Reading the Tea Leaves: What Does LVMH’s Acquisition of L’Epée 1839 Mean?

The temperature wasn’t the only thing that was rising in June because hot on the heels of the announcement that the head Louis Vuitton Moët Hennessy, Bernard Arnault, had bought a personal stake in rival luxury group Richemont, there came the news that LVMH had acquired L’Epée 1839, Switzerland’s leading clock manufacture.

As you can imagine, it wasn’t long before the internet was afire with speculation about what this move meant to the industry and what effect it would have on brands and buyers.

But we here at Watchonista wanted to provide a more nuanced interpretation of this news by going back to the basics we learned in journalism school: Who? What? Where? When? Why?

A prominent clockmaking house for more than 180 years, today L’Epée 1839 is the only manufacture in Switzerland to specialize in the in-house production of high-end clocks.

Founded in 1839 by Auguste L’Epée, the company started out creating music boxes and watch components. From the start, the brand was synonymous with hand-made pieces it calls “Kinetic Pieces of Art.”
 

The current collection ranges from classic carriage clocks to contemporary design clocks and avant-garde horological masterpieces incorporating complications such as retrograde seconds, striking mechanisms, and so much more.

Born from the 1987 merger of Louis Vuitton and Moët Hennessy (the latter of which was, itself, the result of the joining of champagne makers Moët & Chandon and cognac producer Hennessy), LVMH is a Paris-based multinational specializing in luxury goods.

At first glance, you might compare LVMH’s acquisition of L’Epée 1839 to a drawing of a series of larger fishes swallowing up slightly smaller fishes.
 

But before we can judge whether that comparison is applicable, we must consider what’s in it for both businesses.

Let’s compare the move to LVMH’s investment in La Fabrique du Temps, a conceptual movement producer founded in 2007 by the watchmaking duo Michel Navas and Enrico Barbasini. The duo had been working with LVMH since the get-go, but in 2011, the two entities made it official.
 

At the time, all of the big luxury groups were stepping up their investments in watch production and parts providers to reduce their dependence on external suppliers.

The result was that Louis Vuitton watches gained “street cred” on the haute horlogerie playground while La Fabrique du Temps got financial stability.

In this case, the “where” does not represent a physical location but rather a place on the current horological timeline.

Currently, clocks are cool. Just think about Van Cleef & Arpels’ timekeeping automatons or L’Epée’s many collaborations with MB&F, like 2021’s avant-garde Orb, a retro-futuristic mechanical clock.

And let’s not forget that LVMH also recently revived enthusiast favorites Gérald Genta and Daniel Roth (under the direction of Navas and Barbasini).
 

Therefore, the value of the LVMH x L’Epée pairing goes beyond dollars alone. It’s also about appealing to die-hard collectors. And considering how much the profile of L’Epée has been raised in the short time since the acquisition was announced, it seems to be working.

Because of the timing of this purchase, people are positing that it is a sign of a much larger plan for LVMH’s watch world domination.

We see it more as a sign of investing in a healthy infrastructure.

L’Epée crafts mechanical devices at the elite level. Its clocks incorporate complications like perpetual calendars, tourbillons, and, in one instance, a power reserve of 8,760 hours (that is an entire year).
 

When Louis Vuitton opened a dedicated La Fabrique du Temps manufacture in 2014, the goal was to provide master watchmakers, engineers, and designers with a space equipped with traditional artisanal tools and the latest digital technologies. So, if the past is prologue, we’re guessing that LVMH will grant L’Epée the same autonomy.

Moreover, at a time when watchmakers are in short supply, this type of investment – preserving skills while encouraging innovation – is good for the industry as a whole.

Industry insiders agree that it’s time for a market correction – not a crash, but a normalization of sales after the heady pandemic boost. In 2024, the goal for watchmakers and retailers is to keep the value of sales even when the volume drops.

One strategy is to widen the consumer base, like Bremont’s decision to lower the prices of its entry-level timepieces. On the other end of the spectrum, we’ve seen brands introducing more niche, ultra-exclusive timepieces for their ultra-rich customers.
 

Interestingly, of the two approaches described above, the “big tent” strategy includes dabbling in non-watch horological wonders such as clocks. So, perhaps LVMH’s acquisition of L’Epée is a clue as to which direction the luxury conglomerate is leaning.