Will LVMH Owner Bernard Arnault Also Become Owner Of Patek Philippe?
The Beatles already knew that money can’t buy you love. But it can buy you a watch no one else has. LVMH owner Bernard Arnault got himself a Patek Philippe Nautilus Ref. 5740/1G perpetual calendar. You’ve seen it on the internet — I’m talking about the Tiffany Blue one. There’s a lot to say about that watch aesthetically, but it also raises a very valid question: will LVMH owner Bernard Arnault also become the owner of Patek Philippe? Not a Patek Philippe WATCH — he can get his hands on any model he likes and have it customized in any way he likes it. I’m talking about the Patek Philippe BRAND.
You’ve seen what has happened to the Nautilus after Patek Philippe announced that the ultra-desirable sports watch was going to be phased-out. The green Ref. 5711/1A set the world of watches on fire, and when the limited-edition version with a Tiffany Blue dial was launched, it exploded. In the wake of this particular watch, the Rolex Oyster Perpetual with a similar dial color became the must-have alternative and subsequently made prices soar on the parallel market.
… just when you thought Tiffany Blue was no longer the it color, Frédéric Arnault, CEO of LVMH brand TAG Heuer decided to post a picture of him playing chess with his father …
And just when you thought Tiffany Blue was no longer the it color, Frédéric Arnault, CEO of LVMH brand TAG Heuer, decided to post a picture of him playing chess with his father Bernard Arnault, the overall boss of LVMH, on his Instagram account. And that picture revealed not one of the 170 pieces of the Nautilus made to celebrate the 170-year partnership between the Swiss watchmaker and Tiffany & Co. Rather, it was a custom Patek Philippe Ref. 5740/1G.
LVMH owner Bernard Arnault to purchase Patek Philippe? Rumors from inside the luxury periphery
Getting a Tiffany Blue Nautilus Ref. 5740/1G perpetual calendar is not that big of a big deal. Not when you are the big boss of the luxury conglomerate that owns Tiffany & Co. and your son Alexandre is on the board of directors of that famous jewelry brand. The picture has caused lots of different things, from a wide variety of visual jokes on social media to people being outraged by the billionaire’s way of presenting himself. What also happened is that rumors from 2019 were suddenly revived in watch insiders’ memories — namely, that Patek Philippe might come up for sale.
Three years ago, the rumors regarding a possible sale of the Geneva-based manufacture proved false. But since then, three years have passed, and a lot can happen in three years. One thing is certain, and that is that if Patek Philippe comes up for sale, it will cause a bidding war between interested parties. There can’t be that many since serious financial power is necessary — Patek Philippe has estimated sales of over 1.5 billion Swiss francs. And although not a lot of sharks will partake in the feeding frenzy, with their size in mind, the spectacle will be monumental. Just like the number on the bill.
Obstacles on the road to acquiring Patek Philippe
One look at LVMH’s current watch brand portfolio, which includes TAG Heuer, Zenith, Bvlgari, and Hublot, indicates there’s room for a classic watch manufacture. Money is not an issue given LVMH’s financial strength, even though the price for Patek Philippe will be a premium one. But if money is not an issue, what is? First, Thierry Stern, president of Patek Philippe, needs to be willing to sell the last independent, family-owned Genevan watch manufacture.
It looked like Bernard Arnault just needed to find a few Hermès heirs that wanted to cash out …
Second, Stern needs to be willing to sell it to Arnault. And when it comes to Arnault buying an independent luxury brand, history has proven that not always successful. In 2010, LVMH disclosed that it quietly acquired a stake of 20.2% in Hermès. It looked like Bernard Arnault just needed to find a few Hermès heirs that wanted to cash out to make the saddle-maker-turned-luxury-icon into an LVMH company.
Not Hermès, but Tiffany & Co. instead
But it didn’t happen. After sending shockwaves through the luxury world and the brand in particular, Hermès closed its ranks and did not succumb to vast amounts of money on the horizon. In an interview for the website Mr Ping Life, Arnault revealed that “Patrick Thomas [Hermès CEO] in particular is not very happy, but we are very peaceful … we would like to talk to them, but they do not wish to talk to us.” As a result, Hermès remained independent. It was a historically inspired but also very successful decision because, between 2010 and 2019, Hermès nearly tripled its revenues to €6.9 billion. So instead (well, maybe not instead, which would suggest that instead of a blue jumper that was out of stock, he settled on the green one) in 2021, Arnault’s LVMH bought Tiffany & Co. for the ginormous sum of €14.7 billion.
Don’t force the kids into the family business
Would Thierry Stern be willing to sell the family company to LVMH? It’s interesting to note that before Thierry took over the helm from his father Philippe Stern in 2009, there were strong rumors/gossip circulating that he didn’t want to fill his dad’s big shoes. And because of that rumor, the word spread that Patek Philippe could be sold to Swatch Group. It didn’t happen, but what if Thierry Stern now knows for a fact that both of his teenage sons don’t want to follow in his footsteps? The eldest is studying hotel management and the youngest is in watchmaking school. The path the youngest has chosen sounds very promising, but Thierry Stern already made clear in a couple of interviews that he won’t force either into the family business. “I didn’t have children just so they could take over Patek,” he told Forbes in 2019.
The advertising campaign as a company strategy
Since that interview, just nearly three years have passed. Maybe Thierry Stern now knows, after long and intense talks at the kitchen table, that a fifth generation of Sterns owning the most prestigious of watch brands is not going to happen. In that case, seeking a way to secure the brand’s future is the responsible thing to do. For advice on what and what not to do, Stern can look to his company’s long-running advertising campaign.
You never actually own (a) Patek Philippe. You merely look after it for the next generation.
I just had to remove one word to make it applicable to today’s rumors: “You never actually own (a) Patek Philippe. You merely look after it for the next generation.” If not the Stern family, then it could apply to the Arnault family. What would happen then is difficult to predict. Will Frédéric Arnault leave TAG Heuer for the presidency of Patek Philippe, or does pater familias Bernard want that prestigious position for himself?
What are your thoughts on the matter?
What are your thoughts on the matter? Do you think Bernard Arnault wearing a Nautilus with a Tiffany Blue dial is a (clumsy?) prediction of bigger things to happen? And what would become of Patek Philippe in the hands of the Arnault family? Would you rather see Swatch Group, which I consider more of a horology group than a luxury conglomerate, sweep in to “save” Patek Philippe? Or do you think all these rumors started with an Instagram post revealing nothing more than that money can buy you anything your heart desires? Except love, of course. Paul and John’s wisdom still applies.
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