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LVMH’s Jean-Claude Biver on Why He’s Ready For A Challenge

jean-claude biver_What a difference a year makes.  In January 2013 Jean-Claude Biver said he was preparing to wind down his activities overseeing Hublot.  Then several weeks ago in a surprise it was announced he would succeed Francesco Trapani leading LVMH’s watch group.  Today before speaking at a conference in Berlin I caught up with the watch industry legend to find out what he has in store for Tag Heuer, Zenith and Hublot.

What is your title going to be?

I’m the manager of the watch division.  I don’t have a title.  Depending on how much ego one has it could be chairman or managing director.  Seriously I have no title. My responsibility is to drive the three brands and beat the Swiss exports.  When Swiss exports go up 5 percent I want to go up 5.5 percent.  My goal is to gain market share and beat the competition.

There seems to be more and more caution in the luxury segment. What’s your viewpoint on growth in the luxury sector?

If (wage and economic) growth in the world goes on and 2014 you are as wealthy as 2013, why would people who bought in 2013 change and think now this is too expensive.  If you went to the Four Seasons in New York in 2013 and spent $1,200 a night then $1,200 should be fine in 2014.

The Wall Street Journal just had a piece about how a woman was cutting back on designer shoes because of prices increases. Aren’t luxury goods companies increasing prices?

In the watch industry we have not increased our prices to that proportion, and the price increase was the consequence of the exchange rate between the dollar and the Swiss franc.  In the U.S. it may be the case, but not the other countries.

After your success with Blancpain and Hublot, will you be looking for a big innovation?

I will be an entrepreneur.  An entrepreneur has the vision, has the courage to take risks and be wrong, somebody who is excited by competition and shares with his people, motivates a team and grows people, but takes responsibility.  That’s my character.  Most of my Hublot team has been with me for 20 or 30 years.

Why the change from last year to this year?

I did exactly the contrary of what I said I was going to do.  I wanted to less but I ended up doing more.  That’s my character.  All of a sudden I felt that my age would not be what’s written in my passport.  My age would be what I felt in my heart and my head, and from my perspective, and the perspective of my family, we all believe I am young.   And when you believe you are young you ask yourself why should I stop?

How did you end up in this position?

The group came to us, my family and myself.  And we analyzed that if the group comes to you and asks you to do something, you can come to the conclusion that you’re not old, and I also came to the conclusion that I wanted a challenge to motivate three brands and be part of the three successes.

What’s your outlook on Tag Heuer, Zenith and Hublot?

None of these brands need a restructuring.  It’s like having three healthy athletes. You just have to train them, and they may become better.  With Blancpain and Hublot I took athletes that were hurt, but here that’s not the case. When you turn Hublot from $26 million to $500 million in nine years people say wow. But with Tag we are not starting from scratch so it might be less spectacular.

How about acquisitions?

Acquisition is more the consequence of opportunities today because there is nothing to acquire.  Twenty years ago there were companies to buy.  Today you can’t name five companies (of scale) that are for sale.  But in life you never know.

What’s the future for small watchmakers?

They have a brilliant future for themselves, but not in groups.  The big groups are not adaptive to grow a small brand.  All these little artisans have bright futures for themselves but they will stay small mushrooms.

How do you see Asia at the moment?

Asia is a very big market.  You cannot think Asia, then speak about China and Japan together because they are so different.  Then with Asia you have Indonesia and India, but they are so different. Then you have Singapore, Thailand, the Philippines and Hong Kong and they are each different.  It’s a compilation of markets. Some markets such as Japan are doing very well whereas China is coming back from hype to something that’s normal, and that’s fantastic.  Singapore is not a new market.  There has been an appreciation for watches for a long time.