With the numerous brand development projects of the LVMH group, which recorded 10% growth last year in its watches and jewellery division, the future graduates of the Institut des métiers d’excellence will surely have opportunities to seize.
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