Swiss Investment Helps LVMH Make Better Watches
LVMH Watch Division has bought a small share in La Joux-Perret (LJP), a Swiss movement maker controlled by Japan’s Citizen Group. The transaction, which was made public on November 12, gives LVMH better access to Swiss-manufactured mechanical and solar-quartz movements. This gives its premium watch brands, such as Tag Heuer, Hublot, Zenith, Bulgari, and Tiffany & Co., more size and strategic depth.
Analysts see the investment as a way for LVMH to get a strategic footing in Switzerland’s watch supply chain, even if the terms of the deal have not been made public. It makes sure that sourcing precision movements, which are very important for luxury watches, will be stable in the long term. It also provides LVMH a say in LJP’s future direction if Citizen decides to sell further businesses.
La Joux-Perret A Key Player in Swiss Movement Making
La Joux-Perret is based in La Chaux-de-Fonds and makes over 150,000 movements a year. These range from the G100 automatic caliber, which is the most basic, to the L100 column-wheel chronograph and various high-end tourbillon movements. The Solargraph is another product made by the firm. It is a solar-powered movement that was created in partnership with Tag Heuer.
You don’t have to change the batteries in the Solargraph since it charges itself with sunshine or artificial light. A watch can run for a whole day on just two minutes of full sunshine and for six months on 20 hours of sunlight. This technology has powered popular LVMH watches, such as the Tag Heuer Aquaracer and the relaunched Formula 1 series. This shows that the company is becoming more interested in sustainable energy solutions.
Increasing Solar Innovation Across LVMH’s Watch Brands
The Solargraph was so successful that it was added to other LVMH Maison products, such as Tiffany & Co.’s Rope watch. The company wants to use it in other watches throughout the group. LVMH wants to use its knowledge of solar energy to make things more efficient, cut down on maintenance, and help the business reach its larger sustainability goals.
Jean-Christophe Babin, CEO of Bulgari and head of LVMH’s Watch Division, said in a statement that the investment shows the group’s desire to “leverage our unmatched expertise in solar energy” while also working more closely with Citizen’s technical teams.
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Strategic Positioning in a Consolidating Industry
The purchase happens as the watch industry throughout the world continues to merge. La Joux-Perret competes with other big Swiss movement suppliers, including Sellita, Kenissi (which is mostly owned by Rolex’s Tudor brand and partly owned by Chanel), and Swatch Group’s ETA.
LVMH was also speculated to be among possible buyers for Vaucher Manufacture Fleurier, owned by the Sandoz Foundation. The foundation recently stopped the selling process because it couldn’t get good conditions. However, Hermès, which owns 20% of the company, still has the right of first preference if a new bid comes in.
The Citizen Group’s Ongoing Role and Independence
After LVMH’s investment, Citizen Group said that La Joux-Perret will stay autonomous and run its own business. The business will continue making high-end movements for watchmakers that aren’t part of either the Citizen or LVMH ecosystems.
Yoshitaka Oji, president and CEO of Citizen Watch Group, called the purchase a “strategic alliance with a key partner” that proves Citizen’s technological competence and opens up “new long-term development prospects.”
Strengthening LVMH’s Watchmaking Portfolio
LVMH, the world’s largest luxury business, maintains a varied portfolio ranging from Louis Vuitton and Dior to Moët & Chandon and Dom Pérignon. Tag Heuer, Hublot, Zenith, Bulgari, and the restored Daniel Roth and Gérald Genta are some of the most revered brands in the watchmaking industry.
LVMH still doesn’t make as many watches or sell as many watches as Richemont, Swatch Group, or Rolex, though. The minority share in La Joux-Perret is a strategic move toward being able to make movements on its own, which will provide its maisons more freedom and room for new ideas.
A Calculated Step Toward Vertical Integration
People who watch the industry think that LVMH made the transaction on purpose to increase vertical integration in response to changes in the supply chain. Having access to Swiss movements that are solely available to you not only makes things more cost-effective, but it also gives you more freedom to be creative in design and manufacturing.
LVMH is at the crossroads of traditional craftsmanship and technological sustainability by working with Citizen’s manufacturing expertise and expanding solar technology across its watch brands. The relationship is part of a bigger goal to make sure it stays a leader in both luxury watchmaking history and new ideas.
