Business News: LVMH Buys Minority Stake In Swiss Movement Maker La Joux-Perret From Japan's Citizen Group

LVMH Watch Division is buying a minority stake in Swiss movement maker La Joux-Perret from Japan’s Citizen Group in a deal that will boost the maker of Tag Heuer, Hublot, and Zenith’s access to high-end Swiss-made watch movements at scale. The acquisition of the minority interest strengthens LVMH’s ability to source mechanical and solar-quartz movements for its stable of watch brands that also include jewelry houses Bulgari and Tiffany & Co. 

Movements are a key component of the Swiss industry and watchmaking production that drive timekeeping functions and complications, and are considered the beating heart of a timepiece. The deal for the minority stake, the exact terms of which were not disclosed, will give LVMH a voice in the strategy and operations of LJP and enough equity to be in an influential position if Citizen were to ever consider selling La Joux-Perret or any of its other Swiss-based watchmaking assets, which includes brands such as Frederique Constant, Angelus, and Arnold & Son. 

Based in La Chaux-de-Fonds, La Joux-Perret currently produces about 150,000 movements per year, Hodinkee reported in a recent article on the manufacturer. They range from its workhorse time-only movement, the G100, to its column-wheel chronograph movement, the L100, as well as high-end tourbillon and monopusher chronograph movements. It also makes the Solargraph movement, developed in association with Tag Heuer and first used in the Aquaracer, a critical component for the brand. 

The Solargraph recharges with sunlight or artificial light with no battery change required and needs only two minutes of full sunlight to power a watch for a full day. Less than 20 hours under strong sunlight gives the Solargraph six months of autonomy, and it is also used in the revival of the Tag Heuer Formula 1 watch, which has proven a hit as LVMH has become the title sponsor of the top motor sports series. The companies say the solar movement partnership also extends to the development of a movement that now powers the Rope watch by Tiffany & Co, and it will continue to develop with other Maisons of the LVMH group. 

La Joux-Perret competes with other major Swiss movement manufacturers that supply Swiss brands, including Swatch Group’s ETA, Sellita, and Kenissi, which is majority controlled by Rolex’s Tudor brand and whose other shareholders include Chanel. LVMH was recently among the potential bidders for the Vaucher movement maker, which is owned by the Sandoz Foundation and in which French luxury giant Hermés owns a 20% stake and the right of first refusal on any sale of the movement maker. 

The Sandoz family tried to sell its watchmaking assets, but recently ended the sale process after a deal couldn’t be reached.  Citizen says, following the LVMH investment, La Joux-Perret will continue to operate independently as part of the Citizen Group and that it will continue to supply movements to other watchmakers outside the Citizen Group and LVMH. 

LVMH is the biggest luxury conglomerate in the world with brands ranging from Louis Vuitton to wine and Champagne producer Moët & Chandon. Its watchmaking assets also include LVMH watches and the revived Daniel Roth and Gerald Genta brands. The LVMH Watch division, headed by Bulgari Chief Executive Officer Jean-Christophe Babin, is among the biggest watchmaking groups, but trails rivals including Richemont, Swatch Group, and Rolex in volume and sales. 

In a statement, Babin said the LVMH Watch Division aims to leverage “our unmatched expertise in solar energy” through the investment in La Joux-Perret. Citizen is one of the largest watchmakers in the world, and Yoshitaka Oji, the President and CEO of Citizen Watch Group, says the “strategic alliance with a key partner confirms the recognition of its expertise and opens new long-term development prospects.”