LVMH 1H 2015 report

I was reading the LVMH financial reports for 1H 2015, ending June 2015. On slide 14 of this deck (published apparently on July 28), there is short blurb about Tag Heuer:

http://r.lvmh-static.com/uploads/2015/07/lvmh_2015-half-year-results.pdf

Continued refocusing of TAG Heuer on its core range and adapting its organization to this strategy, continued destocking from retailers

I understand the first part of that sentence, as it corresponds with what I've read about TH wanting to focus to watches under 5000 Swiss Francs (about $5000 USD). However, I don't understand the second part. Isn't "continued destocking from retailers" bad news? That means that retailers are removing TH watches, right?


LVMH also has a financial report available at:
http://r.lvmh-static.com/uploads/2015/07/rapport-financier-semestriel-va.pdf

There are paragraphs about Tag Heuer on page 13:

At Baselworld, TAG Heuer presented new creations in its Carrera, Aquaracer and Formula 1 flagship collections, accentuating its recentered focus on its core product ranges. The Carrera Heuer 01 model was particularly well received. The announcement of a partnership with Google and Intel ahead of the upcoming launch of a smartwatch, a perfect illustration of the Maison’s pioneering character, generated considerable interest. New partnerships, in particular with soccer champion Cristiano Ronaldo and the model Cara Delevingne, increased brand awareness among its target audiences and boosted its social media presence.

...

The Watches and Jewelry businesses have strong overall growth prospects for the second half of the year. Revenue growth will be fueled by the delivery of new products and sustained by new marketing and communication campaigns. The store network will continue to grow, featuring in particular new points of sale in Moscow and the renovation of the Bvlgari store in London. During the summer, Hublot will open its second manufacturing facility in Nyon, boosting its production capacity in response to the success of its products. The majority of TAG Heuer’s new products will be launched over the coming months, backed by a communication plan targeting the brand’s key markets.

Interesting; thanks for sharing. Maybe others have some knowledge about this and can comment on your points.

I read that from "refocusing" and "adapting" perspective, possibly referring to moving out items no longer part of their core by way of some strategic program...?

Thanks for sharing, its this type of articles and this type of people like you that make forums worth visiting.

Great post. A couple of comments/ observations from what I read:
- I've said for the last 12 months that I don't expect the "change in strategy" with regards to price to be as drastic as others are making out. You may recall that this was first interpreted as a "$1000-$3000" strategy, which obviously isn't happening when you see the Carrera Heuer-01 at CHF5000 (so I 'd expect in the USD5-5500 range) and the Heuer-02 at CHF15,000. But yes, those $8-10,000 models (mainly the Calibre 36 models) I would expect to disappear
- I expect what they mean from destocking is that they are reducing the amount of stock they are requiring their retailers to hold- this could be because demand has been soft (as it had been for the whole industry) or because they are trying to clear the decks for newer models
- So, I don't think this is necessarily retailers dropping TAG Heuer, but the ratio of what they order from the factory compared to what they keep on hand is changing
- I think 2016 is going to be a pivotal year. THE most important for the brand in the last 20 years. Every time there is a change in management it takes a couple of years for "their" watches to hit the market. We never really got a chance with the Linder refresh, so I'm expecting we will see many new models next year that show exactly where Biver wants the brand to go. I expect that the range will be rationalised (Link? Grand Carrera?)

I'm hoping to head across to HQ in the next month, so will be asking exactly these question 😉

Great commentary David. 2016 shot be pretty interesting indeed!

While you're at HQ, can you please ask them what happened to the 41mm Carrera models????????

...and what Arcola is. 😀