Ready, Set, Go! LVMH & Rolex Compete for Formula 1
Recent rumors suggest that LVMH is in negotiations with Formula 1 to make Tag Heuer, one of its prestigious watch brands, the official timekeeper of the globally popular racing circuit. Since 2013, Rolex has held the position of official timekeeper for Formula 1.
LVMH & Tag Heuer
Should these talks come to fruition, it would mark a significant triumph for LVMH and Tag Heuer while delivering a notable setback to Rolex, which has benefited from Formula 1's increasing popularity across Europe and beyond.
One estimate indicates that the number of Formula 1 viewers in the United States roughly doubled between 2018 and 2023. Consequently, Rolex’s expenses have nearly tripled since 2011.
The speculation about this potential collaboration—or at least the internal discussions that LVMH is facilitating between Formula 1 and its subsidiary Tag Heuer—was confirmed last week during LVMH's second-quarter earnings call. When asked directly about the rumor's validity, CFO Jean-Jacques Guiony responded,
"I won’t comment on Formula 1. I mean, there are some discussions, but it’s not something I can elaborate on as we speak — nothing is decided. Obviously, the press knows much more than I do. It’s normal. I’m just a CFO. I cannot really comment," Guiony said.
Securing a partnership with Formula 1 is one of the most prestigious achievements for a watchmaker. However, experts believe that, despite LVMH's substantial financial resources and influence, it will be challenging to displace a legendary brand like Rolex.
Rolex vs. LVMH
While LVMH generates over $80 billion annually from its diverse interests—including restaurants, fashion, leather goods, and hospitality—Rolex's annual revenue stands at approximately $10 billion. Rolex's long-standing reputation as a luxury watch brand gives it a deep-rooted legitimacy in the market.
Photo: 2023 Australian Grand Prix (Source: Youtube Screenshot)
Despite the hurdles, some industry experts argue that LVMH and Tag Heuer would benefit from focusing their watch ambitions on sports. Tag Heuer has a rich history of supporting championship golfers and tennis events.
Given that precise timekeeping is essential in racing and a significant portion of high-income individuals enjoy both motorsports and luxury watches, a strong connection exists between timepieces and racing.
Who is LVMH?
Louis Vuitton Moët Hennessy, commonly known as LVMH, is a French multinational conglomerate specializing in luxury goods, headquartered in Paris.
The company was formed in 1987 from the merger of the fashion house Louis Vuitton (founded in 1854) and Moët Hennessy.
Moët Hennessy itself was established after the 1971 merger of the cognac producer Hennessy (founded in 1765) and the champagne house Moët & Chandon (founded in 1743).
In April 2023, LVMH became the first European firm to be valued at over $500 billion. According to Forbes Global 2000, LVMH was ranked number 47 in 2023.
%20aims%20to%20challenge%20the%20giants%20of%20the%20watch%20industry,%20with%20Rolex%20now%20emerging%20as%20its%20latest%20target.Recent%20rumors%20suggest%20that%20LVMH%20i...){kind=link}