Is Slowing Demand For TAG Heuer Watches

While the & Wonders is running at full throttle in Hong Kong, one needs to take a step back to understand how markets in China and other places around the world are affecting the watch market and causing it to adapt and evolve. Even in Hong Kong, strong pro-democracy protests have been under way, in what some refer to as "the worst unrest since the territory's 1997 handover from Britain," according to Reuters. At the same time, news released from Replica Tag Heuer Grand Carrera (the largest watch company in the LVMH luxury conglomerate) announced earlier this week it is cutting jobs in its watch manufacturing facilities. We believe that this news is strongly linked to the slowing demand from the "Asian watch capital," and China overall.

According to official Swiss statistics, Hong Kong alone accounted for nearly 20% of all Swiss watch exports in value, more than the USA and Germany combined – and with that in mind, it is easy to see why this has been urging Replica TAG Heuer Monaco to undertake consolidating measures. Beyond unsettling news from important markets, there have been some major changes implemented within TAG Heuer as well – let's see how those factor in, and what these measures might mean for the brand in the long term.

To begin with, let's see what these measures are, specifically: LVMH will cut 46 jobs in management and production and has put 49 employees on partial unemployment, Jean-Claude Biver, head of LVMH's watch making division, said in an e-mail. The job losses will affect TAG Heuer's sites in La Chaux-de-Fonds, as well as its new manufacturing facility in Chevenez in Switzerland, where it employs approximately 600 staff, and which we visited less than a year ago (manufacture visit article here). Some news sources claim that the new facility might be put on ice, as its costs are claimed to outweigh some of its potential benefits.

While it certainly happens from time to time, it is very rare to receive news of such job cuts at one of the major Swiss watch brands. In essence, the company is cutting jobs in its brand new (and unquestionably incredibly investment-heavy) manufacturing facility, which makes this story even more interesting and difficult to understand. Once we try and look at the larger picture however, it all starts to make sense.

As we discussed in a recent article dedicated to TAG Heuer's future company direction, Jean-Claude Biver (former CEO of Hublot) now oversees the watch making division of LVMH, and hence his vision applies, not just to Hublot, but rather, to all watch brands within the massive French luxury conglomerate. One of Biver's major decisions is re-focusing TAG Heuer's brand positioning, in terms of their average price point. As such, TAG Heuer moving forward is said to lower their watches' average price point to about €1,000 - €4,000 ($1,300 to $5,000). This comes after pretty good attempts by the brand to cover the $3,000 - $5,000 watch range, and more recently, the $5,000 - $8,000 watch price range.