Frédéric Arnault, TAG Heuer CEO


TAG Heuer has had some well-known leaders over its 185 years. After all, the model is outlined by the period of Jack Heuer, who developed and launched a lot of the collections which can be emblematic of the model immediately. This century alone has seen TAG Heuer beneath the management of trade legends akin to Jean-Christophe Babin (now of Bulgari), Jean-Claude Biver (no introduction vital) and Stephane Bianchi (now head of LVMH Watch and Jewelry).

As we speak, the model is the area of one other well-known identify, Arnault. CEO Frédéric Arnault is maybe finest referred to as the son of LVMH supremo Bernard Arnault, one of many world’s richest individuals (some say the richest, relying on how Elon Musk is tweeting) and positively Europe’s richest man. That’s in fact unfair, and we convey it up now simply to get it out of the way in which. Simply utilizing the surname Arnault in an LVMH-related story could have you pondering instantly of the senior Arnault, so there isn’t a avoiding it. In our dialog with Frédéric Arnault, we didn’t focus on his household — apart from one particular point out, associated to his first watch — and the usual publicity strictures across the younger CEO (he’s 28) preclude any private questions. This isn’t uncommon, in itself, as a result of loads of CEOs don’t put themselves on the centre of their model’s narratives.

We lastly managed to get some face time with Arnault in Singapore when he was on the town for the Singapore Grand Prix this 12 months, and we had been excited. The timing was not supreme, given the size of time between the interview and publication. With that in thoughts, it was determined to strive a distinct format for this story, on condition that we have now by no means spoken with Arnault beforehand, in any capability. This isn’t to say that he’s a cipher or something, though he’s extra reserved than anticipated for a CEO. Definitely, the distinction between himself and different extra established figures at TAG Heuer is a robust one. Whereas we might have used this story within the Legacy concern, it appeared a greater match for our commonplace Festive concern as a substitute. We’ve had a deluge of interviews within the second half of this 12 months, ensuing within the largest interview part we have now run since 2016, and we’re managing all this by publishing in chronological order.

Again on Observe

Carrera x Porsche RS 2.7 steel

So far as the story of the Arnault household and their ties to TAG Heuer go, bringing this up in relation to Frédéric Arnault’s prime job is especially unfair for a variety of causes. To begin with, on the advertising and marketing aspect of issues, TAG Heuer devoted will bear in mind Frédéric Arnault as the person who lastly made the Carrera connection between Porsche and TAG Heuer official. Biver didn’t do this, and never even Jack managed it. Frédéric Arnault did, however first he needed to pivot the model away from soccer, or soccer, and again to motorsports, in a transfer that many — inside TAG Heuer and amongst watch lovers too — had been unconvinced by, initially.

“Individuals had been saying, ‘Oh, motorsports, it’s not what it was; it’s not as thrilling; it doesn’t entice a younger crowd… Are you actually certain you need to reinvest closely in that route?’ And there’s like all this sustainability points (related with motorsports), however I had the idea that that was proper for the model, and that’s the place we have to be robust. That’s the place we would have liked to additionally dominate within the trade as being the watch model most intently linked with this world. So, in fact it was motor racing for us.”

It was a daring transfer, even when it felt like a return to custom as a result of the soccer connection was solely in its nascent part, or beta part as Arnault says, and he notes that it was a significant funding. In any case, TAG Heuer is again in Components 1 now, and climbed to the highest of the rostrum in its partnership with reigning world champions Purple Bull Racing. The profitable Porsche connection adopted, nevertheless it was not the case that Arnault might simply journey on each his well-known identify and that of the model he commanded. In line with numerous sources, together with the wonderful New York Instances article by Vanessa Freidman referenced closely for this story, Arnault achieved this by making chilly calls and being tenacious.

Digital Renaissance

TAG Heuer Related watch

“He writes a letter to the chairman and will get no reply,” Bianchi instructed the New York Instances. “He writes to the VP for advertising and marketing: no reply. He invitations them to see the corporate. He had three or 4 refusals earlier than they even agreed to come back and pay attention.”

“So the administration, and the household as nicely as a result of you understand it’s a family-owned enterprise, noticed the historic connection,” mentioned Arnault. “They noticed the imaginative and prescient we have now for the model, they usually wished to be a part of it. For now, it’s doing very nicely for us.” It appeared to line up completely, what with Porsche virtually sure at one level to re-join Components 1 with none aside from Purple Bull Racing. Occasions have put paid to that plan, however the mud has not but settled.

Arnault can also be the architect behind the digital renaissance at TAG Heuer. It’s no small feat that TAG Heuer stays the main Swiss participant within the smartwatch sport, giving fellow LVMH manufacturers akin to Louis Vuitton and Hublot a leg up on this space.

“We’ve a imaginative and prescient and technique that’s totally different from our watch opponents as a result of we determined to speculate closely, and construct (the Related Watch) as a pillar. Of the watch manufacturers, we have now legitimacy as a result of avant-garde is a part of our identify [this was in response to our suggestion about the meaning behind TAG – Ed] therefore innovation as nicely…additionally due to our relationship with the worlds of sports activities, well being and wellness. This has all the time been so vital for TAG Heuer, and can also be one of many key options on the Related Watch. Our values (thus) enable us to make it work higher than different manufacturers.”

Rising Up Arnault

It’s this improvement of smartwatches that appears most salient in relation to discussing the youthful Arnault. It’s no exaggeration that a lot of the Swiss watch commerce by no means actually tried to make a go of grabbing a part of the smartwatch pie. So why and the way did TAG Heuer handle it? The reply in a single identify is Frédéric Arnault, though he was behind the scenes on the time and has by no means actually made the TAG Heuer Related Watch about himself. There’s an fascinating story right here, which requires us to backtrack a little bit and get into Arnault’s historical past.

The fourth youngster of Bernard Arnault, Frédéric is on the report saying he by no means felt pressured to affix what quantities to the household enterprise. Notably, he’s additionally considered one of 5 Arnault kids to search out himself working at LVMH, and now the second within the watch enterprise; youthful brother Jean works at Louis Vuitton watches, however Frédéric paved the way in which for him, arguably. The New York Instances and South China Morning Put up, amongst others, observe that Frédéric and the opposite Arnault kids all grew up in, or round, the enterprise, which can be a supposition however not an unfair one on condition that they’re primarily a part of a household enterprise. Consider it this fashion: What do you name a farmer’s spouse, and youngsters? The reply is farmers, in fact.

Like a lot of France’s elite, Frédéric Arnault attended the École Polytechnique, rising with a level in utilized arithmetic and laptop science. He later interned at Fb and McKinsey & Firm, earlier than co-founding a cell cost start-up with a good friend from faculty. On the similar time, he was already engaged on the Related Watch at TAG Heuer. The beginning-up was bought to funding agency BNP after 18 months and Arnault correctly joined TAG Heuer in 2017 in a brief position because the boss of related applied sciences. On the similar time, he indulged in his love of music, reportedly enjoying piano at spectacular ranges. He used to offer concert events annually, till he grew to become CEO in fact, in accordance with the New York Instances.

Software program Engineering

TAG Heuer Connected Calibre E4
Picture: TAG Heuer

Whereas Arnault’s rise might have been meteoric, he did study some spectacular classes throughout his expertise stints. For instance, in our dialogue, he expressed a level of incredulity in regards to the fascination Swiss watchmaking companies have with vertical integration, though he does observe the significance of leveraging TAG Heuer’s know-how in assembling nice wristwatches. He simply didn’t suppose the corporate wanted to be within the micro-electronics enterprise. Arnault understood instantly that software program was the sport.

“After I joined, emphasis had been placed on the manufacturing, making every little thing Swiss-Made, so investing in our personal factories to construct the Related Watch. After I studied the trade, the applied sciences evolve so quick that it’s virtually not possible (to perform) with the volumes that we had, and what we deliberate to realize… It took a while for me to shift this (to say) really we’re not going to speculate ourselves in manufacturing (of the Related Watch). The place we have to make investments is on differentiation (between all the various smartwatch choices), which implies software program, and that’s why we constructed our personal software program crew.”

Ultimately, Arnault leveraged on his experience within the expertise sector to arrange store in Paris, the place TAG Heuer takes care of design and mechanics by leveraging off the experience of the Swiss manufacturing groups. He notes that they now give attention to growing software program, and making some {hardware}, to construct the model’s use-cases and drive the expertise behind the success of the Related Watch. The remainder of the electronics {hardware}, nicely that’s constructed by companions and distributors. One main pay-off right here is that TAG Heuer has the most well-liked golf app on the planet, in accordance with the Instances.

Superdiver

TAG Heuer STILL in water
Picture: TAG Heuer

This partnership narrative performs out in different areas of manufacturing as nicely, with quartz expertise being one other instance. It additionally explains some of the talked-up and shocking developments arising from TAG Heuer this 12 months: the Aquaracer Superdiver, powered by a Kenissi automated motion.

“What’s vital is differentiation on the merchandise and the extent of high quality we provide to our clients. Typically for some actions, we make investments in-house for a lot of the facets just like the Heuer automated motion and the place we go very deep. We’re investing additionally on the hairspring…it’s not industrialized but so we will solely provide it on very high-end items akin to our tourbillon or among the Solely Watch items that we do. We’re engaged on industrializing it as a result of it has lots of advantages for the client: higher precision, higher sturdiness, and a few manufacturing advantages as nicely.

“So, there’s causes for us to speculate there, however we don’t essentially need or aspire to do every little thing ourselves. For some actions, we companion with the perfect…so with Kenissi for a threehand motion in our Aquaracer. Additionally, for quartz, we’re not going to develop and construct quartz ourselves once we can have entry to the perfect expertise and work hand-in-hand with a companion that may enable us to develop unique applied sciences for us.”

This level-headed and pragmatic strategy is just not restricted to manufacturing and the digital realm, and goes a great distance in the direction of explaining why Arnault (and LVMH) should not shy about Web3 components akin to cryptocurrency and NFTs, present headwinds however. Why ought to manufacturers not hedge their bets, in any case. Maybe essentially the most well-known of Arnault’s partnership strikes is his largest publicity coup: securing Ryan Gosling as a TAG Heuer model ambassador. Identical to the Porsche partnership, Arnault drove the hassle to safe the Drive star. Gosling had by no means accepted any model partnerships, and famously doesn’t play this sport. Nonetheless, Arnault felt he was an awesome match.

Thought Chief

“Sure, sports activities performed an vital position within the historical past of the model, however we additionally all the time had a really robust reference to Hollywood, being current in some iconic motion pictures. After all, there’s Steve McQueen (whose relationship with the Monaco is famous, see #65 – Ed) and extra just lately we had additionally some very iconic ambassadors on this world (Chris Hemsworth, notably).

“We need to construct the connection with Ryan Gosling (he’s presently designing a watch with TAG Heuer). You already know, that’s how we strategy it. We don’t need a one-way partnership the place the ambassador is simply there as a result of he’s been referred to as upon by the model (to do one thing). No, he must need it. To present his time, to offer enter; it’s actual collaboration we have now with him, and he’s very concerned within the particulars of all of the creatives with him. He offers lots of concepts. He challenges us.”

Clearly, Arnault relishes challenges, and is himself considerably difficult. He’s definitely an interview problem, as famous earlier, and maybe Gosling’s rejection of social media (he has no public presence on any platform, besides TAG Heuer’s now) resonated. Internally, Arnault clashed with loads of TAG Heuer executives, with numerous information stories harping on his tendency to be cussed about getting his approach. “We clashed all over the place to start with, however now we giggle about it,” Bianchi mentioned. “You possibly can have a giant mind and never be a frontrunner. He has each.”

It appears Arnault has mellowed considerably, if he values partnerships as a lot as mentioned he does on this interview. Provided that these initiatives are all long-term, then his actions give drive to his phrases. We sit up for checking in with him once more quickly.

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