In news which will come as a surprise to few, considering the rumblings which have been coming from the Swiss Manufacturer in recent times, after 21 years with the company, CEO Stéphan Linder has just announced his resignation from TAG Heuer, with immediate effect. So, what does this mean for this giant among watch brands?
The story began during Baselworld 2014 with the introduction of a brand new in-house movement, the Calibre 80, a nicely finished and technically advanced engine. the clear intention was to elevate the brand into higher markets, with prices from 6,000 to 8,000 euros. Together with this new movement, TAG Heuer also announced the creation of a new production plant, based in Chevenez (we explained it first here).
Then, without any clear explanation, TAG announced that this new movement was going to be postponed (you can see our post from June about it here). The official statement was that all production capacities will be focused exclusively on the Calibre 1887 for an unknown period. According to TAG Heuer this was to ‘respond more effectively to current market needs.‘ TAG Heuer was ‘postponing the launch of the Carrera CH80 chronograph, even though the company has completed the development of the movement that powers it.‘ However, the official press release stated that employees were not ‘affected by this measure and will be redeployed to TAG heuer’s three other industrial sites in Switzerland.‘
This statement was difficult to understand, as multiple rumors of discontent in the boardroom were already circulating through the industry. Now it would appear that the rumors were indeed true, and in September / October, the situation became even worse than many had thought.
In a recent piece of news, Jean-Claude Biver, the actual President of watches for the LVMH group, announced a brand new strategy for the group, involving the 3 main brands: Zenith, Hublot and TAG Heuer. To simplify the situation, brands should not cannibalize themselves inside the group, meaning that TAG should only focus on entry level (luxury) watches, with prices from 1,500 to 4,500 euros. Consequently, development and production of the new Calibre CH80, which would have been destined for watches priced over 6,000 euros, was to be totally cancelled.
Thus, according to the announcement at the time, the new Chevenez facility would be used for other movements, such as the Calibre 1887. Sadly, it would transpire that to date 46 employees have been fired and 49 others are temporarily unemployed. The brand will only focus on watches, and stop activities related to their luxury smart-phones and leather goods.
Resignation of the CEO, Stéphane Linder
Considering all these elements, the resignation of Stéphane Linder is no big surprise. Even if Biver thanks Linder for his outstanding contribution to the development of the brand during the 21 years he spent at TAG Heuer, the situation is extremely alarming for the company, its future developments and the employees, especially 3 months before Baselworld (which is the sales’ climax for all the brands).
Under his long-standing term of leadership, Stéphane Linder positioned TAG Heuer to become one of the world’s highest profile watch brands, with a youthful, sporty professional image, global brand recognition, and sales to match (they have come a long, long way from the dark days of the 1980’s, and the quartz watches they produced en masse at that time). However, it would now seem that the future strategy for TAG Heuer, as envisioned by J-C Biver is the opposite of the direction which Stéphane Linder led the brand during his 21 years at TAG Heuer. In a sense, it is a natural (but ruthless) sequel to this 1-year story. The loss of such an experienced man is never good for a firm.
We have to understand that LVMH is a group and that its strategy is, on paper, intelligent and certainly efficient. JC Biver is known to be an extremely good strategist. However, the method used and the way to communicate about it is disappointing and devoid of any passion for watches. If it were not already, TAG Heuer, together with Zenith or Hublot, has become another money-machine for a global luxury group. And that is not what we like here, at Monochrome-Watches.