Billionaire Arnault Has a MoonSwatch in His Archives

There’s a new hype watch in town. No, I’m not talking about the crazy Rolex with

There's a new hype watch in town.

No, I’m not talking about the crazy Rolex with yellow, pink, coral, turquoise and green bubbles on the dial. I mean the long-discontinued, partly plastic TAG Heuer Formula 1 from the 1980s and ‘90s that's getting a lot of love from the watch bros.

Timepiece platform Hodinkee recently called for a return of the icon. Menswear influencers have been extolling its virtues. Well, the enthusiasts are right: It's time for LVMH Moet Hennessy Louis Vuitton SE chairman Bernard Arnault and his 28-year-old son Frederic to revive the retro model. The vintage timepiece stands a good chance of doing for their TAG Heuer brand what the MoonSwatch, a wildly successful collaboration that drew heavily from Omega's Speedmaster Moonwatch, did for Swatch AG's Omega brand — introduce it to a broader, more youthful and aspirational audience.

The younger Arnault has been doing well rejuvenating TAG Heuer, drawing on its heritage to appeal to millennial and Gen-Z buyers. Adding a funky, limited-edition retro timepiece would be the diamond on the bezel.

The original Formula 1 watch hit the scene in 1986. The models had brightly colored bezels, cases and straps. There was also the option of a steel case and bracelet.

A reissue would be timely. Since becoming chief executive officer of the brand three years ago, Frederic Arnault has been seeking to transform TAG Heuer into a true luxury house. This has involved enhancing design, movements and materials, enabling TAG Heuer to charge a higher price. Frederic hasn't lost sight of the fact that the name is often bought as one's first luxury watch. But he aims to have buyers coming back for elevated models, particularly the TAG Heuer Carrera and the Monaco.

With LVMH's considerable resources, he has also been able to amplify marketing, for example, recruiting actor Ryan Gosling to appear in a short film to mark the 60th anniversary of the Carrera watch, also featuring TAG Heuer's automotive partner Porsche. He has ditched football sponsorships to concentrate on the brand's racing heritage. Its partnership with the Oracle Red Bull F1 team began in 2016.

Although the watchmaker does not reveal revenue or profit figures, it said 2022 sales were 20% higher than 2019 levels. Yet TAG Heuer still hasn't reached hype status. It also faces significant competition, for example from Rolex's Tudor, which is performing well, and Breitling.

So it's time to turn up the heat.

TAG Heuer has a modern watch resembling the original F1, in red, green and yellow, retailing at $1,900. But it should ramp up the retro styling and expand the color selection. Even though the economy looks more like the 1970s, the ‘90s refuses to die in fashion and music, so a watch from the era should fit right in. The company doesn't comment on its future commercial plans.

While the younger Arnault would likely prefer to steer his own course, it's hard not to draw parallels between the F1 and the MoonSwatch. Unless you’ve actually been living on the moon for the past year, you’re probably aware of the mania around the quartz-driven timepiece in a ceramic and bio-plastic composite case that costs about $250.

The MoonSwatch borrowed key design elements from the Speedmaster Moonwatch, which retails for about $7,000 and is lionized for being the first watch worn on the moon. Not only did the MoonSwatch become a global retail phenomenon when it launched in March 2022, but it created a halo around the Omega brand. Sales of all Omega Speedmaster models, for example, increased by a percentage in the double-digits, Swatch CEO Nick Hayek told Bloomberg News last year.

But there should be some important differences for a TAG Heuer.

To really build the F1's hypewatch status, it should be more exclusive. Colorways, which should be sold for a limited period, could be acquired individually or by collectors to build a set. This is the strategy that Rolex employed three years ago with Oyster Perpetual watches in turquoise, yellow, coral, green and pink. All are now trading above their retail values, according to research platform WatchCharts.

In contrast, the MoonSwatch, although available only in Swatch's own retail stores, is not a limited-edition timepiece. Swatch said it sold more than 1 million models in 2022, and Jean-Philippe Bertschy, an analyst at Vontobel Wealth Management, estimates it will sell up to 2 million this year. That may explain why secondary market values fell shortly after release, although they have remained stable over the past six months, and above the retail price, according to WatchCharts.

Meanwhile, the MoonSwatch, although it drew on Omega, was still a Swatch timepiece, priced at an entry level for Swiss watches. Any new F1 would be a TAG Heuer, which has a higher positioning and potentially a richer price. Vintage F1 models trade between about $400 and $600 on secondary platforms.

But although LVMH is a master of elevation — just look at how it has transformed Dior and is upgrading Tiffany — it shouldn't lose sight of the fact that any reissued F1 would primarily be a way to build buzz around the brand. Consequently, it should be priced at a level that appeals to both collectors and younger customers who might not otherwise have considered a TAG Heuer.

Who knows, delving into the past might even influence the future. Frederic is one of Bernard Arnault's five children who might eventually succeed him at the luxury conglomerate. Turbocharging TAG Heuer could put him in pole position.