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·LVMH, the parent company of TAG Heuer, reported its 2020 first half earnings on July 27, 2020. As one would expect with global declines in consumer spending and GDP during this time period, revenue and profit at LVMH likewise sank dramatically.
For LVMH as a whole, year-over-year revenue from 1H 2019 to 1H 2020 declined 27% while profit declined a dizzying 84%.
Within the "watches and jewelry" group (in which TAG Heuer sits), revenue declined 38% y/y while profit declined more than 100% y/y from 357M euros in 1H 2019 to a loss of -17M euros in 1H 2020.
Compare these results to 1H 2017, when both revenue and profit were up double digits.
The earnings report comprises multiple documents that make mention of the individual watch brands (but only rather superficially). Below are direct quotes:
The Watches & Jewelry business group saw its organic revenue decline by 39% in the first half of 2020. Profit from recurring operations came to (17) million euros. Confronted in January with the decline of the Chinese market, then with the closure of other markets from mid-March, Bvlgari quickly took advantage of the recovery in China in the second quarter. After the launch of the B.Zero1 Rock collection, the Maison unveiled a new line of Barocko fine jewelry through an augmented reality experience. After a year of renovation, Chaumet inaugurated its historic address on Place Vendôme in Paris and strengthened its presence in China. After a good start to the year, TAG Heuer and Hublot were impacted by the decline in orders from retailers. The new TAG Heuer smartwatch, which was one of the major innovations of the first half, has been a great success.
In more detail:
Store closures and the suspension of international travel due to the global health crisis affected the Watches and Jewelry businesses, leading to negative organic revenue growth of 39%. In this context, the Maisons took measures to reduce costs and preserve cash while doing their best to spur demand and develop alternative distribution methods such as digital channels and direct sales. Watch Week - an event held by Bvlgari, Hublot, TAG Heuer and Zenith in Dubai in January - was an excellent opportunity to present the Maisons' new collections to retailers and the media.
Faced with the downturn in China starting in January, followed by the closure of other markets from mid-March, Bvlgari quickly capitalized on the recovery in China in the second quarter. A number of digital initiatives were developed. The Maison helped combat the pandemic by donating hand sanitizer to healthcare facilities in Italy, Switzerland and the United Kingdom, and launched the Bvlgari Virus Free Fund to support Covid-19 vaccine research being done by leading teams at Oxford University, Rockefeller University and Lazzaro Spallanzani Hospital. New designs continued to appear at a rapid pace, with the B.Zero1 "Rock" collection adding rings, bracelets, pendants and earrings, reflecting the brand's bold creativity along with other iconic jewelry models launched in the Fiorever and Bvlgari Bvlgari series. High jewelry featured the presentation of the Jannah Flower collection in Abu Dhabi and sales held in Taiwan and South Korea. The Serpenti Seduttori Tourbillon and Octo Répétition Minutes watch designs sparked a keen interest. A new marketing campaign was launched worldwide with Zendaya, Naomi Watts, Kris Wu and Lily Aldridge.
In March, TAG Heuer unveiled the third generation of its smartwatch in New York. Performance, precision, innovative materials, a wide range of features and elegance are the defining characteristics of this product, which was met with great success, amplified by the more recent launch of the Golf edition. A new online store was launched in February. The Autavia collection was enriched with new models, as were the iconic Formula 1 and Aquaracer series. New directly operated stores were opened in Dubai (in February) and in Japan (in March). Together with Hublot and Zenith, TAG Heuer supported the fight against the pandemic by donating 150,000 protective face masks to Swiss hospitals.
Hublot's most significant new additions included the Big Bang Integral, for the first time featuring an integrated metal bracelet, and the Spirit of Big Bang Meca-10, whose manufacture movement offering a 10-day power reserve was adapted to the "barrel"design. The marketing launch of the Big Bang e digital model was accompanied by the addition of an e-commerce function to the Hublot.com website. In Japan, which is now the brand's number-one market, a store was opened in the Hublot Tower in Tokyo. To mark Hublot's 40th anniversary, a #timetoreflect campaign began in May, retracing the origins of its iconic Big Bang Original, Classic Fusion and Spirit of Big Bang series, and celebrating its constant quest for innovation.
Zenith launched its Time To Reach Your Star marketing campaign and a new website offering online sales. The Maison enriched its collections with the Defy Midnight women's model, the new Elite and the Chronomaster Revival, which celebrates its long tradition of watchmaking.
For LVMH as a whole, year-over-year revenue from 1H 2019 to 1H 2020 declined 27% while profit declined a dizzying 84%.
Within the "watches and jewelry" group (in which TAG Heuer sits), revenue declined 38% y/y while profit declined more than 100% y/y from 357M euros in 1H 2019 to a loss of -17M euros in 1H 2020.
Compare these results to 1H 2017, when both revenue and profit were up double digits.
The earnings report comprises multiple documents that make mention of the individual watch brands (but only rather superficially). Below are direct quotes:
The Watches & Jewelry business group saw its organic revenue decline by 39% in the first half of 2020. Profit from recurring operations came to (17) million euros. Confronted in January with the decline of the Chinese market, then with the closure of other markets from mid-March, Bvlgari quickly took advantage of the recovery in China in the second quarter. After the launch of the B.Zero1 Rock collection, the Maison unveiled a new line of Barocko fine jewelry through an augmented reality experience. After a year of renovation, Chaumet inaugurated its historic address on Place Vendôme in Paris and strengthened its presence in China. After a good start to the year, TAG Heuer and Hublot were impacted by the decline in orders from retailers. The new TAG Heuer smartwatch, which was one of the major innovations of the first half, has been a great success.
In more detail:
Store closures and the suspension of international travel due to the global health crisis affected the Watches and Jewelry businesses, leading to negative organic revenue growth of 39%. In this context, the Maisons took measures to reduce costs and preserve cash while doing their best to spur demand and develop alternative distribution methods such as digital channels and direct sales. Watch Week - an event held by Bvlgari, Hublot, TAG Heuer and Zenith in Dubai in January - was an excellent opportunity to present the Maisons' new collections to retailers and the media.
Faced with the downturn in China starting in January, followed by the closure of other markets from mid-March, Bvlgari quickly capitalized on the recovery in China in the second quarter. A number of digital initiatives were developed. The Maison helped combat the pandemic by donating hand sanitizer to healthcare facilities in Italy, Switzerland and the United Kingdom, and launched the Bvlgari Virus Free Fund to support Covid-19 vaccine research being done by leading teams at Oxford University, Rockefeller University and Lazzaro Spallanzani Hospital. New designs continued to appear at a rapid pace, with the B.Zero1 "Rock" collection adding rings, bracelets, pendants and earrings, reflecting the brand's bold creativity along with other iconic jewelry models launched in the Fiorever and Bvlgari Bvlgari series. High jewelry featured the presentation of the Jannah Flower collection in Abu Dhabi and sales held in Taiwan and South Korea. The Serpenti Seduttori Tourbillon and Octo Répétition Minutes watch designs sparked a keen interest. A new marketing campaign was launched worldwide with Zendaya, Naomi Watts, Kris Wu and Lily Aldridge.
In March, TAG Heuer unveiled the third generation of its smartwatch in New York. Performance, precision, innovative materials, a wide range of features and elegance are the defining characteristics of this product, which was met with great success, amplified by the more recent launch of the Golf edition. A new online store was launched in February. The Autavia collection was enriched with new models, as were the iconic Formula 1 and Aquaracer series. New directly operated stores were opened in Dubai (in February) and in Japan (in March). Together with Hublot and Zenith, TAG Heuer supported the fight against the pandemic by donating 150,000 protective face masks to Swiss hospitals.
Hublot's most significant new additions included the Big Bang Integral, for the first time featuring an integrated metal bracelet, and the Spirit of Big Bang Meca-10, whose manufacture movement offering a 10-day power reserve was adapted to the "barrel"design. The marketing launch of the Big Bang e digital model was accompanied by the addition of an e-commerce function to the Hublot.com website. In Japan, which is now the brand's number-one market, a store was opened in the Hublot Tower in Tokyo. To mark Hublot's 40th anniversary, a #timetoreflect campaign began in May, retracing the origins of its iconic Big Bang Original, Classic Fusion and Spirit of Big Bang series, and celebrating its constant quest for innovation.
Zenith launched its Time To Reach Your Star marketing campaign and a new website offering online sales. The Maison enriched its collections with the Defy Midnight women's model, the new Elite and the Chronomaster Revival, which celebrates its long tradition of watchmaking.
Edited:
