LONDON — The Method 1 season doesn’t begin till mid-March, however already, TAG Heuer can really feel the traction from a deal reportedly price $1 billion, which made it the game’s new official timekeeper and title sponsor of the Monaco Grand Prix.
“In January, we noticed a double-digit enhance within the variety of individuals coming to our shops in comparison with the identical interval final 12 months,” stated TAG Heuer’s new chief govt Antoine Pin in an interview with The Enterprise of Trend forward of the opening occasion for F1’s seventy fifth anniversary season, held at London’s O2 enviornment final week.
The Swiss watchmaker’s function was made public January 6 by guardian firm LVMH, following an announcement final October that the French conglomerate had signed a multi-brand 10-year cope with F1’s homeowners Liberty Media. Alongside TAG Heuer’s timekeeping, Moët & Chandon develop into the game’s official champagne whereas Louis Vuitton will present trunks for race trophies amongst different activations. The function confirmed TAG Heuer’s emergence because the LVMH Watch Division’s darling.
Pin stated it could take time earlier than the affect the partnership would have on gross sales turned clear. “The momentum is increase, but it surely’s nonetheless very early,” he stated.
TAG Heuer’s new chief was appointed in September from LVMH stablemate Bulgari. He succeeds Julien Tornare, who moved over to Hublot after simply 8 months within the job. The group’s watch division is headed by Frédéric Arnault, son of LVMH chairman Bernard.
TAG Heuer was first concerned in F1 within the late Sixties and stays a sponsor of the Oracle Purple Bull Racing Crew and present F1 World Champion Max Verstappen. It final took care of timekeeping between 1992 and 2003. LVMH is known to have outbid F1’s earlier timekeeper Rolex, which had timed races for the previous decade.
In accordance with George Ciz, TAG Heuer’s chief advertising officer, who was current in the identical interview, information of the deal has prompted a spike in social engagements, too. “4 years in the past we had been the quantity seven [watch] model on Instagram,” he stated. “Then we jumped to 3rd by 2023, and final 12 months we had been second. In January, we had been first, forward of Rolex and Omega, and never by a small margin.”
Impartial information backed up the declare. “TAG Heuer was the quickest rising model on our benchmark panel, up 8 p.c year-on-year in 2024,” stated Benjamin Dubuc, innovation director and companion at Digital Luxurious Group (DLG), a Geneva-based consultancy. Posts that includes Purple Bull Racing, which TAG Heuer first partnered in 2016, and the Netflix racing sequence “Senna” carried out notably effectively.
“TAG Heuer’s posts averaged 20,000 likes per submit, whereas opponents [Breitling, Longines and Tudor] averaged solely 4,300 likes per submit,” Dubuc stated. “Engagement ranges recommend a robust emotional connection to F1-driven content material.” He famous that TAG Heuer’s Method 1-driven social media technique had resonated notably effectively within the US, the place its share of search demand was up 3 p.c to document ranges in December.
Ciz stated he hadn’t invested closely in instantly selling the model on Instagram, however that the outcomes stemmed from a excessive diploma of pure curiosity in its actions with F1, the Car Membership of Monaco and Senna Basis. “We didn’t spend foolish cash on this: most of it was natural,” he stated.
Surging curiosity in TAG Heuer comes at a time when the posh watch trade is battling robust headwinds. Exports are down and lots of manufacturers have put employees on short-hours contracts as retailers scale back orders in a bid to offset swelling inventories.
TAG Heuer, nonetheless, might already be bucking the pattern. LVMH doesn’t publish revenues by model, however in keeping with Morgan Stanley’s influential Swiss watch report, printed this month, final 12 months TAG Heuer was one in every of solely a handful of luxurious watchmakers to extend gross sales. The report’s estimates indicated TAG Heuer’s revenues climbed 9 p.c to 670 million Swiss francs towards an trade common of -2.4 p.c. Pin declined to verify Morgan Stanley’s figures, however stated they had been near precise.
Whereas Pin stated this made him “cautiously optimistic”, he wasn’t making any massive forecasts. “You’ll count on that the developments you’re making are having a constructive affect on what you are promoting,” he stated. “However then again, we all know we’re not in the perfect financial situations.”
He continued: “The great thing about this deal is that it’s a 10-year deal. The complexity for us is to keep up fixed strain and to suppose long-term. This trade doesn’t alter to the ups and downs of the financial system in a single day. So you’re balancing between the optimism of this main choice to return into F1 and the constructive affect it ought to have on our enterprise, and on the opposite finish, being conservative when it comes to the financial fundamentals the place principally you’re undecided that folks could have extra disposable earnings in 2025 than in 2024.”
Analysis suggests it’s a superb time to be on the roster of F1 sponsors. A report launched in December by Nielsen Sports activities, the sports activities measurement and analytics company, indicated that F1 is now probably the most adopted sports activities sequence on this planet with a world TV viewers of 1.5 billion. Since 2021, world curiosity in F1 has added roughly 50 million new followers, in keeping with the report, making it the quickest rising annual sports activities competitors on this planet.
For TAG Heuer, the partnership might but be measured towards the US market, which Pin confirmed is TAG Heuer’s largest, including that the Americas, together with F1 hotspots Brazil and Mexico, account for one third of the corporate’s whole revenues.
Lately, Method 1 has grown in recognition within the US on the again of the Netflix sequence “Drive to Survive”, whereas new races in Miami and Las Vegas have pulled in massive crowds and document TV audiences. Race weekend attendance on the Miami Grand Prix final 12 months elevated to 275,000 from 243,000, and the race attracted the biggest ever F1 US TV viewers within the sport’s historical past, in keeping with organisers.
The US is by far Swiss watchmaking’s largest market, and nonetheless rising. The Federation of the Swiss Watch Business (FHS) recorded export values to the US of 4.4 billion Swiss francs in 2024, up 5 p.c on 2023 and 12.4 p.c on 2022, document years for the trade because the pandemic bounce kicked in.
“It’s a superb equation,” admitted Pin. “Every little thing is becoming collectively. And these new [US] races deliver the identical glamour you discover in Monaco, so the elements are there that make actually effervescent moments. Hopefully we must always make the most of that.”
China, by comparability, stays in a droop and after years of decline now accounts for Swiss watch exports valued at 2 billion Swiss francs, down 26 p.c year-on-year in 2024 alone, in keeping with the FHS.
Pin says TAG Heuer is “under-represented in China in comparison with the trade” and that it nonetheless has to “show itself” within the nation. Subsequent month, F1 will return to China for the primary time since 2019.
“We’re clearly a really small participant [in China] in comparison with the remainder of the world,” he says. “It’s not in our prime 10. We got here late to China and once we did, within the late 2000s, we had been impatient and tried to do an excessive amount of. Sports activities watches weren’t prized there, however the market has modified and the Grand Prix is a chance for us to specific what we’re correctly.”
TAG Heuer has but to announce the way it will activate the partnership on race weekends, however Ciz stated the pitlane exit would have a 1.2-metre TAG Heuer clock and that an LVMH steering group had been set as much as coordinate VIP experiences. He stated the group can be taking round 120 individuals to every race weekend.
However Ciz stated TAG Heuer’s multi-layered involvement within the sport would supply it with distinctive storytelling alternatives. “What makes us totally different from another companion is that we’ve got a partnership with a circuit [Monaco], with the world champion Max Verstappen, and with Purple Bull Racing,” he stated. “Now we have the nirvana second, the place you could have the competitors and the perfect athlete in it.”
In accordance with Pin, TAG Heuer will make investments almost 20 p.c of its revenues in advertising this 12 months, consistent with the model’s historic common. “We’re not simply supervising the race, we’re engaged within the competitors,” he stated. “The emotion of successful is tremendous vital to us. We’ll make a variety of buzz, but it surely’s a marathon we’re working. It could possibly’t be that we do one thing for one season after which repeat ourselves. It received’t be enterprise as typical year-on-year.”
Pin stated F1 can be used to advertise every of the corporate’s 5 present mannequin households, together with the Method 1 usually the corporate’s entry-level product line. At LVMH Watch Week final month, TAG Heuer added new chronographs to the Method 1 assortment, priced round $5,000, and it’s anticipated to introduce a extra accessible line at Watches and Wonders Geneva, the trade’s largest annual watch truthful, which takes place within the first week of April. Pin additionally stated a brand new model of TAG Heuer’s Linked luxurious smartwatch can be launched later this 12 months and that the corporate can be trying to leverage its historic timekeeping know-how sooner or later.
Whereas the trade has been transferring to a low-volume, high-value mannequin, Pin stated he was bold to extend his firm’s volumes, contradicting the present trade pattern. FHS figures present that final 12 months, export volumes plummeted by nearly 10 p.c and that Switzerland now exports half as many watches as in 2011. In the meantime, common export values have greater than doubled over the previous decade.
“For those who surrender and say it’s simply going to be tremendous costly merchandise, you’re battling for only a few individuals,” stated Pin. “We have to have all people on board with this, all stakeholders. Nevertheless it received’t be straightforward. Every little thing is main towards fairly excessive underlying inflation.” A robust Swiss franc and the rising worth of gold have been a relentless headache for Swiss watchmakers.
Pin shall be hoping the F1 partnership is the gas that revs up his enterprise. “There’s a matter of delight that we’re again in Method 1,” he stated. “There’s a way that we’re dwelling.”
Disclosure: LVMH is a part of a gaggle of buyers who, collectively, maintain a minority curiosity in The Enterprise of Trend. All buyers have signed shareholders’ documentation guaranteeing BoF’s full editorial independence.
