The luxury giant LVMH With a restructured watch division and new, higher-priced models, the company is pushing for a share of the global luxury watch business.

According to market research firm IMARC Group, worldwide sales of luxury watches are estimated to be around $30 billion this year. They are expected to grow to more than $37 billion by 2032, as global wealth increases and Generation Z and millennials become more interested in high-end mechanical watches.

LVMH’s jewelry and watch division posted sales of $11.8 billion in 2023, representing 7% organic growth. The luxury giant now owns 10 watch brands, including TAG Heuer, Hublot and Zenith, as well as fashion and jewelery brands such as Louis Vuitton, Bulgari and Dior.

Last month, the company named Frédéric Arnault, the 29-year-old son of LVMH chairman and CEO Bernard Arnault, CEO of LVMH Watches, which includes the TAG Heuer, Hublot and Zenith brands.

Analysts estimate that sales of these three brands reached nearly $2 billion last year.

Frederic Arnault, who launched an array of highly popular new models at TAG Heuer, is expected to bring his focus on innovation, innovative materials and creative designs to the big brand group. Analysts say LVMH may also continue to acquire attractive brands if they become available.

In interviews with CNBC during LVMH’s Watch Week in Miami, the brands’ chief executives said 2024 is already shaping up to be stronger than 2023, when rising interest rates and recession fears dampen demand. is coming Executives say they are particularly encouraged by the resilience of American luxury consumers.

“It’s all about cycles, and the beauty of America is that the cycles are very short,” said Zenith CEO Benoit de Klerk. “We go through ups and downs and all that, but I can assure you that today Zenith is moving fast with good traction in the US markets.”

Watch sales are following the same pattern as the broader luxury market, where the wealthiest consumers remain strong. Wealthy people are less affected by rising rates and economic uncertainty, executives say, so more and more brands are catering to “superspenders” and VIP collectors who demand the highest quality and craftsmanship. Keep spending.

“Prestige has really been one of the main drivers of our growth,” said Bulgari CEO Jean-Christophe Babin. “I think the wealthy are more willing to invest in authentic, well-known and timeless brands than ever before.”

Babin said he sees increased strength at the top level across all of Bulgari’s businesses, which now include hotels, fashion and fragrance.

“We sold more high-end jewelry, more high-end watches, more high-end bags,” said Babin, referring to one of Bulgari’s coveted yellow gold Serpenti Secret watches that sell for $350,000.

LVMH is also targeting the fastest growing segment of luxury watches: women’s watches. While women’s watches account for only a third of total sales, women’s interest in luxury mechanical watches has been fueled by greater exposure on social media and an increasing number of models designed for women. A growing global population of wealthy women – both self-made and inherited – is also fueling sales growth.

“There is a trend toward more feminine and more unisex watches,” Babin said. “Women have increased power in terms of independence, autonomy and purchasing power. We think that will continue.”

In the highly competitive luxury watch world, brands have to constantly innovate with materials, complications and designs to gain share and keep collectors engaged.

TAG Heuer, with its roots in car racing, had great success using lab-grown diamonds with its Carrera Plasma. Its Carrera Plasma Diamant d’Avant-Garde Chronograph Tourbillon costs more than $500,000 — and has a waiting list of more than two years.

TAG Heuer unveiled a blue-green Carrera glass box chronograph with a teal green dial, referencing the shade of green used in auto racing in the 1920s and 1930s.

TAG Heuer CEO Julien Tournare said LVMH’s advantage over other watch brands and groups is its constant focus on reinvention and ambition.

He said that the Swiss watchmaking industry has been somewhat conservative. “But at LVMH, we’re pushed to try new things to move forward. I think if we still want to appeal to (a) new generation, it’s very important to show that we’re looking to the past. No, but will work for the future.”

Many of the LVMH brands are mining their storied past for new designs and models.

Zenith launches its Chronomaster Triple Calendar, featuring a triple calendar moon phase chronograph, inspired by its rare prototype El Primero watch from 1970.

De Klerk said part of the Zenith’s appeal to younger watch buyers and collectors is its price. He said that although Zenith sells highly complicated watches, it tries to provide value, such as the Triple Calendar, which sells for around $14,000, but may be priced higher based on the level of craftsmanship and complications required. “There may be thousands more.”

“We have a very good value proposition compared to the competition,” he said. “You get a lot of watch for the money, and we want to keep that spirit.”

At the same time, many LVMH brands are moving up the price ladder, with more expensive, limited editions. Hublot, known for its bold, big watches, has just launched a $250,000 limited edition watch, called the MP-10 Tourbillon Weight Energy System. Only 50 of the futuristic watches will be produced, and are expected to sell out quickly.

“We call it the art of fusion in watchmaking,” said Hublot CEO Ricardo Guadalupe. “We are combining over 400 years of watchmaking tradition with innovation. We do it through design, through materials, through new mechanics and new methods of movement.”