From Tiffany & Co. to Daniel Roth: A Hard Luxury Push is Underway at LVMH

Image: LVMH

From Tiffany & Co. to Daniel Roth: A Hard Luxury Push is Underway at LVMH

At LVMH, fashion and leather goods are the name of the game. While soft luxury is the clear bread winner for the group – driving almost 50 percent of its $71.5 billion in revenue in 2021, the luxury giant (and similarly-situated companies) is placing increased emphasis on ...

March 28, 2023 - By TFL

From Tiffany & Co. to Daniel Roth: A Hard Luxury Push is Underway at LVMH

Image : LVMH

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From Tiffany & Co. to Daniel Roth: A Hard Luxury Push is Underway at LVMH

At LVMH, fashion and leather goods are the name of the game. While soft luxury is the clear bread winner for the group – driving almost 50 percent of its $71.5 billion in revenue in 2021, the luxury giant (and similarly-situated companies) is placing increased emphasis on hard luxury, angling to bolster its Watches and Jewelry division, a category where rivals like Swiss conglomerate Richemont have traditionally held the upper hand. The most obvious indication of this focus was its mega-merger with Tiffany & Co., which saw LVMH splash out a cool $15.8 billion in 2021 to acquire the New York-headquartered jewelry brand. It has since embarked on a sweeping revamp of iconic jewelry brand, complete with an aggressive attempt to lure millennials by way of buzzy marketing and new offerings, including a bracelet, the Lock, that is being positioned to compete with Cartier’s much-coveted Love bracelet.  

Since the Tiffany & Co. merger, LVMH also indicated its growing ambitions in the hard luxury realm by way of a recent reorganizational effort, in which it brought most of its watches and jewelry brands under the purview of Stéphane Bianchi, president of the group’s Watches and Jewelry Division. The move serves to “frame [each brand’s] focus within a total hard luxury strategy,” per LVMH, and “enhance sharing of knowledge and resources for faster progress.”

Now look beyond these headline-garnering developments, and a quieter endeavor appears to be in the works. LVMH is revamping a formerly dormant name under its umbrella: Daniel Roth, the Swiss watch brand that the group added to its arsenal when it acquired Bulgari back in 2011 in a 3.7 billion euros ($5.2 billion at the time) deal that reportedly saw it beat out rivals Richemont and Kering (then still PPR) in the process. 

Reviving Daniel Roth

A reintroduction of the Daniel Roth is still in relatively early stages. In September, counsel for Louis Vuitton Malletier filed two applications for registration for the “Daniel Roth” name for use in Classes 9 (spectacles, smart watches, etc.) and 14 (jewelry, wristwatches, etc.) in France and Switzerland, respectively. (Bulgari Horlogerie SA amassed dozens of trademark registrations for “Daniel Roth” for use on similar goods in the late 1990s and early 2000s in countries ranging from Singapore and Japan to Switzerland and Italy. It was also granted a few registrations for the source-indicating face of Roth’s Small Seconds timepiece – but it is not necessarily clear whether those registrations, if challenged, would be deemed valid in light of a lack of consistent use by Bulgari.)

Speaking briefly about the budding revival effort, Jean Arnault, Louis Vuitton’s Marketing and Product Development Director for watches, told the Financial Times, “We decided with Bulgari that we would jointly build the [Daniel Roth] company as a separate entity of LVMH, respecting its high watchmaking roots.” 24-year-old Arnault’s focus right now is primarily on the twentieth anniversary of Louis Vuitton’s Tambour timepiece and a new watch-making prize, but he hinted that 2023 will be the year for Daniel Roth, saying, “Next year is going to be something interesting.”

LVMH formally unveiled the “revival [of Daniel Roth] as an independent brand” on February 23, complete with the launch of the company’s website, which teases a “limited series” of 20 pieces of the Tourbillon Souscription watch.

Heritage, History & Scale

As for why LVMH is opting to position Daniel Roth to sit prominently alongside its other watch brands, including Bulgari, Chaumet, TAG Heuer, Fred, Hublot and Zenith, as well as Louis Vuitton, Dior, and Tiffany & Company, which also offer up timepieces, the move falls neatly in line with a broader practice of companies – including LVMH – reviving dormant luxury brands

From a practical standpoint, it is generally a bit more straightforward – and maybe a bit less risky – to revive existing brands than to create entirely new ones. “For designers, it is easier to start from something than a blank page,” according to Arnaud de Lummen, whose private investment company Luvanis has successfully reintroduced and sold formerly defunct brands, such Moynat, Vionnet, and Poiret. “On the business side,” he previously told WWD that reviving a dormant brand “can be less onerous” than starting a new brand or taking over and revamping an existing one that might come with “large management and creative structures, existing supplier relations, and a risk of [things like] hidden debts.” 

At the same time, defunct-but-storied names bring with them something that groups like LVMH look for in acquisition targets: Heritage that can be leveraged to attract luxury consumers (and premium pricing), and the Daniel Roth brand is no exception. The draw for LVMH likely stems from Mr. Roth’s prevailing reputation as “a genius of modern independent watchmaking, who is respected amongst the best watch collectors in the world,” and the company’s “unparalleled history” in the contemporary watchmaking space, WatchBox chairman Danny Govberg tells TFL.

Also not to be overlooked is the value that comes with the unique shape of what Govberg calls the “iconic” Daniel Roth watch case, which acts as a well-established indicator of source for the brand in the eyes of true watch aficionados. 

Logistically, Govberg says that LVMH is smart to separate the Daniel Roth brand out from Bulgari, where it has lived since the 2011 acquisition. In the wake of the Bulgari deal, which also saw LVMH snap up Gérald Genta SA, along with the manufacturing “teams and knowledge” from both the Roth and Genta brands, LVMH would incorporate elements of the celebrated watchmakers’ designs into Bulgari offerings. “Their decades of expertise helped lay the foundation for Bulgari as an unrivaled force in the world of Haute Horlogerie,” the Italian luxury brand boasts on its website. Since then, Bulgari has taken off in its own right, and does not need to rely on Genta or Roth to drive demand, per Govberg, thereby, paving the way for each of these brands to stand on their own. He also notes that attempts by Bulgari to offer up mashups of sorts of Bulgari and Genta, and Bulgari and Roth timepieces “never really took off,” likely further incentivizing LVMH to facilitate a spin-off, of sorts, of the Roth brand. 

Not limited to a reintroduction of Daniel Roth, “Gérald Genta will be revived and operated as a standalone brand that will be manufactured at La Fabrique du Temps, LVMH’s state-of-the-art watchmaking factory in Switzerland,” the FT confirmed on March 28, reporting that “further details of the watches are expected to be announced later this year, with the first pieces available next year (for hundreds of thousands of pounds).”

In terms of timing, revamping the Daniel Roth and Genta brands makes sense, as demand for the offerings of independent (and in Roth and Genta’s cases, formerly independent) watch companies has “exploded over the past four or five years,” Govberg contends. Watch collectors – from the wealthiest players in this space to budding younger collectors – have increasingly educated themselves about some of these more niche names in the world of horology, in many cases, during Covid-19 lockdowns, and added to their collections accordingly. This has led to a spike in popularity and prices, and chances are, demand for and the price tags of watches in this segment of the market have room to grow even further. 

As for what LVMH has planned for Daniel Roth, the French conglomerate will almost certainly not attempt to aggressively scale the brand to match the volumes and revenues associated with other properties under its umbrella. What is more probable, according to Govberg, is that the group will approach the revamp with a “long term view,” releasing Daniel Roth watches in “very small” quantities, maybe 500 to 1,000 watches per year at most. Such an effort may not necessarily move the needle significantly in terms of LVMH revenue, but it will undeniably impact the credibility of its Watches & Jewelry group to be able to say that it is offering such “top of class” timepieces.

The timing also makes sense in light of LVMH’s broader efforts to compete in the hard luxury segment, where it has room to grow. MT Capital Research analysts asserted in a note in October that “there is a structural opportunity” for the group as a result of “the lack of name-brand penetration in this area (approximately 20 percent worldwide).” Pointing to continued growth of LVMH’s main jewelry and watch brands, such as Bulgari and Tiffany & Co., as well as the impending re-introduction of names like Daniel Roth, MT Capital says that this represents “an exciting prospect, [and] an interesting opportunity for the next decade.” 

UPDATED (Feb. 23, 2023 & Mar. 28, 2023): This article was originally published on December 9, 2022. It has been updated to reflect the official launch of the Daniel Roth brand on Feb. 23, and to note LVMH’s impending relaunch of Gérald Genta as a standalone brand.

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