Tag Heuer Bullish on Retail Expansion With Fifth Avenue Flagship: CEO Frédéric Arnault
“It is very important for us to be on Fifth Avenue,” said Tag Heuer chief executive officer Frédéric Arnault, in town to celebrate the opening of the brand’s New York City flagship.
Tag Heuer previously had a store on the same avenue but Arnault felt the presence “was not strong enough,” offering little space to display product, impeding brand discovery and overall foot traffic. The flagship at 645 Fifth Avenue changes that with a massive street-facing display window, situated at an intersection of city landmarks, St. Patrick’s Cathedral and Rockefeller Center, cementing it as a strategic retail post for the brand within the Americas.
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Currently the luxury timepiece brand operates 14 stores in the U.S, with plans in place to have 18 by the end of 2023.
“When I joined the brand [in 2021], it was just two or three. So we really transformed the way of nurturing customer relationship in store. In the next three, four years, we’ll be looking to reach 50,” the CEO reported, adding that they “have already seen a huge difference in the time customers spend and the type of customers who come in“ during the soft opening of the store. It officially opens with an event on Wednesday with brand ambassadors, media and guests of the LVMH-owned timepiece brand.
“It’s a much more elevated experience, making it easier to sit down and talk about higher-end pieces,” he said, pointing to the in-store VIP area used to showcase the brand’s watch catalogue.
The flagship features the brand’s newest retail concept — developed by Tag Heuer’s in-house design and architectural team in Switzerland — blending sleek modernity with elements that pay homage to the brand’s sport heritage. From the street, the boutique’s tall façade stands out with black metal panels and illuminated branding.
Arnault is pulling out all the stops, marking the occasion with a brand first — bringing iconic historic pieces from the Tag Heuer museum to showcase in the boutique for a few months, including the Carrera Indy 500 timepiece worn by Steve McQueen in the 1971 cult classic film “Le Mans.” Each museum piece chosen has direct links to the American market.
The brand maintains its deep ties with motocross sports with styles created through partnerships with Formula 1 racing, Porsche, and relationships with F1 drivers like Juan Manuel Fangio and Ayrton Senna. “We never stopped believing in the strength and power of racing,” Arnault said firmly.
Golf is another key sport in the Tag Heuer universe, a category where it gets to show off its commitment to innovation married with groundbreaking techniques. In 2015, it was the first brand to launch a luxury smartwatch, now part of a range of styles, which the CEO said is performing very well in the U.S. market.
“We have a unique positioning with the most elevated elegant smartwatch on the market,” he said. A niche that resonates with a younger customer base as well as timepiece OGs.
“We are always strong with young customers,” he added. “In the American mindset, Tag Heuer is the first watch that one would be offered or buy for himself with his first bonus or his first paycheck,” attributing it the brand’s price positioning.
“We are at the entry of the luxury watch world and we were an entry into watch collecting. For many people, the first watch they get is a gift,” he said, explaining that the positioning is connecting with younger generations. “Five to seven years ago, both Formula 1 and golf were aging sports. But in the past three, four years it’s changed — now there is a young population who is either playing golf or following Formula 1,” he said, crediting F1’s huge push into the U.S. market with the annual Miami Grand Prix and the debut Las Vegas Grand Prix in November.
The America’s Cup is another race with Tag Heuer roots and the brand is returning to the world of high sea yachting, reintroducing the Skipper chronograph — which Arnault was wearing — a legacy style that debuted in 1968 and which was part of the Tag Heuer catalogue until 1983.
The new 2023 Skipper is derived from the recently launched “glassbox” Carrera with a 39mm diameter case, the latest TH20-06 movement with bi-directional winding, an 80-hour power reserve, completed with a a high-end, resistant textile strap, all paying homage to the original model that was born from Jack Heuer’s involvement with the America’s Cup.
On the retail expansion front, Arnault shared that the company is planning to update its Miami retail footprint, with early-stage plans to bring the brand to the Miami Design District in 2024. “Growth is very strong there [in Miami]. Today, we don’t have walking traffic but by changing location, we’re going to double the sales,” he projected.
Arnault has also limited distribution since joining and as of July 1, Tag Heuer “has transitioned the management of Mexican commercial distribution from external agent Relojes Exactos to Tag Heuer Mexico and we have our first official office in the territory. All commercial distribution in Mexico is now owned and centralized within the Americas, which is the number-one market in the world for us,” Benjamin Beaufils, president of Tag Heuer Americas, said via email.
While recent reports project the secondhand watch market to slow going into the fourth quarter, the CEO sees it as a positive.
“We think it’s healthy that the secondhand market softens because it was driven a lot by speculation, with traders trying to anticipate the future value. Long term, what matters is true passionate collectors. Even with a drop in the secondhand market, they [collectors] are stronger than ever, their desire to purchase watches is there and we see that growing a lot.”
Arnault pointed to a modern timepiece landscape that is changing — the old model that saw people buy one watch for a lifetime has evolved and he sees a customer that is buying multiple watches, creating personal collections and giving his brand more room to connect to its customer long term.
“America is our number-one market, and we see a tremendous room to grow in the U.S.,” Arnault said.
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