SINGAPORE - It has been five years since Mr Frederic Arnault’s last visit to Singapore.
“That’s the most difficult part about the pandemic, not being able to travel,” says the chief executive of Tag Heuer. “It’s very important to travel; meet staff, customers, retailers; to feel the market; and to drive the brand.”
It is also his first visit here after he became head honcho of Tag – probably the youngest of a major watch company – in July 2020. He was then barely 25. Prior to that, Mr Arnault was the company’s head of strategy and digital overseeing the Connected Watch, the brand’s smart timepiece.
Taking charge of a 162-year-old watch company when Covid-19 was turning the world topsy-turvy has been quite an experience, he says.
“I took over in July when the pandemic had already started. Everything was uncertain at the time. April and May were the worst two months in Europe for the whole industry because production, factories, the supply chain had to close.
“So I knew what I was going into,” says the corporate captain, whose father is Mr Bernard Arnault, chairman and chief executive of luxury conglomerate LVMH which, besides Tag, also owns three other watch brands – Hublot, Zenith and Bvlgari. “We had put in place key measures, first protecting the people and then the business. I just continued in that direction.”
Mr Frederic Arnault – an applied mathematics and computer science graduate from the prestigious Ecole Polytechnique in Paris – says geopolitical and micro-economic trends are evolving very fast.
“More than ever, we have to be agile because every six months, there is something new we have to react to.”
By all accounts, he has acquitted himself pretty well since taking charge. Over the last couple of years, he has, among other achievements, reversed the Covid-19-induced decline in sales, rolled out cutting-edge technology, formed a brand partnership with Porsche and moved into the sphere of NFTs (non-fungible tokens).
Tag, for instance, generated much buzz recently when it signed on Canadian actor Ryan Gosling as a brand ambassador – the first brand endorsement for the Hollywood A-lister. The wooing reportedly took more than a year.
“Tag has always been close to Hollywood. The first collaboration we had was with Steve McQueen 50 years ago when he wore the Monaco in the movie Le Mans (1971). And we thought: ‘Okay, we want to build a new collaboration with an icon in the world of cinema today, and Gosling is a great fit’,” he says of the star of movies such as romantic drama La La Land (2016) and action flick The Gray Man (2022).
A former intern at Facebook and consulting firm McKinsey, Mr Arnault has also earned kudos for the strides he has made with the Connected Watch, which dominates the luxury smartwatch segment and is now a key pillar of Tag, accounting for 15 per cent of watch sales.
“We have a roadmap. We launch new features every month. We also have new hardware releases every two years, not too fast because we invest in the durability and want to show our customers that we don’t expect them to upgrade and change the watch too often.”
A few months ago, Tag made headlines when it announced it would accept crypto payments for watch purchases on its website. The turbulence currently dogging the crypto markets does not worry Mr Arnault.
“We went there, but in a cautious way. We didn’t build a brand-new product with a high level of risk. We are accepting a new means of payment without taking any risk ourselves on the crypto market. Customers buy with crypto, but we receive in dollars or euros,” he says.
Ditto with the company’s foray into the NFT space, with the Tag Heuer Connected Watch allowing users to showcase their NFTs on the display.
“Again, we did not build our own collection of NFTs. I think it’s too early for that. But what we did was talk to this small community of passionate people. I think there’s great promise in this new world. And it’s a new way of interacting with customers,” says Mr Arnault.
His new brand strategy includes showcasing innovation in traditional watchmaking, which is still Tag Heuer’s core business.
At this year’s Watches & Wonders watch fair in Geneva, one of the most-talked-about pieces was the Tag Heuer Carrera Plasma, which has a case made from sandblasted black anodised aluminium and a textured dial blasted with fine ground diamond powder.
Priced at more than half a million dollars, it is the brand’s most expensive timepiece to date, boasting nearly 50 laboratory-grown diamonds set into its case alone.
Tag, says Mr Arnault, is going avant-garde with the Carrera Plasma. “We had some diamonds in our collection, and going avant-garde gives us legitimacy to invest in and investigate lab-grown diamonds. But first, we had to find the right angle.”
The right angle, he continues, was not just replacing natural diamonds with lab-grown ones – in this case, polycrystalline and monocrystalline.
“We asked ourselves how we could leverage the production process and technology to create something new, something never seen before, something which would be impossible to do with natural diamonds,” he says, alluding to the fact that the shape of naturally occurring diamonds cannot be controlled.
In making the watch which boasts a crown fashioned from a 2.5-carat piece of diamond, he not only hopes to highlight the brand’s mastery of carbon and diamond design, but also dispels any misconceptions or fears that lab-grown diamonds are cheaper and of inferior quality.
He has more tricks up his sleeves, he says with a grin.
In 2023, he hopes to do a major launch of a new watch in Singapore – one inspired by the city-state’s Formula One race.
He declines to reveal details, but says: “I can say that it will leverage one of the unique aspects of the Singapore Grand Prix which, today and tomorrow, will still be the world’s best night race.”
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MCI (P) 031/10/2021, MCI (P) 032/10/2021. Published by SPH Media Limited, Co. Regn. No. 202120748H. Copyright © 2021 SPH Media Limited. All rights reserved.