Consumer Discretionary

Swiss watches’ phenomenal survival: Tag Heuer CEO

Tag Heuer's luxury smart watch sells out
VIDEO2:3502:35
Tag Heuer's luxury smart watch sells out

The chief executive of luxury Swiss brand Tag Heuer has hailed the resilience of the country's watch market, claiming it was "phenomenal" that exports declined just 3.3 percent in the face of global headwinds and not further.

Speaking to CNBC on Tuesday, Jean Claude Biver suggested that after a year like 2015, he expected the industry to recover.

The Swiss watch market was able to eke out minimal losses, he said, despite volatile stock moves, geopolitical tensions that affected Russian and Middle East markets, slowing Chinese growth as well as a significant strengthening of the Swiss currency after the franc was de-pegged from the euro last January.


Pedestrians walk past a Tag Heuer store in Sydney, Australia.
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"With all this that happened, you could have expected that the Swiss industry goes down by 10 percent, 15 percent. It went down by 3 percent," Biver explained.

"That's a phenomenal performance."

He now forecasts Swiss watch exports will stabilize, if not grow, in 2016.

Tag Heuer didn't exactly feel the full brunt of the market downturn, however. Biver said his company, which is owned by luxury group LVMH, saw watch sales rise 2.5 percent last year.

"I believe when the market is difficult, the best people are ahead," he said. "And that's why I'm not so much afraid for us, for my group, for my brand. I'm not afraid of a difficult market."

But Tag Heuer's relatively limited exposure to China seems to be part of the company's advantage. Competitors who depend on China for 40 to 50 percent of their business have been slammed, Biver said.

Tag Heurer connected luxury smart watch.
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Still, the CEO made clear that he's not going to shy away from China given the buying power of its growing middle class, which some estimates project will grow to 500 million people by 2025.

"There's a huge opportunity for 500 million people. So I'm very enthusiastic about China, not worried at all," he explained.

But don't expect the company to lower prices to cater to lower income buyers. Biver said his company will "never" produce a watch in the $500 to $900 range.

"No, we want to remain a luxury accessible Swiss watch brand," Biver said.

"That's what we want to stay"