Opinion: Maybe One Group Controlling All the Major Luxury Brands Would Be Bad?

It’s been a slow few months in the watch industry. Not at all uncommon in the summer, and we haven’t even hit the real sleepy months yet, when most of Europe goes on holiday and American watch media is confronted with the reality that we’re working a beat that doesn’t really exist for a short period of time. But there was real news last week: Bloomberg reported that LVMH CEO Bernard Arnault owns a (small) personal stake in the Richemont Group, his closest rival in the luxury goods space. Once the news broke, many began to speculate. Hey, it’s a slow summer – speculating is what keeps us awake. Could this be a sign that LVMH is positioning itself to buy the Richemont Group? Could that even happen? What’s the actual point of antitrust laws anyway? 

There’s no actual indication, of course, that Arnault wants to purchase Richemont. The holdings, according to Bloomberg, are part of a larger portfolio of Arnault family investments that include many publicly traded companies. No comment as of yet from Richemont or LVMH, although as many outlets are reporting, LVMH has a history of buying an interest in their rivals. 

We live in a world where insane wealth becomes more insane every year, so it’s not a huge mental leap to think that Bernard Arnault, who on any given day might be the world’s wealthiest man, could have eyes on getting even richer. Taking an ownership stake in Richemont would almost certainly do that. It likely already has – Richemont shares were up a few percentage points after the news broke last week. 

As watch enthusiasts, the business side of our world often feels like a spectator sport. We spend a great deal of time thinking about the watches we wear, the physical objects, and not so much time about the executives who bring them to market and the decisions they make that shape the watch landscape, whether we’re paying attention or not. 

It seems to me, and this won’t be a surprise to most people, that one company, and indeed at the end of the day, one person, having a controlling interest in the fate of so many watch brands would not be a great development for watches on the whole. The luxury group model, bifurcated as it is between three major players and a handful of smaller ones, hasn’t exactly been a win for creativity, quality, or owner satisfaction. Shared resources between group brands, be they human, intellectual property, or the physical material and components of watchmaking, inevitably creates an environment where corners are cut to save in operating costs (for example, parts sharing, and watch servicing), and brand identity suffers.

The LVMH stable of watch brands is already incredibly powerful, representing both the mass market (TAG Heuer) and high watchmaking in multiple guises (Daniel Roth, Bulgari, and, occasionally, Hublot). I’m a huge fan of many of these brands and the watches that come from their houses, but a frustration persists when I see evidence of a “group style” emerge. Zenith, TAG, and Hublot, for example, have all released watches in recent years with similar partially skeletonized date displays that “hide” all but the current date behind an opaque ring. Why should watches in totally different registers from all three brands share this highly specific design cue? Did they all independently have the idea at the same time? Is it merely a coincidence that they fall under the same corporate umbrella? You can probably infer what the cynic inside me suspects. 

Richemont, for its part, has its own issues with brand identity within the group. Speculation was rampant at Watches & Wonders this year that the decision on Jaeger-LeCoultre’s part to not make the movements in their new Duometre collection from German Silver was a concession to A. Lange & Söhne, who still uses this material in their own calibers. The need for brands to be positioned in a certain way in comparison to one another is a natural byproduct of the luxury group model. It makes my head hurt to think about how this might be managed in a theoretical LVMH x Richemont Super Group. 

It’s hard enough to let brands be brands now. But in a world where Cartier and TAG might theoretically operate under the same corporate structure, does anyone think either brand would be in a position to truly thrive? When decisions at a brand have to be run up a flagpole that needs to take the corporate interests of other brands into consideration, it seems unlikely that risk taking and experimentation would be prioritized. 

I worry, at moments like this, about the potential for increased homogeneity among the most well known luxury brands. I don’t necessarily mean that watches from these brands will begin to all look alike (although that’s a definite possibility) but more so that the big luxury group brands will be run in a way that prioritizes safety and conservatism. The homogeneity of ideas is a lot more concerning than an opaque date display. 

While the average watch enthusiast is powerless to stop a potential merger of LVMH and Richemont, there is a way that we can at the very least make these problems feel minor: stay away from luxury groups. Months ago, turned off by the idea of mass produced watches with insanely high markups that might be quite nice on the one hand, but fail to break any new ground or move the industry forward, I decided that this year I wouldn’t buy a watch from a big luxury group brand. Not as a protest or anything, but as a way to affirm my own dedication to the independent mindset that truly excites me about the hobby. I only faltered once, when I purchased a Swatch at the Geneva airport on my way back from Watches & Wonders. 

There’s a world of indies out there at all price points with designers who don’t answer to a board of directors. This is the best time, possibly in the history of our community, to be an adventurous watch collector.